http://www.nwda.co.uk/docs/MCJ_Casings

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Mr Marcus Tierney MCJ Casings Ltd 159 Triumph Way Speke Merseyside L24 9GQ 11 October 2006 Our Ref: MW/06/0020 Project Number: Dear Mr Tierney 1.

I am pleased to tell you that the Northwest Development Agency will give MCJ Casings Ltd, Company Registration Number 5331653, a grant of up to £58,000 (fifty eight thousand pounds) under Section 7 of the Industrial Development Act 1982 to help implement the project to build a new factory and invest in new plant and equipment at 159 Triumph Way, Speke, Merseyside, L24 9GQ, (“the Premises”), all as more fully described at Schedule 2 attached (“the Project”). This offer is subject to the conditions set out in this letter and Schedules 1, 2 and 3 attached.

PRECONDITIONS 2. of:

Please note that before accepting this offer you will need to provide written confirmation

i) Injection of £235k share capital/funds; ii) Availability of loans (inc mortgage offer) totalling at least £647k ; iii)Availability of hire purchase/leasing facilities of at least £300k CONDITIONS FOR MAKING CLAIMS AND WHEN TO CLAIM 3.

The grant1 will be paid in 2 instalments:

First instalment

1

Time and condition

Grant

When MCJ Casings Ltd has defrayed £705,000 (excluding VAT) on the fixed assets for the Project set out in Schedule 2 and has entered into unconditional obligations committing it to further expenditure of £240,000 (excluding VAT) on those fixed assets and has as a result of the project created at least 6 permanent full time jobs within the range of skill levels set out in Schedule 2 and employment at the Premises is not less than 23

£46,000

Please note that the grant is taxable .

RESTRICTED - COMMERCIAL Final instalment

At least 12 months after the first instalment, when MCJ Casings Ltd has defrayed/HP ÂŁ1,182,000 in total (excluding VAT) on those fixed assets, the Job Target (number and skill levels) and Productivity Target, both, as defined in Schedule 2, have been met, the Project has been completed and we are satisfied with its result.

ÂŁ12,000

Liabilities incurred but not yet discharged by payment cannot be the subject of a claim.

4.

If, within one year of accepting the offer, you have not made a claim for the first instalment of grant, which meets the conditions in paragraph 3 and Schedule 3, we may withdraw the offer. We will accept no claims after 31st Dec 2008.

HOW TO CLAIM 5.

Make your claim on an official claim form. Schedule 3 sets out the information, which must be included with each claim. We normally pay each grant instalment, or tell you why the claim cannot be accepted, within 30 days of receiving a fully documented claim.

VARIATION, WITHHOLDING AND REPAYMENT OF GRANT 6.

Schedule 1 sets out the circumstances in which we have the right to vary, withhold and/or require repayment of part or all of the grant. You must read this Schedule and the other Schedules before signing the Acceptance. If any of the circumstances set out in Schedule 1 occurs or may occur, you must tell us immediately so that we can discuss the best way forward with you. We will revisit the rationale to support the project at each claim stage as outlined in 3 above.

PUBLICITY 7.

We normally publish the amount of grant offered with the name of the company concerned and a brief description of its project in the first quarter after the payment of the first instalment of grant. Very exceptionally, if there is a strong case on grounds of public accountability, we may also publish information on grant payments. If you propose to give any publicity for the Project prior to our normal publicity arrangements, you must consult us in sufficient time to enable us to discuss the publicity with you.

EUROPEAN COMMUNITY 8.

We are obliged to give the European Commission schedules of information on offers in certain industrial sectors. Very occasionally the European Commission queries an offer, in which case we are obliged to give them information about the case. You may be required to cooperate with the Agency in the provision of such information.

STATE AID The grant amounts to an individual state aid. State aid is restricted by European law. The grant is being paid in line with Regulation (EC) No 1/2004 which sets out rules for payment of state

RESTRICTED - COMMERCIAL aid to small and medium-sized enterprises in the agricultural sector. The project has been assessed by NorthWest Regional Development Agency as complying with Regulation 1/2004.

In particular, NWDA has reached the following conclusions:• • • • •

•

Your business is a small/medium sized enterprise as defined in Annex 1 of Regulation (EC) No 70/2001 Your business is viable Your business complies with minimum standards regarding the environment, hygiene and animal welfare.

