Document:

Share Purchase Agreement dated November 27, 2006 by and between CEH Limited,
      Jardin International Holding BV and Katy Industries, Inc.

     

    EXHIBIT
      10.1

     

    Dated
      27th
      November 2006

     

    ------------

     

    Share
      purchase agreement

     

    

    between

    

     

    CEH
      Limited

     

    and

     

    Jardin
      International Holding BV

     

    and

     

    Katy
      Industries, Inc.

     

    

     

    HOWARD
      KENNEDY

    19
      Cavendish Square

    London
      W1A 2AW

    DX
      42748
      Oxford Circus North

    telephone
      +44(0)20
      7636 1616

    fax
      +44
      (0)20
      7491 2899

     

    Ref
      :kl1/ drl1/ 027043.1 [2688192]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Contents

     

    Clause

     

    1. 
Interpretation.....................................................................................................................4

    2. 
this
      paragraph has been intentionally
      deleted..............................................................9

    3. 
Sale
      and
      purchase..............................................................................................................9

    4. 
Purchase
      price....................................................................................................................9

    5. 
Completion..........................................................................................................................9

    6. 
Warranties.........................................................................................................................11

    7. 
Limitations
      on
      claims.......................................................................................................12

    8. 
Conduct
      of
      claims............................................................................................................15

    9. 
Tax
      covenant....................................................................................................................18

    10.           
      working
      capital
      statement...............................................................................................18

    11.           
      Restrictions
      on
      Seller......................................................................................................18

    12.           
      Guarantee..........................................................................................................................19

    13.           
      Confidentiality
      and
      announcements.............................................................................19

    14.           
      Further
      assurance............................................................................................................21

    15.           
      Provision
      of Assistance by the
      Company...................................................................21

    16.           
      Assignment......................................................................................................................22

    17.           
      Entire
      Agreement.............................................................................................................22

    18.           
      Variation
      and
      Waiver......................................................................................................23

    19.           
      Costs..................................................................................................................................23

    20.           
      Notice................................................................................................................................23

    21.           
      Interest
      on Late
      Payment................................................................................................25

    22.           
      Severance..........................................................................................................................25

    23.           
      Agreement
      Survives
      Completion..................................................................................25

    24.           
      Third
      Party
      Rights...........................................................................................................25

    25.           
      Counterparts.....................................................................................................................26

    26.           
      Language..........................................................................................................................26

    27.           
      Governing
      Law and
      Jurisdiction....................................................................................26

    

    Schedules

     

    Schedule
      1 
      Particulars
      of the
      Company............................................................................27

     

    Schedule
      2 
      Completion........................................................................................................28

     

    Part
      1. 
      What
      the
      Seller shall deliver to the Buyer at
      Completion..................................28

     

    Part
      2. 
      Matters
      for the board meeting at
      Completion......................................................30

     

    Schedule
      3 
      Warranties.........................................................................................................31

     

    Part
      1. 
      General
      warranties....................................................................................................31

    1.                     
      Power
      to
      sell the
      company......................................................................................31

     

    
      
        
        

      

      
        Page
          1

        
          

        

      

      
        
        

      

    

     

    2. 
Shares
      in
      the
      company....................................................................................................31

    3. 
Constitutional
      and corporate
      documents....................................................................32

    4. 
information........................................................................................................................33

    5. 
Compliance
      with
      laws......................................................................................................33

    6. 
Licences
      and
      consents...................................................................................................33

    7. 
Insurance..........................................................................................................................33

    8. 
Power
      of
      attorney............................................................................................................33

    9. 
Disputes
      and
      investigations..........................................................................................34

    10.           
      Defective
      products and
      services...................................................................................34

    11.           
      Customers
      and
      suppliers................................................................................................35

    12.           
      Competition......................................................................................................................35

    13.           
      Contracts...........................................................................................................................35

    14.           
      Transactions
      with the
      seller...........................................................................................37

    15.           
      Finance
      and
      guarantees..................................................................................................37

    16.           
      Insolvency........................................................................................................................39

    17.           
      Assets...............................................................................................................................40

    18.           
      Condition
      of plant and
      equipment................................................................................40

    19.           
      property.............................................................................................................................40

    20.           
      Intellectual
      property........................................................................................................41

    21.           
      Information
      technology..................................................................................................48

    22.           
      Employment......................................................................................................................49

    23.           
      Accounts..........................................................................................................................53

    24.           
      Financial
      and other
      records............................................................................................53

    25.            Changes
      since accounts
      date........................................................................................54

    26.           
      Effect
      of
      sale on sale
      shares...........................................................................................55

    27.           
      Retirement
      benefits..........................................................................................................56

     

    Part
      2. 

     

    Tax
      warranties...................................................................................................................................56 

    1. 
General...............................................................................................................................56

    2. 
Capital
      allowances...........................................................................................................58

    3. 
Distributions.....................................................................................................................59

    4. 
Loan
      relationships...........................................................................................................59

    5. 
Close
      companies..............................................................................................................60

    6. 
Group
      relief.......................................................................................................................60

    7. 
Groups
      of
      companies......................................................................................................60

    8. 
Company
      residence and overseas
      interests................................................................61

    9. 
Anti-avoidance.................................................................................................................61

    10.           
      VAT...................................................................................................................................62

    11.           
      Stamp
      duty and stamp duty land
      tax............................................................................63

    12.           
      INHERITANCE
      TAX......................................................................................................64

    13.           
      Employee
      taxation...........................................................................................................64

     

    Part
      3. 
      Buyer’s
      Warranties..................................................................................................65

     

    
      
        
        

      

      
        Page
          2

        
          

        

      

      
        
        

      

    

     

    1. 
Power
      to
      Buy the
      company............................................................................................65

     

    Schedule
      4 
      Tax
      Covenant...................................................................................................66

    2. 
Interpretation....................................................................................................................66

    3. 
Covenant...........................................................................................................................70

    4. 
Payment
      date and
      interest..............................................................................................70

    5. 
Exclusions.........................................................................................................................71

    6. 
Savings,
      Overprovisions, Tax
      Refunds........................................................................72

    7. 
Recovery
      from third
      parties............................................................................................73

    8. 
Surrender
      of group
      relief................................................................................................74

    9. 
Corporation
      tax
      returns...................................................................................................74

    10.           
      Conduct
      of tax
      claims......................................................................................................77

    11.           
      Grossing
      up......................................................................................................................78

    12.           
      BUYER’S
      COVENANT...................................................................................................79

    13.            Value
      added tax
      groups..................................................................................................79

     

    Schedule
      5 
      Intellectual
      property
      rights.............................................................................81

     

    Part
      1. 
      Registered
      Intellectual Property
      Rights................................................................81

     

    Part
      2. 
      Material
      unregistered Intellectual Property
      Rights.............................................81

     

    Part
      3. 
      Intellectual
      property rights licensed from third
      parties......................................82

     

    Part
      4. 
      Intellectual
      property rights licensed to third
      parties..........................................82

     

    Schedule
      6 
      Working
      Capital
      Statement............................................................................83

    

    

    
      
        
           

        

        
        

      

      
        Page
          3

        
          

        

      

      
        
        

        
          

           

        

      

    

    THIS
      AGREEMENT
      is dated
      27th
      November
      2006

     

    Parties

     

     

    
      	(1)  	
              CEH
                Limited
                incorporated and registered in England and Wales with company number
                04992300 whose registered office is at Cardew Way, Redruth, Cornwall,
                TR15
                1ST (Seller);

            

    

     

     

    
      	(2)  	
              JARDIN
                INTERNATIONAL HOLDING BV
                incorporated and registered in the Netherlands , with its corporate
                seat
                in Rijen and with a registered office at Ericssonstraat
                17, 5121 MK Rijen, the Netherlands
                (Buyer);
                

            

    

     

     

    
      	(3)  	
              Katy
                Industries, Inc.
                incorporated in Delaware, USA, whose principal office is at
                2461 South Clark Avenue, Suite 630, Arlington, Virginia 22022,
                as guarantor (Guarantor).

            

    

     

     

    Background

     

     

    
      	(A)  	
              The
                Company has an issued share capital of £10.00 divided into ten ordinary
                shares of £1.00 each;

            

    

     

     

    
      	(B)  	
              Further
                particulars of the Company at the date of this agreement are set
                out in
                Schedule
                1;

            

    

     

     

    
      	(C)  	
              The
                Seller has agreed to sell and the Buyer has agreed to buy the Sale
                Shares
                subject to the terms and conditions of this agreement;

            

    

     

     

    
      	(D)  	
              The
                Guarantor is the ultimate holding company of the Seller and has become a
                party to this agreement for the purpose of entering into the guarantee
                set
                out in clause 12.

            

    

     

     

    Agreed
      terms

     

     

    
      	1.  	
              Interpretation

            

    

     

    
      	1.1  	
              The
                definitions and rules of interpretation in this clause apply in this
                agreement.

            

    

     

    Accounts:
      the
      audited financial statements of the Company as at and to the Accounts Date,
      including the balance sheet, profit and loss account together with the notes
      thereon, the cash flow statement and the auditor ́s and Directors ́ reports (a
      copy of which is attached to the Disclosure Letter).

     

    Accounts
      Date:
      31
      December 2005.

     

    Affiliate:
      of a
      Party shall mean an entity: (i) which is directly or indirectly controlling
      such Party; (ii) which is under the same direct or indirect ownership or
      control as such Party; or (iii) which is directly or indirectly owned or
      controlled by such Party. For these purposes, an entity shall be treated as
      being controlled by another if that other entity has more than fifty (50%)
      of
      the votes in such entity or is able to control the composition of its board
      of
      directors or any other equivalent body.

     

    
      
        
        

      

      
        Page
          4

        
          

        

      

      
        
        

      

    

     

    Business:
      the
      business of the Company that consists of the marketing and sale of plastic
      products for home storage or garage organisation, gardening, food storage,
      laundry, bath, cleaning, closet or cupboard organisation and refuse removal
      into
      a primarily consumer distribution market, and the manufacture of such products
      for sale into a primarily consumer distribution market, except with respect
      to
      certain garden storage and related products manufactured for and sold to the
      independent garden retail market, excluding Wyevale. For purposes of
      clarification, a “primarily consumer distribution market” shall not include any
      business which substantially serves a commercial market, even if such business
      also serves a consumer market. 

     

    Business
      Day:
      a day
      (other than a Saturday, Sunday or public holiday) when banks in the City of
      London are open for business.

     

    Buyer’s
      Warranties: the
      warranties given by the Buyer in clause 6 and Part 3 of
      Schedule 3.

     

    CAA
      2001:
      the
      Capital Allowances Act 2001.

     

    Change
      in Control:
      shall
      mean (a) the Seller is a party to a merger, consolidation or other
      reorganization (each, a “Reorganization”)
      with a
      non-Affiliate, or the Seller or its parent Continental Commercial Products,
      LLC
      (“CCP”)
      or its
      ultimate parent Katy Industries, Inc. (“Katy”,
      together with CCP, the “Parents”)
      is a
      party to a sale, assignment, lease, conveyance or other transfer of
      substantially all of its assets (each, a “Sale”)
      to a
      non-Affiliate, as a consequence of which members of the Board of Directors
      of
      the Seller or a Parent, as the case may be, in office immediately prior to
      such
      Reorganization or Sale constitute less than a majority of the Board of Directors
      of the Seller or a Parent, as the case may be, thereafter; or (b) there is
      a sale, assignment, conveyance or other transfer of over 50% of the voting
      stock
      of the Seller or a Parent to a non-Affiliate, as a consequence of which members
      of the Board of Directors of the Seller or a Parent, as the case may be, in
      office immediately prior to such transaction or event constitute less than
      a
      majority of the Board of Directors of the Seller or a Parent, as the case may
      be, thereafter.

     

    CML:
      Contico
      Manufacturing Limited (Company Number: 01338772)

     

    Company:
      Contico
      Europe Limited, a company incorporated and registered in England and Wales
      with
      company number 04992337 whose registered office is at Cardew Way, Redruth,
      Cornwall, TR15 1ST, further details of which are set out in Schedule
      1.

     

    Companies
      Acts:
      the
      Companies Act 1985 and the Companies Act 1989 (as amended).

     

    Completion:
      completion of the sale and purchase of the Sale Shares in accordance with this
      agreement.

     

    Completion
      Date:
      the date
      upon which Completion occurs.

     

    
      
        
        

      

      
        Page
          5

        
          

        

      

      
        
        

      

    

     

    Completion
      Payment:
      the sum
      of US$4,000,000 (four million US dollars) in cash to be paid by the Buyer to
      the
      Seller on Completion.

     

    Conditions:
      the
      conditions set out in clause 2.1.

     

    Connected:
      in
      relation to a person, has the meaning contained in section 839 of the ICTA
      1988.

     

    Control:
      in
      relation to a body corporate, the power of a person to secure that the affairs
      of the body corporate are conducted in accordance with the wishes of that
      person:

     

    
      	(a)  	
              by
                means of the holding of shares, or the possession of voting power,
                in or
                in relation to that or any other body corporate;
                or

            

    

     

    
      	(b)  	
              by
                virtue of any powers conferred by the constitutional or corporate
                documents, or any other document, regulating that or any other body
                corporate,

            

    

     

    and
      a
Change
      of Control
      occurs
      if a person who controls any body corporate ceases to do so or if another person
      acquires control of it.

     

    Director:
      each
      person who is a director or shadow director of the Company, the names of whom
      are set out in Schedule
      1.

     

    Disclosed:
      fairly
      disclosed in the Disclosure Letter.

     

    Disclosure
      Letter:
      the
      letter from the Seller to the Buyer with the same date as this agreement that
      is
      described as the disclosure letter, including the bundle of documents attached
      to it (Disclosure
      Bundle).
      

     

    Environment:
      air,
      water and land, all living organisms and natural or man-made structures.

    

    Environmental
      Law:
      all
      applicable laws, statutes, regulations, secondary legislation, bye-laws, common
      law, directives, treaties and other measures, judgements and decisions of any
      court or tribunal, codes of practice and guidance notes which are legally
      binding and in force as at the date of this agreement in so far as they relate
      to or apply to the Environment, including Part IIA of the Environmental
      Protection Act 1990 and any legally binding regulations and guidance made or
      issued thereunder. 

    

     

    Encumbrance:
      any
      interest or equity of any person (including any right to acquire, option or
      right of pre-emption) or any mortgage, charge, pledge, lien, assignment,
      hypothecation, security, title, retention or any other security agreement or
      arrangement.

     

    Event:
      has the
      meaning given in Schedule 4.

     

    Group:
      in
      relation to a company (wherever incorporated) that company, any company or
      group
      of companies which is owned directly or indirectly by the same ultimate
      beneficial owners as that company, any company of which it is a Subsidiary
      (its
      holding company) and any other Subsidiaries of any such holding company; and
      each company in a group is a member of the group. Unless the context otherwise
      requires, the application of the definition of Group to any company at any
      time
      will apply to the company as it is at that time.

     

    
      
        
        

      

      
        Page
          6

        
          

        

      

      
        
        

      

    

     

    ICTA
      1988:
      the
      Income and Corporation Taxes Act 1988.

     

    IHTA
      1984:
      the
      Inheritance Tax Act 1984.

     

    Intellectual
      Property Rights:
      has the
      meaning given in paragraph 20.1
      of
Part
      1
      of
      Schedule 3.

     

    Lease
      means
      the Lease of the Property to be granted by the Seller to the Company on the
      Completion Date in the agreed form.

     

    Management
      Accounts:
      the
      unaudited balance sheet and the unaudited profit and loss account of the Company
      for the period of ten months ended 31 October 2006 (a copy of which is attached
      to the Disclosure Letter).

     

    Pension
      Scheme:
      the
      Contico Group Personal Pension Plan administered by Scottish Mutual Assurance
      Plc.

     

    Purchase
      Price:
      the
      purchase price for the Sale Shares to be paid by the Buyer to the Seller in
      accordance with clause 4.

     

    Property:
      the
      land and buildings on the east side of Cardrew Way, Redruth, Cornwall, TR15
      1ST
      being the entire land and buildings registered at the Land Registry under title
      number: CL84586.

     

    Receivable:
      the sum
      of £512,515 owed by the Seller to the Company as at 2359hrs GMT on Friday 17
      November 2006 represented by the note in agreed form issued by the
      Seller.

     

    Sale
      Shares:
      the ten
      ordinary shares of £1.00 each in the Company, all of which have been issued and
      are fully paid.

     

    Subsidiary:
      in
      relation to a company wherever incorporated (a holding company) means a
      "subsidiary" as defined in section 736 of the Companies Act 1985 and any other
      company which is a subsidiary (as so defined) of a company which is itself
      a
      subsidiary of such holding company. Unless the context otherwise requires the
      application of the definition of Subsidiary to any company at any time will
      apply to the company as it is at that time.

     

    Sterling
      Consideration:
      the sum
      equal to the Receivable

     

    Sub-Lease
      means
      the sublease of part of the Property to be granted by the Company to CML on
      the
      Completion Date in the agreed form.

     

    Tax
      Covenant:
      the tax
      covenant as set out in Schedule 4.

     

    Tax
      or Taxation:
      has the
      meaning given in Schedule 4.

     

    Tax
      Claim:
      has the
      meaning given in Schedule 4.

     

    
      
        
        

      

      
        Page
          7

        
          

        

      

      
        
        

      

    

     

    Tax
      Warranties:
      the
      Warranties in Part 2 of Schedule 3.

     

    Taxation
      Authority:
      has the
      meaning given in Schedule 4.

     

    Taxation
      Statute:
      has the
      meaning given in Schedule 4.

     

    TCGA
      1992:
      the
      Taxation of Chargeable Gains Act 1992.

     

    TMA
      1970:
      the
      Taxes Management Act 1970.

     

    Transaction:
      the
      transaction contemplated by this agreement or any part of that
      transaction.

     

    VATA
      1994:
      the
      Value Added Tax Act 1994.

     

    Warranties:
      the
      warranties given by the Seller in clause 6 and Parts 1 and 2 of
      Schedule 3.

     

    Working
      Capital:
      the
      amount of the Company’s working capital as at 2359hrs GMT on Friday 17 November
      2006 as determined in accordance with Schedule 6 and shown in the Working
      Capital Statement.

     

    Working
      Capital Statement:
      the
      statement of Working Capital to be prepared pursuant to clause 10 and in
      accordance with Schedule 6.

     

     

    
      	1.2  	
              Clause
                and schedule headings do not affect the interpretation of this
                agreement.

            

    

     

     

    
      	1.3  	
              A
                person
                includes a corporate or unincorporated
                body.

            

    

     

     

    
      	1.4  	
              Words
                in the singular include the plural and in the plural include the
                singular.

            

    

     

     

    
      	1.5  	
              A
                reference to one gender includes a reference to the other
                gender.

            

    

     

     

    
      	1.6  	
              A
                reference to a particular law is a reference to it as it is in force
                for
                the time being taking account of any amendment, extension, or re-enactment
                and includes any subordinate legislation for the time being in force
                made
                under it.

            

    

     

     

    
      	1.7  	
              Writing
                or
                written
                includes faxes but not e-mail.

            

    

     

     

    
      	1.8  	
              Documents
                in agreed
                form
                are documents in the form agreed by the parties or on their behalf
                and
                initialled by them or on their behalf for
                identification.

            

    

     

     

    
      	1.9  	
              References
                to clauses and schedules are to the clauses and schedules of this
                agreement; references to paragraphs are to paragraphs of the relevant
                schedule.

            

    

     

    
      
        
        

      

      
        Page
          8

        
          

        

      

      
        
        

      

    

     

    
      	1.10  	
              Reference
                to this agreement include this agreement as amended or varied in
                accordance with its terms.

            

    

     

     

    
      	2.  	
              this
                paragraph has been intentionally
                deleted

            

    

     

    
      	3.  	
              Sale
                and purchase

            

    

     

    On
      the
      terms of this agreement the Seller shall sell and the Buyer shall buy, with
      effect from Completion, the Sale Shares with full title guarantee free from
      all
      Encumbrances and together with all rights that attach (or may in the future
      attach) to them including, in particular, the right to receive all dividends
      and
      distributions declared, made or paid on or after the date of this
      agreement.

     

     

    
      	4.  	
              Purchase
                price

            

    

     

    
      	4.1  	
              The
                Purchase Price is the aggregate of US$4,000,000 (four million US
                dollars)
                and the Sterling Consideration, subject to adjustment in accordance
                with
                clause 4.2. 

            

    

     

     

    
      	4.2  	
              The
                Purchase Price shall be adjusted as
                follows:

            

    

     

    
      	(a)  	
              the
                Purchase Price shall be increased by the amount which is the amount,
                if
                any, by which the Working Capital exceeds £2,467,000 (two million four
                hundred and sixty seven thousand pounds); and

            

    

     

    
      	(b)  	
              the
                Purchase Price shall be reduced by the amount which is the amount,
                if any,
                by which the Working Capital is less than £2,467,000 (two million four
                hundred and sixty seven thousand
                pounds).

            

    

     

     

    
      	4.3  	
              The
                Purchase Price shall be deemed to be reduced by the amount of any
                payment
                made to the Buyer:

            

    

     

    
      	(a)  	
              for
                a breach of any Warranty; or

            

    

     

    
      	(b)  	
              under
                the Tax Covenant.

            

    

     

     

    
      	5.  	
              Completion

            

    

     

    
      	5.1  	
              Completion
                shall take place forthwith following signature of this
                agreement:

            

    

     

    
      	(a)  	
              at
                the offices of Howard Kennedy; or

            

    

     

    
      	(b)  	
              at
                any other place or time as agreed in writing by the Seller and the
                Buyer.
                

            

    

     

     

    
      	5.2  	
              Immediately
                upon Completion the Seller shall:

            

    

     

    
      
        
        

      

      
        Page
          9

        
          

        

      

      
        
        

      

    

     

    
      	(a)  	
              deliver
                or cause to be delivered the documents and evidence set out in Part 1
                of Schedule 2;

            

    

     

    
      	(b)  	
              procure
                that any indebtedness in the nature of borrowing owed by the Company
                to a
                bank or other financial institution or any member of its Group as
                at the
                Completion Date or any other indebtedness which has not been incurred
                in
                the normal course of business (it being acknowledged that any debt
                which
                has arisen in the ordinary course of business between the Company
                and CML
                shall not be required to be discharged on the Completion Date, but
                in the
                normal course) is repaid or otherwise discharged and the Seller undertakes
                to indemnify and keep indemnified the Company against all losses
                or
                liabilities which it may suffer or incur as a result of the Seller’s or
                the Company’s failure to do so;

            

    

     

    
      	(c)  	
              procure
                that a board meeting of the Company is held at which the matters
                identified in Part 2 of Schedule 2 are carried out or that such
                matters are otherwise approved by the board of the Company;
                and

            

    

     

    
      	(d)  	
              deliver
                any other documents referred to in this agreement as being required
                to be
                delivered by the Seller.

            

    

     

    

     

     

    
      	5.3  	
              At
                Completion the Buyer shall:

            

    

     

    
      	(a)  	
              pay
                the Completion Payment in cash by telegraphic transfer to the
                Seller;

            

    

     

    
      	(b)  	
              deliver
                to the Seller a certified copy of the resolution adopted by the board
                of
                directors of the Buyer authorising the Transaction and the execution
                and
                delivery by the officers specified in the resolution of this agreement,
                and any other documents referred to in this agreement as being required
                to
                be delivered by it;

            

    

     

    
      	(c)  	
              deliver
                to the Seller any other documents referred to in this agreement as
                being
                required to be delivered by the
                Buyer;

            

    

     

    
      	(d)  	
              deliver
                to the Seller an original of the Transition Services Agreement between
                the
                Company and CML in the agreed form duly executed by the
                Company; 

            

    

     

    
      	(e)  	
              deliver
                to the Seller an original of the Lease between the Seller, the Company
                and
                the Buyer in the agreed form duly executed by the Company and the
                Buyer;
                

            

    

     

    
      	(f)  	
              deliver
                to the Seller an original of the Sub Lease between the Company and
                CML in
                the agreed form duly executed by the
                Company;

            

    

     

    
      	(g)  	
              deliver
                to the Seller an original of the Trademark Licence Agreement between
                the
                Company and the Guarantor in the agreed form duly executed by the
                Company;

            

    

     

    
      	(h)  	
              deliver
                to the Seller an original of the Trademark Licence Agreement between
                the
                Company and CML
                in
                the agreed form duly executed by the Company;
                and

            

    

     

    
      
        
        

      

      
        Page
          10

        
          

        

      

      
        
        

      

    

     

    
      	(i)  	
              deliver
                to the Seller an original of the note in the agreed form duly executed
                by
                the Buyer in satisfaction of the Sterling
                Consideration.

            

    

     

     

    
      	5.4  	
              As
                soon as reasonably practicable after Completion the Seller shall
                send to
                the Buyer (at the Buyer ́s registered office for the time being) all
                records, correspondence, documents, files, memoranda and other papers
                belonging to the Company not required to be delivered at Completion
                and
                which are not kept at any of the properties used by the
                Company.

            

    

     

    
      	
              5.5
                 

            	
              The
                Seller shall pay to the Buyer within 5 Business Days of demand by
                the
                Buyer a sum equal to 0.5% of the Sterling Consideration (as adjusted,
                if
                applicable, in accordance with clause
                5.7).

            

    

    

    
      	
              5.6 
                

            	
              The
                Seller shall pay to the Buyer or the Company within 5 Business Days
                of
                demand by the Buyer an amount equal to the professional costs (including
                counsel’s fees) and expenses reasonably incurred by the Company in
                connection with the proposed reduction in the Company’s share premium
                account for the purposes of creating distributable reserves of the
                Company
                such costs not to exceed £20,000 (excluding VAT if payable) without the
                Seller’s consent (such consent not to be unreasonably withheld or
                delayed). The Buyer shall provide to the Seller copies of all relevant
                invoices if requested by the
                Seller.

            

    

    

    
      	
              5.7 
                

            	
              In
                the event that the net amount due to the Company by members of the
                Seller’s Group as at 2359hrs GMT on 17 November 2006 as recorded in the
                accounting records of the Company is more or less than the amount
                of the
                Receivable the Seller and the Buyer agree that the amount of the
                Receivable and the amount of the Sterling Consideration shall be
                adjusted
                so that they both equal such net amount and the Notes in the agreed
                form
                shall be amended accordingly.

            

    

    

    
      	
              5.8 
                

            	
              It
                is recognised that the Working Capital is likely to be less than
                £2,467,000. The Seller shall therefore within 4 Business Days following
                the Completion Date pay to the Buyer the sum of £370,000 on account of
                monies which are anticipated to be due pursuant to paragraph 8 (b)
                of
                Schedule 6 hereof. No interest will be payable on such sum of ££370,000
                for the period of 4 Business Days referred to
                above.

            

    

    

    
      	
              5.9 
                

            	
              The
                Seller will procure that there shall be repaid to the Company as
                soon as
                reasonably practicable following Completion and in any event within
                4
                Business Days of Completion any sums which have been swept by Bank
                of
                America from the Company's bank accounts after 2359hrs on Friday
                17
                November 2006.

            

    

     

    
      	6.  	
              Warranties

            

    

     

    
      	6.1  	
              The
                Buyer is entering into this agreement on the basis of, and in reliance
                on,
                the Warranties.

            

    

     

    
      
        
        

      

      
        Page
          11

        
          

        

      

      
        
        

      

    

     

    
      	6.2  	
              The
                Seller warrants to the Buyer that each Warranty is true on the date
                of
                this agreement except as Disclosed.

            

    

     

     

    
      	6.3  	
              Warranties
                qualified by the expression so
                far as the Seller is aware or
                to the Seller’s knowledge
                (or any similar expression) are deemed to be given to the best of
                the
                knowledge, information and belief of the Seller after it has made
                all
                reasonable enquiries.

            

    

     

     

    
      	6.4  	
              Each
                of the Warranties is separate and, unless otherwise specifically
                provided,
                is not limited by reference to any other Warranty or any other provision
                in this agreement; provided, however, that notwithstanding any provision
                in this agreement to the contrary, any matter Disclosed for any purpose
                shall be deemed Disclosed for all purposes to the extent that such
                disclosure amounts to a fair
                disclosure.

            

    

     

     

    
      	6.5  	
              The
                Seller waives and may not enforce any right which he may have in
                respect
                of any misrepresentation, inaccuracy or omission in or from any
                information or advice supplied or given by the Company or its officers
                or
                employees in enabling the Seller to give the Warranties or to prepare
                the
                Disclosure Letter unless such right arises as a result of fraud or
                deliberate non-disclosure or dishonest
                deception.

            

    

     

     

    
      	6.6  	
              The
                Seller and the Guarantor are each entering into this agreement on
                the
                basis of, and in reliance on, the Buyer’s
                Warranties.

            

    

     

     

    
      	6.7  	
              The
                Buyer warrants to the Seller and the Guarantor that each Buyer’s Warranty
                is true on the date of this
                agreement.

            

    

     

     

    
      	7.  	
              Limitations
                on claims

            

    

     

    
      	7.1  	
              The
                definition and rules of interpretation in this clause apply in this
                agreement. 

            

    

     

     

    Claim:
      a claim for breach of any of the Warranties, the Tax Warranties,
the
      Tax Covenant or this Agreement

     

     

    
      	7.2  	
              The
                Seller is not liable for a Claim to the extent that the Claim relates
                to
                matters Disclosed.

            

    

     

     

    
      	7.3  	
              The
                Seller is not liable for a Claim unless the Buyer has given the Seller
                notice in writing of the Claim, summarising the nature of the Claim
                as far
                as it is known to the Buyer and the amount claimed,
                within the period of two years beginning with the Completion Date
                except
                that the period in which the Buyer may make a Claim in respect of
                the Tax
                Warranties or the Tax Covenant shall be seven years beginning with
                the
                Completion Date.

            

    

     

    
      
        
        

      

      
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          12

        
          

        

      

      
        
        

      

    

     

    
      	7.4  	
              Nothing
                in clause 7 applies to a Claim that arises or is delayed as a result
                of dishonesty, fraud, wilful misconduct or wilful concealment by
                the
                Seller, its agents, officers or
                advisers.