The grant does not contravene any prohibitions or restrictions laid down in European legislation establishing common organisations of the market.

Normal market outlets for products concerned exist for the future. An assessment has been carried out by the Northwest Development Agency in line with Article 7 (5) Regulation (EC) No 1/2004 the assessment will be made available to anyone who requests a copy by writing to NorthWest Regional Development Agency P.O.Box 3 Renaissance House Centre Park Warrington WA1 1XB. In line with the derogation under Article 7 (3b) of Regulation (EC) No 1/2004; any purchase of second hand equipment must be agreed with NWDA and accompanied by a declaration from the vendor that the equipment has not been granted previously.

If the NWDA discovers any of these to conclusions to be false, NWDA may terminate the agreement and require the repayment of any sums already paid under this agreement.

In line with the requirements of Article 19 of Regulation 1/2004 and to ensure transparency, this letter (together with a copy of the monitoring and evaluation plan and the standard conditions) will be published on the website of the NWDA and a summary of the grant will be sent to the European Commission. No aid will be paid before 31 st May 2007 or until the letter has appeared on NWDA’s website and until 10 working days after the summary is received by the European Commission, whichever is the later date.

MONITORING OF THE PROJECT 9.

From time to time we will inspect the Project and may require information from you to enable us to monitor its progress.

10.

We may require a report 5 years after the first payment of grant and/or a report 18 months after the final payment of grant to check that the conditions of the grant have been maintained. These reports should be confirmed by an independent accountant.

HOW TO ACCEPT 11.

This offer remains open until 10th January 2007. A Director of MCJ Casings Ltd should sign and date the Acceptance, return the whole document to Liz Murphy on the SFI team and keep a copy.

12.

If you have queries on this letter or the Schedules, do contact Liz Murphy 07795 255527 who will be pleased to advise you.

13.

Please note that variations to this offer will be effective only if we agree them in writing.

14.

I wish you every success with the Project.

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Yours sincerely

Mark Hughes Executive Director Enterprise, Innovation & Skills ACCEPTANCE MCJ Casings Ltd accepts the offer on the conditions set out in your letter above and in the Schedules 1, 2 and 3 attached, all of which I have read carefully. MCJ Casings Ltd also agrees to NWDA and DTI keeping a record of the data information provided for appraising and monitoring the grant.

Signed ........................................

Date .......................

PRINT NAME ..........................................................................

Director On behalf of: MCJ Casings Ltd

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SCHEDULE 1 VARIATION, WITHHOLDING AND REPAYMENT OF GRANT All references to ‘the Company’ refer to MCJ Casings Ltd. 1.

We may vary or withhold any or all of the payments and/or require repayment of grant already paid to the Company if, at any time while the Project is being carried out or during the 5 years immediately following the first payment of grant or the 18 months immediately following the final payment of grant, whichever period ends at the later date: i)

the Company has entered into an arrangement to defray money or defray money on the Project before 11 October 2006, that is the date of this letter

ii)

the arrangements for financing the Project are changed;

iii)

assistance for the Project is received or promised additional to that disclosed by the Company to us before the date of this letter from an institution of the European Communities, a Government Department, a local authority, a Regional Development Agency, any other partly or wholly publicly financed body or charitable fund;

iv)

in our opinion, progress on the Project; including progress towards reaching the Productivity Target shown in Schedule 2, is not satisfactory;

v)

in our opinion, the future of the Project is in jeopardy;

vi)

in our opinion, there is a significant change in the scale or nature of the Project.

vii)

the pre-conditions noted in paragraph 2 of the offer are not met and maintained

viii)

the Company becomes insolvent or makes any arrangement with its creditors, or goes into liquidation or takes or suffers any steps preparatory to winding up the Company or to the appointment of an Administrator, Liquidator or Receiver or commits or suffers any act equivalent to any of the foregoing;

ix)

there is a change of ownership or control of the Company;

x)

for a period of more than 3 months, the Company ceases to own or stops using for the purposes of the Project part or all of the Premises, or any of the assets, all as specified in Schedule 2;

xi)

in our opinion, any information the Company has given, on which we have based Schedule 2, changes substantially during implementation or is shown to be incorrect or misleading or any claim for grant is based on misleading information;

xii)

the Company fails to comply with any conditions of this letter or the Schedules.