            

    

     

     

    
      	7.5  	
              The
                aggregate liability of the Seller in respect of all Claims notified
                in
                accordance with clause 7.3 on or prior to the date which is 6 months
                after the Completion Date shall not exceed an amount equal to 100%
                (one
                hundred per cent.) of the Purchase Price. The aggregate liability
                of the
                Seller in respect of all Claims notified after the date which is
                6 months after the Completion Date but within the period of two years
                beginning with the Completion Date (other than Claims under clause
                7.14
                (“Environment
                Claims”))
                shall not exceed an amount equal to “A” minus “B”, where “A” equals 50%
                (fifty per cent.) of the Purchase Price and “B” equals the aggregate
                liability (if any) of the Seller in respect of all Claims notified
                on or
                prior to the date which is 6 months after the Completion Date (if
                any).
                The aggregate liability of the Seller in respect of all Environment
                Claims
                notified in accordance with clause 7.3 after the date which is
                6 months after the Completion Date but within the period of two years
                beginning with the Completion Date shall not exceed an amount equal
                to “C”
                minus “D”, where “C” equals 100% (one hundred per cent.) of the Purchase
                Price and “D” equals the aggregate liability (if any) of the Seller in
                respect of all other Claims notified within the period of two years
                beginning with the Completion Date (if any). Subject to Clause
                7.4,
                in no circumstances shall the aggregate liability of the Seller in
                respect
                of Claims (whenever notified) exceed an amount equal to 100% (one
                hundred
                per cent.) of the Purchase Price.

            

    

     

     

    
      	7.6  	
              No
                amount shall be payable by the Seller in respect of any Claim unless
                and
                until:

            

    

     

    
      	(a)  	
              the
                liability for that individual Claim exceeds £20,000
                (twenty thousand pounds) but provided always that individual Claims
                arising out of the same subject matter fact or circumstances shall
                be
                aggregated for this purpose; and 

            

    

     

    
      	(b)  	
              the
                aggregate cumulative liability of the Seller in respect of all such
                Claims
                exceeds £50,000 (fifty thousand pounds) in which case the Seller shall be
                liable for both the initial £50,000
                (fifty
                thousand pounds) and the excess.

            

    

     

     

    
      	7.7  	
              No
                Claim shall be admissible and the Seller shall not be liable under
                any
                Claim:

            

    

     

    
      	(a)  	
              to
                the extent that provision, reserve or allowance has been made in
                the
                Management Accounts or the Accounts in respect thereof;
                or

            

    

     

    
      	(b)  	
              to
                the extent that such liability arises or is increased as a result
                of any
                change or changes in legislation after Completion (primary or delegated)
                and whether or not with retrospective effect;
                or

            

    

     

    
      	(c)  	
              to
                the extent that such liability occurs or arises as a result of or
                is
                otherwise attributable wholly or partly to any voluntary act, transaction
                or omission of the Company or the Buyer or their respective directors,
                employees or agents on or after Completion (including any act, transaction
                or omission which does or might reasonably be expected to subject
                the
                Company to a greater risk of enforcement action or any investigation
                under
                Environmental Law) otherwise
                than: 

            

    

     

    
      
        
        

      

      
        Page
          13

        
          

        

      

      
        
        

      

    

     

    
      	(i)  	
              in
                the ordinary and proper course of business; or

            

    

     

    
      	(ii)  	
              pursuant
                to a legally binding commitment created on or before Completion by
                the
                Company; or

            

    

     

    
      	(d)  	
              to
                the extent that any Claim or the subject matter thereof has been
                or is
                made good or is otherwise compensated for (otherwise than by the
                Buyer or
                any member of the Buyer ́s
                Group); or

            

    

     

    
      	(e)  	
              to
                the extent that the matter to which it relates is recovered by the
                Company
                from its insurers save that the Seller hereby agrees to pay any increases
                in insurance costs shown to be directly related to such Claim but
                only to
                the extent that such increase is shown to amount to a sum greater
                than
                that figure set out in clause 7.6 (a) per annum ;
                or

            

    

     

    
      	(f)  	
              if
                a Claim results from or is increased or extended by the change of
                the
                accounting reference date of the Company on Completion or any subsequent
                change thereafter or by any change in the accounting policies of
                the
                Company after Completion unless such change is necessary to comply
                with
                generally accepted accounting principles subsisting at Completion;
                or

            

    

     

    
      	(g)  	
              to
                the extent that the Buyer has actual knowledge at the date of this
                Agreement of a matter which it is aware would enable a Claim to be
                brought.

            

    

     

     

    
      	7.8  	
              In
                assessing the liability of the Seller in respect of any Claim there
                shall
                be taken into account any benefit (including Taxation benefit) accruing
                to
                the Buyer or the Company solely and directly as a consequence of
                the
                matter or circumstances giving rise to the
                Claim.

            

    

     

     

    
      	7.9  	
              The
                Buyer shall not be entitled to recover any sum more than once in
                respect
                of any claim under the Warranties or the Tax Covenant or otherwise
                obtain
                reimbursement more than once in respect of any loss which arises
                out of
                the same act, matter or thing to the extent that the Buyer has already
                made a recovery or obtained reimbursement under the Warranties or
                the Tax
                Covenant in respect of that act, matter or
                thing.

            

    

     

     

    
      	7.10  	
              Where
                the Buyer and/or the Company is/are at any time entitled to recover
                from
                some other person any sum in respect of any matter giving rise to
                a Claim
                the Buyer shall and shall procure that the Company shall take all
                reasonable steps to enforce such recovery prior to taking any action
                against the Seller (other than notifying the Seller of the Claim)
                and in
                the event that the Buyer or the Company shall recover any amount
                from such
                other person the amount of the Claim against the Seller shall be
                reduced
                by the amount recovered less all costs and expenses reasonably incurred
                by
                the Buyer or the Company in recovering that sum from such other
                person.

            

    

     

    
      
        
        

      

      
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          14

        
          

        

      

      
        
        

      

    

     

    
      	7.11  	
              If
                the Seller or the Guarantor pays at any time to the Buyer or to the
                Company an amount pursuant to a Claim or the Company subsequently
                becomes
                entitled to recover from some other person any sum in respect of
                any
                matter giving rise to such Claim, the Buyer shall and shall procure
                that
                the Company shall take all reasonable steps to enforce such recovery
                and
                shall, as soon as reasonably practicable, repay to the Seller or
                the
                Guarantor (as the case may be) so much of the amount paid by it to
                the
                Buyer or the Company as does not exceed the sum recovered from such
                other
                person less all costs and expenses reasonably incurred by the Buyer
                or the
                Company in recovering that sum from such other
                person.

            

    

     

     

    
      	7.12  	
              The
                Parties acknowledge and agree that for the purposes of clause 7.10
                and 7.11
                hereof in taking “all reasonable steps” neither the Company nor the Buyer
                shall be required to institute legal proceedings against any of the
                top
                five customers identified pursuant to schedule 3 paragraph
                11.

            

    

     

     

    
      	7.13  	
              The
                provisions of this clause 7 shall apply, in relation to claims made
                by the
                Seller in respect of the Buyer’s Warranties mutatis mutandis but with the
                substitution of the word Seller with Buyer, Buyer with Seller and
                Claim
                with the words claim under the Buyer’s
                Warranties.

            

    

     

    
      	
              7.14
                  

            	
              The
                parties agree and acknowledge that the Seller shall remain liable
                to
                comply with any notice served or requirement made by any competent
                authority under any Environmental Law or rules of common law applicable
                from time to time to the Property in respect of any matter, event
                or
                circumstance arising as a result of the use and/or operation of the
                Property prior to the date hereof and that the Seller shall indemnify
                the
                Buyer against all actions, proceedings, costs, claims, demands or
                liabilities whatsoever, howsoever arising as a result of any pollution
                or
                contamination, whatsoever or such matters, event or circumstance
                prior to
                the date hereof. The Seller’s liability under this clause 7.14 is subject
                to all of the provisions of this clause 7 relating to
                Claims.

            

    

     

     

    
      	8.  	
              Conduct
                of claims

            

    

     

    
      	8.1  	
              If
                either the Buyer or the Company become aware of a matter which they
                reasonably consider might give rise to a Claim (other than a Claim
                in
                respect of Tax to which the provisions of paragraph 9 of the Tax
                Covenant
                shall apply) or the Seller becomes aware of a matter which it reasonably
                considers might give rise to a claim pursuant to the Buyer’s Warranties
                then such party:

            

    

     

    
      	(a)  	
              shall
                (or, in the case of the Buyer, shall procure that the Company shall)
                as
                soon as reasonably practicable give notice to the Seller or the Buyer
                as
                the case may be of the matter and shall consult with the Seller or
                the
                Buyer as the case may be with respect to such matter but such notice
                shall
                not be a condition precedent to the liability of the Seller or the
                Buyer
                as the case may be;

            

    

     

    
      
        
        

      

      
        Page
          15

        
          

        

      

      
        
        

      

    

     

    
      	(b)  	
              shall
                provide to the Seller or the Buyer as the case may be and its advisers
                reasonable access (at reasonable hours and with reasonable prior
                notice
                having been given) to premises and personnel and to relevant assets,
                documents and records within the Buyer ́s
                or the Seller’s Group (as the case may be) for the purposes of
                investigating the matter;

            

    

     

    
      	(c)  	
              (at
                the requesting party’s cost) may take copies of the documents or records,
                and photograph the premises or assets, referred to in clause
                8.1(b);

            

    

     

    
      	(d)  	
              subject
                to the following provisions of this clause 8
                and clause 7.12,
                shall (and in the case of the Buyer shall procure that the Company
                shall)
                take such action and give such information and assistance in connection
                with the affairs of the Buyer or the Company or the Seller as the
                requesting party may reasonably request in writing to negotiate,
                avoid,
                dispute, resist or defend against the
                matter;

            

    

     

    
      	(e)  	
              shall
                indemnify the other party against all costs and expenses reasonably
                incurred by that other party or any member of such party’s Group in
                complying with their obligations under this clause 8.

            

    

     

     

    
      	8.2  	
              The
                Buyer and, as the case may be, the Seller shall not be obliged to
                take or
                procure the taking of any of the following actions pursuant to its
                obligations contained in clause 8.1(d):

            

    

     

    
      	(a)  	
              the
                submission of any proposal to settle or compromise the relevant matter
                made by the Seller or the Buyer (as the case may be) of which the
                Buyer
                (or the Seller as the case may be) (acting reasonably) does not
                approve;

            

    

     

    
      	(b)  	
              agreeing
                to the settlement or compromise of any claim or any proposal for
                the same
                which is likely to affect the future liability of the Company, the
                Buyer
                or any member of the Buyer ́s
                Group or the Seller or any member of the Seller’s Group unless the Seller
                (or the Buyer as the case may be) indemnifies the Buyer (or the Seller
                as
                the case may be), or the Company or the relevant member of the
                Buyer ́s
                Group or the Seller’s Group (as the case may be) against any such future
                liability;

            

    

     

    
      	(c)  	
              complying
                with any unreasonable instruction of the Seller or the Buyer as the
                case
                may be or taking any action or procuring the taking of any action
                which
                the Buyer or the Seller (as the case may be) considers (acting reasonably)
                to be onerous or prejudicial to the Buyer or any member of the
                Buyer ́s
                Group or the Seller or any member of the Seller’s Group (as the case may
                be).

            

    

     

    
      
        
        

      

      
        Page
          16

        
          

        

      

      
        
        

      

    

     

    
      	8.3  	
              If
                a Party does not request the other to take action pursuant to clause
                8.1(d) or shall fail to indemnify the other Party or the Company
                concerned
                in accordance with clause 8.1(e)
                within 14 days of the written notice to the Seller (or the Buyer
                as the
                case may be) served in accordance with clause 8.1(a) the Buyer (or
                the
                Seller as the case may be) or the Company shall be free to pay or
                settle
                the relevant matter on such terms as it may in its absolute discretion
                think fit.

            

    

     

     

    
      	8.4  	
              Any
                Claim or claim under the warranties given by the Buyer shall (if
                it has
                not been previously satisfied, settled or withdrawn) be deemed to
                be
                irrevocably withdrawn and waived at the expiration of twelve months
                from
                the date of giving notice of such Claim (or claim under the Buyer’s
                Warranties) unless legal proceedings in respect thereof have been
                commenced by the other party by issuing and serving such proceedings
                on
                the Seller (or the Buyer as the case may be) and the loss giving
                rise to
                any such Claim (or claim under the warranties given by the Buyer)
                which
                shall be so deemed withdrawn and waived shall not be capable of being
                the
                subject of a further Claim (or claim under the Buyer’s
                Warranties).

            

    

     

     

    
      	8.5  	
              The
                Seller acknowledges that if any Warranty is breached or proves to
                be
                untrue or misleading or if a Claim is made and in assessing the loss
                to
                the Company or the Buyer all
                costs and expenses reasonably and properly incurred by the Buyer
                or the
                Company as a result of such breach or of the Warranty being untrue
                or
                misleading shall be taken into account and form part of any
                Claim.

            

    

     

     

    
      	8.6  	
              Notwithstanding
                any failure by the Buyer to notify the Seller or of the Seller to
                notify
                the Buyer (as the case may be) pursuant to clause 8.1(a) the Buyer
                (or the
                Seller as the case may be) shall not (and shall procure, only in
                the case
                of the Buyer, that the Company shall not) settle or compromise any
                such
                claim or make any admission of liability without the prior written
                consent
                of the Seller or the Buyer (as the case may be) (which shall not
                be
                unreasonably withheld or delayed).

            

    

     

     

    
      	8.7  	
              If
                any Claim (or claim under the warranties given by the Buyer) shall
                arise
                by reason of some liability which, at the time the Claim (or claim
                under
                the Buyer’s Warranties) is notified to the Seller (or the Buyer as the
                case may be), is contingent only, the Seller (or the Buyer as the
                case may
                be) shall not be under any obligation to make any payment in respect
                of
                such Claim (or claim under the Buyer’s Warranties) unless and until the
                contingent liability crystallises as an actual liability. Provided
                that
                such Claim shall have been notified to the Seller or the Buyer (as
                the
                case may be) in accordance with clause 7.3 then clause 8.4 shall
                be
                amended in relation to such Claim (or claim under the Buyer’s Warranties)
                so as to require that legal proceedings be commenced within twelve
                months
                from the date on which the said liability ceases to be contingent
                or
                becomes capable of being quantified, as the case may
                be.

            

    

     

     

    
      	8.8  	
              Nothing
                in this agreement shall be deemed to relieve the Buyer or of the
                Seller
                (as the case may be) from any duty to mitigate any loss or damage
                incurred
                by it.

            

    

     

    
      
        
        

      

      
        Page
          17

        
          

        

      

      
        
        

      

    

     

    
      	9.  	
              Tax
                covenant

            

    

     

    
      	9.1  	
              The
                provisions of Schedule 4 apply with effect from
                Completion.

            

    

     

     

    
      	10.  	
              Working
                capital statement

            

    

     

    The
      Working Capital Statement shall be prepared and agreed or determined in
      accordance with Schedule 6.

     

     

    
      	11.  	
              Restrictions
                on Seller

            

    

     

    
      	11.1  	
              The
                Seller and the Guarantor covenant with the Buyer that each of them
                shall
                not and in the case of the Guarantor shall procure that none of its
                Subsidiaries shall:
                

            

    

     

    
      	(a)  	
              at
                any time during the period beginning on the Completion Date and ending
                upon the earlier to occur of (i) the date which is 2 years from and
                after
                the Completion Date, and (ii) the date of a Change in Control in the
                United Kingdom of Great Britain and Northern Ireland or the European
                Economic Area and Switzerland, directly or indirectly for its own
                or
                another’s account or benefit carry on or be employed, engaged or
                interested in any part of the Business as the Business was carried
                on at
                the Completion Date; or

            

    

     

    
      	(b)  	
              at
                any time during the period of one year beginning with the Completion
                Date,
                attempt
                to entice away from the Company any individual who is at the time
                of the
                attempt, and was at the Completion Date, employed or directly engaged
                in
                an executive or managerial position with the Company;
                or

            

    

     

    
      	(c)  	
              at
                any time after Completion, except as otherwise permitted by the Buyer or
                its Affiliates under this agreement or otherwise, use in the course
                of any
                business:

            

    

     

    
      	(i)  	
              any
                trade or service mark, business or domain name, design or logo the
                rights
                to which, at Completion, were owned by the Company;
                or

            

    

     

    
      	(ii)  	
              anything
                which is likely to be confused with such words, mark, name, design
                or
                logo.

            

    

     

     

    
      	11.2  	
              The
                covenants in this clause 11 are intended for the benefit of the Buyer
                and apply to actions carried out by the Seller and the Guarantor
                in any
                capacity and whether directly or indirectly, on the Seller ́s or the
                Guarantor ́s own behalf, on behalf of any other person or jointly with any
                other person.

            

    

     

     

    
      	11.3  	
              Each
                of the covenants in this clause 11 is a separate undertaking and
                shall be enforceable by the Buyer separately and independently of
                its
                right to enforce any one or more of the other covenants contained
                in this
                clause 11. Each of the covenants in this clause 11 is considered
                fair and reasonable by the parties, but if any restriction is found
                to be
                unenforceable, but would be valid if any part of it were deleted
                or the
                period or area of application reduced, the restriction shall apply
                with
                such modifications as may be necessary to make it valid and
                enforceable.

            

    

     

    
      
        
        

      

      
        Page
          18

        
          

        

      

      
        
        

      

    

     

    
      	11.4  	
              The
                consideration for the undertakings contained in this clause 11 is
                included in the Purchase Price.

            

    

     

     

    
      	12.  	
              Guarantee

            

    

     

    
      	12.1  	
              In
                consideration of the Buyer entering into this agreement, the Guarantor,
                at
                the request of the Seller, unconditionally and irrevocably guarantees
                as a
                primary obligation to the Buyer and its permitted assignees the due
                and
                punctual performance and observance by the Seller of all the Seller ́s
                obligations and restrictions, and the punctual discharge by the Seller
                of
                all the Seller ́s liabilities to the Buyer, arising under this agreement
                and under the Tax Covenant provided, however, that all limitations
                and
                defences available to the Seller shall apply to such obligation of
                the
                Guarantor.

            

    

     

     

    
      	12.2  	
              If
                the Seller defaults in the payment when due of any amount payable
                to the
                Buyer under this agreement, the Guarantor shall, immediately on written
                demand by the Buyer, unconditionally pay that amount to the Buyer
                in the
                manner prescribed in this agreement as if it were the
                Seller.

            

    

     

     

    
      	12.3  	
              This
                guarantee is a continuing guarantee and shall extend to the ultimate
                balance of sums payable by the Seller under this agreement, regardless
                of
                any intermediate payment or discharge in whole or in part. It shall
                not be
                affected by any act, omission, matter or thing which, but for this
                clause
                12.3, would reduce, release or prejudice any of the Guarantor ́s
                obligations under this clause 12 (without limitation and whether or
                not known to it or the Buyer).

            

    

     

     

    
      	12.4  	
              If
                any payment by the Seller, or any discharge given by the Buyer, is
                avoided
                or reduced as a result of insolvency or any similar event, the liability
                of the Seller and Guarantor shall continue as if the payment, discharge,
                avoidance or reduction had not
                occurred.

            

    

     

     

    
      	12.5  	
              The
                obligations of the Guarantor shall be in addition to and independent
                of
                all other security which the Buyer may at any time hold in respect
                of any
                of the obligations of the Seller under this
                agreement.

            

    

     

     

    
      	13.  	
              Confidentiality
                and announcements

            

    

     

    
      	13.1  	
              The
                Seller and the Guarantor undertake to the Buyer to keep confidential
                the
                terms of this agreement and all information which it has acquired
                about
                the Company and the Buyer ́s Group (as such Group is constituted
                immediately before Completion) and to use the information only for
                the
                purposes contemplated by this
                agreement.

            

    

     

    
      
        
        

      

      
        Page
          19

        
          

        

      

      
        
        

      

    

     

    
      	13.2  	
              The
                Buyer undertakes to the Seller and the Guarantor to keep confidential
                the
                terms of this agreement and all information that it has acquired
                about the
                Seller and the Seller’s Group (other than the Company) and to use the
                information only for the purposes contemplated by this
                agreement.

            

    

     

     

    
      	13.3  	
              The
                Buyer does not have to keep confidential or restrict its use of
                information about the Company after
                Completion.

            

    

     

     

    
      	13.4  	
              A
                party does not have to keep confidential or to restrict its use
                of:

            

    

     

    
      	(a)  	
              information
                that is or becomes public knowledge other than as a direct or indirect
                result of a breach of this agreement;
                or

            

    

     

    
      	(b)  	
              information
                that it receives from a source not connected with the party to whom
                the
                duty of confidence is owed that it acquires free from any obligation
                of
                confidence to any other person; or

            

    

     

    
      	(c)  	
              information
                that it independently develops without otherwise violating the terms
                of
                this clause 13.

            

    

     

     

    
      	13.5  	
              Any
                party may disclose any information that it is otherwise required
                to keep
                confidential under this
                clause 13:

            

    

     

    
      	(a)  	
              to
                such persons as the disclosing party, acting reasonably and in good
                faith,
                deems reasonably necessary if the disclosing party procures that
                the
                people to whom the information is disclosed first enter into a
                non-disclosure agreement in a customary form and that such people
                keep the
                information confidential in accordance with the terms of such agreement;
                or

            

    

     

    
      	(b)  	
              with
                the written consent of all the other parties;
                or

            

    

     

    
      	(c)  	
              to
                confirm that the sale has taken place and the date of the sale (but
                without otherwise revealing any other items of sale or making any
                other
                announcement); or

            

    

     

    
      	(d)  	
              to
                members and shareholders of its Group if
                the disclosing party procures that the people to whom the information
                is
                disclosed keep
                the information confidential and otherwise comply
                with the provisions of this clause as if they were bound by
                them;
                or

            

    

     

    
      	(e)  	
              to
                bona fide third party purchasers of the entire issued share capital
                of the
                Seller or the Buyer or members of their Group if
                the disclosing party procures that the
                people to whom the information is disclosed first enter into a
                non-disclosure agreement in a customary form and that such people
                keep the
                information confidential in accordance with the terms of such agreement;
                or

            

    

     

    
      
        
        

      

      
        Page
          20

        
          

        

      

      
        
        

      

    

     

    
      	(f)  	
              to
                the extent that the disclosure is
                required:

            

    

     

    
      	(i)  	
              by
                law; or

            

    

     

    
      	(ii)  	
              by
                a regulatory body, Taxation Authority or securities exchange;
                or

            

    

     

    
      	(iii)  	
              to
                make any filing with, or obtain any authorisation from, a regulatory
                body,
                Taxation Authority or securities exchange;
                or

            

    

     

    
      	(iv)  	
              under
                any arrangements in place under which negotiations relating to terms
                and
                conditions of employment are conducted;
                or

            

    

     

    
      	(v)  	
              to
                protect the disclosing party ́s interest in any legal
                proceedings;
                or

            

    

     

    
      	(g)  	
              after
                the expiry of a period of 10 years from the Completion Date
                

            

    

     

     

    but
      shall
      use reasonable endeavours to consult the other parties and to take into account
      any reasonable requests they may have in relation to the disclosure before
      making it.

     

     

    
      	13.6  	
              Each
                party shall supply any other party with any information about itself,
                its
                Group or this agreement as such other party may reasonably require
                for the
                purposes of satisfying the requirements of a law, regulatory body
                or
                securities exchange to which such other party is
                subject.

            

    

     

     

    
      	14.  	
              Further
                assurance

            

    

     

    During
      the period which is one year from and after Completion, the Buyer and the Seller
      shall (at their own expense) promptly execute and deliver all such documents,
      and do all such things, as the other party may require for the purpose of giving
      full effect to the provisions of this agreement.

     

     

    
      	15.  	
              Provision
                of Assistance by the
                Company

            

    

     

    
      	15.1  	
              The
                Buyer undertakes to the Seller that it will procure that the Company
                will
                make available during normal business hours and on reasonable notice
                (and
                shall use its reasonable endeavours to procure that the auditors
                of the
                Company make available) to the Seller, its advisers and its agents,
                all
                such information and assistance (including access to properties and
                any of
                the Company ́s
                books, correspondence or other documents or records and the right
                to copy
                the same and making available employees and directors to give assistance
                in each case during normal business hours and on reasonable notice)
                as may
                reasonably be required by the Seller in connection with the preparation
                of
                the Seller ́s
                audited accounts and corporation tax computations for the year ending
                31 December 2006.

            

    

     

    
      
        
        

      

      
        Page
          21

        
          

        

      

      
        
        

      

    

     

    
      	16.  	
              Assignment

            

    

     

    
      	16.1  	
              Except
                as otherwise provided herein, no party may assign, or grant any
                Encumbrance or security interest over, any of its rights under this
                agreement or any document referred to in
                it.

            

    

     

     

    
      	16.2  	
              Each
                party that has rights under this agreement is acting on its own
                behalf.

            

    

     

     

    
      	16.3  	
              The
                Buyer may assign its rights under this agreement (or any document
                referred
                to in this agreement) but not its obligations to a member of its
                Group
                (Permitted
                Assignor).

            

    

     

     

    
      	16.4  	
              In
                the event of any Permitted Assignor itself subsequently becoming
                the
                subject of a sale or transfer other than to a Permitted Assignor
                then the
                Buyer shall procure that the rights assigned under this agreement
                are
                assigned to a Permitted Assignor prior to the completion of any such
                sale
                or transfer. For the avoidance of doubt nothing in this Agreement
                shall
                restrict or prohibit the ability of the Purchaser or the Company
                to deal
                with the Sale Shares or any assets of the
                Company.

            

    

     

     

    
      	17.  	
              Entire
                Agreement

            

    

     

    
      	17.1  	
              This
                agreement (including the schedules to it) and any documents in the
                agreed
                form and the Disclosure Letter (Acquisition
                Documents)
                constitute the entire agreement between the parties with respect
                to the
                subject matter of this agreement.

            

    

     

     

    
      	17.2  	
              Except
                for any misrepresentation or breach of warranty which constitutes
                fraud:

            

    

     

    
      	(a)  	
              the
                Acquisition Documents supersede and extinguish all previous agreements
                between the parties relating to the subject matter thereof and any
                representations and warranties previously given or made other than
                those
                contained in the Acquisition
                Documents;

            

    

     

    
      	(b)  	
              each
                party acknowledges to the other (and shall execute the Acquisition
                Documents in reliance on such acknowledgement) that it has not been
                induced to enter into any such documents by nor relied on any
                representation or warranty other than the warranties contained in
                such
                documents;

            

    

     

    
      	(c)  	
              each
                party hereby irrevocably and unconditionally waives any right it
                may have
                to claim damages or to rescind this agreement or any of the other
                Acquisition Documents by reason of any misrepresentation and/or warranty
                not set forth in any such document;

            

    

     

    
      	(d)  	
              no
                breach of this agreement shall in any event give rise to a right
                on the
                part of the Buyer to rescind or terminate this agreement;
                and

            

    

     

    
      
        
        

      

      
        Page
          22

        
          

        

      

      
        
        

      

    

     

    
      	(e)  	
              the
                Buyer has no rights against and may not make a claim against any
                employee,
                director (save to the extent that such claim arises from any matters
                not
                disclosed in their letters of resignation, in the agreed form), agent
                or
                adviser of any member of the Seller ́s
                Group on whom it may have relied before entering into this
                agreement.

            

    

     

     

    
      	17.3  	
              Each
                of the parties acknowledges and agrees for the purposes of the
                Misrepresentation Act 1967 and the Unfair Contract Terms Act 1977
                that the
                provisions of this clause 17
                are reasonable.

            

    

     

     

    
      	18.  	
              Variation
                and Waiver

            

    

     

    
      	18.1  	
              Any
                variation of this agreement shall be in writing and signed by or
                on behalf
                of each party.

            

    

     

     

    
      	18.2  	
              Any
                waiver of any right under this agreement is only effective if it
                is in
                writing and signed by the waiving or consenting party and it applies
                only
                in the circumstances for which it is given and shall not prevent
                the party
                who has given the waiver from subsequently relying in a different
                instance
                or occurrence on the provision it has
                waived.

            

    

     

     

    
      	18.3  	
              No
                failure to exercise or delay in exercising any right or remedy provided
                under this agreement or by law constitutes a waiver of such right
                or
                remedy or shall prevent any future exercise in whole or in part
                thereof.

            

    

     

     

    
      	18.4  	
              No
                single or partial exercise of any right or remedy under this agreement
                shall preclude or restrict the further exercise of any such right
                or
                remedy.

            

    

     

     

    
      	18.5  	
              Unless
                specifically provided otherwise, rights arising under this agreement
                are
                cumulative and do not exclude rights provided by
                law.

            

    

     

     

    
      	19.  	
              Costs

            

    

     

    
      	19.1  	
              All
                costs in connection with the negotiation, preparation, execution
                and
                performance of this agreement, and any documents referred to in it,
                shall
                be borne by the party that incurred the
                costs.

            

    

     

     

    
      	20.  	
              Notice

            

    

     

    
      	20.1  	
              A
                notice given under this agreement:

            

    

     

    
      	(a)  	
              shall
                be in writing in the English language (or be accompanied by a properly
                prepared translation into English);

            

    

     

    
      
        
        

      

      
        Page
          23

        
          

        

      

      
        
        

      

    

     

    
      	(b)  	
              shall
                be sent for the attention of the person, and to the address or fax
                number,
                specified in this clause 20 (or such other address, fax number or
                person as each party may notify to the others in accordance with
                the
                provisions of this clause 20);
                and

            

    

     

    
      	(c)  	
              shall
                be:

            

    

     

    
      	(i)  	
              delivered
                personally; or

            

    

     

    
      	(ii)  	
              sent
                by fax; or

            

    

     

    
      	(iii)  	
              sent
                by pre-paid first-class post or recorded delivery;
                or

            

    

     

    
      	(iv)  	
              (if
                the notice is to be served by post outside the country from which
                it is
                sent) sent by airmail.