2.

We may vary or withhold any or all of the payments and/or require repayment of grant already paid to the Company at any time while the Project is being carried out if progress to

RESTRICTED - COMMERCIAL reach the Job Target or Site Total is not satisfactory and we may require repayment of grant already paid if, during the 18 months immediately following the final payment of grant, the number or skill levels of jobs in the Project falls below the Job Target or the number of jobs on the Premises falls below the Site Total, both shown in Schedule 2.

European Commission 3.

We may vary or withhold any or all of the payments and/or require repayment of grant already paid, together with interest from the date of payment, if we are required to do so as a result of a decision by the European Commission or as a result of any obligation arising under Community law.

RESTRICTED - COMMERCIAL SCHEDULE 2 THE PROJECT 1.

The Project will be carried out by MCJ Casings Ltd.

2.

The building of a new factory at the current location plus investment in new plant and machinery 3.

Productivity Target

The project will lead to growth in the Gross Value Added per full time equivalent employee from ÂŁ43,830 at the start of the Project to ÂŁ64,137 on completion. Gross Value Added (GVA) measures labour productivity. For the purposes of SFIE assistance the main components in the calculation are GVA = Gross Profit plus direct labour costs, minus indirect materials.

4.

Capital expenditure on fixed assets for the Project Year of Defrayal (Year end:Jan) 2007/8

Land: Buildings: Building Adaptations: Plant and Machinery: Odour Control plant Steam cleaning equipment Gut cleaning equipment Workstations Refrigeration Ancillary Equipment Wet Chemical Scrubber Installations

2008/9

750,000 91,000 12,000 110,000 43,000 50,000 25,000 119,000 40,000

Vehicles: 1,240,000

Total:

5.

Jobs

a)

Number of people directly employed by MCJ Casings Ltd at the Premises before the Project:

17

b)

Number of permanent full time jobs and equivalent 2 to be safeguarded in MCJ Casings Ltd at the Premises as part of the Project as follows:

0

Numb er 2

Number

Description of Job

NVQ level or

Annual salary

A full time job is one of 30 or more hours a week. Two part time jobs of 15 or more hours a week counts as equivalent to one full time job. Self-employed, sub-contracted and temporary jobs and jobs in companies other than MCJ Casings Ltd or at a location other than the Premises, [option: except for agreed numbers of homeworkers/teleworkers in the Assisted Areas,] do not count towards the Job Target.

RESTRICTED - COMMERCIAL equivale nt

c)

Number of permanent full time jobs and equivalent to be created in MCJ Casings Ltd at the Premises as part of the Project broken down as follows: Numb er

d)

Description of Job

NVQ level or equivale nt

Annual salary

8

Machine Operators

2

12,000

1

Production Manager

3

18,000

1

Facilities Manager

3

18,000

1

Transport Manager

3

18,000

1

Accountant

4

20,000

Number of permanent full time jobs and equivalent in MCJ Casings Ltd at the Premises outside the Project.

12

0

Job Target ((b) + (c)) = 12 Resulting in a total site employment of not less than: 29

6.

Other Assistance

It is understood that no other public financial assistance has been offered to MCJ Casings Ltd for this Project.

RESTRICTED - COMMERCIAL SCHEDULE 3 HOW TO CLAIM INSTALMENTS OF SELECTIVE FINANCE FOR INVESTMENT 1.

Make claims for each instalment of grant on an official claim form.

2.

With each claim include: (if not already supplied at acceptance stage) a)

Company bank details on headed paper

b)

the latest accounts of MCJ Casings Ltd which must be audited unless exempt under the Companies Act 1985 (Audit Exemption) (Amendment) Regulations 2000. If audited accounts are required and these accounts cover a period ending more than 9 months before the date of the claim, include unaudited accounts for a later period;

c)

a confirmatory report, as set out overleaf, on the accountant’s headed paper by an accountant who is independent of and is: i)

eligible under Section 25 of the Companies Act 1989 for appointment as a company auditor; or,

ii)

for companies that are not quoted on the Stock Exchange of Great Britain or elsewhere, eligible under Section 34(1) of the Act;

[addition if total offer is <ÂŁ100k: iii)

a member of one of the following accountancy bodies and holds a current practising certificate issued by that body: The Institute of Chartered Accountants in England and Wales The Institute of Chartered Accountants of Scotland The Institute of Chartered Accountants in Ireland The Association of Chartered Certified Accountants The Chartered Institute of Management Accountants The Association of International Accountants The Chartered Institute of Public Finance and Accountancy The Institute of Chartered Secretaries and Administrators The Association of Accounting Technicians

d)

confirmation that no other public assistance has been received for the Project; alternative: [a statement of other public assistance received for the Project;]

e)

evidence that the pre-payment condition[s] in paragraph 2 of the offer letter [has/have] been met.]

RESTRICTED - COMMERCIAL Variations to the wording of this report will not be accepted.

THE INDEPENDENT ACCOUNTANT'S REPORT (On headed paper of the accountant) 1.

The report should be addressed to: (i) The grant receiving company, and also (ii) The NWDA

2.

We have examined the enclosed claim from [name of the company] (‘the company’) for the [period ended [date]]/[[period from [date] to [date]] in accordance with the terms and conditions of the engagement letter and grant offer letter dated 11 October 2006. The claim has been prepared by and is the sole responsibility of the [directors] of the company.

3.

We have carried out a high level of assurance assignment by performing the following tests: a) We have selected a random sample of fixed assets expenditure incurred by value as reported on the claim and traced them to invoices or other supporting documentation and evidence of payment to check that they have been properly incurred and defrayed in accordance with the terms and conditions of the offer letter; b) (include where leasing/HP is part of eligible expenditure) We have selected a random sample of fixed assets expenditure which has been financed by leasing/HP and confirmed these to relevant HP/leasing agreements; c) For where grant is for jobs created/safeguarded: We have identified the number of permanent full time jobs and part time equivalents working on the Project as recorded by the [grant recipient]’s payroll records at the date of the claim.

We have also confirmed the recorded skill level for each of the jobs created/safeguarded using the standard occupational classification (SOC) index. This assigns the project jobs on the basis of an occupation to one of four levels, where 1 is the bottom level and 4 the top. Our confirmation on the skill level has been made by us checking [on a sample basis] to the records and copies of relevant evidence of achieved skill levels (such as photocopies of educational certificates maintained by the company’s payroll/personnel department.

Finally we have identified the total workforce number of permanent full time jobs and part time equivalents as reported by the [grant recipient’s] payroll records at the date of the claim d) We have confirmed the arithmetical accuracy of the schedules relating to the claim and agreed them to the appropriate supporting documentation. We have also checked whether the grant claimed by the company has been calculated in accordance with the terms and conditions of the offer letter.

4.

Statement of any errors and reservations/exceptions.

[These, if any, should be clearly stated under this paragraph.]

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5.

Based on our examination as above and subject to the possible financial effect of any reservations or qualifications set out in paragraph 4, we report that based on our findings, in our opinion the claim for grant payment meets the conditions of the offer letter dated [date] and its Schedules. We: i)

confirm that during the period from [date] to [date] that the company defrayed ÂŁ [amount] (excluding VAT) on fixed assets for the Project in accordance with the offer letter and Schedules;

[include where leasing/HP etc is part of eligible expenditure: ii)

confirm that according to HP/leasing agreements seen by us that during the period from [date] to [date] the company entered into unconditional obligations [HP/leasing] committing it to further expenditure ÂŁ[amount] (excluding VAT) on fixed assets for the Project in accordance with the offer letter and Schedules;]

iii)

confirm that according to the payroll records of the company at the date of the claim the company maintained a workforce of permanent full time jobs and permanent part time jobs employed on the Project in accordance with the offer letter and its Schedules as follows: Number Description of Job NVQ Annual salary level or equivalen t

iv)

confirm that according to the payroll records of the company at the date of the claim the company maintained a total workforce of [number] permanent full time jobs and [number] permanent part time jobs making up [number] permanent full time job equivalents in accordance with the offer letter and schedules.

v)

confirm that the company has maintained adequate records to enable me/us to report on this claim.

6.