            

    

     

     

    
      	20.2  	
              The
                addresses for service of notice
                are:

            

    

     

    
      	(a)  	
              In
                the case of the Seller or the Guarantor, Katy Industries,
                Inc.

            

    

     

    
      	(i)  	
              address:
                2461 South Clark Avenue, Suite 630, Arlington, Virginia
                22022

            

    

     

    
      	(ii)  	
              for
                the attention of:
                Amir Rosenthal, CFO

            

    

     

    
      	(iii)  	
              fax
                number:
                +1
                (703) 236-3170

            

    

     

    
      	(b)  	
              In
                the case of the Buyer:

            

    

     

    
      	(i)  	
              address:
                Keter, 2 Sapir St Industrial Area, Herzelia, 46852
                Israel

            

    

     

    
      	(ii)  	
              for
                the attention of:
                Nir Palistrant

            

    

     

    
      	(iii)  	
              fax
                number:972-9-9554990
                or +97299568314

            

    

     

     

    
      	20.3  	
              A
                notice is deemed to have been
                received:

            

    

     

    
      	(a)  	
              if
                delivered personally, at the time of delivery;
                or

            

    

     

    
      	(b)  	
              in
                the case of fax, at the time of transmission;
                or

            

    

     

    
      	(c)  	
              in
                the case of pre-paid first class post or recorded delivery, two Business
                Days from the date of posting; or

            

    

     

    
      	(d)  	
              in
                the case of airmail, 5 Business Days from the date of posting;
                or

            

    

     

    
      	(e)  	
              if
                deemed receipt under the previous paragraphs of this clause 20.3
                is not
                within business hours (meaning 9.00 am to 5.30 pm Monday to Friday
                on a
                day that is not a public holiday in the place of receipt), when business
                next starts in the place of
                receipt.

            

    

     

    
      
        
        

      

      
        Page
          24

        
          

        

      

      
        
        

      

    

     

    
      	20.4  	
              To
                prove service, it is sufficient to prove that the notice was transmitted
                by fax to the fax number of the party or, in the case of post, that
                the
                envelope containing the notice was properly addressed and
                posted.

            

    

     

     

    
      	21.  	
              Interest
                on Late Payment

            

    

     

    
      	21.1  	
              Where
                a sum is required to be paid under this agreement but is not paid
                before
                or on the date the parties agreed, the party due to pay the sum shall
                also
                pay an amount equal to interest on that sum for the period beginning
                with
                that date and ending with the date the sum is paid (and the period
                shall
                continue after as well as before judgment). For purposes of clarification,
                the term “required to be paid under this agreement” shall not include (i)
                any amounts which are the subject of a dispute among the parties
                hereto or
                (ii) amounts
                payable in respect of a Claim, unless and until such amount is agreed
                among the parties to be due and owing or after final resolution of
                such
                Claim.

            

    

     

     

    
      	21.2  	
              The
                rate of interest shall be 3% per annum above the base lending rate
                for the
                time being of Barclays Bank Plc. Interest shall accrue on a daily
                basis
                and be compounded quarterly.

            

    

     

     

    
      	21.3  	
              This
                clause 21 is without prejudice to any claim for interest under the
                law.

            

    

     

     

    
      	22.  	
              Severance

            

    

     

    
      	22.1  	
              If
                any provision of this agreement (or part of a provision) is found
                by any
                court or administrative body of competent jurisdiction to be invalid,
                unenforceable or illegal, the other provisions shall remain in
                force.

            

    

     

     

    
      	22.2  	
              If
                any invalid, unenforceable or illegal provision would be valid,
                enforceable or legal if some part of it were deleted, the provision
                shall
                apply with whatever modification is necessary to give effect to the
                commercial intention of the
                parties.

            

    

     

     

    
      	23.  	
              Agreement
                Survives Completion

            

    

     

    This
      agreement (other than obligations that have already been fully performed)
      remains in full force after Completion.

     

     

    
      	24.  	
              Third
                Party Rights

            

    

     

    
      	24.1  	
              Save
                as set out herein, a person who is not a party to this agreement
                shall
                have no right under the Contracts (Rights of Third Parties) Act 1999
                to
                enforce any term of this agreement.

            

    

     

    
      
        
        

      

      
        Page
          25

        
          

        

      

      
        
        

      

    

     

    
      	24.2  	
              This
                agreement and the documents referred to in it are made for the benefit
                of
                the parties and Permitted Assignors and are not intended to benefit,
                or be
                enforceable by, anyone else.

            

    

     

     

    
      	24.3  	
              Each
                party represents to the other that their respective rights to agree
                to any
                amendment, variation, waiver or settlement under this agreement are
                not
                subject to the consent of any person that is not a party to this
                agreement.

            

    

     

     

    
      	25.  	
              Counterparts

            

    

     

    This
      agreement may be executed in any number of counterparts, each of which is an
      original and which together have the same effect as if each party had signed
      the
      same document.

     

     

    
      	26.  	
              Language

            

    

     

    If
      this
      agreement is translated into any language other than English, the English
      language text shall prevail.

     

     

    
      	27.  	
              Governing
                Law and Jurisdiction

            

    

     

    
      	27.1  	
              This
                agreement and any disputes or claims arising out of or in connection
                with
                its subject matter are governed by and construed in accordance with
                the
                law of England.

            

    

     

     

    
      	27.2  	
              The
                parties irrevocably agree that the courts of England have exclusive
                jurisdiction to settle any dispute or claim that arises out of or
                in
                connection with this agreement.

            

    

     

    This
      document has been executed as a deed and is delivered and takes effect on the
      date stated at the beginning of it.

     

    
      
        
        

      

      
        Page
          26

        
          

        

      

      
        
        

      

    

     

    
      	 Schedule 1  	
              Particulars
                of the Company

            

    

     

    

    
      	
              Name:

            	
              Contico
                Europe Limited 

            
	
              Registration
                number:

            	
              04992337 

            
	
              Registered
                office:

            	
              Cardew
                Way

              Redruth

              Cornwall

              TR15
                1ST

               

            
	
              Authorised
                share capital:

            	
              Amount:
                £1,000 

              Divided
                into: 1,000 ordinary shares of £1 each 

            
	
              Issued
                share capital:

            	
              Amount:
                £10 

              Divided
                into: 10 ordinary shares of £1 each 

            
	
              Registered
                shareholder (and number of Sale Shares held):

            	
              CEH
                Limited (all of the Sale Shares)

            
	
              Beneficial
                owner of Sale Shares (if different) and number of Sale Shares beneficially
                owned:

            	
              CEH
                Limited (all of the Sale Shares) 

            
	
              Directors
                and shadow directors:

            	
              T
                Mathers

              C
                Lacovara

              C
                Anderson 

              A
                Castor

              K
                Mills

            
	
              Secretaries:

            	
              A
                Elkins

              Amir
                Rosenthal

               

            
	
              Auditors:

            	
              PricewaterhouseCoopers
                LLP

            
	
              Registered
                Charges:

            	
              Guarantee
                and debenture dated 20th
                April 2004 made between, inter alios, the Company and Fleet National
                Bank,
                London U.K. branch

            

    

     

    
      
        
        

      

      
        Page
          27

        
          

        

      

      
        
        

      

    

     

    
      	 Schedule 2  	
              Completion

            

    

     

     

    
      	Part
              1.  	
              What
                the Seller shall deliver to the Buyer at
                Completion

            

    

     

     

    
      	1.  	
              At
                Completion, the Seller shall deliver or cause to be delivered to
                the Buyer
                the following documents and evidence
                :

            

    

     

    
      	(a)  	
              transfers
                of the Sale Shares executed by the registered holder in favour of
                the
                Buyer;

            

    

     

    
      	(b)  	
              the
                share certificates for the Sale Shares in the name of the registered
                holder or an indemnity in the agreed form for any lost
                certificates;

            

    

     

    
      	(c)  	
              the
                waivers, consents and other documents required to enable the Buyer
                to be
                registered as the holder of the Sale
                Shares;

            

    

     

    
      	(d)  	
              an
                irrevocable power of attorney in agreed form given by the Seller
                in favour
                of the Buyer to enable the beneficiary (or its proxies) to exercise
                all
                voting and other rights attaching to the Sale Shares before the transfer
                of the Sale Shares is registered in the register of
                members;

            

    

     

    
      	(e)  	
              the
                original of any power of attorney under which any document to be
                delivered
                to the Buyer under this paragraph 1
                has been executed;

            

    

     

    
      	(f)  	
              in
                relation to the Company, the statutory registers and minute books
                (written
                up to the time of Completion), the common seal, certificate of
                incorporation and any certificates of incorporation on change of
                name;

            

    

     

    
      	(g)  	
              the
                written resignation, executed as a deed and in the agreed form, of
                the
                directors (other than T Mathers) and A Rosenthal as joint secretary
                of the
                Company from their offices and employment with the
                Company;

            

    

     

    
      	(h)  	
              a
                certified copy of the minutes of the board meetings held or resolutions
                approved pursuant to Part 2 of this
                Schedule 2;

            

    

     

    
      	(i)  	
              in
                relation to the Company:

            

    

     

    
      	(i)  	
              statements
                from each bank at which the Company has an account, giving the balance
                of
                each account at the close of business on the last Business Day before
                Completion;

            

    

     

    
      	(ii)  	
              all
                cheque books in current use and written confirmation that no cheques
                have
                been written since those statements were
                prepared;

            

    

     

    
      	(iii)  	
              details
                of its cash book balances; and

            

    

     

    
      	(iv)  	
              reconciliation
                statements reconciling the cash book balances and the cheque books
                with
                the bank statements delivered;

            

    

     

    
      
        
        

      

      
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          28

        
          

        

      

      
        
        

      

    

     

    
      	(j)  	
              evidence
                that any indebtedness of the Company to banks or other financial
                institutions has been discharged;

            

    

     

    
      	(k)  	
              all
                charges, mortgages, debentures and guarantees to which the Company
                is a
                party and, in relation to each such instrument and any covenants
                connected
                with it

            

    

     

    a
      sealed
      discharge or release in the agreed form;

     

    
      	(l)  	
              certified
                copy of the resolution adopted by the board of directors of the Seller
                authorising and approving the
                Transaction;

            

    

     

    
      	(m)  	
              an
                original of the Transition Services Agreement between the Company
                and CML
                in the agreed form duly executed by
                CML;

            

    

     

    
      	(n)  	
              an
                original of the Lease between the Seller, the Company and the Buyer
                in the
                agreed form duly executed by the
                Seller;

            

    

     

    
      	(o)  	
              an
                original of the Sub-Lease between the Company and CML in the agreed
                form
                duly executed by CML; 

            

    

     

    
      	(p)  	
              an
                original of the Trademark Assignment Letter between Continental Commercial
                Products, LLC and the Company in the agreed form duly executed by
                Continental Commercial Products, LLC (Trademark
                Assignment Letter);
                and

            

    

     

    
      	(q)  	
              a
                certified true copy of a full release of security interest in respect
                of
                the trademark which are the subject of the Trademark Assignment Letter
                in
                the agreed form duly executed by Bank of America
                N.A.;

            

    

     

    
      	(r)  	
              an
                original of the Trademark Licence Agreement between the Company and
                the
                Guarantor in the agreed form duly executed by the
                Guarantor;

            

    

     

    
      	(s)  	
              an
                original of the Trademark Licence Agreement between the Company and
                CML
                in
                the agreed form duly executed by CML;

            

    

     

    
      	(t)  	
              a
                form of election under section 569 of CAA 2001 in respect of the
                Property
                executed by the Seller and containing all information required under
                section 569 of CAA 2001 to validly make such
                election;

            

    

     

    
      	(u)  	
              A
                form of election under section 198 CAA 2001 in respect of the plant
                and
                machinery duly containing all information required and duly executed
                by
                the Seller and the Company; and

            

    

     

             (v) an
      original of the note in respect of the Receivable in the agreed form duly
      executed by the Seller.

     

    

    
      
        
        

      

      
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          29

        
          

        

      

      
        
        

      

    

     

    
      	Part
              2.  	
              Matters
                for the board meeting at
                Completion

            

    

     

     

              
1. The
      Seller shall cause a board meeting of the Company to be held at Completion
      at
      which the matters set out in this Part 2 of this Schedule 2 shall take
      place.

     

     

    
      	2.  	
              A
                resolution to register the transfer of the Sale Shares shall be passed
                at
                such board meeting of the Company, subject to the transfer being
                stamped
                at the cost of the Buyer.

            

    

     

     

    
      	3.  	
              All
                directors, (other than T Mathers) and A Rosenthal as joint secretary
                of
                the Company shall resign from their offices and employment with the
                Company with effect from the end of the relevant board meeting.

            

    

     

     

    
      	4.  	
              The
                persons the Buyer nominates shall be appointed as directors of the
                Company
                (but not exceeding any maximum number of directors contained in the
                Company ́s articles of association). The appointments shall take effect at
                the end of the board meeting.

            

    

     

     

    
      	5.  	
              All
                the existing instructions and authorities to bankers shall be revoked
                and
                replaced with new instructions and authorities to those banks in
                the form
                the Buyer requires.

            

    

     

     

    
      	6.  	
              The
                address of the registered office of the Company shall be changed
                to the
                address required by the Buyer.

            

    

     

     

    
      	7.  	
              The
                accounting reference date of the Company shall be changed to the
                date
                required by the Buyer.

            

    

     

    
      
        
        

      

      
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          30

        
          

        

      

      
        
        

      

    

     

    
      	 Schedule 3   
              	
              Warranties

            

    

     

     

    
      	Part
              1.  	
              General
                warranties

            

    

     

     

    
      	1.  	
              Power
                to sell the company

            

    

     

    
      	1.1  	
              The
                Seller has taken all necessary action and has all requisite power
                and
                authority to enter into and perform this agreement in accordance
                with its
                terms and the other documents referred to in
                it.

            

    

     

     

    
      	1.2  	
              This
                agreement and the other documents referred to in it constitute (or
                shall
                constitute when executed) valid, legal and binding obligations on
                the
                Seller in the terms of the agreement and such other
                documents.

            

    

     

     

    
      	1.3  	
              Compliance
                with the terms of this agreement and the documents referred to in
                it shall
                not breach or constitute a default under any of the
                following:

            

    

     

    
      	(i)  	
              any
                agreement or instrument to which the Seller is a party or by which
                it is
                bound; or

            

    

     

    
      	(ii)  	
              any
                order, judgment, decree or other restriction applicable to the
                Seller.

            

    

     

     

    
      	2.  	
              Shares
                in the company

            

    

     

    
      	2.1  	
              The
                Sale Shares constitute the whole of the allotted and issued share
                capital
                of the Company and are fully paid.

            

    

     

     

    
      	2.2  	
              The
                Seller is the sole legal and beneficial owner of the Sale
                Shares.

            

    

     

     

    
      	2.3  	
              The
                Sale Shares are free from all
                Encumbrances.

            

    

     

     

    
      	2.4  	
              No
                right has been granted to any person to require the Company to issue
                any
                share capital and no Encumbrance has been created in favour of any
                person
                affecting any unissued shares or debentures or other unissued securities
                of the Company.

            

    

     

     

    
      	2.5  	
              No
                commitment has been given to create an Encumbrance affecting the
                Sale
                Shares (or any unissued shares or debentures or other unissued securities
                of the Company) or for the Company to issue any share capital and
                no
                person has notified the Company of any claim to be entitled to any
                rights
                in connection with any of those
                things.

            

    

     

    
      
        
        

      

      
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          31

        
          

        

      

      
        
        

      

    

     

    
      	2.6  	
              The
                Company:

            

    

     

    
      	(i)  	
              does
                not hold or beneficially own, nor has it agreed, nor has it ever
                agreed to
                acquire, any securities of any corporation;

            

    

     

    
      	(ii)  	
              is
                not, nor has agreed to become, a member of any partnership or other
                unincorporated association, joint venture or consortium (other than
                recognised trade associations); 

            

    

     

    
      	(iii)  	
              has
                not, outside its country of incorporation, any branch or permanent
                establishment; and

            

    

     

    
      	(iv)  	
              has
                not allotted or issued any securities that are convertible into
                shares.

            

    

     

     

    
      	2.7  	
              The
                Company has not at any time:

            

    

     

    
      	(i)  	
              purchased,
                redeemed or repaid any of its own share capital;
                or

            

    

     

    
      	(ii)  	
              given
                any financial assistance in connection with any acquisition of its
                share
                capital or the share capital of its holding company (as that expression
                is
                defined in section 736 of the Companies Acts) as it would fall within
                sections 151 to 158 (inclusive) of the Companies
                Acts.

            

    

     

     

    
      	2.8  	
              All
                dividends or distributions declared, made or paid by the Company
                have been
                declared, made or paid in accordance with its memorandum, articles
                of
                association, the applicable provisions of the Companies Acts and
                any
                agreements or arrangements made with any third party regulating the
                payment of dividends and
                distributions.

            

    

     

     

    
      	3.  	
              Constitutional
                and corporate documents

            

    

     

    
      	3.1  	
              The
                copies of the memorandum and articles of association or other
                constitutional and corporate documents of the Company Disclosed to
                the
                Buyer or its advisers are true, accurate and complete in all respects
                and
                copies of all the resolutions and agreements required to be annexed
                to or
                incorporated in those documents by the law applicable are annexed
                or
                incorporated.

            

    

     

     

    
      	3.2  	
              All
                statutory books and registers of the Company have been properly kept
                and
                no notice or allegation that any of them is incorrect or should be
                rectified has been received.

            

    

     

     

    
      	3.3  	
              All
                returns, particulars, resolutions and other documents which the Company
                is
                required by law to file with or deliver to any authority in any
                jurisdiction (including, in particular, the Registrar of Companies
                in
                England and Wales) have been correctly made up and filed or, as the
                case
                may be, delivered save where the failure to so file or deliver would
                not
                have a material adverse effect.

            

    

     

    
      
        
        

      

      
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          32

        
          

        

      

      
        
        

      

    

     

    
      	4.  	
              information

            

    

     

    
      	4.1  	
              The
                particulars relating to the Company set out in Schedule 1 are
                accurate and not misleading.

            

    

     

     

    
      	5.  	
              Compliance
                with laws

            

    

     

    The
      Company has at all times conducted its business materially in accordance with
      all applicable laws and regulations. 

     

     

    
      	6.  	
              Licences
                and consents

            

    

     

    
      	6.1  	
              The
                Company has all licences, consents, permits and authorities necessary
                to
                carry on its business in the places and in the manner in which its
                business is now carried on, all of which are valid and
                subsisting.

            

    

     

     

    
      	6.2  	
              The
                Company has not received notice of any reason why any of those licences,
                consents, permits and authorities should be suspended, cancelled,
                revoked
                or not renewed on the same terms.

            

    

     

     

    
      	7.  	
              Insurance

            

    

     

    
      	7.1  	
              To
                the Seller ́s knowledge there are no outstanding claims under, or in
                respect of the validity of, any of the insurance policies maintained
                by or
                on behalf of the Company and so far as the Seller is aware, there
                are no
                circumstances likely to give rise to any claim under any of those
                policies.

            

    

     

     

    
      	7.2  	
              To
                the Seller ́s knowledge all such insurance policies are in full force and
                effect, are not void or voidable, nothing has been done or not done
                which
                could make any of them void or voidable and Completion will not terminate,
                or entitle any insurer to terminate, any such
                policy.

            

    

     

     

    
      	8.  	
              Power
                of attorney

            

    

     

    
      	8.1  	
              There
                are no powers of attorney in force given by the
                Company.

            

    

     

     

    
      	8.2  	
              No
                person, as agent or otherwise, is entitled or authorised to bind
                or commit
                the Company to any obligation not in the ordinary course of the Company ́s
                business.

            

    

     

    
      
        
        

      

      
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          33

        
          

        

      

      
        
        

      

    

     

    
      	8.3  	
              The
                Disclosure Letter sets out details of all persons who have authority
                to
                bind the Company in the ordinary course of
                business.

            

    

     

     

    
      	9.  	
              Disputes
                and investigations

            

    

     

    
      	9.1  	
              Neither
                the Company nor any person for whom the Company is vicariously
                liable:

            

    

     

    
      	(i)  	
              is
                engaged in any litigation, administrative, mediation or arbitration
                proceedings or other proceedings or hearings before any statutory
                or
                governmental body, department, board or agency (except for debt collection
                in the normal course of business);
                or

            

    

     

    
      	(ii)  	
              to
                the Seller ́s knowledge, is the subject of any investigation, inquiry or
                enforcement proceedings by any governmental, administrative or regulatory
                body.

            

    

     

     

    
      	9.2  	
              To
                the Seller ́s knowledge, no such proceedings, investigation or inquiry as
                are mentioned in paragraph 9.1 have been threatened or are pending
                and
                there are no circumstances likely to give rise to any such
                proceedings.

            

    

     

     

    
      	9.3  	
              The
                Company is not affected by any existing or, to the Seller’s knowledge,
                pending judgments or rulings (save in respect of any ex-parte judgments
                of
                which it is unaware) and has not given any undertakings arising from
                legal
                proceedings to a court, governmental agency, regulator or third
                party.

            

    

     

     

    
      	10.  	
              Defective
                products and services

            

    

     

    
      	10.1  	
              The
                Company has not manufactured or sold any products which were, at
                the time
                they were manufactured or sold, in any material respect faulty or
                defective or did not materially comply
                with:

            

    

     

    
      	(i)  	
              warranties
                or representations expressly made or implied by or on behalf of the
                Company; or

            

    

     

    
      	(ii)  	
              all
                laws, regulations, standards and requirements applicable to the
                products.

            

    

     

     

    
      	10.2  	
              No
                proceedings have been started or to the Seller ́s knowledge are pending or
                have been threatened against the Company in which it is claimed that
                any
                products manufactured or sold by the Company are defective, not
                appropriate for their intended use or have caused bodily injury or
                material damage to any person or property when applied or used as
                intended.

            

    

     

    
      
        
        

      

      
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          34

        
          

        

      

      
        
        

      

    

     

    
      	11.  	
              Customers
                and suppliers

            

    

     

    
      	11.1  	
              In
                the 12 months ending with the date of this agreement, the business
                of the
                Company has not been materially affected in an adverse manner as
                a result
                of any one or more of the following things happening to the
                Company:

            

    

     

    
      	(i)  	
              the
                loss of any of its top five customers ranked by reference to sales
                to the
                Company’s customers in the financial year ended 31 December 2005 (“Top
                Five Customers”) or top five suppliers ranked by reference to purchases
                from the Company’s suppliers in the financial year ended 31 December 2005
                (“Top Five Suppliers”); or

            

    

     

    
      	(ii)  	
              a
                reduction in trade with its Top Five Customers or in the extent to
                which
                it is supplied by any of its Top Five Suppliers;
                or

            

    

     

    
      	(iii)  	
              a
                change in the terms on which it trades with or is supplied by any
                of the
                Top Five Customers or Top Five
                Suppliers.

            

    

     

     

    
      	11.2  	
              The
                Disclosure Letter contains the names of and copies of the relevant
                agreements for the Top Five
                Customers.

            

    

     

     

    
      	12.  	
              Competition

            

    

     

    
      	12.1  	
              The
                definition in this paragraph applies in this
                agreement.

            

    

     

    Competition
      Law:
      the
      national and directly effective legislation of any jurisdiction which governs
      the conduct of companies or individuals in relation to restrictive or other
      anti-competitive agreements or practices (including, but not limited to,
      cartels, pricing, resale pricing, market sharing, bid rigging, terms of trading,
      purchase or supply and joint ventures), dominant or monopoly market positions
      (whether held individually or collectively) and the control of acquisitions
      or
      mergers.

     

     

    
      	12.2  	
              The
                Company is not engaged in any agreement, arrangement, practice or
                conduct
                which amounts to an infringement of the Competition Law of any
                jurisdiction in which the Company conducts
                business.

            

    

     

     

    
      	13.  	
              Contracts

            

    

     

    
      	13.1  	
              The
                definition in this paragraph applies in this
                agreement.

            

    

     

    Material
      Contract:
      an
      agreement to which the Company is a party or is bound by and which is of
      material importance to the business, profits or assets of the
      Company.

     

    
      
        
        

      

      
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          35

        
          

        

      

      
        
        

      

    

     

    
      	13.2  	
              Except
                for the agreements and arrangements Disclosed, the Company is not
                a party
                to or subject to any agreement
                which:

            

    

     

    
      	(i)  	
              is
                a Material Contract; or

            

    

     

    
      	(ii)  	
              contains
                a contractual right for the other party to terminate such agreement
                as a
                result of any Change of Control of the Company;
                or

            

    

     

    
      	(iii)  	
              restricts
                the freedom of the Company to carry on the whole or any part of its
                business in any part of the world in such manner as it thinks fit;
                or

            

    

     

    
      	(iv)  	
              is
                not on arm ́s length terms;

            

    

     

    
      	(v)  	
              involves
                agency or distributorship; or

            

    

     

    
      	(vi)  	
              involves
                partnership, joint venture, consortium, joint development, shareholders
                or
                similar arrangements; or

            

    

     

    
      	(vii)  	
              requires
                the Company to pay any commission, finders fee, royalty or the
                like.

            

    

     

     

    
      	13.3  	
              To
                the Seller ́s knowledge, each Material Contract is in full force and effect
                and binding on the parties to it and the Company has not defaulted
                under
                or breached a Material Contract in any material respect
                and:

            

    

     

    
      	(i)  	
              to
                the Seller ́s knowledge, no other party to a Material Contract has
                defaulted under or breached such a contract;
                and

            

    

     

    
      	(ii)  	
              to
                the Seller ́s knowledge, no such default or breach by the Company or any
                other party is likely or has been
                threatened.

            

    

     

     

    
      	13.4  	
              No
                notice of termination of a Material Contract has been received or
                served
                by the Company and to the Seller ́s knowledge there are no grounds for
                determination, rescission, avoidance, repudiation or a material change
                in
                the terms of any such contract.

            

    

     

     

    
      	13.5  	
              All
                contracts entered into or purportedly entered into by any member
                of the
                Seller’s Group and relating to the Business and the Company and Disclosed
                have been performed by the Company and the relevant counterparty
                has not
                objected to the same and has treated the Company for all purposes
                as the
                relevant contracting party.

            

    

     

    
      
        
        

      

      
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          36

        
          

        

      

      
        
        

      

    

     

    
      	14.  	
              Transactions
                with the seller

            

    

     

    
      	14.1  	
              Except
                in respect of trading in the ordinary course of business with CML
                there is
                no outstanding indebtedness or other liability (actual or contingent)
                and
                there is no outstanding contract or commitment between the Company
                and any
                of the following:

            

    

     

    
      	(i)  	
              the
                Seller or any member of the Seller ́s Group or any person Connected with
                the Seller; or

            

    

     

    
      	(ii)  	
              any
                director of a member of the Seller ́s Group or any person Connected with
                such a member or director.

            

    

     

     

    
      	14.2  	
              Except
                in respect of trading in the ordinary course of business with CML
                neither
                the Seller, nor any person Connected with the Seller, is entitled
                to a
                claim of any nature against the Company or has assigned to any person
                the
                benefit of a claim against the Company to which the Seller or a person
                Connected with the Seller would otherwise be
                entitled.

            

    

     

     

    
      	15.  	
              Finance
                and guarantees

            

    

     

    
      	15.1  	
              Full
                particulars of all money borrowed by the Company (including full
                particulars of the terms on which such money has been borrowed) have
                been
                Disclosed.

            

    

     

     

    
      	15.2  	
              No
                guarantee, mortgage, charge, pledge, lien, assignment or other security
                agreement or arrangement has been given by or entered into by the
                Company
                or any third party in respect of borrowings or other obligations
                of the
                Company.

            

    

     

     

    
      	15.3  	
              The
                total amount borrowed by the Company does not exceed any limitations
                on
                the borrowing powers contained:

            

    

     

    
      	(i)  	
              in
                the memorandum and articles of association of the Company;
                or

            

    

     

    
      	(ii)  	
              in
                any debenture or other deed or document binding on the
                Company.

            

    

     

     

    
      	15.4  	
              The
                Company has no outstanding loan capital, or has not lent any money
                that
                has not been repaid, and there are no debts owing to the Company
                other
                than debts that have arisen in the normal course of
                business.

            

    

     

     

    
      	15.5  	
              The
                Company has not:

            

    

     

    
      	(i)  	
              factored
                any of its debts or discounted any of its debts or engaged in financing
                of
                a type which would not need to be shown or reflected in the Accounts;
                or

            

    

     

    
      
        
        

      

      
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          37

        
          

        

      

      
        
        

      

    

     

    
      	(ii)  	
              waived
                any right of set-off it may have against any third
                party.

            

    

     

     

    
      	15.6  	
              All
                debts (less any provision for bad and doubtful debts) owing to the Company
                reflected in the Accounts and all debts subsequently recorded in
                the books
                of the Company:

            

    

    
 

    
      	(i)  	
              have
                arisen out of bona fide transactions in the ordinary course of business;
                and

            

    

     

    
      	(ii)  	
              reflect
                actual transactions and/ or the granting of credit to customers in
                a
                manner consistent with past practices of the
                Company.

            

    

     

     

    
      	15.7  	
              No
                indebtedness of the Company in the nature of borrowing is due and
                payable
                and no security over any of the assets of the Company is now enforceable,
                whether by virtue of the stated maturity date of the indebtedness
                having
                been reached or otherwise. The Company has received no notice in
                relation
                to any such indebtedness whose terms have not been fully complied
                with
                and/or carried out from any creditor requiring any payment to be
                made
                and/or stating that it intends to enforce any security which it may
                hold
                over the assets of the Company.

            

    

     

     

    
      	15.8  	
              The
                Company has not given or entered into any guarantee, mortgage, charge,
                pledge, lien, assignment or other security agreement or arrangement
                or is
                responsible for the indebtedness, or for the default in the performance
                of
                any obligation, of any other
                person.

            

    

     

     

    
      	15.9  	
              The
                Company is not subject to any arrangement for receipt or repayment
                of any
                grant, subsidy or financial assistance from any government department
                or
                other body.

            

    

     

     

    
      	15.10  	
              Particulars
                of the balances of all the bank accounts of the Company, showing
                the
                position as at the day immediately preceding the date of this agreement,
                have been Disclosed and the Company has no other bank accounts. Since
                those particulars were given, there have been no payments out of
                those
                accounts other than payments in the ordinary course of
                business.