Our report is prepared solely for the confidential use of the company and the NWDA, and solely for the purpose of verifying the grant claimed. It may not be relied upon by the company or he NWDA and [named others] for any other purpose whatsoever. Our report must not be recited or referred to in whole or in part in any other published document without our written permission. Our report must not be made available, copied or recited to any other party without our express written permission in every case except for the NWDA and [named others] may disclose the report where it has a statutory obligation to do so. Other than to the company, [the NWDA] and [named others], we neither owe nor accept any duty to any other party to whom this report may be disclosed.

7.

The engagement to report on the grant claim is separate from, and unrelated to, the audit of the annual financial statements of the company and that the report relates only to the matters specified and that it does not extend to the grant recipient's annual financial statements taken as a whole.

8.

Name and signature of the reporting accountant

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Date of the report

10.

Name for enquiries

RESTRICTED - COMMERCIAL SELECTIVE FINANCE FOR INVESTMENT IN ENGLAND (SFIE) STANDARDISED TERMS OF ENGAGEMENT (OFFERED AS PART OF GRANT CONDITION INSTEAD OF A TRI-PARTITE ENGAGEMENT) The following are the terms of engagement on which The Northwest Development Agency agrees to engage accountants to perform a high level of assurance engagement and report in connection with the Selective Finance for Investment in England claim.

References to “The NWDA” hereafter will mean “ The Northwest Development Agency.

References to “Accountant” hereafter will mean “Independent Accountant” and the grant recipient’s reporting accountant.

An agreement between the grant recipient, its reporting Accountant and the NWDA on these terms is formed and the Accountant signs and submits to the NWDA a report as set out in Clause 3 herein.

The NWDA will not need to sign anything. By publishing this document the NWDA makes an offer to engage on these terms. Once the offer is accepted by the grant recipient and the Accountant then an agreement is formed. If the terms of the standardised engagement letter are to be revised, the NWDA will need to confirm its acceptance of the new terms before agreement is formed.

[Should it become necessary in exceptional circumstances to tailor the standard terms of engagement to accommodate specific circumstances the contact point will be the NWDA project officer issuing the grant offer letter to the grantee].

1 Introduction MCJ Casings Ltd is required to submit to the NWDA reports as set out herein below that are also signed by an accountant to provide independent assurance. These terms of engagement set out the basis on which the Accountant will sign the report.

2 MCJ Casings Ltd’s responsibilities 2.1 MCJ Casings Ltd is responsible for producing all information, maintaining proper records, complying with the terms of any legislation or regulatory requirements and the NWDA’s terms and conditions of grant (“the grant conditions”) and providing relevant information to the NWDA on a basis in accordance with the requirements of the grant conditions. MCJ Casings Ltd is responsible for ensuring that the non-financial records can be reconciled to the financial records.

2.2 The management (directors of limited companies, partners in partnership firms and the owner in a sole tradership) of MCJ Casings Ltd will make available to the Accountant all records, correspondence, information and explanations that the Accountant considers necessary to enable the Accountant to perform the Accountant’s work.

2.3 MCJ Casings Ltd and the NWDA accept that the ability of the Accountant to perform his work effectively depends upon the grant recipient providing full and free access to the financial and other records and MCJ Casings Ltd shall procure that any such records held by a third party are made available to the Accountant.

RESTRICTED - COMMERCIAL 2.4 The Accountant accepts that, whether or not MCJ Casings Ltd meets its obligations, the Accountant remains under an obligation to the NWDA to perform his work with reasonable skill and care. The failure by MCJ Casings Ltd to meet its obligations may cause the Accountant to qualify his report or be unable to provide a report.

3 Scope of the Accountant’s work 3.1 MCJ Casings Ltd will provide the Accountant with such information, explanations and documentation that the Accountant considers necessary to carry out his responsibilities. The Accountant will seek written representations from management in relation to matters for which independent corroboration is not available. The Accountant will also seek confirmation that any significant matters of which the Accountant should be aware have been brought to the Accountant’s attention.

3.2 The Accountant will perform the following work in relation to reports required by the NWDA: 3.2.1 The accountant will carry out a high level of assurance assignment as set out in the terms and conditions of the grant by performing the following work in relation to reports required by the NWDA: 3.2.2 Select a random sample of expenditure reported in the statement of claims relating to the assets used for the project; 3.2.3 For each item of expenditure selected in the sample, trace the amounts recorded in the claim to the original invoice and / or other supporting documents to check that the amount has been properly incurred and defrayed in accordance with the terms of the offer letter; 3.2.4 (include where leasing/HP is part of eligible expenditure). Select a random sample of fixed assets expenditure which has been financed by leasing/HP and confirm them to relevant HP/leasing agreements; 3.2.5 Identify the number of permanent full time jobs and part time equivalents working on the Project as recorded by the MCJ Casings Ltd’s payroll records at the date of the claim; 3.2.6 Confirm the recorded skill level for each of the jobs created/safeguarded using the standard occupational classification (SOC) index. This assigns the project jobs on the basis of an occupation to one of four levels, where 1 is the bottom level and 4 the top. Confirmation on the skill level should be made by checking [on a sample basis] to the records and copies of relevant evidence of achieved skill levels (such as photocopies of educational certificates maintained by the company’s payroll/personnel department); 3.2.7 Identify the total workforce number of permanent full time jobs and part time equivalents as recorded by MCJ Casings Ltd’s payroll records at the date of the claim; 3.2.8 Check the arithmetical accuracy of the schedules relating to the claim and check whether the grant claimed by the company has been calculated in accordance with the terms and conditions of the offer letter; 3.3 The Accountant will not subject the information provided by MCJ Casings Ltd to checking or verification except to the extent expressly stated. While the Accountant will perform his work with reasonable skill and care, his work will not be relied upon to disclose all misstatements, fraud or errors that might exist.

RESTRICTED - COMMERCIAL 4 Basis and Form of the Accountant’s reports 4.1 The Accountant’s reports will be prepared on the following basis: 4.1.1 The Accountant’s reports will be prepared for the confidential use of the MCJ Casings Ltd and the NWDA and for the purpose of submission to the NWDA in connection with NWDA’s requirements in connection with the in Finance for Investment in England grant. They may not be relied upon by MCJ Casings Ltd, or the NWDA for any other purpose or provided to any other party except as provided in 4.1.2 below 4.1.2 The NWDA may only disclose the reports to others who may have statutory rights of access to the report. There may be an actual or potential liability to [other bodies] that may arise out of the eligibility and/or use of monies by MCJ Casings Ltd, and [the others] who will be entitled to rely on the report; 4.1.3 Neither MCJ Casings Ltd, nor the NWDA [nor others] may rely on any oral or draft reports the accountant provides. The Accountant accepts responsibility to MCJ Casings Ltd and the NWDA for the Accountant’s final signed reports only; 4.1.4 Subject to clause 4.1.5, the Accountant’s reports must not be recited or referred to in whole or in part in any other document (including, without limitation, any publication issued by the NWDA) without the prior written approval of the Accountant; 4.1.5 Subject to clause 4.1.2 and except to the extent required by court order, law or regulation or to assist in the resolution of any court proceedings the Accountant’s reports must not be made available, copied or recited to any other person (including, without limitation, any person who may use or refer to any of the DTI’s publications); 4.1.6 Except as provided by 4.1.1 herein, the firm of accountants, its partners and staff neither owe nor accept any duty to any other person (including, without limitation, any person who may use or refer to any of the DTI’s publications) and shall not be liable for any loss, damage or expense of whatsoever nature which is caused by their reliance on representations in the Accountant’s reports.

4.1.7 Subject to the above provisions, the Accountant’s report should be addressed both to the grant recipient and also the NWDA and should be based on the model report attached to this engagement letter.

5 Liability Provisions 5.1 The Accountant will perform the engagement with reasonable skill and care and acknowledges that he will be liable to MCJ Casings Ltd and the NWDA for losses, damages, costs or expenses (“losses”) caused by his breach of contract, negligence or wilful default, subject to the following provisions: 5.1.1 The Accountant will not be so liable if such losses are due to the provision of false, misleading or incomplete information or documentation or due to the acts or omissions of any person other than the Accountant, except where, on the basis of the enquiries normally undertaken by accountants within the scope set out in these terms of engagement, it would have been reasonable for the Accountant to discover such defects; 5.1.2 The Accountant accepts liability without limit for the consequences of his own fraud and for any other liability, which he is not permitted by law to limit or exclude;

RESTRICTED - COMMERCIAL 5.1.3 Subject to the previous paragraph (5.1.2), the total aggregate liability of the Accountant whether in contract, tort (including negligence) or otherwise, to the NWDA, arising from or in connection with the work which is the subject of these terms (including any addition or variation to the work), shall not exceed the amount determined in accordance with the capping formula shown below.