            

    

     

     

    
      	15.11  	
              A
                Change of Control of the Company will not result
                in:

            

    

     

    
      	(i)  	
              termination
                of or material effect on any financial or, to the Seller’s knowledge,
                other agreement to which the Company is a party or subject;
                or

            

    

     

    
      	(ii)  	
              any
                indebtedness of the Company becoming due, or capable of being declared
                due
                and payable, prior to its stated
                maturity.

            

    

     

    
      
        
        

      

      
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          38

        
          

        

      

      
        
        

      

    

     

    
      	16.  	
              Insolvency

            

    

     

    
      	16.1  	
              The
                Company:

            

    

     

    
      	(i)  	
              is
                not insolvent or unable to pay its debts within the meaning of the
                Insolvency Act 1986; and

            

    

     

    
      	(ii)  	
              has
                not stopped paying its debts as they fall
                due.

            

    

     

     

    
      	16.2  	
              No
                step has been taken to initiate any process by or under
                which:

            

    

     

    
      	(i)  	
              the
                ability of the creditors of the Company to take any action to enforce
                their debts is suspended, restricted or prevented;
                or

            

    

     

    
      	(ii)  	
              some
                or all of the creditors of the Company accept, by agreement or in
                pursuance of a court order, an amount less than the respective sums
                owing
                to them in satisfaction of those sums with a view to preventing the
                dissolution of the Company; or

            

    

     

    
      	(iii)  	
              a
                person is appointed to manage the affairs, business and assets of
                the
                Company on behalf of the Company ́s creditors;
                or

            

    

     

    
      	(iv)  	
              the
                holder of a charge over the Company ́s assets is appointed to control the
                business and assets of the Company.

            

    

     

     

    
      	16.3  	
              In
                relation to the Company :

            

    

     

    
      	(i)  	
              no
                administrator has been appointed;

            

    

     

    
      	(ii)  	
              no
                documents have been filed with the court for the appointment of an
                administrator; and

            

    

     

    
      	(iii)  	
              no
                notice of an intention to appoint an administrator has been given
                by the
                relevant company, its directors or by a qualifying floating charge
                holder
                (as defined in paragraph 14 of Schedule B1 to the Insolvency Act
                1986).

            

    

     

     

    
      	16.4  	
              No
                process has been initiated which could lead to the Company being
                dissolved
                and its assets being distributed among the Company ́s creditors,
                shareholders or other contributors.

            

    

     

     

    
      	16.5  	
              No
                distress, execution or other process has been levied on an asset
                of the
                Company.

            

    

     

    
      
        
        

      

      
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          39

        
          

        

      

      
        
        

      

    

     

    
      	17.  	
              Assets

            

    

     

    
      	17.1  	
              The
                Company is the full legal and beneficial owner of, and has good and
                marketable title to, all the assets included in the Accounts and
                any
                assets acquired since the Accounts Date except for those disposed
                of since
                the Accounts Date in the normal course of business and the freehold
                property which has been sold to the Seller or a member of the Seller’s
                Group.

            

    

     

     

    
      	17.2  	
              None
                of the assets shown in the Accounts or acquired by the Company since
                the
                Accounts Date is the subject of any lease, lease hire agreement,
                hire
                purchase agreement or agreement for payment on deferred terms or
                is the
                subject of any licence or factoring
                arrangement.

            

    

     

     

    
      	17.3  	
              The
                Company is in possession and control of all the assets included in
                the
                Accounts or acquired since the Accounts Date and all other assets
                used by
                the Company, except for those in the possession of a third party
                in the
                normal course of business, those disposed of since the Accounts Date
                in
                the normal course of business and the freehold property which has
                been
                sold to the Seller or a member of the Seller’s
                Group.

            

    

     

     

    
      	17.4  	
              None
                of the assets, undertakings or goodwill of the Company is subject
                to an
                Encumbrance, or to any agreement or commitment to create an Encumbrance,
                and to the Seller’s knowledge no person has claimed to be entitled to
                create such an Encumbrance.

            

    

     

     

    
      	18.  	
              Condition
                of plant and equipment

            

    

     

    
      	18.1  	
              The
                plant, machinery, equipment and vehicles used in connection with
                the
                Business are in a reasonable condition taking account of their age,
                fair
                wear and tear excepted.

            

    

     

     

    
      	19.  	
              Property

            

    

    

          19.1 Interests
      in Property

     

    
      	(a)  	
              Other
                than the Lease (when granted), the Company does not own, use, occupy
                or
                have any interest in or liability for or in respect of any land or
                buildings.

            

    

     

    
      	(b)  	
              The
                Company has not owned, used, occupied or had any interest in or liability
                for or in respect of any land or buildings save that
                the Company has occupied the part of the Property not demised in
                the
                Sub-Lease for the purposes of the
                Business.

            

    

     

    
      	(c)  	
              The
                particulars of the Property set out above are correct and not
                misleading.

            

    

     

    
      
        
        

      

      
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          40

        
          

        

      

      
        
        

      

    

     

    
      	(d)  	
              The
                Company has disclosed to the Buyer true, complete and accurate copies
                of
                all documents in its possession (including documents in possession
                of
                Continental Commercial Products LLC (formerly known as Contico
                International LLC), the Seller and any member of the Company’s Group and
                any mortgagee) relating to the
                Property.

            

    

     

    
      	(e)  	
              The
                Company has not entered into any agreement to acquire or dispose
                of any
                land or interest therein.

            

    

     

    
      	(f)  	
              Save
                for the interest conferred by the Sublease, the Company is in physical
                possession and actual occupation of the Property on an exclusive
                basis for
                the purposes of the Business.

            

    

     

    

     

         
      19.2 Replies
      to Enquiries

     

    The
      replies to enquires relating to the Property given by Denton Wilde Sapte (on
      behalf of the Seller) to the Buyer are true and accurate in all material
      respects.

     

    

     

         
      19.3 Other
      involvement in relation to real property 

     

    The
      Company has not at any time:-

     

    
      	(a)  	
              had
                vested in it (whether as an original tenant or undertenant or as
                an
                assignee, transferee or otherwise) any freehold or leasehold properties
                other than the Property; or

            

    

     

    
      	(b)  	
              given
                any covenant or entered into any agreement, deed or other document
                (whether as a tenant or undertenant or as an assignee, transferee,
                guarantor or otherwise) in respect of any freehold or leasehold properties
                other than those disclosed to the Buyer in writing in relation to
                those
                properties in respect of which any contingent or potential liability
                remains with the Company.

            

    

     

     

    
      	20.  	
              Intellectual
                property

            

    

     

    
      	20.1  	
              The
                definition in this paragraph applies in this
                agreement.

            

    

     

    
      
        
        

      

      
        Page
          41

        
          

        

      

      
        
        

      

    

     

    Intellectual
      Property Rights:
      means
      all right, title and interest in, to, and under all patents and design patents,
      rights to inventions, utility models, copyright, trade marks, service marks,
      trade, business and domain names, rights in trade dress or get-up, rights in
      goodwill or to sue for passing off, unfair competition rights, rights in
      designs, technology design rights, rights in computer software, database rights,
      topography rights, moral rights, rights in confidential information (including
      know-how and trade secrets) and any other intellectual property rights, in
      each
      case whether registered or unregistered and including all applications for
      and
      renewals or extensions of such rights, and all similar or equivalent rights
      or
      forms of protection in any part of the world.

     

     

    Trademarks:
      means
      the trademarks and domain name set forth in Part
      1 of
      Schedule 5 together
      with the goodwill associated therewith to be assigned and transferred to the
      Buyer by Continental
      Commercial Products LLC
      (“CCP”)
      under
      the terms set forth in the Trademarks Assignment Letter.

     

    Use:
      means
      use, sell, exploit, commercialize, modify, improve, utilize, license, transfer,
      assign, distribute and otherwise dispose of any of the Trademarks or any portion
      thereof.

     

     

     

    
      	20.2  	
              Complete
                and accurate particulars are set out in Part 1 and Part 2 of Schedule
                5
                respectively of all registered Intellectual Property Rights (including
                applications for such rights) and material unregistered Intellectual
                Property Rights owned, used or held for use by the
                Company.

            

    

     

     

    
      	20.3  	
              Complete
                and accurate particulars are set out in Part 3 and Part 4 of Schedule
                5
                respectively of all licences, agreements, authorisations and permissions
                (in whatever form and whether express or implied) under
                which:

            

    

     

    
      	(i)  	
              the
                Company uses or exploits Intellectual Property Rights owned by any
                third
                party; or

            

    

     

    
      	(ii)  	
              the
                Company has licensed or agreed to license Intellectual Property Rights
                to,
                or otherwise permitted the use of any Intellectual Property Rights
                by, any
                third party.

            

    

     

     

    
      	20.4  	
              Except
                as set out in Part 3 and Part 4 of Schedule 5, the Company is the
                sole
                legal and beneficial owner of (or applicant for) the Intellectual
                Property
                Rights set out in Part 1 and Part 2 of Schedule 5, free from all
                Encumbrances. The Company has the sole right to bring actions for
                infringement of any Intellectual Property Rights set out in Part
                1 and
                Part 2 of Schedule 5. The Company has not transferred, assigned or
                licensed any of its rights in any Intellectual Property Rights except
                as
                set out in Part 3 and Part 4 of Schedule 5.
                Except as set out in Part 3 and Part 4 of Schedule 5, there are no
                outstanding options, licenses, or agreements of any kind relating
                to the
                Intellectual Property Rights set out in Part 1 and Part 2 of Schedule
                5,
                nor is the Company bound by or a party to any options, licenses or
                agreements of any kind with respect to the Intellectual Property
                Rights of
                any other person or entity.

            

    

     

    
      
        
        

      

      
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          42

        
          

        

      

      
        
        

      

    

     

    
      	20.5  	
              Part
                1 and Part 2 of Schedule 5 contain details of all material Intellectual
                Property Rights required in order to carry on the Company’s activities and
                Business. The
                Intellectual Property Rights set
                out in Part 1 and Part 2 of Schedule 5 constitutes
                all of the intellectual
                property rights used by the Company in order to conduct the Business
                as currently conducted.

            

    

     

     

    
      	20.6  	
              The
                Intellectual Property Rights set out in Part 1 and Part 2 of Schedule
                5
                are valid, subsisting and enforceable and nothing has been done or
                not
                been done by the Company as a result of which any of them has ceased
                or
                might cease to be valid, subsisting or enforceable. And in respect
                of such
                Intellectual Property Rights, to the Seller’s
                knowledge:

            

    

     

    
      	(i)  	
              all
                application and renewal fees and other steps required for the maintenance
                or protection of such rights have been paid on time or
                taken;

            

    

     

    
      	(ii)  	
              all
                material Intellectual Property Rights and confidential information
                (including know-how and trade secrets) owned or used by the Company
                has
                been kept confidential and has not been disclosed to third parties
                (other
                than parties who have signed written confidentiality undertakings
                in
                respect of such information, details of which are set out in the
                Disclosure Letter). The Company has not taken any action or, failed
                to
                take an action that directly or indirectly caused its Intellectual
                Property Rights and related confidential information to enter into
                the
                public domain or in any way affected its value or the Company’s absolute
                and unconditional ownership
                thereof;

            

    

     

    
      	(iii)  	
              no
                mark, trade name or domain name identical or similar to any such
                rights
                and which is material to the business of the Company has been registered,
                or is being used by any person in the same or a similar business
                to that
                of the Company, in any country in which the Company or has registered
                or
                is using that mark, trade name or domain name, except as set forth
                in
                paragraph 20.6.1 below; and

            

    

     

    
      	(iv)  	
              there
                are and have been no claims, challenges, disputes or proceedings,
                pending
                or threatened, which was not favourably resolved, in relation to
                the
                ownership, validity or use of such rights and none of Company nor
                any of
                their directors and officers has ever received any charge, complaint,
                claim, demand, or notice, which was not favourably resolved, alleging
                any
                interference, infringement, misappropriation or violation by the
                Company
                of any third party’s rights.

            

    

     

    
      
        
        

      

      
        Page
          43

        
          

        

      

      
        
        

      

    

     

    
      	(v)  	
              Seller
                owns U.S. Trademark Registration No. 1,448,359 for the trademark
                TUFF BOX
                for plastic tool boxes, granted July 21, 1987. On or about July 1,
                2005,
                Seller became aware of use of the mark TUFF BOX in connection with
                utility
                and tool storage boxes by Sunshine Home Products of Cerritos, California
                (“Sunshine”). Seller has taken commercially reasonable steps to enforce
                its trademark rights against Sunshine Home Products, including a
                written
                demand that Sunshine cease use of the subject mark. The parties are
                still
                engaged in discussions as of the date of this agreement.
                

            

    

     

     

    
      	20.7  	
              Nothing
                is due to be done within 60 days of Completion the omission of which
                would
                jeopardise the maintenance or prosecution of any of the Intellectual
                Property Rights owned or used by the Company which are registered
                or the
                subject of an application for registration. Part 1 of Schedule 5
                includes
                a list of actions due to be done within 180 days of Completion with
                respect to the maintenance and/or prosecution of any of the Intellectual
                Property Rights owned or used by the Company which are registered
                or the
                subject of an application for registration.

            

    

     

     

    
      	20.8  	
              To
                the Seller’s knowledge there has been no infringement, interference or
                misappropriation by any third party of any Intellectual Property
                Rights
                set out in Part 1 and Part 2 of Schedule 5, which was not favourably
                resolved, except as set forth in paragraph 20.6.1 above, nor any
                third
                party breach of confidence, passing off or actionable act of unfair
                competition in relation to the business or assets of the Company,
                and no
                such infringement, breach of confidence, passing off or actionable
                act of
                unfair competition is current or
                anticipated.

            

    

     

     

    
      	20.9  	
              The
                agreements and licences set out in Part 3 and Part 4 of Schedule
                5:

            

    

     

    
      	(i)  	
              are
                legal, valid, binding and enforceable and in full force and effect
                and
                shall stay such on identical terms following the consummation of
                the
                transactions contemplated hereby;

            

    

     

    
      	(ii)  	
              have
                not been the subject of any breach or default by any party or of
                any event
                which, with the giving of notice or lapse of time, would constitute
                a
                default or permit termination, modification, or acceleration, under
                such
                agreement or license;

            

    

     

    
      	(iii)  	
              are
                not to the Seller’s knowledge the subject of any claim, dispute or
                proceeding, pending or threatened; 

            

    

     

    
      	(iv)  	
              have,
                where required, been duly recorded or registered;
                and

            

    

     

    
      	(v)  	
              neither
                the Company nor to the Seller’s knowledge any of the other parties to the
                agreements and licenses has repudiated any provision of the agreement
                and/or license.

            

    

     

    
      
        
        

      

      
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          44

        
          

        

      

      
        
        

      

    

     

    
      	20.10  	
              A
                Change of Control of the Company will not automatically result in
                the
                termination of any of the Intellectual Property Rights set out in
                Schedule
                5.

            

    

     

     

    
      	20.11  	
              To
                the Seller’s knowledge the activities of the
                Company:

            

    

     

    
      	(i)  	
              have
                not infringed, do not infringe and are not likely to infringe the
                Intellectual Property Rights or any other rights of any third party;
                or

            

    

     

    
      	(ii)  	
              have
                not given and do not give rise to any obligation to pay any royalty,
                fee
                compensation or any other sum
                whatsoever.

            

    

     

     

    
      	20.12  	
              Each
                Employee, consultant and officer of the Company has executed an agreement
                with the Company pertaining to non-competition, confidentiality and
                assignment of inventions, or has otherwise sufficiently vested in
                the
                Company good title to the work product or result of endeavours of
                every
                employee, officer or contractor, free of any retained rights or royalty
                or
                similar obligations, except where such a failure would not have a
                material
                adverse effect to the business of the Company. To the Seller’s knowledge:
                (i) none of the said employees, officers or consultants is in violation
                thereof; (ii) no such employees, officers or consultants breached
                any
                third party contract with respect to any item of the Intellectual
                Property
                Rights set out in Part 1 and Part 2 of Schedule 5; (iii) no such
                employees, officers or consultants retained by the Company has, or
                has
                alleged to have any right, title or
                interest in the Intellectual Property Rights set out in Part 1 and
                Part 2
                of Schedule 5. 

            

    

     

     

    
      	20.13  	
              The
                Trademarks.
                In connection with the Trademarks and without derogating from the
                provisions of Sections 20.1
                .20.12, (it is hereby agreed that warranties herein with respect
                to the
                Trademarks shall only apply to such period in which the Trademarks
                or any
                portion thereof were owned by any member of the Seller’s Group) For
                purposes of clarification, to the extent that the records of the
                relevant
                Patent and Trademark Office indicated in 2006 that Contico International,
                Inc. is the owner of any of the Trademarks CCP has corrected such
                records
                to properly reflect that CCP is the owner of the Trademarks effective
                as
                of the date Contico International, Inc. assigned such Trademarks
                to
                Contico International, LLC, which thereafter changed its name to
                that of
                CCP:

            

    

     

    
      	(i)  	
              CCP
                has
                full power and authority (including full corporate power and authority)
                to
                execute and deliver the Trademark Assignment Letter and to perform
                its
                obligations thereunder. The Trademark Assignment Letter constitutes
                the
                valid and legally binding obligation of CCP,
                enforceable in accordance with its terms and conditions, except to
                the
                extent that enforceability may be subject to applicable bankruptcy,
                insolvency, reorganization, moratorium, receivership and similar
                laws
                affecting the enforcement of creditors’ rights
                generally.

            

    

     

    
      
        
        

      

      
        Page
          45

        
          

        

      

      
        
        

      

    

     

    
      	(ii)  	
              Neither
                the execution and the delivery of the Trademark Assignment Letter,
                nor the
                consummation of the transactions contemplated thereby, will (i) violate
                any constitution, statute, regulation, rule, injunction, judgment,
                order,
                decree, ruling, charge, or other restriction of any government,
                governmental agency, or court to which CCP
                is
                subject;
                or (ii) result in any lien against the Trademarks.

            

    

     

    
      	(iii)  	
              CCP
                does
                not need to give any notice to, make any filing with, or obtain any
                authorization, consent, or approval of any government, governmental
                agency
                or any third party in order to consummate the transactions contemplated
                by
                the Trademark Assignment Letter, other than the filing of the Trademark
                Assignment Letter to the relevant patent and/or trademark office.
                No
                consent, approval, license, permit, declaration, registration or
                authorization of the action by, or filing with, any person, or entity
                including any court, governmental or regulatory authority, commission,
                board, administrative agency or non-governmental third party, on
                the part
                of CCP,
                is required in connection with the execution and performance of the
                Trademark Assignment Letter or the consummation of the transactions
                contemplated thereunder other than the filing of such
                Trademark Assignment Letter.

            

    

     

    
      	(iv)  	
              The
                Trademarks are owned solely by CCP,
                and, except as set forth in part 4 of Schedule 5, CCP has
                not transferred, assigned or licensed to any third party (including
                to any
                Affiliate and related party) any of its rights in the
                Trademarks.

            

    

     

    
      	(v)  	
              CCP
                has,
                and immediately following the Completion Date, the Buyer shall have,
                good
                and marketable title to the Trademarks, free and clear of all Encumbrances,
                or restrictions on transfer.
                There are no agreements or arrangements between CCP
                and any third party that are reasonably likely to have a material
                effect
                upon CCP’s
                title to the Trademarks. Except as set forth in part 4 of Schedule
                5, (i)
                with respect to the assignment of rights in and to the Trademarks
                under
                the Trademark Assignment Letter, no party nor person other than Buyer
                shall have any right, title or interest in the Trademarks, and (ii)
                Buyer
                shall be subject to no limitations, obligations or restrictions with
                regard to the Use or other transfer or exploitation of the Trademarks.
                CCP
                is under no
                obligation to pay any other party any royalties or other fixed or
                contingent amounts based upon the sale, distribution or other use
                or
                exploitation of the Trademarks (the “Royalties”). Buyer,
                by entering into the Trademark Assignment Letter and consummating
                the
                transactions contemplated thereby, is not assuming or agreeing to
                pay or
                otherwise become liable for any contracts, indebtedness, obligations
                or
                liabilities CCP, or any of CCP’s Affiliates of any type or nature
                whatsoever, except for Buyer’s assumption as of the Completion Date of the
                rights and obligations arising from Buyer’s ownership or use of the
                Trademarks from and after the Completion
                Date.

            

    

     

    
      
        
        

      

      
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          46

        
          

        

      

      
        
        

      

    

     

    
      	(vi)  	
              To
                Seller’s
                and Guarantor’s best knowledge, CCP
                has
                complied with all applicable laws with regard to the Trademarks (including
                rules, regulations, codes, plans, injunctions, judgments, orders,
                decrees,
                rulings and charges there under) of federal, state, local, and foreign
                governments (and all agencies thereof). No action, suit, proceeding,
                hearing, investigation, charge, complaint, claim, demand, or notice
                has
                been filed or commenced against CCP
                in connection with the Trademarks alleging any failure so to comply.
                There
                are no judgments outstanding and unsatisfied against the
                Trademarks.

            

    

     

    
      	(vii)  	
              To
                Seller’s and Guarantor’s best knowledge, no
                claim (which was not favourably resolved) has been made against
                CCP
                that the Trademarks infringes, misappropriates, or otherwise comes
                into
                conflict with any intellectual property rights of third parties,
                and
                CCP
                has not
                received any
                charge, complaint, claim, demand, or notice (which was not favourably
                resolved) alleging any such interference, infringement, misappropriation,
                or violation. To Seller’s and Guarantor’s best knowledge, no third party
                is currently interfering with, infringing upon, misappropriating,
                or
                otherwise coming into conflict with any of
                the Trademarks, except as set forth in paragraph 20.6.1; and no third
                party has in the past interfered with, infringed upon, misappropriated,
                or
                otherwise come into conflict with the Trademarks, except for instances
                which were favourably resolved following CCP taking commercially
                reasonable action to protect the Trademarks. CCP
                has
                the sole right to bring actions for infringement of the
                Trademarks.

            

    

     

    
      	(viii)  	
              There
                are no instances in which CCP
                (i) is subject to any outstanding injunction, judgment, order, decree,
                ruling, or charge
                in
                respect of the Trademarks;
                or (ii) is party or, to their
                best knowledge, is threatened to be made a party to any action, suit,
                proceeding, hearing, or investigation of, in, or before any court
                or
                quasi-judicial or administrative agency of any state, local, or foreign
                jurisdiction or before any arbitrator in respect of the Trademarks.
                To
                their best knowledge, there is no litigation pending or threatened
                against
                CCP (a) that would have a material adverse effect on the ability
                of Seller
                to perform its obligations under the Trademark Assignment Letter;
                or (b)
                that seeks to enjoin or obtain damages in respect of the consummation
                of
                the transactions contemplated
                thereby.

            

    

     

    
      
        
        

      

      
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          47

        
          

        

      

      
        
        

      

    

     

    
      	(ix)  	
              Following
                the Completion Date, CCP shall fully cooperate with the Buyer in
                protecting the Buyer’s rights in the Trademarks including but not limited
                to by making its personnel available, and providing such testimony
                and
                access to its books and records as shall be reasonably
                necessary
                in connection with any contest or defense,
                all at Buyer’s cost.

            

    

     

    
      	(x)  	
              Except
                to the extent described in the Trademark License Agreements in the
                agreed
                form, as soon as practicable after the Completion Date, Seller,
                Guarantor and CCP shall cease any use of
                the word “Contico” or any other name which includes any of the Trademarks
                or any derivation thereof.

            

    

     

    
      	(xi)  	
              As
                of the Completion Date, the license agreement between CCP and the
                Company dated
                December 31, 2003 shall immediately terminate and shall be deemed
                null and
                void.

            

    

     

    
      	(xii)  	
              The
                Seller shall notify the Buyer as soon as reasonably practicable following
                the date upon which the purchaser of Contico Manufacturing (Ireland)
                Limited becomes obliged to change that company’s name to a name which does
                not include the word “Contico”.

            

    

     

    
      	(xiii)  	
              Nothing
                in the Sale Agreement between CEH Limited and Brendan Murphy and
                Carolyn
                Murphy (the "Sale Agreement") and/or in the Distribution Agreement
                between
                Contico Manufacturing Limited and Contico Manufacturing (Ireland)
                Ltd (the
                "Distribution Agreement") contradicts, prevents or prohibits Buyer
                and/or
                its assigns from utilizing the name CONTICO in any form or manner,
                including without limitation, as a trade name, trademark, service
                mark,
                logo, domain name or otherwise in any territory, including but not
                limited
                to the territories of the Sale Agreement and/or the aforementioned
                Distribution Agreement

            

    

     

    

     

     

    
      	21.  	
              Information
                technology 

            

    

     

    
      	21.1  	
              The
                definitions in this paragraph apply in this
                agreement.

            

    

     

    IT
      System:
      all
      computer hardware (including network and telecommunications equipment) and
      software (including associated preparatory materials, user manuals and other
      related documentation) owned, used, leased or licensed by or to the
      Company.

     

    IT
      Contracts:
      all
      material agreements under which any third party (including without limitation
      any member of the Seller ́s Group and any source code deposit agents) provides
      any element of, or services relating to, the IT System, including leasing,
      hire
      purchase, licensing, maintenance and services agreements.

     

    
      
        
        

      

      
        Page
          48

        
          

        

      

      
        
        

      

    

     

    
      	21.2  	
              Save
                to the extent provided in the IT Contracts, the Company is the owner
                of
                the IT System free from Encumbrances. The Company has obtained all
                necessary rights from third parties to enable it to use the IT
                System.

            

    

     

     

    
      	21.3  	
              The
                IT Contracts are valid and binding and to the Seller’s knowledge no act or
                omission has occurred which would, if necessary with the giving of
                notice
                or lapse of time, constitute a breach of any such
                contract.

            

    

     

     

    
      	21.4  	
              There
                are and have been no claims, disputes or proceedings arising or to
                the
                Seller’s knowledge threatened under any IT
                Contracts.

            

    

     

     

    
      	21.5  	
              To
                the Seller ́s knowledge, none of the IT Contracts is liable to be
                terminated by a Change of Control of the Company, and the Seller
                has no
                reason to believe that any IT Contracts will not be renewed on the
                same or
                substantially the same terms when they
                expire.

            

    

     

     

    
      	21.6  	
              The
                Company is duly licensed to use the IT System and no further licences
                are
                required for the operation of the IT
                System.

            

    

     

     

    
      	21.7  	
              The
                IT System is functioning to the level necessary for the conduct of
                the
                Business as it has been carried on by the Company.
                

            

    

     

     

    
      	22.  	
              Employment 

            

    

     

    
      	22.1  	
              The
                definitions in this paragraph apply in this
                agreement.

            

    

     

    Employment
      Legislation:
      legislation applying in England and Wales affecting contractual or other
      relations between employers and their employees including, but not limited
      to,
      any legislation and any amendment, extension or re-enactment of such legislation
      and any claim arising under European treaty provisions or directives enforceable
      against the Company by any Employee.

     

    Employee:
      any
      person employed by the Company.

     

     

    
      	22.2  	
              The
                name of each person who is a Director is set out in Schedule
                1.

            

    

     

    
      
        
        

      

      
        Page
          49

        
          

        

      

      
        
        

      

    

     

    
      	22.3  	
              The
                Disclosure Letter includes details of all Employees of the Company,
                the
                particulars of each Employee and the principal terms of their contract
                including:

            

    

     

    
      	(i)  	
              the
                company which employs or engages them;

            

    

     

    
      	(ii)  	
              their
                remuneration (including any benefits and privileges provided or which
                the
                Company is bound to provide to them or their dependants whether now
                or in
                the future);

            

    

     

    
      	(iii)  	
              the
                commencement date of each contract and the date on which their continuous
                service began;

            

    

     

    
      	(iv)  	
              the
                length of notice necessary to terminate each contract or, if a fixed
                term,
                the expiry date of the fixed term and details of any previous
                renewals;

            

    

     

    
      	(v)  	
              the
                type of employment contract (whether full or
                part-time);

            

    

     

    
      	(vi)  	
              their
                date of birth;

            

    

     

    
      	(vii)  	
              any
                country in which the Employee works and/or is paid, if the Employee
                works
                or is paid outside England and Wales;
                and

            

    

     

    
      	(viii)  	
              the
                law governing the contract, if the Employee works or is paid outside
                England and Wales,

            

    

     

    
      	(ix)  	
              which
                information is accurate and
                complete.

            

    

     

     

    
      	22.4  	
              The
                Disclosure Letter includes details of all Employees of the Company
                who are
                on secondment, maternity, paternity, adoption or other leave or absent
                due
                to ill-health or for any other reason for more than 3
                months.

            

    

     

     

    
      	22.5  	
              No
                notice to terminate the contract of employment of any Employee of
                the
                Company (whether given by the Company or by the Employee) has been
                issued
                or received by the Company or to the Seller’s knowledge is pending or
                threatened and no dispute under any Employment Legislation or otherwise
                is
                outstanding between the Company and any of its current or former
                Employees
                relating to their employment or its
                termination.

            

    

     

     

    
      	22.6  	
              No
                questionnaire has been served on the Company by an Employee under
                any
                Employment Legislation which remains unanswered in full or in
                part.

            

    

     

     

    
      	22.7  	
              To
                the Seller ́s knowledge, every Employee of the Company who requires a work
                permit or other permission to work in the United Kingdom has a current
                and
                appropriate work permit or other permission and all necessary permissions
                to remain in the United Kingdom.

            

    

     

    
      
        
        

      

      
        Page
          50

        
          

        

      

      
        
        

      

    

     

    
      	22.8  	
              No
                offer of employment or engagement has been made by the Company that
                has
                not yet been accepted, or which has been accepted but where the employment
                or engagement has not yet started.

            

    

     

     

    
      	22.9  	
              The
                acquisition of the Sale Shares by the Buyer and compliance with the
                terms
                of this agreement will not entitle any senior Employees of the Company
                to
                terminate their employment or receive any payment or other
                benefit.

            

    

     

     

    
      	22.10  	
              All
                contracts between the Company and its Employees are terminable at
                any time
                on not more than three months' notice without compensation (other
                than for
                unfair dismissal or a statutory redundancy payment or any other
                express contractual liability
                on the part of the Company).

            

    

     

     

    
      	22.11  	
              The
                Company is not a party to, bound by or proposing to introduce in
                respect
                of any of its Employees any redundancy payment scheme in addition
                to
                statutory redundancy pay, nor is there any agreed procedure for redundancy
                selection.

            

    

     

     

    
      	22.12  	
              The
                Company is not a party to, bound by or proposing to introduce in
                respect
                of any of its Employees any share option, profit sharing, bonus,
                commission or any other scheme relating to the profit or sales of
                the
                Company.

            

    

     

     

    
      	22.13  	
              The
                Company has not incurred any actual or contingent liability in connection
                with any termination of employment of its Employees (including redundancy
                payments) or for failure to comply with any order for the reinstatement
                or
                re-engagement of any Employee.

            

    

     

     

    
      	22.14  	
              The
                Company has not incurred any liability for failure to provide information
                or to consult with Employees under any Employment
                Legislation.

            

    

     

     

    
      	22.15  	
              The
                Company has not made or agreed to make a payment or provided or agreed
                to
                provide a benefit to a present or former Director or officer, Employee
                or
                to their dependants in connection with the actual or proposed termination
                or suspension of employment or variation of an employment
                contract.

            

    

     

     

    
      	22.16  	
              The
                Company is not involved in any industrial or trade dispute or negotiation
                regarding a claim with any trade union, group or organisation of
                employees
                or their representatives representing Employees and to the Seller’s
                knowledge there is nothing likely to give rise to such a dispute
                or
                claim.

            

    

     

    
      
        
        

      

      
        Page
          51

        
          

        

      

      
        
        

      

    

     

    
      	22.17  	
              The
                Company has not in the last 12 months materially altered nor entered
                into
                negotiations to alter or proposed to alter any of the terms of employment
                or engagement of any of the
                Employees.

            

    

     

     

    
      	22.18  	
              There
                are no sums owing to or from any Employee other than reimbursement
                of
                expenses, wages for the current salary period and holiday pay for
                the
                current holiday year. 

            

    

     

     

    
      	22.19  	
              The
                Disclosure Letter includes true, complete and
                accurate:

            

    

     

    
      	(i)  	
              copies
                of all contracts, handbooks, policies and other documents which apply
                to
                any of the Employees whose basic annual salary exceeds
                £15,000;

            

    

     

    
      	(ii)  	
              copies
                of all agreements with any trade union, employee representative or
                body of
                employees or their representatives (whether binding or not) and details
                of
                any such unwritten agreements which may affect any
                Employee.

            

    

     

     

    
      	22.20  	
              In
                respect of each Employee, the Company
                has:

            

    

     

    
      	(i)  	
              performed
                all obligations and duties they are legally required to perform (and
                settled all outstanding claims);

            

    

     

    
      	(ii)  	
              complied
                with the terms of any relevant agreement with any trade union, employee
                representative or body of employees or their
                representatives;

            

    

     

    
      	(iii)  	
              maintained
                adequate and up to date records.

            

    

     

     

    
      	22.21  	
              There
                are no consultants or independent contractors who currently provide
                services to the Company or who have provided services to the Company
                in
                the twelve months prior to the date of this Agreement and in respect
                of
                whom a fee exceeding £10,000 or more has been paid or is payable. There is
                no person who has accepted an offer to provide services to the Company
                but
                his engagement has not yet started.

            

    

     

     

    
      	22.22  	
              No
                former Employee has the right to return to work for whatever reason,
                or
                has, or may have, the right to be reinstated.

            

    

     

     

    
      	22.23  	
              The
                Company does not recognise and has not in the last six months received
                a
                request for recognition of a trade union for the purposes of collective
                bargaining in relation to any of its
                Employees.

            

    

     

    
      
        
        

      

      
        Page
          52

        
          

        

      

      
        
        

      

    

     

    
      	22.24  	
              There
                is no works council or other body of Employees convened for the purpose
                of
                providing information to or consulting with the Employees which represents
                or is elected by its Employees.

            

    

     

     

    
      	22.25  	
              The
                Seller is not aware of any disciplinary or grievance issue that has
                been
                raised by or against any Employee or any allegation of discrimination,
                harassment or bullying within the last twelve
                months.

            

    

     

     

    
      	22.26  	
              During
                the last 12 months no Employee has been made redundant or has been
                given
                notice of redundancy and the Company is not obliged or accustomed
                to make
                any payments to any Employee of the Company by way of an enhanced
                redundancy payment.

            

    

     

     

    
      	23.  	
              Accounts

            

    

     

    
      	23.1  	
              The
                Accounts have been prepared in accordance with the Companies Acts
                and with
                accounting standards, policies, principles and practices generally
                accepted in the UK and in accordance with the law of that
                jurisdiction.

            

    

     

     

    
      	23.2  	
              The
                Accounts have been audited by an auditor or firm of accountants qualified
                to act as auditors in the UK and the auditors ́ report(s) required to be
                annexed to the Accounts is
                unqualified.

            

    

     

     

    
      	23.3  	
              The
                Accounts show a true and fair view of the state of the Company’s affairs
                as at the Accounts Date and of the profit of the Company for the
                financial
                year ended on that date.

            

    

     

     

    
      	23.4  	
              The
                Accounts have been filed and laid before the Company in general meeting
                in
                accordance with the requirements of the Companies
                Acts.

            

    

     

     

    
      	23.5  	
              The
                Management Accounts have been prepared on a basis consistent with
                that
                employed in preparing the Accounts and fairly represent the income
                and
                expenditure of the Company to the date for which they have been
                prepared.

            

    

     

     

    
      	24.  	
              Financial
                and other records

            

    

     

    
      	24.1  	
              All
                financial and other records of the
                Company:

            

    

     

    
      	(i)  	
              have
                been properly prepared and
                maintained;

            

    

     

    
      	(ii)  	
              constitute
                an accurate record of all matters required by law to appear in
                them;

            

    

     

    
      	(iii)  	
              do
                not contain any material inaccuracies or discrepancies;
                and

            

    

     

    
      
        
        

      

      
        Page
          53

        
          

        

      

      
        
        

      

    

     

    
      	(iv)  	
              are
                in the possession of the Company to which they
                relate.

            

    

     

     

    
      	24.2  	
              No
                notice has been received or allegation made that any of those records
                are
                incorrect or should be rectified.

            

    

     

     

    
      	24.3  	
              All
                statutory records, including accounting records, required to be kept
                or
                filed by the Company have been properly kept or filed and comply
                with the
                requirements of the Companies Acts.

            

    

     

     

    
      	24.4  	
              All
                deeds and documents belonging to the Company are in the possession
                of the
                Company.

            

    

     

     

    
      	25.  	
              Changes
                since accounts date

            

    

     

    Since
      the
      Accounts Date:

     

    
      	(i)  	
              the
                Company has conducted its business in the normal course and as a
                going
                concern;

            

    

     

    
      	(ii)  	
              there
                has been no change in the turnover or financial position of the Company
                which has had a material adverse
                effect;

            

    

     

    
      	(iii)  	
              the
                Company has not issued or agreed to issue any share or loan
                capital;

            

    

     

    
      	(iv)  	
              no
                dividend or other distribution of profits or assets has been, or
                agreed to
                be, declared, made or paid by the Company;

            

    

     

    
      	(v)  	
              the
                Company has not borrowed or raised any money or taken any form of
                financial security and no capital expenditure has been incurred on
                any
                individual item by the Company in excess of £50,000 and the Company has
                not acquired, invested or disposed of (or agreed to acquire, invest
                or
                dispose of) any individual item in excess of £50,000 (other than the sale
                of the freehold property to a member of the Seller’s Group);
                and

            

    

     

    
      	(vi)  	
              no
                shareholder resolutions of the Company have been passed other than
                as
                routine business at the annual general
                meeting.

            

    

     

    
      
        
        

      

      
        Page
          54

        
          

        

      

      
        
        

      

    

     

    
      	26.  	
              Effect
                of sale on sale shares

            

    

     

    Neither
      the acquisition of the Sale Shares by the Buyer nor compliance with the terms
      of
      this agreement will:

     

    
      	(i)  	
              result
                in any third party being entitled contractually to exercise a right
                which
                would cause the Company to lose the benefit of any right or privilege
                it
                presently enjoys; or

            

    

     

    
      	(ii)  	
              relieve
                any person of any contractual obligation to the Company, or contractually
                enable any person to determine any such obligation or any right or
                benefit
                enjoyed by the Company, or to exercise any contractual right in respect
                of
                the Company; or

            

    

     

    
      	(iii)  	
              give
                rise to, or cause to become exercisable, any right of pre-emption
                over the
                Sale Shares; or

            

    

     

    
      	(iv)  	
              entitle
                any person to receive from the Company any finder ́s fee, brokerage or
                other commission in connection with the purchase of the Sale Shares
                by the
                Buyer; or

            

    

     

    
      	(v)  	
              result
                in any customer or supplier being contractually entitled to cease
                dealing
                with the Company or to reduce substantially its existing level of
                business
                or to change the terms on which it deals with the Company;
                or

            

    

     

    
      	(vi)  	
              result
                in any officer or senior Employee being entitled contractually to
                leave
                the Company; or

            

    

     

    
      	(vii)  	
              result
                in a breach by the Company of contract, law, regulation, order, judgment,
                injunction, undertaking, decree or other like imposition;
                or

            

    

     

    
      	(viii)  	
              result
                in the loss or impairment of or any default under any licence,
                authorisation or consent required by the Company for the purposes
                of its
                business; or

            

    

     

    
      	(ix)  	
              result
                in the creation, imposition, crystallisation or enforcement of any
                Encumbrance on any of the assets of the Company;
                or

            

    

     

    
      	(x)  	
              result
                in any present or future indebtedness of the Company becoming due
                and
                payable, or capable of being declared due and payable, prior to its
                stated
                maturity date or in any financial facility of the Company being withdrawn;
                or

            

    

     

    
      	(xi)  	
              entitle
                any person to acquire or affect the entitlement of any person to
                acquire
                shares in the Company.

            

    

     

    
      
        
        

      

      
        Page
          55

        
          

        

      

      
        
        

      

    

     

    
      	27.  	
              Retirement
                benefits 

            

    

     

    
      	27.1  	
              The
                Pension Scheme is the only arrangement under which the Company has
                any
                obligation to provide or contribute towards pension, lump sum, death,
                ill-health, disability or accident benefits in respect of its past
                or
                present officers and employees and no proposal or announcement has
                been
                made to any Employee about the introduction, continuance, increase
                or
                improvement of, or the payment of a contribution towards, any other
                pension, lump sum, death, ill-health, disability or accident
                benefit.

            

    

     

     

    
      	27.2  	
              The
                details of the Pension Scheme and its members set out in the Disclosure
                Letter are true and accurate in all material
                respects.

            

    

     

     

    
      	27.3  	
              All
                contributions, insurance premiums, Tax and expenses due by the Company
                to
                and in respect of the Pension Scheme have been duly
                paid.

            

    

     

     

    
      	Part
              2.  	
               

            

    

     

     

    Tax
      warranties

     

     

    
      	1.  	
              General

            

    

     

    
      	1.1  	
              Provision
                or reserve (as appropriate) has been made in the Accounts:
                

            

    

     

    

    
      	(i)  	
              for
                all Taxation liable to be assessed on the Company or for which the
                Company
                is accountable in respect of all income, profits or gains earned,
                accrued
                or received on or before the Accounts Date or deemed to have been
                or
                treated as earned accrued or received for taxation purposes on or
                before
                the Accounts Date, and in respect of any event occurring or deemed
                to have
                occurred on or before the Accounts Date, including distributions
                made on
                or before the Accounts Date or provided for in the Accounts;
                and

            

    

     

                  (ii) for
      all
      deferred Taxation of the Company in accordance with generally accepted
      accounting practice in the United Kingdom (or, where the Accounts are prepared
      in accordance with international accounting standards as defined in section
      50(2) of the Finance Act 2004, in accordance with those standards).

     

     

    
      	1.2  	
              All
                notices, returns (including any land transaction returns), reports,
                accounts, computations, statements, assessments and registrations
                and any
                other necessary information submitted by the Company to any Taxation
                Authority for the purposes of Taxation have been made on a proper
                basis
                were punctually submitted, were accurate and complete when supplied
                and so
                far as the Seller is aware, remain accurate and complete in all material
                respects and none of the above is the subject of any dispute with
                any
                Taxation Authority. 

            

    

     

    
      
        
        

      

      
        Page
          56

        
          

        

      

      
        
        

      

    

     

    
      	1.3  	
              All
                Taxation (whether of the United Kingdom or elsewhere) for which the
                Company is or has been liable or is liable to account for has been
                duly
                paid (insofar as such Taxation ought to have been paid) within the
                necessary time limits and
                deadlines.

            

    

     

     

    
      	1.4  	
              The
                Company has not made any payments representing instalments of corporation
                tax pursuant to the Corporation Tax (Instalment Payments) Regulations
                1998
                in respect of any current or preceding accounting periods and is
                not under
                any obligation to do so.

            

    

     

     

    
      	1.5  	
              The
                Company has not paid within the past three years ending on the date
                of
                this agreement or will become liable to pay any penalty, fine, surcharge
                or interest charged by virtue of the provisions of the TMA 1970 or
                any
                other Taxation Statute. 

            

    

     

     

    
      	1.6  	
              The
                Company has not within the past three years been subject to any
                non-routine visit, audit, investigation, discovery or access order
                by any
                Taxation Authority and the Seller is not aware of any circumstances
                existing which make it likely that a visit, audit, investigation,
                discovery or access order will be made in the next 12
                months.

            

    

     

     

    
      	1.7  	
              The
                amount of Taxation chargeable on the Company during any accounting
                period
                ending on or within the six years before Completion has not, to any
                material extent, depended on any concession, agreements or other
                formal or
                informal arrangement with any Taxation Authority.
                

            

    

     

     

    
      	1.8  	
              All
                transactions in respect of which any clearance or consent was required
                from any Tax Authority have been entered into by the Company after
                such
                consent or clearance has been properly obtained, any application
                for such
                clearance or consent has been made on the basis of full and accurate
                disclosure of all relevant material facts and considerations, and
                all such
                transactions have been carried into effect only in accordance with
                the
                terms of the relevant clearance or consent.

            

    

     

     

    
      	1.9  	
              The
                Company is not nor will it become liable to make to any person (including
                any Taxation Authority) any payment in respect of any liability to
                Taxation of any other person where that other person fails to discharge
                liability to Taxation to which he is or may be primarily liable and
                there
                is no liability to Taxation for which the Company is or may become
                liable
                to be assessed or asked to account for or have collected from it
                where
                such Taxation is the joint and several liability of the Company and
                some
                other person or where the Taxation in question relates to any income,
                profits or gains earned, accrued or received by any other person
                .

            

    

     

     

    
      	1.10  	
              All
                income tax deductible and payable under the PAYE system and/or any
                other
                Taxation Statute has so far as is required to be deducted been deducted
                from all payments made or treated as made by a Company or any Subsidiary
                and all amounts due to be paid to the relevant Taxation Authority
                prior to
                the date of this Agreement have been so paid including all Tax chargeable
                on benefits provided for directors, employees or former employees
                of the
                Company or any Subsidiary or any persons required to be treated as
                such.

            

    

     

    
      
        
        

      

      
        Page
          57

        
          

        

      

      
        
        

      

    

     

    
      	1.11  	
              The
                Company has, where legally obliged to do so, deducted or withheld
                amounts
                in respect of Taxation from all payments it has made. The Company
                has, if
                required by law, provided a certificate of deduction or withholding
                to the
                recipient of the payment and has properly and punctually accounted
                to the
                relevant taxation authority for the Taxation so deducted or
                withheld.

            

    

     

     

    
      	1.12  	
              Any
                liability of the Company (actual or contingent) to gross up any payment
                which it is or may become to required to make, as well as copies
                of all
                notifications from HM Revenue & Customs that any payment may be made
                gross or at a reduced rate of withholding which otherwise should
                have been
                made subject to deduction of an amount in respect of Taxation, are
                set out
                in the Disclosure Letter.

            

    

     

     

    
      	1.13  	
              The
                Company has correctly applied the provisions of Section 349E ICTA
                1988 to
                any appropriate payments made under Section 349(1) ICTA
                1988.

            

    

     

     

    
      	2.  	
              Capital
                allowances 

            

    

     

    
      	2.1  	
                If
                the entire pool of assets was disposed of by the Company for a
                consideration equal to the tax written down value shown in or adopted
                for
                the purposes of the Accounts there would be no balancing charge under
                CAA
                2001 (or any legislation relating to capital
                allowances).

            

    

     

     

    
      	2.2  	
              No
                event has occurred since the Accounts Date whereby any balancing
                charge
                may fall to be made against, or any disposal value may fall to be
                brought
                into account by the Company under the CAA 2001 (or any other legislation
                relating to capital allowances).

            

    

     

     

    
      	2.3  	
              The
                Seller has maintained all the records necessary to quantify and claim
                Capital Allowances in respect of the Plant (being plant and machinery
                within the meaning of the CAA 2001).

            

    

     

     

    
      	2.4  	
              The
                Seller warrants that an election made pursuant to section 569 of
                CAA 2001
                or section 198 CAA 2001 in either case in the amount equal to the
                tax
                written down value of the Property or the assets covered by the election
                as per the Accounts can be validly made within the requirements of
                such
                section and that it knows of no circumstance which would invalidate
                the
                effectiveness for tax purposes of any such
                election.

            

    

     

     

    
      	2.5  	
              In
                relation to the sale of the Property from the Company to Seller,
                the
                Seller warrants that it shall, and it shall procure that the Company
                shall, enter into such section 198 and 569 elections as are necessary
                to
                ensure that there is no balancing charge or accelerated allowance
                arising
                as a result of the sale.  The Seller and the Buyer warrant that
                neither of them will seek to, or will procure or permit the Company
                to,
                seek to withdraw from or otherwise cause such election to be invalidated,
                provided always that the elections have been made in amounts equal
                to the
                tax written down values of the relevant
                assets.

            

    

     

    
      
        
        

      

      
        Page
          58

        
          

        

      

      
        
        

      

    

     

    
      	3.  	
              Distributions

            

    

     

    
      	3.1  	
              No
                distribution or deemed distribution within the meaning of sections
                209,
                210 or 211 of ICTA 1988 has been made (or will be deemed to have
                been
                made) by the Company after 5 April 1965 except dividends shown in
                their
                audited accounts and the Company is not bound to make any such
                distribution. 

            

    

     

     

    
      	3.2  	
              No
                rents, interest, annual payments or other sums of an income nature
                in
                excess of £2,500 paid or payable by the Company or which the Company is
                under an existing legal obligation to pay in the future are or may
                be
                wholly or partially disallowable as deductions, management expenses
                or
                charges in computing profits for the purposes of corporation tax.
                

            

    

     

     

    
      	3.3  	
              The
                Company has not within the period of seven years preceding Completion
                been
                engaged in, nor been a party to, any of the transactions set out
                in
                sections 213 to 218 (inclusive) of ICTA 1988, nor has it made or
                received
                a chargeable payment as defined in section 218(1) of ICTA
                1988.

            

    

     

     

    
      	4.  	
              Loan
                relationships 

            

    

     

    
      	4.1  	
              The
                Company is not party to any loan relationship (as defined in section
                81
                Finance Act 1996):

            

    

     

    
      	(i)  	
              which,
                were it to be repaid in full in accordance with its terms, may give
                rise
                to any Taxation liability (other than in relation to
                interest);or

            

    

     

    
      	(ii)  	
              to
                which any of paragraphs 10 (imported losses), 11 (transactions not
                at
                arm’s length), 11A (exchange gains and losses where loan not on arm’s
                length terms), 13 (loan relationships for unallowable purposes) or
                15
                (repo transactions and stock-lending) of schedule 9 Finance Act 1996
                (special computational provisions) apply or may
                apply.

            

    

     

     

    
      	4.2  	
              The
                Company has no loan relationship in relation to which:
                

            

    

     

    
      	(i)  	
              there
                is or was a connection between the parties as defined by section
                87
                Finance Act 1996 (accounting method where parties have a connection),
                or
                one of the parties has or had a major interest (as defined in paragraph
                20
                of schedule 9 Finance Act 1996) in the other;
                or

            

    

     

    
      	(ii)  	
              there
                has been, or has been deemed to be, a release or waiver of the amounts
                payable under the relationship; or

            

    

     

    
      	(iii)  	
              paragraph
                5 of schedule 9 Finance Act 1996 (bad debts etc) applies or
                applied.

            

    

     

    
      
        
        

      

      
        Page
          59

        
          

        

      

      
        
        

      

    

     

    
      	4.3  	
              All
                interests, discounts and premiums payable by the Company in respect
                of its
                loan relationships (within the meaning of section 81 of the Finance
                Act
                1996) are eligible to be brought into account by the Company as a
                debit
                for the purposes of Chapter II of Part IV of the Finance Act 1996
                at the
                time and to the extent that such debits are recognised in the statutory
                accounts of the Company.

            

    

     

     

    
      	4.4  	
              The
                Company has not been released from any loan relationship or other
                debt in
                whole or in part in circumstances that give rise or could give rise
                to a
                liability to Taxation.

            

    

     

     

    
      	5.  	
              Close
                companies

            

    

     

    
      	5.1  	
              The
                Company is not, nor has ever been, a close investment-holding company
                as
                defined in section 13A of ICTA
                1988.

            

    

     

     

    
      	5.2  	
              No
                distribution within section 418 of ICTA 1988 has been made by the
                Company
                during the last six years ending at the Accounts Date, nor have such
                distributions been made between the Accounts Date and
                Completion.

            

    

     

     

    
      	5.3  	
              Any
                loans or advances made, or agreed to be made, by the Company within
                sections 419 and 420 or 422 of ICTA 1988 and which remain outstanding
                have
                been disclosed in the Disclosure Letter and any tax liability of
                the
                Company or any participator within the meaning of section 416 of
                ICTA 1988
                in relation to such loans or advances have been paid. The Company
                has not
                released or written off, or agreed to release or write off, the whole
                or
                any part of any such loans or advances.

            

    

     

     

    
      	6.  	
              Group
                relief 

            

    

     

    Except
      as
      provided in the Accounts, the Company is not or will not be obliged to make
      or
      be entitled to receive any payment for group relief as defined in section 402(6)
      of ICTA 1988 in respect of any period ending on or before the Accounts Date,
      or
      any payment for the surrender of the benefit of an amount of advance corporation
      tax or any repayment of such a payment.

     

     

    
      	7.  	
              Groups
                of companies

            

    

     

    
      	7.1  	
              The
                Company has not entered or agreed to enter into an election pursuant
                to
                section 171A or section 179A of TCGA 1992 or paragraph 66 of Schedule
                29
                to the Finance Act 2002. 

            

    

     

     

    
      	7.2  	
              The
                execution or completion of this agreement or any other Event (as
                defined
                in the Tax Covenant) since the Accounts Date will not result in any
                chargeable asset being deemed to have been disposed of and re-acquired
                by
                the Company for Taxation purposes pursuant to section 179 of TCGA
                1992,
                paragraphs 58 or 60 of Schedule 29 to the Finance Act 2002.
                

            

    

     

    
      
        
        

      

      
        Page
          60

        
          

        

      

      
        
        

      

    

     

    
      	7.3  	
              The
                Company has never been party to any arrangements pursuant to section
                36 of
                the Finance Act 1998 (group payment
                arrangements).

            

    

     

     

    
      	8.  	
              Company
                residence and overseas
                interests

            

    

     

    
      	8.1  	
              The
                Company has within the past seven years been resident in the United
                Kingdom for corporation tax purposes and has not at any time in the past
                seven years been treated for the purposes of any double taxation
                arrangements having effect by virtue of section 249 of the Finance
                Act
                1994, section 788 of ICTA 1988 or for any other tax purpose as resident
                in
                any other jurisdiction.

            

    

     

     

    
      	8.2  	
              The
                Company has not without the prior written consent of HM Treasury
                caused,
                permitted or entered into any of the transactions specified in section
                765
                of ICTA 1988 (migration of
                companies).

            

    

     

     

    
      	8.3  	
              The
                Company does not hold shares in a company which is not resident in
                the
                United Kingdom and which would be a close company if it were resident
                in
                the United Kingdom in circumstances such that a chargeable gain accruing
                to the company not resident in the United Kingdom could be apportioned
                to
                the Company pursuant to section 13 of TCGA
                1992.

            

    

     

     

    
      	8.4  	
              The
                Company is not holding or has not held in the past seven years any
                interest in a controlled foreign company within section 747 of ICTA
                1988,
                and has no material interest in an offshore fund as defined in section
                759
                of ICTA 1988.

            

    

     

     

    
      	8.5  	
              The
                Company does not have a permanent establishment outside the
                UK.

            

    

     

     

    
      	9.  	
              Anti-avoidance

            

    

     

    
      	9.1  	
              The
                Company has not at any time been a party to or otherwise involved
                in a
                transaction or series of transactions the main purpose or one of
                the main
                purposes was the avoidance of Tax and there was a risk that the Company
                could be liable to taxation as a result of the principles in W.T
                Ramsey Limited v IRC (54 TC 101)
                or
                Furniss
                v Dawson (55 TC 324),
                as developed in subsequent cases.

            

    

     

     

    
      	9.2  	
              Transactions
                or arrangements made by the Company have been made on fully arms
                length
                terms and there are no circumstances in which section 770A of or
                Schedule
                28AA to ICTA 1988 or any other rule or provision could apply causing
                any
                Taxation Authority to make an adjustment to the terms on which such
                transaction or arrangement is treated as being made for Taxation
                purposes.
                

            

    

     

    
      
        
        

      

      
        Page
          61

        
          

        

      

      
        
        

      

    

     

    
      	10.  	
              VAT

            

    

     

    
      	10.1  	
              The
                Company is a member of a group for VAT purposes of which Contico
                International LLC
                is
                the representative member (the Representative
                Member)
                with quarterly prescribed accounting periods, such registration not
                being
                pursuant to paragraph 2 of Schedule 1 to the VATA 1994 or subject
                to any
                conditions imposed by or agreed with HM Revenue &
                Customs.

            

    

     

     

    
      	10.2  	
              Neither
                the Company nor the Representative Member nor any Group Member is
                (nor are
                there any circumstances in which they may become) under a duty to
                make
                monthly payments on account under the Value Added Tax (Payments on
                Account) Order 1993.

            

    

     

     

    
      	10.3  	
              The
                Disclosure letter contains full details of the group registration
                including details of each company which has or has been in the period
                of
                six years ending with the date of Completion, a member of that group.
                (“Group Member”)

            

    

     

     

    
      	10.4  	
              The
                Company and the Representative Member and any Group Member have complied
                with all statutory provisions, rules, regulations, orders and directions
                in respect of VAT and promptly submitted accurate returns, and maintained
                full and accurate VAT records, invoices and other requisite documents.
                Neither the Company nor the Representative Member nor any Group Member
                have been:

            

    

     

    
      	(i)  	
              subject
                to any interest, forfeiture, surcharge or penalty;
                or

            

    

     

    
      	(ii)  	
              given
                any notice under sections 59, 59A or 64 of the VATA 1994;
                or

            

    

     

    
      	(iii)  	
              given
                a warning within section 76(2) of the VATA 1994;
                or

            

    

     

    
      	(iv)  	
              required
                to give security under paragraph 4 of Schedule 11 to the VATA
                1994.

            

    

     

     

     

    
      	10.5  	
              VAT
                has been duly paid by the Company and each Group Member and Representative
                Member or provision has been made in the Accounts for all amounts
                of VAT
                for which the Company is liable.

            

    

     

     

    
      	10.6  	
              All
                supplies made by the Company are taxable supplies and the Company
                has not
                been or will not be denied full credit for all input tax by reason
                of the
                operation of sections 25 and 26 of the VATA 1994 and regulations
                made
                thereunder or for any other reasons and no VAT paid or payable by
                the
                Company is not input tax as defined in section 24 of the VATA 1994
                and
                regulations made thereunder. 

            

    

     

     

    
      	10.7  	
              For
                the purposes of paragraph 3(7) of Schedule 10 to the VATA 1994, the
                Company or any relevant associates of such companies (within the
                meaning
                of paragraph 3(7) of Schedule 10 to the VATA 1994) has exercised
                the
                election to waive exemption from VAT (pursuant to paragraph 2 of
                Schedule
                10 to the VATA 1994) only in respect of those Properties listed (as
                having
                been the subject of such an election) in the Disclosure Letter
                and:

            

    

     

    
      
        
        

      

      
        Page
          62

        
          

        

      

      
        
        

      

    

     

    
      	(a)  	
              all
                things necessary for the election to have effect have been done and
                in
                particular any notification and information required by paragraph
                3(6) of
                Schedule 10 to the VATA 1994 has been given and any permission required
                by
                paragraph 3(9) of Schedule 10 to the VATA 1994 has been properly
                obtained;
                and

            

    

     

    
      	(b)  	
              no
                election has or will be disapplied or rendered ineffective by virtue
                of
                the application of the provisions of paragraph 2(3AA) of Schedule
                10 to
                the VATA 1994.

            

    

     

    
      	(c)  	
              the
                election will not cease to have effect as a result of the Company
                leaving
                the VAT Group

            

    

     

     

    
      	10.8  	
              The
                Disclosure Letter contains details of all assets owned by the Company
                which are capital items for the purpose of the Capital Goods Scheme
                under
                Part XV of the VAT Regulations 1995.

            

    

     

     

    
      	10.9  	
              All
                transactions between any Group Member and the Company have been made
                in
                accordance with a valid VAT Group Election and the Company will not
                be
                required to make good any default by any other Group Member in relation
                to
                VAT nor will it be liable for additional output tax or non recoverable
                input tax as a result of a direction under VATA 1994 section 9A paragraph
                3.

            

    

     

     

    
      	10.10  	
              The
                transfer of the assets and trade of Contico Europe Holdings Limited
                to the
                Company constituted a “transfer of a going concern” for the purposes of
                section 49 of VATA 1994 and Article 5 of the Value Added Tax (Special
                Provisions) Order 1995. 