Amount of grant being reported on in this claim:

Proportion of amount

Total cap

Up to £1m

100%

Between £1m and £5m Between £5m and £15m

100% of first £1m + 50% of remainder 100% of first £1m + 50% of amount between £1m and £5m + 20% of remainder Negotiate

Amount of grant included in claim £1m + 50% of amount in excess of £1m £3m + 20% of amount in excess of £5m

Above £15M

Negotiate

The NWDA will negotiate the comparatively rare claims above £15m on an individual basis and accountants should contact the named contact at the NWDA shown in the preamble to this engagement letter in advance of agreeing their engagement letter with their client to discuss such cases.

The NWDA and its agents should note that the Institute of Chartered Accountants in England and Wales (“the ICAEW”) has not agreed this capping formula on behalf of the profession. If firms are not happy with the proposals (as above) they will need to discuss their concerns either with the NWDA or its agents directly.

5.2 MCJ Casings Ltd and the NWDA agree that they will not bring any claims or proceedings against individual partners, members, directors or employees of the Accountant. This clause is intended to benefit such partners, members, directors and employees who may enforce this clause pursuant to the Contracts (Rights of Third Parties) Act 1999 (the “Act”). Notwithstanding any benefits or rights conferred by this agreement on any third party by virtue of the Act, the parties to this agreement may agree to vary or rescind this agreement without any third party’s consent. Other than as expressly provided in these terms, the provisions of the Act are excluded; 5.3 Any claims, whether in contract, negligence or otherwise, must be formally commenced within 3 years after the party bringing the claim becomes aware (or ought reasonably to have become aware) of the facts which give rise to the action and in any event no later than 6 years after any alleged breach of contract, negligence or other cause of action. This expressly overrides any statutory provision, which would otherwise apply; 5.4 This engagement is separate from, and unrelated to, the Accountant’s audit work on the financial statements of the MCJ Casings Ltd for the purposes of the Companies Act 1985 (or its successor) or other legislation and nothing herein creates obligations or liabilities regarding the Accountant’s statutory audit work, which would not otherwise exist.

6 Fees

RESTRICTED - COMMERCIAL The Accountant’s fees, together with VAT and out of pocket expenses, will be agreed with and billed to MCJ Casings Ltd. The NWDA is not liable to pay the Accountant’s fees.

7 Quality of Service The Accountant will investigate all complaints. The NWDA or MCJ Casings Ltd have the right to take any complaint to the ICAEW or to any professional accountancy body as appropriate.

8 Providing Services to Other Parties The Accountant will not be prevented or restricted by virtue of the Accountant’s relationship with MCJ Casings Ltd and the NWDA, including anything in these terms of engagement, from providing services to other clients. The Accountant’s standard internal procedures should be designed to ensure that confidential information communicated to the Accountant during the course of an assignment will be maintained confidentially.

9 Applicable law and jurisdiction 9.1 This agreement shall be governed by, and interpreted and construed in accordance with, English law.

9.2 MCJ Casings Ltd, the NWDA and the Accountant irrevocably agree that the courts of England shall have exclusive jurisdiction to settle any dispute (including claims for set-off and counterclaims) which may arise in connection with the validity, effect, interpretation or performance of, or the legal relationship established by this agreement or otherwise arising in connection with this agreement.

10 Alteration to Terms All additions, amendments and variations to these terms of engagement shall be binding only if in writing and signed by the duly authorised representatives of the parties. These terms supersede any previous agreements and representations between the parties in respect of the scope of the Accountant’s work and the Accountant’s report or the obligations of any of the parties relating thereto (whether oral or written) and represents the entire understanding between the parties. ………………………………………..End……………………………………

RESTRICTED - COMMERCIAL APPENDIX 1 DECISION & DETAILS INPUT SHEET PMS File Ref N000

File No. NW/06/0020

Full Application Date: 04/10/06

Applicant:

MCJ Casings Ltd

Correspondence Address:

159 Triumph Way Speke Liverpool L24 9GQ

Project Address

As above

Start date for Project: January 2007 Contact name: Marcus Tierney Telephone no: 0151 486 7124

Tier: 1 Project Description SIC

To build a new modernised factory on the current site and to invest in new plant and machinery

1513

Project Costs Land: Building: Plant & Machinery: Vehicles: Working Capital: Other:

Project Finance Non-Public: European: Other Public: SFI Grant: TOTAL:

750,000 490,000

Types of European Finance: 0 TOTAL: Total Planned Business Spend £1,240,000

1,240,000 What is the total eligible project cost? £1,240,000

GVA Calculations at Doc: 43 GVA per FTE at offer stage

What is the company contribution to the total eligible project costs? £1,182,000

Yr £ 06/ 43,830 07 Forecast GVA per FTE at end of project 08/ 64,137 09 Total RAW GVA at Beginning of Project 06/ 669 07

1,182,000 58,000 1,240,000

RESTRICTED - COMMERCIAL Total RAW GVA at end of Project Pass category Regional Employment case GVA fail

08/ 1860 09 01 N

Y/N

DECISION & DETAILS INPUT SHEET Project Grant Proposed:

58,000

NGE at Doc: 46 ( GROSS for Tier 3)

3.2 %

CPJ:

Forecast Grant Payments 2006 / 07 2007/08 Financial Year ending 31st March: Employment:

46,000

Total site jobs, preproject:

Full time

£4,833 2008/200 9 12,000

Part time

No. of ftes and equivalent at the premises outside the project

17

Financial Year:

Triggers: Instalments

2006 / 07

2007 / 08

Transferred:

0

2008/200 9 0

New:

6

6

Safeguarded:

0

0

Site:

23

29

New Jobs

Safe Jobs

Total Site Jobs

Fixed Cap. Ex £ (Cumulative)

2009/201 0

1

£46,000

6

0

23

£705,000

HP £ Commitm ent (Cumulati ve) £240,000

2

£12,000

6

0

29

£882,000

£300,000

2009/201 0

Gap between payments

12 months

June 2007

(NB – 2ND and subsequent capex, HP and jobs figures should be cumulative) No Obligation to pay date:

31st Dec 2008 Offer letter job target

29

Internationally Mobile: (Y/N)

No

N/A

UK Group Employees

Expected Pay date

June 2008

RESTRICTED - COMMERCIAL

DECISION & DETAILS INPUT SHEET Conditions Of Offer are:Pre-Acceptance: Written confirmation of the: 1)Injection of £235k share capital; 2)Availability of loans (inc mortgage offer) totalling at least £647k ; 3) Availability of hire purchase/leasing facilities of at least £300k Pre-Payment: Special Monitoring Instructions:

Parental Guarantee required: Y/N Parent Company Name Country or State Risk level:

LOW

N/A N/A N/A HIGH

APPRAISAL OFFICER RECOMMENDATION

x

Local Publicity (Y/N)

DECISION Signed:

Signed: NAME: (Block Capitals) Date:

NAME: (Block Capitals) Date:

BUDGET HOLDER AGREEMENT Signed: Name: (Block Capitals)

Full Application Date:

Date: Number of days taken to appraise:

04/10/06

RESTRICTED - COMMERCIAL EMPLOYMENT: Skills Test Score at Doc: 47 Creation:12 Number Description of Job 8 1 1 1 1

NVQ Level of Equivalent 2 4 3 3 3

Machine Operators Accountant Transport manager Facilities manager Production manager

Total

Level 1:

0

Level 2:

8

Level 3:

3

Annual Salary 12,000 20,000 18,000 18,000 18,000

Level 4:

Safeguarding: (use if maintaining balance of skills, where no creation or safeguarding) Number Description of Job NVQ Level of Annual Equivalent Salary

Total

Level 1:

Level 2:

Annual Turnover for Financial Year:

£2m

Level 3:

Trigger

1

Trigger

Level 4:

Year Ending: Jan 2006

Wage Costs at Offer Stage Total UK Wage Costs at Offer Stage

£221,000 0

Turnover at Offer Stage Total UK Turnover at Time of Offer

£2m 0

Projected Spend on Training as a result of the project

0

RESTRICTED - COMMERCIAL

Projected Spend on Innovation as a result of the project

0