            

    

     

     

    
      	11.  	
              Stamp
                duty and stamp duty land
                tax

            

    

     

    
      	11.1  	
              Any
                document which is in the possession or control of the Company and
                that may
                be necessary in proving the title of the Company to any asset which
                is
                owned by the Company at Completion is duly stamped for stamp duty
                purposes. 

            

    

     

     

    
      	11.2  	
              Neither
                entering into this agreement nor Completion will result in the withdrawal
                of any stamp duty or stamp duty land tax relief granted on or before
                Completion which will affect the
                Company.

            

    

     

     

    
      	11.3  	
              The
                Company has complied in all respects with the provisions of Part
                4 Finance
                Act 2003 (stamp duty land tax), including its associated schedules,
                and
                with any regulations made under the same and the Company is not and
                will
                not become liable to pay stamp duty land tax by reference to any
                land
                transaction, as defined in section 43 Finance Act 2003, to which
                the
                Company has before Completion been, or has agreed by legally binding
                contract to be, a party. HM Revenue & Customs has not enquired, or
                given notice of its intention to enquire, into a land transaction
                return
                delivered by or on behalf of the Company and the Company is not aware
                that
                HM Revenue & Customs has reasonable grounds for commencing such an
                enquiry. 

            

    

     

    
      
        
        

      

      
        Page
          63

        
          

        

      

      
        
        

      

    

     

    11.4   The
      Disclosure Letter sets out full and accurate details of any chargeable interest
      (as defined under section 48, Finance Act 2003) acquired or held by the Company
      before Completion in respect of which the Seller is aware or ought reasonably
      to
      be aware that an additional land transaction return will be required to be
      filed
      with a Taxation Authority and/or a payment of stamp duty land tax made on or
      after Completion.

     

     

    
      	12.  	
              INHERITANCE
                TAX

            

    

     

    
      	12.1  	
              The
                Company has never made any transfer of value within the meaning of
                the
                Inheritance Tax Act 1984.

            

    

     

     

    
      	12.2  	
              Neither
                the assets owned by, nor the shares of, the Company are subject to
                an
                outstanding HM Revenue & Customs charge as defined in section 237
                Inheritance Tax Act 1984 (imposition of
                charge).

            

    

     

     

    
      	
              12.3 
                

            	
              No
                circumstances exist, or but for section 204(6) Inheritance Tax Act
                1984
                (contingent liability of transferee for unpaid capital transfer tax
                or
                inheritance tax) would exist, such that a power of sale could be
                exercised
                in relation to any assets or shares of the Company pursuant to section
                212
                Inheritance Tax Act (powers to raise
                tax).

            

    

     

    
      	13.  	
              EMPLOYEE
                TAXATION 

            

    

     

    
      	13.1  	
              The
                Seller warrants that it will, or will procure that the Company is
                fully
                informed of any payments made to employees or former employees of
                the
                Company to enable the Company to comply with its obligations to report
                and
                account for employee taxation including payments made by any member
                of the
                Seller's Group of companies.  The Seller shall notify the Company
                within 7 days of making such payments or becoming aware of any third
                party
                making such a payment.

            

    

     

    
      
        
        

      

      
        Page
          64

        
          

        

      

      
        
        

      

    

     

    
      	Part
              3.  	
              Buyer’s
                Warranties

            

    

     

     

    
      	1.  	
              Power
                to Buy the Company

            

    

     

    
      	1.1  	
              The
                Buyer has taken all necessary action and has all requisite power
                and
                authority to enter into and perform this agreement in accordance
                with its
                terms and the other documents referred to in
                it.

            

    

     

     

    
      	1.2  	
              This
                agreement and the other documents referred to in it constitute (or
                shall
                constitute when executed) valid, legal and binding obligations on
                the
                Buyer in the terms of the agreement and such other
                documents.

            

    

     

     

    
      	1.3  	
              Compliance
                with the terms of this agreement and the documents referred to in
                it shall
                not breach or constitute a default under any of the
                following:

            

    

     

    
      	(a)  	
              any
                agreement or instrument to which the Buyer is a party or by which
                it is
                bound; or

            

    

     

    
      	(b)  	
              any
                order, judgment, decree or other restriction applicable to the
                Buyer.

            

    

     

    
      
        
        

      

      
        Page
          65

        
          

        

      

      
        
        

      

    

     

    
      	 Schedule 4  	
              Tax
                Covenant 

            

    

     

       1. INTENTIONALLY
      BLANK

     

    
      	2.  	
              Interpretation

            

    

     

    
      	2.1  	
              The
                definitions and rules of interpretation in this paragraph apply in
                this
                Tax Covenant:

            

    

     

    Buyer ́s
      Relief:
      means:

     

    
      	(a)  	
              any
                Accounts Relief (as defined in paragraph 2.1(a)) of the definition
                of
                Liability for Taxation) or Repayment Relief (as defined in paragraph
                2.1(b) of the definition of Liability for
                Taxation);

            

    

     

    
      	(b)  	
              any
                Post-Completion Relief of the Company (as defined in paragraph 2.1(c)
                of
                the definition of Liability for Taxation);
                and

            

    

     

    
      	(c)  	
              any
                Relief, whenever arising, of the Buyer or any member of the Buyer ́s Tax
                Group other than the Company.

            

    

     

    Buyer ́s
      Tax Group:
      the
      Buyer and any other company or companies which either are or become after
      Completion treated as members of the same group as, or otherwise connected
      or
      associated in any way with, the Buyer for any Tax purpose.

     

    Degrouping
      Charge:
      any
      Liability for Taxation of the Company as a result of the Company ceasing to
      be,
      or ceasing to be treated as, a member of a group of companies for Tax purposes
      as a result of Completion or of entering into this agreement, or of the
      satisfaction of any condition in this agreement.

     

    Event:
      includes
      (without limitation), the expiry of a period of time, the Company becoming
      or
      ceasing to be associated with any other person for any Tax purpose or ceasing
      to
      be or becoming resident in any country for any Tax purpose, the death or the
      winding up or dissolution of any person, and any transaction (including the
      execution and completion of all provisions of this agreement), event, act or
      omission whatsoever, and any reference to an Event occurring on or before a
      particular date shall include Events which for Tax purposes are deemed to have,
      or are treated or regarded as having, occurred on or before that
      date.

     

    Group
      Relief:
      any or
      all of the following:

     

    
      	(a)  	
              relief
                surrendered or claimed pursuant to Chapter IV Part X ICTA
                1988;

            

    

     

    
      	(b)  	
              advance
                corporation tax surrendered or claimed pursuant to section 240 of
                ICTA
                1988 (set off of company ́s surplus advance corporation tax against
                subsidiary ́s liability to corporation
                tax);

            

    

     

    
      	(c)  	
              a
                Tax refund relating to an accounting period as defined in section
                102(3)
                of the Finance Act 1989 (surrender of company Tax refund etc within
                group)
                in respect of which a notice has been given pursuant to section 102(2)
                of
                that statute; and

            

    

     

    
      	(d)  	
              eligible
                unrelieved foreign Tax surrendered or claimed pursuant to The Double
                Taxation Relief (Surrender of Relievable Tax Within a Group) Regulations
                2001.

            

    

     

    
      
        
        

      

      
        Page
          66

        
          

        

      

      
        
        

      

    

     

    Liability
      for Taxation:
      any
      liability of the Company to make a payment of or in respect of Tax whether
      or
      not the same is primarily payable by the Company and whether or not the Company
      has or may have any right of reimbursement against any other person or persons
      and shall also include:

     

    
      	(a)  	
              the
                Loss of any Relief (Accounts
                Relief)
                where such Relief has been taken into account in computing and so
                reducing
                or eliminating any provision for Tax which appears in the Working
                Capital
                Statement (or which but for such Relief would have appeared in the
                Working
                Capital Statement) or where such Relief was treated as an asset of
                the
                Company in the Working Capital Statement (Loss
                of an Accounts Relief),
                in which case the amount of the Liability for Taxation will be the
                amount
                of Tax which would (on the basis of Tax rates current at the date
                of
                Completion) have been saved but for such Loss, assuming for this
                purpose
                that the Company had sufficient profits or was otherwise in a position
                to
                use the Relief; 

            

    

     

    
      	(b)  	
              the
                Loss of any right to repayment of Tax (including any repayment supplement)
                (Repayment
                Relief)
                which was treated as an asset in the Working Capital Statement
                (Loss
                of a Repayment Relief),
                in which case the amount of the Liability for Taxation will be the
                amount
                of the loss of the right to repayment and any related repayment
                supplement;

            

    

     

    
      	(c)  	
              the
                set off or use against income, profits or gains earned, accrued or
                received on or before Completion or against any Tax chargeable in
                respect
                of an Event occurring on or before Completion of any Relief (Post-Completion
                Relief)
                or right to repayment of Tax (including any repayment supplement)
                which is
                not available before Completion but arises after Completion in
                circumstances where, but for such set off or use, the Company would
                have
                had a liability to make a payment of or in respect of Tax for which
                the
                Buyer would have been able to make a claim against the Seller under
                this
                Tax Covenant (Loss
                of a Post-Completion Relief),
                in which case, the amount of the Liability for Taxation shall be
                the
                amount of Tax saved by the Company as a result of such set off or
                use;

            

    

     

    
      	(d)  	
              any
                liability to repay in whole or in part any payment received by the
                Company
                or a liability of the Company to make any payment (other than to
                the
                Company) for the surrender of Group Relief pursuant to any arrangement
                or
                agreement entered into on or before Completion (save to the extent
                that
                such repayment or payment is reflected in the Working Capital Statement
                or
                to the extent that the Group Relief which was the subject of the
                payment
                is returned to the Company), in which case the amount of the Liability
                for
                Taxation shall be the amount of such liability (disregarding any
                set
                off).

            

    

     

    
      	(e)  	
              the
                loss in whole or in part of the right of the Company to receive any
                payment (other than from the Company) for Group Relief pursuant to
                any
                arrangement or agreement entered into on or before Completion where
                such
                payment was taken into account in the Working Capital Statement,
                in which
                case the amount of the Liability for Taxation shall be the amount
                taken
                into account in the Working Capital
                Statement.

            

    

     

    Loss:
      any
      reduction, modification, loss, counteraction, nullification, utilisation,
      disallowance or claw-back for whatever reason.

     

    
      
        
        

      

      
        Page
          67

        
          

        

      

      
        
        

      

    

     

    Overprovision:
      the
      amount by which any provision in the Working Capital Statement relating to
      Tax
      (other than a provision for deferred Tax) is overstated (except to the extent
      that such overstatement results from the utilisation of a Post-Completion
      Relief), applying the accounting policies, principles and practices adopted
      in
      relation to the preparation of the Working Capital Statement (and ignoring
      the
      effect of any change in law made after Completion).

     

    Relief:
      includes
      any loss, relief, allowance, credit, exemption or set off in respect of Tax
      or
      any deduction in computing income, profits or gains for the purposes of Tax
      and
      any right to a repayment of Tax.

     

    Retained
      Group:
      the
      Seller and any other company or companies (other than the Company) which either
      are or become after Completion, or have within the seven years ending at
      Completion been, treated as members of the same group, or otherwise connected
      or
      associated in any way with the Seller for Tax purposes.

     

    Saving:
      the
      reduction or elimination of any liability of the Company to make an actual
      payment of corporation tax in respect of which the Seller would not have been
      liable under paragraph 3, by the use of any Relief arising wholly as a result
      of
      a Liability for Taxation in respect of which the Seller has made a payment
      under
      paragraph 3 of this Tax Covenant.

     

    Tax:
      all
      forms of taxation and statutory, governmental, state, federal, provincial,
      local, government or municipal charges, duties, imposts, contributions, levies,
      withholdings or liabilities in the nature of taxation wherever chargeable and
      whether of the UK or any other jurisdiction; and any penalty, fine, surcharge,
      interest, charges or costs imposed by a Taxation Authority, and Taxation
      shall
      have the same meaning.

     

    Tax
      Claim:
      any
      assessment (including self-assessment), notice, demand, letter or other document
      issued or action taken by or on behalf of any Taxation Authority from which
      it
      appears that the Company or the Buyer is or may be subject to a Liability for
      Taxation or other liability in respect of which the Seller is or may be liable
      under this Tax Covenant or that the Company is denied or is sought to be denied
      a Relief. 

     

    Taxation
      Authority:
      HM
      Revenue & Customs, the Inland Revenue, HM Customs & Excise, the
      Department of Social Security and any other governmental or other authority
      whatsoever competent to impose any Tax whether in the United Kingdom or
      elsewhere.

     

    Tax
      Refund:
      means a
      right of repayment of Tax or an actual repayment of Tax which the Company
      becomes entitled to or receives in respect of a period (or part period) prior
      to
      Completion or arising as a result of an Event occurring on or before Completion
      other than where such Tax Refund is a Repayment Relief;

     

    Taxation
      Statute:
      any
      directive, statute, enactment, law or regulation wheresoever enacted or issued,
      coming into force or entered into providing for or imposing any Tax and shall
      include orders, regulations, instruments, bye-laws or other subordinate
      legislation made under the relevant statute or statutory provision and any
      directive, statute, enactment, law, order, regulation or provision which amends,
      extends, consolidates or replaces the same or which has been amended, extended,
      consolidated or replaced by the same. 

     

     

    
      	2.2  	
              References
                to gross
                receipts,
                income,
                profits
                or
                gains
                earned, accrued or received shall include any gross receipts, income,
                profits or gains deemed pursuant to the relevant Taxation Statute
                to have
                been or treated or regarded as earned, accrued or
                received.

            

    

     

    
      
        
        

      

      
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          68

        
          

        

      

      
        
        

      

    

     

    
      	2.3  	
              A
                reference to an Event
                occurring on or before Completion includes
                a series or combination of Events all of which were Events occurring
                on or
                before Completion or the first of which was an Event occurring on
                or
                before Completion which was not in the ordinary course of business
                of the
                Company and any of which occurring after Completion were in the ordinary
                course of business of the Company and, for the avoidance of doubt, this
                clause shall not apply to any series of Events which result in any
                Tax
                Liability which arises on income , profits or gains earned, accrued
                or
                received after Completion due to in whole or part an Event occurring
                on or
                before Completion save to the extent that such tax Liability is on
                deemed
                (as opposed to actual) income, profits or gains earned accrued or
                received
                on or before Completion.  

            

    

     

     

    
      	2.4  	
              Any
                reference to something occurring in the ordinary course of business
                shall,
                without prejudice to the generality thereof, be deemed not to
                include:

            

    

     

    
      	(a)  	
              anything
                which involves, or leads directly or indirectly to, any liability
                of the
                Company to Tax that is the primary liability of, or properly attributable
                to, or due from another person (other than a member of the Buyer ́s Tax
                Group) or is the liability of the Company only because some other
                person,
                other than a member of the Buyer ́s Tax Group, has failed to pay it or is
                the liability of the Company because it has elected to be regarded
                as
                taxable or liable or to be regarded as having made a disposal;
                or

            

    

     

    
      	(b)  	
              anything
                which relates to or involves the acquisition or disposal of an asset
                or
                the supply of services (including the lending of money, or the hiring
                or
                licensing of tangible or intangible property) in a transaction which
                is
                not entered into on arm ́s length terms;
                or

            

    

     

    
      	(c)  	
              anything
                which relates to or involves the making of a distribution for Tax
                purposes, the creation, cancellation or re-organisation of share
                or loan
                capital, the creation, cancellation or repayment of any intra-group
                debt
                or the Company becoming or ceasing to be or being treated as ceasing
                to be
                a member of a group of companies or becoming or ceasing to be associated
                or connected with any other company for any Tax purposes;
                or

            

    

     

    
      	(d)  	
              anything
                which relates to a transaction or arrangement which includes, or
                a series
                of transactions or arrangements which includes, any step or steps
                having
                no commercial or business purpose apart from the reduction, avoidance
                or
                deferral of a Liability for Taxation;
                or

            

    

     

    
      	(e)  	
              anything
                which gives rise to a Liability for Taxation on deemed (as opposed
                to
                actual) profits or to the extent that it gives rise to a Liability
                for
                Taxation on an amount of profits greater than the difference between
                the
                sale proceeds of an asset and the amount attributable to that asset
                in the
                Accounts or, in the case of an asset acquired since the Accounts
                Date, the
                cost of that asset; 

            

    

     

    
      	(f)  	
              anything
                which involves, or leads directly or indirectly to, a change of residence
                of the Company for Tax purposes; or

            

    

     

    
      	(g)  	
              any
                employment related taxes arising from bonuses paid to employees or
                former
                employees of the Company as a result of commitments provided by the
                Company or any member of the Seller's Group prior to Completion in
                respect
                of duties performed prior to
                Completion.

            

    

     

    
      
        
        

      

      
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          69

        
          

        

      

      
        
        

      

    

     

    
      	2.5  	
              Unless
                the contrary intention appears, words and expressions defined in
                this
                agreement have the same meaning in this Tax Covenant and any provisions
                in
                this agreement concerning matters of construction or interpretation
                also
                apply in this Tax Covenant.

            

    

     

     

    
      	3.  	
              Covenant

            

    

     

    The
      Seller covenants with the Buyer that, subject to the provisions of this Tax
      Covenant, the Seller shall pay to the Buyer, an amount equal to any:

     

    
      	(a)  	
              Liability
                for Taxation resulting from or by reference to any Event occurring
                on or
                before Completion or in respect of any gross receipts, income, profits
                or
                gains earned, accrued or received by the Company on or before
                Completion;

            

    

     

    
      	(b)  	
              Liability
                for Taxation which arises solely as a result of the relationship
                for Tax
                purposes of the Company with any person other than a person which
                is or
                has been a member of the Buyer’s Tax Group whensoever
                arising;

            

    

     

    
      	(c)  	
              Liability
                for Taxation arising in connection with or as a result of the grant
                of
                share options to and/or the exercise thereof to by employees or directors
                of the Company in either case on or before Completion and save to
                the
                extent that such Liability for Taxation was withheld or deducted
                from
                payments made to that individual (including, for the avoidance of
                doubt,
                payments of the Purchase Price in respect of Sale Shares owned by
                the
                relevant individual).

            

    

     

    
      	(d)  	
              Liability
                for Taxation arising in connection with or as a result of the actions
                or
                omissions of any Company which was within the same VAT Group as the
                Company prior to Completion.

            

    

     

    
      	(e)  	
              Liability
                for Taxation arising in connection with, or as a result of, transactions
                which the Company entered into on or before Completion with Continental
                Commercial Products LLC. 

            

    

     

    
      	(f)  	
              all
                reasonable costs and expenses reasonably and properly incurred by
                the
                Buyer and/or the Company on an indemnity basis in connection with
                a
                successful claim in respect of such Liability to
                Taxation.

            

    

     

     

    
      	4.  	
              Payment
                date and interest

            

    

     

    
      	4.1  	
              Where
                the Seller is liable to make any payment under paragraph 3 (including
                any
                payment pursuant to paragraph 3(f)), the due date for the making
                of that
                payment (Due Date) shall be the later of the date falling seven days
                after
                the Buyer has served a written notice on the Seller demanding that
                payment
                and in a case:

            

    

     

    
      	(a)  	
              that
                involves an actual payment of Tax (including any payment pursuant
                to
                paragraph 3(f)) by the Company, the date which is 5 days prior to
                that
                date on which the Tax in question would have had to have been paid
                to the
                relevant Taxation Authority in order to prevent a liability to interest
                or
                a fine, surcharge or penalty from arising in respect of the Liability
                for
                Taxation in question; or

            

    

     

    
      	(b)  	
              that
                falls within paragraph 2.1(a) of the definition of Liability to Taxation,
                the last date upon which the Tax is or would have been required to
                be paid
                to the relevant Taxation Authority in respect of the period in which
                the
                Company is deprived of the benefit of using the Relief; or
                

            

    

     

    
      
        
        

      

      
        Page
          70

        
          

        

      

      
        
        

      

    

     

    
      	(c)  	
              that
                falls within paragraph 2.1(b) of the definition of Liability to Taxation,
                the date upon which the repayment was due from the relevant Taxation
                Authority; or

            

    

     

    
      	(d)  	
              that
                falls within paragraph 2.1(c) of the definition of Liability to Taxation,
                the date upon which the Tax saved by the Company is or would have
                been
                required to be paid to the relevant Taxation Authority;
                or

            

    

     

    
      	(e)  	
              that
                falls within paragraph 2.1(e) of the definition of Liability for
                Taxation
                (loss of payment rights relating to the surrender of group relief),
                not
                later than the day on which the right to a payment or other consideration
                is lost.

            

    

     

     

    
      	4.2  	
              If
                any sums required to be paid by the Seller under this Tax Covenant
                are not
                paid on the Due Date, then, except to the extent that the Seller’s
                liability under paragraph 3 compensates the Buyer for the late payment
                by
                virtue of it extending to interest and penalties, such sums shall
                bear
                interest (which shall accrue from day to day after as well as before
                any
                judgement for the same) at the rate of 2% per annum over the base
                rate
                from time to time of Barclays Bank plc or (in the absence thereof)
                at such
                similar rate as the Buyer shall select from the day following the
                Due Date
                up to and including the day of actual payment of such sums, such
                interest
                to be compounded quarterly. 

            

    

     

     

    
      	5.  	
              Exclusions

            

    

     

    
      	5.1  	
              The
                covenant contained in paragraph 3 above shall not cover any Liability
                for
                Taxation (and the Seller shall not be liable for any breach of the
                Tax
                Warranties) to the extent that:

            

    

     

    
      	(a)  	
              a
                provision or reserve in respect thereof is made in the Working Capital
                Statement; or

            

    

     

    
      	(b)  	
              it
                arises or is increased as a result of any change in the law of Tax
                announced and coming into force after Completion (whether relating
                to
                rates of Tax or otherwise) or the withdrawal or change of any
                extra-statutory concession, published practice or written interpretation
                previously made by a Taxation Authority (whether or not the change
                purports to be effective retrospectively in whole or in part); or
                

            

    

     

    
      	(c)  	
              it
                would not have arisen but for a change after Completion in the accounting
                reference date or the accounting bases upon which the Company values
                its
                assets (other than a change made in order to correct pre-Completion
                failures to comply with UK GAAP applicable prior to Completion);
                or

            

    

     

    
      	(d)  	
              the
                Buyer is compensated for any such matter under any other provision
                of this
                agreement; or 

            

    

     

    
      	(e)  	
              it
                would not have arisen but for a voluntary act, transaction or omission
                carried out by the Buyer or the Company (including any act, transaction
                or
                omission by any director, officer, employee, agent or adviser of
                the
                Company) after Completion being an act
                which:

            

    

     

    
      	(i)  	
              is
                not in the ordinary course of business;
                or

            

    

     

    
      	(ii)  	
              the
                Company was not legally committed to do under a commitment that existed
                on
                or before Completion; or

            

    

     

    
      
        
        

      

      
        Page
          71

        
          

        

      

      
        
        

      

    

     

    
      	(iii)  	
              the
                Buyer was aware, or ought reasonably to have been aware, would give
                rise
                to the Liability for Taxation in question;
                or

            

    

     

    
      	(f)  	
              the
                Liability for Taxation is a Degrouping Charge which, whether by election
                or otherwise, is treated as accruing not to the Company but to the
                Seller
                or any member of the Retained Group;
                or

            

    

     

    
      	(g)  	
              the
                Liability to Taxation would not have arisen but for a major change
                in the
                nature or conduct of the trade (within the meaning of section 768A
                of ICTA
                1988) of, the Company on or after Completion;
                or

            

    

     

    
      	(h)  	
              the
                Liability to Taxation is in respect of interest and/or penalties
                and
                arises or is increased in consequence of any failure by the Buyer
                to
                comply with, or a failure to procure the compliance of the Company
                with,
                any of their respective obligations under this Agreement;
                or

            

    

     

    
      	(i)  	
              any
                Relief (other than a Buyer's Relief) is available, or is for no
                consideration made available, to the Company (and in circumstances
                where
                the Buyer or Company is aware that such a Relief is available) to
                set
                against or otherwise mitigate the Liability to Taxation, and so
                that:

            

    

     

    (a)
      for
      this purpose, any Relief arising in respect of an accounting period falling
      partly before and partly after Completion shall be apportioned on a time basis,
      unless some other basis is more reasonable; and

     

    (b)
      any
      Relief that is so available in relation to more than one Liability to Taxation
      to which this Schedule applies shall be deemed, so far as possible, to be used
      in such a way as to reduce to the maximum extent possible the Seller's total
      liability under this Schedule; 

     

    (j)
      the
      Liability to Taxation would not have arisen but for:

     

    (a)
      the
      making of a claim, election, surrender or disclaimer, the giving of a notice
      or
      consent, or the doing of any other thing under the provisions of any enactment
      or regulation relating to Tax, in each case after Completion by the Purchaser,
      or the Company or the relevant Subsidiary other than at the Seller’s direction
      in accordance with paragraph 9 or 10 ; or

     

    (b)
      the
      failure by the Buyer to comply with, or a failure by the Buyer to procure the
      compliance of the Company with, their respective obligations under paragraphs
      9
      and/or 10; 

     

    (k)
      such
      Liability to Taxation is interest arising under the Corporation Tax (Instalment
      Payments) Regulations 1998 as a result of the instalment payments made before
      Completion being insufficient as a result of Income, Profits or Gains earned,
      accrued or received after Completion or an Event arising after Completion;
      or

     

    (l)
      such
      Liability for Taxation arises as a result of a withdrawal by the Buyer or the
      Company post Completion of the election under s 569 CAA 2001 made by the Company
      and the Seller in relation to the Property.

     

    
      	6.  	
              Savings,
                Overprovisions, Tax
                Refunds

            

    

     

    
      	6.1  	
              If
                the Buyer or the Company becomes aware that an Overprovision, Saving
                or
                Tax Refund has arisen, the Buyer shall promptly give details of such
                Overprovision, Saving or Tax Refund by written notice to the Seller.
                

            

    

     

    
      
        
        

      

      
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          72

        
          

        

      

      
        
        

      

    

     

    
      	6.2  	
              The
                Seller may instruct the auditors for the time being of the Company
                to
                certify (at the request and expense of the Seller) whether (i) any
                provision for Tax in the Working Capital Statement has proved to
                be an
                Overprovision, and, if so, the extent of such Overprovision, or (ii)
                a
                Saving has arisen and, if so, the extent of such Saving, or (iii)
                a Tax
                Refund has arisen and, if so, the extent of such Tax
                Refund.

            

    

    

    
      	6.3  	
              If
                the auditors certify that an Overprovision, Saving or Tax Refund
                has
                arisen, then:

            

    

    

    (a)
      the
      amount shall first be set off against any payment then due from the Seller
      under
      this Tax Covenant; 

    

    (b)
      to
      the extent that there is an excess, a refund shall be made to the Seller of
      any
      previous payment or payments made by the Seller under this Tax Covenant (and
      not
      previously refunded under this Tax Covenant) up to the amount of such
      excess; 

    

    (c)
      to
      the extent that such excess as referred to in paragraph 6.3(b)
      is
      not exhausted, the remainder of that excess shall be carried forward and set
      off
      against any future payment or payments which become due from the Seller under
      this Tax Covenant; 

    

    

    

    
      	6.4  	
              After
                the Company ́s auditors have produced any certificate under this paragraph
                6, the Seller or the Buyer may, at any time before the seventh anniversary
                of Completion, request the auditors for the time being of the Company
                (as
                the case may be) to review (at the expense of the party requesting
                the
                review) that certificate in the light of all relevant circumstances,
                including any facts of which they were not or it was not aware, and
                which
                were not taken into account, at the time when such certificate was
                produced and to certify whether, in their opinion, the certificate
                remains
                correct or whether, in light of those circumstances, it should be
                amended.

            

    

    

    
      	6.5  	
              If
                the auditors make an amendment to the earlier certificate and the
                amount
                of the Overprovision, Saving or Tax Refund is revised, that revised
                amount
                shall be substituted for the previous amount and any adjusting payment
                that is required shall be made by or to the Seller (as the case may
                be) as
                soon as reasonably practicable.

            

    

     

    
      	7.  	
              Recovery
                from third parties

            

    

     

    
      	7.1  	
              Where
                the Seller has paid an amount in full discharge of a liability under
                paragraph 3 in respect of any Liability for Taxation and the Buyer
                or the
                Company is or becomes entitled to recover from some other person
                not being
                the Buyer or the Company or any other company within the Buyer’s Tax
                Group, any amount in respect of such Liability for Taxation to which
                paragraph 3 applies, the Buyer shall or shall procure that the Company
                shall:

            

    

     

    
      	(a)  	
              notify
                the Seller of its entitlement as soon as reasonably practicable;
                and

            

    

     

    
      	(b)  	
              if
                required by the Seller and, subject to the Buyer, the Company being
                reasonably indemnified by the Seller to the satisfaction of the Buyer
                against any Tax that may be suffered on receipt of that amount and
                any
                costs and expenses incurred in recovering that amount, take or procure
                that the Company takes all reasonable steps to enforce that recovery
                against the person in question (keeping the Seller fully informed
                of the
                progress of any action taken).

            

    

     

    
      
        
        

      

      
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          73

        
          

        

      

      
        
        

      

    

     

    
      	7.2  	
              If
                the Buyer or the Company recovers any amount referred to in paragraph
                7.1,
                the Buyer shall account to the Seller for the lesser of:
                

            

    

     

    
      	(a)  	
              any
                amount recovered (including any related interest or related repayment
                supplement) less any Tax suffered in respect of that amount and any
                costs
                and expenses incurred in recovering that amount (save to the extent
                that
                amount has already been made good by the Seller under paragraph 7.1
                above); and

            

    

     

    
      	(b)  	
              the
                amount paid by the Seller under paragraph 3 in respect of the Liability
                for Taxation in question.

            

    

     

     

    
      	7.3  	
              If
                any amount recovered pursuant to paragraph 7.1 (the Recovered
                Amount)
                exceeds any payment made to the Seller pursuant to paragraph 7.2
                (the
                Payment
                Amount)
                then an amount equal to the difference between the Payment Amount
                and the
                Recovered Amount shall be set off against the liability of the Seller
                in
                respect of future claims under the Tax Covenant.
                

            

    

     

     

    
      	8.  	
              Surrender
                of group relief

            

    

     

    
      	8.1  	
              Subject
                to and in accordance with the provisions of this paragraph 8, if
                any
                liability of the Seller under this Tax Covenant or in respect of
                any claim
                under the Tax Warranties can be reduced or eliminated by the surrender
                of
                Group Relief to the Company by the Seller or any company other than
                a
                member of the Buyer’s Tax Group, the Seller may make or procure the making
                of such surrender and the Company shall co-operate with the Seller
                in
                relation to such surrender and make all necessary returns, claims,
                consents and notifications required to be made in respect of such
                surrender.

            

    

     

     

    
      	8.2  	
              The
                Company shall not be liable to give any consideration in respect
                of any
                surrender of Group Relief pursuant to paragraph
                8.1.

            

    

     

     

    
      	9.  	
              Corporation
                tax returns

            

    

     

    
      	9.1  	
              The
                Seller or its duly authorised agent shall at the cost of the Company
                prepare the corporation tax returns and computations of the Company
                for
                all accounting periods ended on or prior to the Accounts Date, to
                the
                extent that the same have not been prepared before Completion, and
                submit
                them to the Buyer. 

            

    

     

     

    
      	9.2  	
              The
                Buyer shall procure that the returns and computations referred to
                in
                paragraph 9.1 shall be authorised, signed and submitted to the relevant
                Taxation Authority without amendment or with such amendments as requested
                by the Buyer but subject to the prior approval of the Seller (such
                approval not to be unreasonably withheld) and shall give the Seller
                or its
                agent all such assistance as may reasonably be required (at the Seller ́s
                cost and expense) to agree those returns and computations with the
                relevant Taxation Authority provided that the Buyer shall not be
                obliged
                to take any such action as is mentioned in this paragraph 9.2 in
                relation
                to any return that is not full, true and accurate in all material
                respects. 

            

    

     

    
      
        
        

      

      
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          74

        
          

        

      

      
        
        

      

    

     

    
      	9.3  	
              The
                Seller or its duly authorised agent shall at the Seller ́s cost and expense
                prepare all documentation and shall have conduct of all matters (including
                correspondence) relating to the corporation tax returns and computations
                of the Company for all accounting periods ended on or prior to the
                Accounts Date provided that the Seller shall not without the prior
                written
                consent of the Buyer (not to be unreasonably withheld or delayed)
                transmit
                any communication (written or otherwise) to the relevant Taxation
                Authority or agree any matter with the relevant Taxation Authority.
                

            

    

     

     

    
      	9.4  	
              The
                Buyer shall procure that the Company, at the Seller ́s cost and expense,
                afford such access to their books, accounts and records as is necessary
                and reasonable to enable the Seller or its duly authorised agent
                to
                prepare the corporation tax returns and computations of the Company
                for
                all accounting periods ended on or before the Accounts Date and conduct
                matters relating to them in accordance with this paragraph 9.
                

            

    

     

     

    
      	9.5  	
              The
                Seller shall take all reasonable steps to ensure that the corporation
                tax
                returns and computations of the Company for all accounting periods
                ended
                on or before the Accounts Date are prepared and agreed with the relevant
                Taxation Authority as soon as
                possible.

            

    

     

     

    
      	9.6  	
              The
                Buyer shall procure that the
                Company:

            

    

     

    (a)
      makes
      such claims (including, but not limited to, claiming or disclaiming capital
      allowances, depreciation allowances and claiming roll over
      reliefs);

     

    (b)
      executes such documents (including but not limited to returns of profits and
      losses and amended returns); and

     

    (c)
      does
      such other things in relation to the relevant accounting periods as are
      considered necessary by the Seller;

     

    in
      each
      case, as is required to give effect to the returns, computations and other
      documentation referred to in paragraphs 9.2 and 9.3.

     

     

    
      	9.7  	
              The
                Buyer shall further procure that the Company shall not (unless it
                has been
                approved by the Seller such approval not to be unreasonably withheld
                or
                delayed or otherwise pursuant to this paragraph
                9):

            

    

     

    (a)
      amend, withdraw or disclaim any election or claim previously made;
      nor

     

    (b)
      disclaim any allowance or Relief arising on or before Completion;
      nor

     

    (c)
      carry
      back any Post-Completion Relief in circumstances where such carry back will
      reduce the Company’s ability to make any surrenders, claims or
      elections.

     

     

    
      	9.8  	
              In
                relation to the accounting period commencing prior to but ending
                after
                Completion, the Buyer shall have conduct of all corporation tax matters
                of
                the Company and its Subsidiaries provided that the Buyer shall not
                (and
                shall procure that its agents shall not) transmit any written
                communication or agree any matter with a Tax Authority without the
                prior
                written consent of the Sellers (such consent not to be unreasonably
                withheld or delayed).

            

    

     

    
      
        
        

      

      
        Page
          75

        
          

        

      

      
        
        

      

    

     

    
      	9.9  	
              The
                Seller shall ensure that if the Company is a party to a group payment
                arrangement with HM Revenue & Customs under section 36 of the Finance
                Act 1998, it shall be immediately removed from the arrangement as
                provided
                for in the arrangement.

            

    

     

     

    
      	9.10  	
              The
                Seller will ensure that the Nominated Company under the group payment
                arrangement to which the Company is a party exercises its rights
                to
                apportion and re-apportion payments under the arrangement so far
                as
                possible to ensure that Liability for Taxation of the Company for
                which
                (disregarding any de minimis provisions in this agreement) recovery
                would
                otherwise be available under this Tax Covenant are fully and expeditiously
                discharged.

            

    

     

     

    
      	9.11  	
              The
                Seller will ensure (to the extent permitted by law and for no
                consideration) that any Degrouping Charge for which recovery would
                otherwise be available under this Tax Covenant or under the Tax Warranties
                is treated as accruing not to the Company but to the Seller or a
                member of
                the Retained Group and the Buyer will procure that the Company executes
                all claims, elections, consents or other documents relevant for that
                purpose.

            

    

     

     

      9.12
 For
      the
      avoidance of doubt:

     

    (a)
      where
      any matter relating to Tax gives rise to a Tax Claim, the provisions of
      paragraph 10 shall take precedence over the provisions of this paragraph 9;
      and

     

    (b)
      the
      provisions of this paragraph 9 shall not prejudice the rights of the Buyer
      to
      make a Tax Claim under this Tax Covenant in respect of any Liability for
      Taxation.

     

     

    
      	
              9.13
                 

            	
              The
                Seller shall, or shall procure, to the extent that it is able to
                do so,
                that all the records not in the possession or control of the Company
                needed by the Buyer to identify, quantify and submit a claim for
                capital
                allowances shall be preserved and, to the extent that such records
                are not
                delivered to the Buyer on Completion, the Seller shall make available
                or
                shall procure that the records shall be made available to the Buyer.
                The
                Seller agrees to provide such information and other assistance as
                the
                Buyer may reasonable request to enable it to claim capital allowances
                in
                respect of the plant and the Seller will keep the Buyer informed
                of any
                information and correspondence which it receives from HM Revenue
&
                Customs which might effect the capital allowances on the plant or
                indicate
                that such capital allowances may be
                challenged.

            

    

     

     

    
      	
              9.14  
                

            	
              For
                the avoidance of doubt, the Seller shall (to the extent permitted
                by law)
                be free to make claims and obtain consents for the surrender of Group
                Relief between the Company and the Retained Group for the period
                between
                the Accounts Date and 1 April 2006 on a just and reasonable apportionment
                basis (as well as periods ending prior to the Accounts Date). If
                Group
                Relief is surrendered under this paragraph 9 to a member of the Retained
                Group, no member of the Retained Group shall be liable to pay any
                consideration to the Company or the Buyer in respect of such
                surrender. 

            

    

     

    
      
        
        

      

      
        Page
          76

        
          

        

      

      
        
        

      

    

     

    
      	10.  	
              Conduct
                of tax claims

            

    

     

    
      	10.1  	
              If
                the Buyer or the Company becomes aware of a Tax Claim, the Buyer
                shall
                give or procure that notice in writing is given to the Seller as
                soon as
                is reasonably practicable (and, in any event, within 10 Business
                Days
                where there is a time limit for appeal), provided that if the Seller
                receives any Tax Claim for whatever reason, it shall notify the Buyer
                in
                writing as soon as is reasonably practicable and the Buyer shall
                be deemed
                on receipt of such claim by the Seller to have given the Seller notice
                of
                such Tax Claim in accordance with the provisions of this paragraph
                10
                provided always that the giving of such notice shall not be a condition
                precedent to the Seller ́s liability under this Tax
                Covenant.

            

    

     

     

    
      	10.2  	
              Provided
                that the Seller indemnifies the Buyer and the Company to the Buyer ́s
                reasonable satisfaction against all liabilities, costs, damages or
                expenses which may be reasonably incurred thereby including any additional
                Liability for Taxation, the Buyer shall take and shall procure that
                the
                Company shall take such action as the Seller may reasonably request
                by
                notice in writing given to the Buyer or the Company to avoid, dispute,
                defend, resist, appeal or compromise any Tax Claim (such a Tax Claim
                where
                action is so requested being hereinafter referred to as a Dispute),
                provided that neither the Buyer nor the Company shall be obliged
                to appeal
                or procure an appeal against any assessment to Tax raised on any
                of them
                if, the Seller having been given written notice of the receipt of
                such
                assessment, the Buyer or the Company has not within 10 Business Days
                or,
                where there is a time limit for appeal, 5 Business Days of the date
                of the
                notice, received instructions in writing from the Seller to do
                so.

            

    

     

     

    
      	10.3  	
              If:

            

    

     

    (a)
       the
      Seller does not request the Buyer or the Company to take any action under
      paragraph 10.2 or fails to indemnify the Buyer or the Company to the Buyer ́s
      reasonable satisfaction within a period of time (commencing with the date of
      the
      notice given to the Seller) that is reasonable having regard to the nature
      of
      the Tax Claim and the existence of any time limit in relation to avoiding,
      disputing, defending, resisting, appealing or compromising such Tax Claim;
      or

     

    (b)
       the
      Seller (or the Company before Completion) has been involved in a case involving
      fraudulent conduct or wilful default in respect of the Liability for Taxation
      which is the subject matter of the Dispute; or

     

    (c) the
      Dispute involves an appeal against a determination by the General or Special
      Commissioners of the VAT and Duties Tribunal, unless the Seller has obtained
      the
      opinion of Tax counsel of at least 5 years ́ standing that there is a reasonable
      prospect that the appeal will succeed,

     

     

    the
      Buyer
      or the Company shall have the conduct of the Dispute absolutely (without
      prejudice to its rights under this Tax Covenant) and shall be free to pay or
      settle the Tax Claim on such terms as the Buyer or the Company may in its
      absolute discretion consider fit. 

     

     

    
      	10.4  	
              Subject
                to paragraph 10.3, the Seller may resist any Dispute for and on behalf
                of
                the Company or the relevant Subsidiary and in its name provided
                that:

            

    

     

    
      
        
        

      

      
        Page
          77

        
          

        

      

      
        
        

      

    

     

    (a) the
      Buyer
      or the Company shall promptly be kept fully informed of all matters pertaining
      to a Dispute and shall be entitled to see and keep copies of all correspondence
      and notes or other written records of telephone conversations or meetings and,
      in the event that there is no written record, shall be given an immediate report
      of all telephone conversations with any Taxation Authority to the extent that
      it
      relates to a Dispute;

     

    (b) the
      appointment of solicitors or other professional advisers shall be subject to
      the
      approval of the Buyer, such approval not to be unreasonably withheld or delayed;
      and

     

    (c) all
      material written communications pertaining to the Dispute which are to be
      transmitted to the relevant Taxation Authority shall first be submitted to
      the
      Buyer for approval and shall only be finally transmitted if such approval is
      given, which approval is not to be unreasonably withheld or delayed;
      and

     

    (d) the
      Seller shall make no settlement or compromise of the Dispute or agree any matter
      in the conduct of the Dispute which is likely to affect the amount thereof
      or
      the future liability to Tax of the Buyer or the Company without the prior
      approval of the Buyer (not to be unreasonably withheld or delayed).

     

    (e) the
      Buyer
      shall not be required and the Seller shall not be permitted to make or procure
      the making of a formal appeal to any tribunal, court, appellate body or judicial
      authority unless the Seller, at its own expense and after disclosure of all
      relevant information and documents, obtains and delivers to the Buyer an opinion
      from appropriate counsel who has been approved for the purpose by the Buyer
      (such approval not to be unreasonably withheld or delayed) and who has
      specialised in relevant Tax matters for a minimum of five years that the appeal
      has a reasonable change of success.

     

     

    
      	10.5  	
              The
                Buyer shall provide and shall procure that the Company provides to
                the
                Seller and the Seller ́s professional advisors reasonable access to
                premises and personnel and to any relevant assets, documents and
                records
                within their power, possession or control for the purpose of investigating
                the matter and enabling the Seller to take such action as is referred
                to
                in this paragraph 10.

            

    

     

     

    
      	10.6  	
              Other
                than where paragraph 10.3 applies, the Buyer shall not (and shall
                procure
                that the Company shall not) settle, accept, pay or compromise the
                Dispute
                without the Seller's written consent (such consent not to be unreasonably
                withheld or delayed).

            

    

     

     

    
      	10.7  	
              Neither
                the Buyer nor the Company shall be subject to any claim by or liability
                to
                the Seller for non-compliance with any of the provisions of this
                paragraph
                10 if the Buyer, or the Company has bona fide acted in accordance
                with the
                instructions of the Seller. 

            

    

     

     

    
      	11.  	
              Grossing
                up

            

    

     

    
      	11.1  	
              All
                sums payable by the Seller to the Buyer under this Tax Covenant shall
                be
                paid free and clear of all deductions or withholdings in respect
                of
                Taxation unless the deduction or withholding is required by law.
                If any
                deductions or withholdings are required by law to be made from any
                of the
                sums payable under this Tax Covenant, the Seller shall pay to the
                Buyer
                such sum as will, after the deduction or withholding has been made,
                leave
                the Buyer with the same amount as it would have been entitled to
                receive
                in the absence of any such requirement to make a deduction or
                withholding.

            

    

     

    
      
        
        

      

      
        Page
          78

        
          

        

      

      
        
        

      

    

     

    
      	11.2  	
              If
                the Buyer incurs a Taxation liability which results from, or is calculated
                by reference to, any sum paid under this Tax Covenant, the amount
                so
                payable shall be increased by such amount as will ensure that, after
                payment of the Taxation liability, the Buyer is left with a net sum
                equal
                to the sum it would have received had no such taxation liability
                arisen.

            

    

     

     

    
      	11.3  	
              If
                the Buyer would, but for the availability of a Buyer ́s Relief, incur a
                Taxation liability falling within paragraph 11.2, it shall be deemed
                for
                the purposes of that paragraph to have incurred and paid that
                liability

            

    

     

     

    
      	11.4  	
              If
                the Seller pays an additional amount in accordance with paragraph
                11.1 or
                11.2, the Buyer shall reimburse the Seller such amount as the Buyer
                shall
                (acting in good faith) determine as leaving the Buyer in the same
                position
                as the Buyer would have been in had no such additional Tax been paid
                or
                deduction or withholding been made, but only to the extent that the
                Buyer
                can do so without prejudicing the retention of any credit or relief
                obtained as a result of the relevant deduction or withholding or
                additional Tax

            

    

     

     

    
      	11.5  	
              If
                the Buyer assigns the benefit of this Tax Covenant or this agreement,
                the
                Seller shall not be liable pursuant to paragraph 11.1 or paragraph
                11.2,
                save to the extent that the Seller would have been so liable had
                no such
                assignment occurred.

            

    

     

     

    
      	12.  	
              BUYER’S
                COVENANT

            

    

     

    
      	12.1  	
              The
                Buyer covenants to pay to the Seller and any member of the Retained
                Group
                an amount equal to any Tax assessed on the Sellers or a member of
                the
                Retained Group to the extent that such Tax is primarily a liability
                of the
                Company and is not of a type which would allow it to be claimed by
                the
                Buyer from the Seller under paragraph
                3.

            

    

    

    
      	12.2  	
              Paragraphs
                4 (Payment
                Date and interest),
                10 (Conduct
                of Tax Claims)
                and 11 (Grossing
                up)
                apply to the covenant at paragraph 12.1 as they apply to the covenant
                in
                paragraph 3 as if all references in the relevant paragraphs to the
                "Seller"
                were to the "Buyer"
                instead and vice versa.

            

    

     

    13 Value
      added tax groups

     

      13.1 Immediately
      after the date of this Deed the Seller shall procure that an application be
      made
      to HM Revenue & Customs, pursuant to section 43 VAT 1994 for the exclusion
      of the Company from the Seller’s value added tax group and that such exclusion
      is sought to have effect from Completion. Unless the Buyer otherwise requires,
      the Seller shall co-operate to ensure that the exclusion from the Seller’s value
      added tax group is simultaneous with the registration of the Company for value
      added tax purposes or their inclusion in the Buyer’s value added tax group (as
      the case may be).

     

    
      
        
        

      

      
        Page
          79

        
          

        

      

      
        
        

      

    

     

      13.2 Pending
      the taking effect of such application and for so long thereafter as may be
      necessary, the Seller and the Buyer shall reciprocally furnish such information
      as may be required to enable the continuing representative member of the VAT
      Group to make all the returns required of it in respect of the VAT Group and
      the
      party being or controlling (as defined in Section 43(8) VATA) that
      representative member shall make or procure it to make such returns
      accordingly.

     

     

      13.3 The
      Buyer
      will procure that the Company will account to the representative member of
      the
      VAT Group for any excess output VAT over input VAT paid or payable by such
      representative member to the Commissioners of HM Revenue & Customs in
      respect of any supply of goods or services made or received by the Company
      in
      respect of a prescribed accounting period during which the Company was and
      remained a member of the VAT Group for the purposes of section 43
      VATA.

     

     

      13.4 The
      Seller will procure that the representative member of the VAT Group will account
      to the Company for any excess of input VAT over output VAT received or
      receivable by such representative member from the Commissioners of Customs
      and
      Excise in respect of any supply of goods or services made by or received by
      the
      Company in respect of a prescribed accounting period or part of a prescribed
      accounting period during which the Company was an remained a member of the
      VAT
      Group for the purposes of Section 43 VATA.

     

     

      13.5 The
      provisions of clause 4 (Amount Due from Seller and Date of Payment) shall apply
      to any payments made under this clause 13 as if incorporated
      herein.

     

    
      
        
        

      

      
        Page
          80

        
          

        

      

      
        
        

      

    

     

    
      	 Schedule 5  	
              Intellectual
                property rights

            

    

     

    Part
      1
Registered
      Intellectual Property Rights

     

    

    The
      following table contains particulars of all the registered Intellectual Property
      Rights used by the Company:

    

    
      	
              No.

            	
              Country

            	
              Registration
                No.

            	
              Trademark

            	
              Owner

            
	
              1

            	
               

              United
                Kingdom

               

            	
               

              2171543

               

            	
               

              CONTICO

               

            	
               

              Continental
                Commercial Products LLC

               

            
	
              2

            	
              Ireland

            	
              212752

            	
              CONTICO

            	
              Continental
                Commercial 

              Products
                LLC

               

            
	
               

              3

               

            	
               

              European
                Community

               

            	
               

              001764786

               

            	
               

              CONTICO

               

            	
               

              Continental
                Commercial 

              Products
                LLC

               

            
	
               

              4

               

            	
               

              USA

               

            	
               

              1822425

               

            	
               

              CONTICO

               

            	
               

              Continental
                Commercial Products LLC

              (by
                assignment 25-Jul-03)

               

            
	
               

              5

               

            	
               

              USA

               

            	
               

              1428387

               

            	
               

              CONTICO

               

            	
               

              Continental
                Commercial Products LLC

              (by
                assignment 25-Jul-03)

               

            

    

    www.contico.co.uk

    

     

    Part
      2. Material unregistered Intellectual Property Rights

     

    The
      following table contains particulars of all material unregistered Intellectual
      Property Rights used by the Company on an unregistered basis in connection
      with
      the Business in Europe:

    

    
      	
               

              No.

               

            	
               

              Trademark

               

            
	
               

              1)  

               

            	
               

              TUFF
                BOX

               

            
	
               

              2)  

               

            	
               

              TUFFBIN

               

            
	
               

              3)  

               

            	
               

              TUFF-E

               

            
	
               

              4)  

               

            	
               

              VALUE
                TUFF

               

            

    

     

    
      
        
        

      

      
        Page
          81

        
          

        

      

      
        
        

      

    

     

    
      	
               

              5)  

               

            	
               

              WORK
                BIN

               

            
	
               

              6)  

               

            	
               

              NEUVO

               

            
	
               

              7)  

               

            	
               

              TRASH
                'N' STASH

               

            
	
               

              8)  

               

            	
               

              TUFF
                CRATE

               

            
	
               

              9)  

               

            	
               

              TUFF

               

            
	
               

              10)  

               

            	
               

              STRUCTURAL
                FOAM

               

            
	
               

              11)  

               

            	
               

              STRUCTOLENE

               

            
	
               

              12)  

               

            	
               

              FUN
                STORAGE

               

            

    

    

     

    Part
      3. Intellectual
      property rights licensed from third parties

     

    N/A

     

    
      	Part
              4.  	
              Intellectual
                property rights licensed to third
                parties

            

    

     

    The
      following is a list of all licences, agreements, authorisations and permissions
      under which the Company has licensed or agreed to license Intellectual Property
      Rights to, or otherwise permitted the use of any Intellectual Property Rights,
      by any third party:

    

    
      	1)  	
              License
                Agreement dated December 31, 2003 between Continental Commercial
                Products
                LLC (“CCP”) and the Company, according to which CCP grants the Company a
                license under the terms of the license agreement to use the intangible
                assets as detailed therein. Such license shall be terminated on the
                Completion Date.

            

    

     

    

     

    
      	2)  	
              As
                part of the sale by CCP of its truck box business, a non-exclusive,
                royalty-free license to use the Contico trademark for one year post
                closing (until June 2, 2007) was granted to Tradesman Truck Accessories
                LLC under the license agreement dated June 2,
                2006.

            

    

     

    
      	3)  	
              As
                part of the sale of Contico Manufacturing (Ireland) Limited, the
                share
                sale and purchase agreement between CEH Limited and Brendan Murphy
                and
                Carolyn Murphy dated February 21, 2005, gives Contico Manufacturing
                (Ireland) Limited the right to use the Contico name. This arrangement
                shall cease on termination of the distribution agreement between
                CML and
                Contico Manufacturing (Ireland)
                Ltd.

            

    

     

    
      
        
        

      

      
        Page
          82

        
          

        

      

      
        
        

      

    

     

    
      	 Schedule 6  	
              Working
                Capital Statement

            

    

     

     

    
      	
              1.

            	
              The
                Buyer shall at its cost prepare as soon as practicable after Completion,
                and in any event within 40 Business Days after Completion, a draft
                Working
                Capital Statement.

            

    

     

     

    
      	
              2.

            	
              The
                Working Capital Statement shall be prepared in accordance with the
                accounting principles, policies and practices adopted by the Company
                for
                the purposes of the Accounts (the Policies)
                including a stock count at which representatives of the Seller and
                the
                Buyer shall be present. The Working Capital Statement shall show
                the
                Working Capital of the Company as at 2359hrs GMT on Friday 17 November
                2006 which shall comprise the aggregate of Account Receivables (net
                of any
                provisions necessary in accordance with the Policies but excluding
                the
                Receivable) and Stock (net of any provisions necessary in accordance
                with
                the Policies and subject as stated below) less Account Payables (including
                , VAT, PAYE and National Insurance contributions), in each case as
                at
                2359hrs GMT on Friday 17 November 2006. 
                The amount for Stock shall not in any event exceed £1,600,000 (one million
                six hundred thousand pounds) and if such sum shall exceed such amount
                then
                the difference shall not be included in calculating the Working Capital.
                The Working Capital Statement will not take into account amounts
                relating
                to pre-payments and accruals as at 2359hrs on Friday 17 November
                2006
                unless the net amount of accruals and pre-payments as at 2359hrs
                on Friday
                17 November 2006 exceeds the aggregate net amount of accruals and
                pre-payments as at 31 December 2005 (as shown in the agreed form
                pro-forma) by a sum greater than £150,000 whereupon the excess over such
                value shall be included as a liability within the Working Capital
                Statement. The
                Working Capital Statement shall be prepared in accordance with the
                pro-forma Working Capital Statement in the agreed form and shall
                only
                contain those line items shown on the pro-forma. For the purposes
                of
                illustration, the Working Capital of the Company as at 31 December
                2005 by reference to the Accounts would have been £2,467,000 (two million
                four hundred and sixty seven thousand
                pounds).

            

    

     

     

    
      	
              3.

            	
              When
                prepared, the Buyer shall procure that the draft Working Capital
                Statement
                shall be promptly submitted to the Seller (together with such working
                papers used in connection with the preparation of the Working Capital
                Statement as are necessary to understand its preparation) for review
                by
                the Seller and its advisers. 

            

    

     

     

    
      	
              4.
                

            	
              For
                the purposes of such review the Buyer shall procure that the Seller
                and
                its advisers shall be given the same access to information and
                co-operation from the management of the Company as if they were the
                auditors of the Company.

            

    

     

    
      
        
        

      

      
        Page
          83

        
          

        

      

      
        
        

      

    

     

    
      	
              5.

            	
              The
                Seller shall within 10 Business Days following its receipt of the
                draft
                Working Capital Statement, notify the Buyer in writing (Response
                Notice)
                whether it accepts the draft Working Capital Statement as submitted
                or
                whether it rejects the draft as not being in accordance with this
                Schedule. Any Response Notice rejecting the draft shall set out in
                reasonable particularity the grounds for such
                rejection.

            

    

     

     

    
      	
              6.

            	
              If
                no Response Notice is given within the period stated in paragraph 5,
                the Seller shall be deemed to have accepted the draft Working Capital
                Statement as being in accordance with this Schedule and the amount
                of the
                Working Capital as stated in the draft Working Capital Statement,
                and
                accordingly the amount of the Working Capital so stated shall be
                accepted
                by and shall be final and binding on the
                parties.

            

    

     

     

    
      	
              7.

            	
              If
                within 20 Business Days of the submission of the draft Working Capital
                Statement to the Seller the draft Working Capital Statement has not
                been
                accepted by the Seller, then the matters outstanding or in dispute
                shall
                be referred for final determination to a firm of chartered accountants
                nominated jointly by the Seller and the Buyer or failing such nomination
                within 10 Business Days after request by either the Seller or the
                Buyer,
                nominated at the request of either of them by the President of the
                Institute of Chartered Accountants in England and Wales (the Experts).
                The Buyer shall procure that the Experts shall be given the same
                access to
                information and co-operation from the management of the Company as
                if they
                were the auditors of the Company and the Buyer shall procure that
                the
                Experts shall be given access to such working papers used in connection
                with the preparation of the draft Working Capital Statement as are
                necessary to understand its preparation. In making their determination
                the
                Experts shall be treated as acting as experts and not as arbitrators.
                The
                determination of the Experts shall be final and binding on the parties.
                The Experts’ fees shall be borne and paid by the Seller and the Buyer in
                such proportions as the Experts
                determine.

            

    

     

     

    
      	
              8.

            	
              Within
                5 Business Days of the date of agreement or determination of the
                Working
                Capital Statement and the amount of the Working Capital in accordance
                with
                this Schedule:

            

    

     

     

    (a) if
      the
      Purchase Price as adjusted in accordance with clause 4.2 exceeds the Completion
      Payment, the Buyer shall
      pay
      to the Seller an amount equal to the aggregate of such excess and the sum of
      £370,000 paid to the Buyer pursuant to clause 5.8 of the Agreement (plus
      interest at an annual rate equal to the base rate of Barclays Bank Plc from
      time
      to time plus 2% in respect of the period from the Completion Date to the date
      of
      payment of such excess) by way of telegraphic transfer; or

     

     

    (b) if
      the
      Purchase Price as adjusted in accordance with clause 4.2 is less than the amount
      equal to the Completion Payment less the sum of £370,000 paid to the Buyer
      pursuant to clause 5.8 of the Agreement, the Seller shall pay to the Buyer
      an
      amount equal to such shortfall (plus interest at an annual rate equal to the
      base rate of Barclays Bank Plc from time to time plus 2% in respect of the
      period from the Completion Date to the date of payment of such shortfall) by
      way
      of telegraphic transfer. 

     

    
      
        
        

      

      
        Page
          84

        
          

        

      

      
        
        

      

    

     

    
      	
              9.

            	
              Notwithstanding
                the above provisions no recognition shall be made in the Working
                Capital
                Statement of any deferred Tax asset arising from the recognition
                of tax
                losses. 

            

    

     

    
      
         

        
        

      

      
        Page
          85

        
          

        

      

      
        
        

      

    

     

    

     

    
      	
              Executed
                as a deed by CEH
                Limited

               

              acting
                by its attorney

               

               

              Executed
                as a deed by Jardin
                International Holding BV

               

              acting
                by its attorney

               

               

               

              Executed
                as a deed by Katy
                Industries, Inc.

               

              acting
                by its attorney

               

            	
              /s/
                Peter Kavanagh

              as
                attorney for

              CEH
                Limited

               

               

              /s/
                Oren Vaner

              for
                and behalf of

              Jardin
                International Holding BV

               

               

               

              /s/
                Peter Kavanagh

              as
                attorney for

              Katy
                Industries, Inc.

               

              
              

               

               

               

            

    

    

    

    
      
        
        

      

      
        Page
          86Seventh Amendment to Amended and Restated Loan Agreement dated November 27,
      2006 with Bank of America

    EXHIBIT
      10.2

    
 

    SEVENTH
      AMENDMENT

    TO
      AMENDED AND RESTATED LOAN AGREEMENT

     

    THIS
      SEVENTH AMENDMENT TO AMENDED AND RESTATED LOAN AGREEMENT
      (“Seventh Amendment”) is made as of this 27th day of November, 2006, by and
      among BANK
      OF AMERICA, N.A.
      (“Bank
      of America”) (as successor-in-interest to Fleet Capital Corporation), with an
      office at One South Wacker Drive, Suite 3400, Chicago, Illinois 60606,
      individually as a Lender and as Agent (“Agent”) for itself and any other
      financial institution which is or becomes a party hereto (each such financial
      institution, including Fleet, is referred to hereinafter individually as a
      “Lender” and collectively as the “Lenders”), the CANADIAN
      PARTICIPANTS party
      hereto, the U.K.
      PARTICIPANTS party
      hereto, BABC
      GLOBAL FINANCE, INC.,
      individually as a Lender and as Canadian Agent (“Canadian Agent”), BANK
      OF AMERICA, N.A.,
      London
      branch (as successor-in-interest to Fleet National Bank, London branch, trading
      as FleetBoston Financial), individually as a Lender and as U.K. Agent (“U.K.
      Agent”), WELLS
      FARGO FOOTHILL, LLC,
      as
      Syndication Agent, LASALLE
      BANK NATIONAL ASSOCIATION,
      as
      Documentation Agent, the LENDERS, KATY
      INDUSTRIES, INC.,
      a
      Delaware corporation, with its chief executive office and principal place of
      business at 2461 South Clark Street, Suite 630, Arlington, Virginia 22202
      (“Katy” or “U.S. Borrower”), WOODS
      INDUSTRIES (CANADA) INC.,
      a
      Canadian corporation with its chief executive office and principal place of
      business at 375 Kennedy Road, Scarborough, Ontario M1K 2A3 (“Woods Canada” or
“Canadian Borrower”), CEH
      LIMITED (“CEH”),
      a private limited company incorporated under the laws of England and Wales
      and
      registered with Company No. 4992300 whose registered office is Cardew Way,
      Redruth Cornwall, TR15 1ST, England and CONTICO
      MANUFACTURING LIMITED (“CML”
      and together with CEH, collectively, “U.K. Borrower”), a private limited company
      incorporated under the laws of England and Wales and registered with Company
      No.
      1338772 whose registered office is Cardew Way, Redruth Cornwall, TR15 1ST,
      England. Katy, Woods Canada, CEH and CML are sometimes hereinafter referred
      to
      individually as a “Borrower” and collectively as “Borrowers.”

     

    W
      I T
      N E S S E T H:

     

    WHEREAS,
      Agent, Lenders, Canadian Participants, U.K. Participants, Canadian Agent, U.K.
      Agent and Borrowers (other than CML) entered into a certain Amended and Restated
      Loan Agreement dated as of April 20, 2004, as amended by a certain First
      Amendment to Amended and Restated Loan Agreement dated June 29, 2004 by and
      among Agents, Lenders and Borrowers (other than CML), by a certain Second
      Amendment to Amended and Restated Loan and Security Agreement dated March 29,
      2005 by and among Agents, Lenders and Borrowers (other than CML), by a certain
      Third Amendment to Amended and Restated Loan and Security Agreement dated April
      13, 2005 by and among Agents, Lenders and Borrowers (other than CML), by a
      certain Fourth Amendment to Amended and Restated Loan and Security Agreement
      dated June 8, 2005 by and among Agents, Lenders and Borrowers (other than CML),
      by a certain Fifth Amendment to Amended and Restated Loan Agreement dated as
      of
      August 4, 2005 by and among Agent, Lenders and Borrowers (other than CML) and
      by
      a certain Sixth Amendment to Amended and Restated Loan Agreement dated March
      9,
      2006 by and among Agents, Lenders and Borrowers (other than CML) (said Loan
      Agreement, as so amended, is hereinafter referred to as the “Loan Agreement”);
      and

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    WHEREAS,
      Borrowers desire to amend and modify certain provisions of the Loan Agreement
      pursuant to the terms and conditions hereof;

     

    WHEREAS,
      subject to the terms and conditions hereof, Agent, Lenders, Canadian
      Participants, U.K. Participants, U.K. Agent and Canadian Agent are willing
      to so
      amend and modify the Loan Agreement; and

     

    NOW
      THEREFORE, in consideration of the premises, the mutual covenants and agreements
      herein contained, and any extension of credit heretofore, now or hereafter
      made
      by Agent and Lenders to Borrowers, the parties hereto hereby agree as
      follows:

     

    
      	1.  	
              Definitions.
                All capitalized terms used herein without definition shall have the
                meanings given to them in the Loan
                Agreement.

            

    

     

    
      	2.  	
              Additional
                and Amended Definitions.
                The definitions of “Net Orderly Liquidation Value” and “Seventh Amendment
                Effective Date” are hereby inserted into Appendix A to the Loan Agreement.
                On the Seventh Amendment Effective Date, the definitions of “Applicable
                Margin,” “Availability Block,” “Canadian Borrowing Base,” “U.K. Borrower,”
                “U.K. Borrowing Base,” “U.K. Loan Parties” and “U.S. Borrowing Base” are
                hereby deleted and the following is inserted in their
                stead.

            

    

     

    “Applicable
      Margin”
      -

     

    (a) U.K.
      and Canadian Loans.
      With
      respect to Revolving Credit Loans to U.K. Borrower in Sterling and Euros, to
      Revolving Credit Loans to Canadian Borrower in Canadian Dollars and the issuance
      of Canadian Letters of Credit or Canadian LC Guaranties or U.K. Letters of
      Credit or U.K. LC Guaranties, from the Closing Date to, but not including,
      the
      first Adjustment Date (as hereinafter defined) the percentages set forth below
      with respect to the Base Rate Revolving Portion, Canadian Prime Loans, the
      LIBOR
      Revolving Portion, Canadian BA Rate Loans and the Letter of Credit and LC
      Guaranty Fees:

     

    
      	
              Base
                Rate Revolving Portion or Canadian Prime Loans

            	
              2.75%

            
	
              LIBOR
                Revolving Portion or Canadian
                BA Rate Loans

            	
              2.75%

            
	
              LC
                Fee

            	
              2.50%

            

    

    

    The
      percentages set forth above will be adjusted on the first day of the month
      following delivery by Borrowers to Agent of the financial statements required
      to
      be delivered pursuant to subsection 7.1.3(ii) of the Agreement for each March
      31, June 30, September 30 and December 31 during the Term, commencing with
      the
      month ending March 31, 2007 (each such date an “Adjustment Date”), effective
      prospectively, by reference to the applicable “Financial Measurement” (as
      defined below) for the four quarters most recently ending in accordance with
      the
      following:

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    
      	
              Financial
                Measurement

            	
              Base
                Rate

              Revolving

              Portion
                or Canadian Prime Loans

            	
              LIBOR

              Revolving

              Portion
                or Canadian BA Rate Loans

            	
              LC
                Fee

            
	 	 	 	 
	
              >
                3.5 to 1

            	
              2.50%

            	
              2.50%

            	
              2.25%

            
	
              >
                2.5 to 1, but < 3.5 to 1

            	
              2.25%

            	
              2.25%

            	
              2.00%

            
	
              >
                2.0 to 1, but <2.5 to 1

            	
              2.00%

            	
              2.00%

            	
              1.75%

            
	
              >
                1.5 to 1, but < 2.0 to 1

            	
              1.75%

            	
              1.75%

            	
              1.50%

            
	
              <
                1.5 to 1

            	
              1.50%

            	
              1.50%

            	
              1.25%

            

    

    

    provided
      that, (i) if Katy’s audited financial statements for any fiscal year delivered
      pursuant to subsection 7.1.3(i) of the Agreement reflect a Financial Measurement
      that yields a higher Applicable Margin than that yielded by the monthly
      financial statements previously delivered pursuant to subsection 7.1.3(ii)
      of
      the Agreement for the last month of such fiscal year, the Applicable Margin
      shall be readjusted retroactively for the period that was incorrectly calculated
      and (ii) if Borrowers fail to deliver the financial statements required to
      be
      delivered pursuant to subsection 7.1.3(i) or subsection 7.1.3(ii) of the
      Agreement on or before the due date thereof, the interest rate shall
      automatically adjust to the highest interest rate set forth above, effective
      prospectively from such due date until the next Adjustment Date.

     

    (b) U.S.
      Loans.
      With
      respect to Revolving Credit Loans to U.S. Borrower in Dollars, the Term Loan,
      U.S. Letters of Credit, U.S. LC Guaranties and the Unused Line Fee, from the
      Closing Date to, but not including, the first Adjustment Date (as hereinafter
      defined) the percentages set forth below with respect to the Base Rate Revolving
      Portion, the Base Rate Term Portion, the LIBOR Revolving Portion, the LIBOR
      Term
      Portion, the Letter of Credit and LC Guaranty Fees and the Unused Line
      Fee:

     

    
      	
              Base
                Rate Revolving Portion

            	
              1.00%

            
	
              Base
                Rate Term Portion

            	
              1.25%

            
	
              LIBOR
                Revolving Portion

            	
              2.75%

            
	
              LIBOR
                Term Portion

            	
              3.00%

            
	
              LC
                Fee

            	
              2.50%

            
	
              Unused
                Line Fee

            	
              0.50%

            

    

    

    The
      percentages set forth above will be adjusted on the first day of the month
      following delivery by Borrower to Agent of the financial statements required
      to
      be delivered pursuant to subsection 7.1.3(ii) of the Agreement for each March
      31, June 30, September 30 and December 31 during the Term, commencing with
      the
      month ending March 31, 2007 (each such date an “Adjustment Date”), effective
      prospectively, by reference to the applicable “Financial Measurement” (as
      defined below) for the four quarters most recently ending in accordance with
      the
      following:

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	
              Financial
                Measurement

            	
              Base
                Rate

              Revolving

              Portion

            	
              Base
                Rate

              Term

              Portion

            	
              LIBOR

              Revolving

              Portion

            	
              LIBOR

              Term

              Portion

            	
              Unused

              Line

              Fee

            	
              LC
                Fee

            
	 	 	 	 	 	 	 
	
              >
                3.5 to 1

            	
              0.75%

            	
              1.00%

            	
              2.50%

            	
              2.75%

            	
              0.50%

            	
              2.25%

            
	
              >
                2.5 to 1, but <3.5 to 1

            	
              0.50%

            	
              0.75%

            	
              2.25%

            	
              2.50%

            	
              0.375%

            	
              2.00%

            
	
              ≥
                2.0 to 1, but < 2.5 to 1

            	
              0.25%

            	
              0.50%

            	
              2.00%

            	
              2.25%

            	
              0.375%

            	
              1.75%

            
	
              >
                1.5 to 1, but < 2.0 to 1

            	
              0.00%

            	
              0.25%

            	
              1.75%

            	
              2.00%

            	
              0.375%

            	
              1.50%

            
	
              <
                1.5 to 1

            	
              0.00%

            	
              0.00%

            	
              1.50%

            	
              1.75%

            	
              0.375%

            	
              1.25%

            

    

    

    provided
      that, (i) if Katy’s audited financial statements for any fiscal year delivered
      pursuant to subsection 7.1.3(i) of the Agreement reflect a Financial Measurement
      that yields a higher Applicable Margin than that yielded by the monthly
      financial statements previously delivered pursuant to subsection 7.1.3(ii)
      of
      the Agreement for the last month of such fiscal year, the Applicable Margin
      shall be readjusted retroactively for the period that was incorrectly calculated
      and (ii) if Borrower fails to deliver the financial statements required to
      be
      delivered pursuant to subsection 7.1.3(i) or subsection 7.1.3(ii) of the
      Agreement on or before the due date thereof, the interest rate shall
      automatically adjust to the highest interest rate set forth above, effective
      prospectively from such due date until the next Adjustment Date. For purposes
      of
      paragraphs (a) and (b) of this definition of Applicable Margin, “Financial
      Measurement” shall mean the Leverage Ratio (as such term is defined in
Exhibit
      7.3).
      The
      foregoing notwithstanding, as of any date on which the aggregate outstanding
      principal balance of the Term Loan is $10,000,000 or less, then each percentage
      contained in the above table for Base Rate Term Portion and LIBOR Term Portion
      shall be reduced by 0.25%.

     

    *
      *
      *

     

    Availability
      Block - $0 from and after the Seventh Amendment Effective Date.

     

    *
      *
      *

     

    Canadian
      Borrowing Base
      - as at
      any date of determination thereof, an amount equal to the lesser
      of:

     

    
      	 	
              (i)

            	
              the
                Canadian Sublimit, or

            

    

     

    
      	 	
              (ii)

            	
              an
                amount equal to:

            

    

     

    (a) 85%
      of
      the net amount of Eligible Accounts of Canadian Loan Parties outstanding at
      such
      date; plus

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    (b) the
      lesser of (i) $8,000,000 or (2) 85% of the Net Orderly Liquidation Value of
      Eligible Inventory of Canadian Loan Parties at such date, minus (subtract from
      the sum of (a) and (b) above); plus

     

    (c) to
      the
      extent not included in the U.K. Borrowing Base as evidenced by a Borrowing
      Base
      Certificate, 85% of the net amount of Eligible Accounts of U.K. Loan Parties
      outstanding at such date; plus

     

    (d) to
      the
      extent not included in the U.K. Borrowing Base as evidenced by a Borrowing
      Base
      Certificate, the lesser of (1) $ 6,000,000 or (2) 85% of the Net Orderly
      Liquidation Value of Eligible Inventory of U.K. Loan Parties at such date;
      minus

     

    (e) the
      sum
      of (1) the Hedge Reserve applicable to Canadian Loan Parties, (2) Dilution
      Reserves applicable to Canadian Loan Parties, (3) Rent Reserves applicable
      to
      Canadian Loan Parties, (4) the Revolving Loan Repayment Reserve applicable
      to
      Canadian Loan Parties, (5) any Reserve established by Canadian Agent in its
      Permitted Discretion for Prior Claims, (6) the PAYE Reserve (to the extent
      Eligible Accounts and Eligible Inventory of U.K. Loan Parties are included
      in
      the Canadian Borrowing Base) and (7) the aggregate amount of other reserves
      applicable to Canadian Loan Parties, if any, established by Agent in the
      exercise of its Permitted Discretion against Eligible Accounts and Eligible
      Inventory.

     

    provided
      that Agent, in the exercise of its Permitted Discretion, may (a) increase or
      decrease reserves against Eligible Accounts Receivable and Eligible Inventory
      and (b) reduce the advance rates provided in this definition, or restore such
      advance rates to any level equal to or below the advance rates in effect as
      of
      the Closing Date.

     

    For
      purposes hereof, (1) the net amount of Eligible Accounts at any time shall
      be
      the face amount of such Eligible Accounts, less any and all returns, rebates,
      discounts (which may, at Agent’s option, be calculated on shortest terms),
      credits allowance or excise taxes of any nature at any time issued, owing,
      claimed by Account Debtors, granted, outstanding or payable in connection with
      such accounts at such time and (2) the amount of Eligible Inventory shall be
      determined on a first-in, first-out, lower of cost or market basis in accordance
      with GAAP, with costs adjusted for differences between standard and actual
      costs.

     

    *
      *
      *

     

    Net
      Orderly Liquidation Value - with respect to any item of Collateral in which
      Agent for its benefit and the benefit of Lender has a first perfected security
      interest (subject to Permitted Liens), the amount estimated to be recoverable
      in
      the orderly liquidation of such item of Collateral over a three month period
      with respect to Inventory or a six month period with respect to Equipment or
      any
      other item of such Collateral, net of liquidation expenses (as estimated by
      Agent), such amount to be determined by an appraisal of such item of Collateral
      (on a category a type basis) conducted by a qualified company selected by Agent
      in its reasonable discretion as provided in Section 2.10 of the Agreement (or
      if
      such Collateral turns over in the ordinary course of business, based upon the
      assumptions derived from the most recent such appraisal of Collateral similar
      in
      type) or as determined by Agent in the reasonable exercise of its
      discretion.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    *
      *
      *

     

    Seventh
      Amendment Effective Date
      - as
      defined in Section 10 of the Seventh Amendment.

     

    *
      *
      *

     

    U.K.
      Borrower
      - CEH
      Limited, a private company incorporated under the laws of England and Wales
      and
      Contico Manufacturing Limited, a private company incorporated under the laws
      of
      England and Wales.

     

    U.K.
      Borrowing Base
      - as at
      any date of determination thereof, an amount equal to the lesser
      of:

     

    (i) the
      U.K.
      Sublimit, or

     

    (ii) an
      amount
      equal to:

     

    (a) 85%
      of
      the net amount of Eligible Accounts of U.K. Loan Parties outstanding at such
      date; plus

     

    (b) the
      lesser of (1) $6,000,000 or (2) 85% of the Net Orderly Liquidation Value of
      Eligible Inventory of U.K. Loan Parties at such date, minus (subtract from
      the
      sum of (a)and (b) above); plus

     

    (c) to
      the
      extent not included in the Canadian Borrowing Base as evidenced by a Borrowing
      Base Certificate, 85% of the net amount of Eligible Accounts of Canadian Loan
      Parties outstanding at such date; plus

     

    (d) to
      the
      extent not included in the Canadian Borrowing Base as evidenced by a Borrowing
      Base Certificate, the lesser of (1) $8,000,000 or (2) 85% of the Net Orderly
      Liquidation Value of Eligible Inventory of Canadian Loan Parties at such date;
      minus

     

    (e) the
      sum
      of (1) the Hedge Reserve applicable to U.K. Loan Parties, (2) Dilution Reserves
      applicable to U.K. Loan Parties, (3) Rent Reserves applicable to U.K. Loan
      Parties, (4) the Revolving Loan Repayment Reserve applicable to U.K. Loan
      Parties, (5) the PAYE Reserve, (6) the aggregate amount of other reserves
      applicable to U.K. Loan Parties, if any, established by Agent in the exercise
      of
      its Permitted Discretion against Eligible Accounts and Eligible Inventory and
      (7) any reserve established by Canadian Agent in its Permitted Discretion for
      prior claims (to the extent Eligible Accounts and Eligible Inventory of Canadian
      Loan Parties are included in the U.K. Borrowing Base).

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    provided
      that Agent, in the exercise of its Permitted Discretion, may (a) increase or
      decrease reserves against Eligible Accounts Receivable and Eligible Inventory
      and (b) reduce the advance rates provided in this definition, or restore such
      advance rates to any level equal to or below the advance rates in effect as
      of
      the Closing Date.

     

    For
      purposes hereof, (1) the net amount of Eligible Accounts at any time shall
      be
      the face amount of such Eligible Accounts, less any and all returns, rebates,
      discounts (which may, at Agent’s option, be calculated on shortest terms),
      credits allowance or excise taxes of any nature at any time issued, owing,
      claimed by Account Debtors, granted, outstanding or payable in connection with
      such accounts at such time and (2) the amount of Eligible Inventory shall be
      determined on a first-in, first-out, lower of cost or market basis in accordance
      with GAAP, with costs adjusted for differences between standard and actual
      costs. In addition, Borrowers acknowledge that no Accounts or Inventory of
      CML
      shall be included within Eligible Accounts or Eligible Inventory of U.K. Loan
      Parties until such time as Agent has conducted its due diligence on such assets
      to Agent’s satisfaction in its Permitted Discretion and such assets satisfy all
      of the criteria of Eligible Accounts and Eligible Inventory, including, without
      limitation, that Agent has a valid and perfected First Priority Lien on such
      assets.

     

    *
      *
      *

     

    U.K.
      Loan Parties
      - CEH
      Limited and Contico Manufacturing Limited.

     

    *
      *
      *

     

    U.S.
      Borrowing Base
      - as at
      any date of determination thereof, an amount equal to the lesser
      of:

     

    
      	 	
              (i)

            	
              the
                U.S. Revolving Loan Commitment, or

            

    

     

    
      	 	
              (ii)

            	
              an
                amount equal to:

            

    

     

    (a) 85%
      of
      the net amount of Eligible Accounts of U.S. Loan Parties (as defined below)
      outstanding at such date; plus

     

    (b) the
      lesser of (1) $60,000,000 or (2) 85% of the value of the Net Orderly Liquidation
      Value of Eligible Inventory of U.S. Loan Parties at such date; plus

     

    (c) to
      the
      extent not included in the U.K. Borrowing Base or the Canadian Borrowing Base
      as
      evidenced by a Borrowing Base Certificate, 85% of the net amount of Eligible
      Accounts of U.K. Loan Parties (other than CML) outstanding at such date;
      plus

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    (d) to
      the
      extent not included in the U.K. Borrowing Base or the Canadian Borrowing Base
      as
      evidenced by a Borrowing Base Certificate, the lesser of (1) $6,000,000 or
      (2)
      85% of the Net Orderly Liquidation Value of Eligible Inventory of U.K. Loan
      Parties (other than CML) at such date; minus

     

    (e) the
      sum
      of (1) the Hedge Reserve applicable to U.S. Loan Parties, (2) Dilution Reserves
      applicable to U.S. Loan Parties, (3) Rent Reserves applicable to U.S. Loan
      Parties, (4) the Revolving Loan Repayment Reserve applicable to U.S. Loan
      Parties, (5) the PAYE Reserve (to the extent Eligible Accounts and Eligible
      Inventory of U.K. Loan Parties (other than CML) are included in the U.S.
      Borrowing Base) and (6) the aggregate amount of other reserves applicable to
      U.S. Loan Parties, if any, established by Agent in the exercise of its Permitted
      Discretion against Eligible Accounts and Eligible Inventory.

     

    provided
      that Agent, in the exercise of its Permitted Discretion, may (a) increase or
      decrease reserves against Eligible Accounts Receivable and Eligible Inventory
      and (b) reduce the advance rates provided in this definition, or restore such
      advance rates to any level equal to or below the advance rates in effect as
      of
      the Closing Date.

     

    For
      purposes hereof, (1) the net amount of Eligible Accounts at any time shall
      be
      the face amount of such Eligible Accounts, less any and all returns, rebates,
      discounts (which may, at Agent’s option, be calculated on shortest terms),
      credits allowance or excise taxes of any nature at any time issued, owing,
      claimed by Account Debtors, granted, outstanding or payable in connection with
      such accounts at such time and (2) the amount of Eligible Inventory shall be
      determined on a first-in, first-out, lower of cost or market basis in accordance
      with GAAP, with costs adjusted for differences between standard and actual
      costs.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	3.  	
              U.S.
                Revolver.
                The last sentence of subsection 1.1.1(a) of the Loan Agreement is
                hereby
                deleted and the following is inserted in its
                stead:

            

    

     

    “1.1 Loans.

     

    1.1.1 Revolving
      Credit Loans.

     

    (a) U.S.
      Revolver.
      . . . .
      The U.S. Revolving Credit Loans made by the Lenders for the benefit of U.S.
      Borrower shall be denominated in Dollars. The U.S. Revolving Credit Loans shall
      be repayable in accordance with the terms of the U.S. Revolving Notes and shall
      be secured by all of the U.S. Collateral and that portion (if any) of the U.K.
      Collateral owned by CEH.”

     

    *
      *
      *

     

    
      	4.  	
              Canadian
                and U.K. Sublimit of Euro Sublimit.
                Subparagraphs (e) and (f) of subsection 1.1.1 are hereby deleted
                and the
                following are inserted in their
                stead:

            

    

     

    “1.1 Loans.

     

    1.1.1 Revolving
      Credit Loans.

     

    *
      *
      *

     

    (e) Canadian
      and U.K. Sublimit.
      Although Canadian Revolving Credit Loans will be funded in Canadian Dollars
      and
      U.K. Revolving Credit Loans will be funded in Sterling or Euros, the Canadian
      Sublimit and U.K. Sublimit are denominated in Dollars. As of the Closing Date,
      the Canadian Sublimit and U.K. Sublimit are allocated as set forth
      below:

     

    Canadian
      Sublimit          $15,000,000

     

    U.K.
      Sublimit                  
$8,000,000    

     

    (f) Euro
      Sublimit.
      U.K.
      Lender shall not be required to fund U.K. Revolving Credit Loans in Euros or
      issue or cause to be issued U.K. Letters of Credit denominated in Euros if
      the
      Dollar Equivalent of the aggregate principal amount of the U.K. Revolving Credit
      Loans funded or to be funded in Euros and the undrawn available amount of
      outstanding U.K. Letters of Credit issued or to be issued and denominated in
      Euros exceeds $1,000,000.”

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	5.  	
              Term
                Loan.
                Section 1.6 of the Loan Agreement is hereby deleted and the following
                is
                inserted in its stead:

            

    

     

    “1.6 Term
      Loan. Pursuant to the terms of the Loan Agreement, Lenders extended to Katy
      a
      term loan (the “2004 Term Loan”) in the amount of Twenty Million Dollars
      ($20,000,000). As of the Seventh Amendment Effective Date, the outstanding
      principal balance of the 2004 Term Loan owed to Lenders is $11,636,424.42.
      Subject to the fulfillment or waiver of all the conditions precedent to the
      effectiveness of the Seventh Amendment, each U.S. Lender shall make additional
      term loans (collectively, the “2006 Term Loan”) to Katy in the aggregate
      principal amount equal to the amount set forth below such Lender’s name on the
      signature pages to this Agreement (such Lender’s “2006 Loan Commitment”), which
      2006 Term Loan shall be made not later than the seventh day after the Seventh
      Amendment Effective Date as requested by Katy. The aggregate amount of the
      2006
      Loan Commitment is $1,363,575.58. On the Seventh Amendment Effective Date,
      the
      2004 Term Loan and the 2006 Term Loan shall be combined into one term loan
      (the
“Term Loan”) in the aggregate principal amount of Thirteen Million Dollars
      ($13,000,000) and the Term Loan shall be evidenced by amended and restated
      promissory notes executed and delivered by Katy to each U.S. Lender, the forms
      of which are attached hereto and made a part hereof as Exhibit 1.6 to this
      Agreement (the “Term Note(s)”), shall bear interest as specified in Section 2.1
      and shall be repayable in accordance with the terms of the Term Notes. The
      proceeds of the Term Loan were or shall be used by Katy solely for the purposes
      for which the proceeds of the Revolving Credit Loans are authorized to be used.
      Upon the closing of the transactions contemplated by this Agreement, the
      promissory notes evidencing the 2004 Term Loan shall be returned to Katy marked
      “Amended and Superceded.”

     

    
      	6.  	
              Term
                Loan Principal.
                Subsection 3.2.1(ii) of the Loan Agreement is hereby deleted and
                the
                following is inserted in its stead:

            

    

     

    “3.2.1 Principal.

     

    *
      *
      *

     

    (ii) Term
      Loan.
      The
      aggregate principal amount of the Term Loan shall be payable in quarterly
      installments, together with accrued and unpaid interest thereon, commencing
      on
      April 1, 2007 and continuing on each July 1, October 1, January 1 and April
      1
      thereafter to and including April 1, 2009 in installments of Three Hundred
      Seventy-Five Thousand Dollars ($375,000) each. The entire remaining principal
      amount of the Term Loan shall be due and payable on April 19,
      2009.”

     

    
      	7.  	
              Sale
                of United Kingdom Consumer Plastics Group and English Real
                Estate.
                Agent and Lenders consent to the sale by Loan Parties of its U.K.
                Consumer
                Plastics business group or division and the real Property commonly
                known
                as Cardew Way, Redruth, Cornwall TR15 1ST, England so long as (i)
                after
                giving effect to either such sale, no Event of Default has occurred
                and is
                continuing, (ii) such sale is consummated on substantially the same
                terms
                and conditions as outlined on Exhibit A attached hereto and (x) with
                respect to the sale of the U.K. Consumer Plastics division or business
                group, in substantially the form of the draft Share Purchase Agreements
                between CEH, Katy and Jardin International Holding BV, an affiliate
                of
                Keter Plastics Ltd. dated on or about November 23, 2006, a true and
                correct copy of which has been delivered to Agent and (y) with respect
                to
                the real Property described above, on customary terms for a cash
                purchase
                price of at least $4,000,000 and (iii) the sale of the U.K. Consumer
                Plastics group or division shall be consummated on or prior to November
                30, 2006 and the sale of such real Property shall be consummated
                on or
                prior to March 31, 2007. Borrowers, Agent and Lenders consent and
                agree
                that the proceeds from the sale of the U.K. Consumer Plastics business
                group or division and such real Property shall be paid to Agent for
                application to the U.S. Revolving Credit
                Loans.

            

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	8.  	
              Financial
                Covenants.
                Upon the Seventh Amendment Effective Date, Exhibit
                7.3
                attached to the Loan Agreement shall be deemed deleted and Exhibit
                7.3
                attached hereto and incorporated herein shall be inserted in its
                stead.

            

    

     

    
      	9.  	
              Amendment
                Fee.
                In order to induce Agent and Lenders to enter into this Seventh Amendment,
                Borrowers agree to pay to Agent for the ratable benefit of U.S. Lenders
                an
                amendment fee in the amount of $103,000. Said fee shall be due and
                payable
                and shall be deemed fully earned and non-refundable on the Seventh
                Amendment Effective Date.

            

    

     

    
      	10.  	
              Condition
                Precedent.
                This Seventh Amendment shall become effective
                upon:

            

    

     

    (w)
      the
      execution and delivery of this Seventh Amendment by each of Borrowers, Agents
      and Lenders;

     

    (x)
      the
      execution by Katy and delivery by Katy to each U.S. Lender of the amended and
      restated Term Notes as contemplated by Section 1.6 of the Loan Agreement as
      amended by this Seventh Amendment;

     

    (y) Borrower
      shall have paid to Agent the amendment fee referred to in Section 7 of the
      Seventh Amendment; and

     

    (z) CML
      and
      CEH shall have executed and delivered to Agent an Amended and Restated U.K.
      Revolving Note in the form attached hereto and incorporated herein as
      1.1.(b).

     

    The
      date
      on which such condition precedent is satisfied shall be referred to as the
      “Seventh Amendment Effective Date.”

     

    
      	11.  	
              Continuing
                Effect.
                Except as otherwise specifically set out herein, the provisions of
                the
                Loan Agreement shall remain in full force and
                effect.

            

    

     

    
      	12.  	
              Governing
                Law.
                This Seventh Amendment and the obligations arising hereunder shall
                be
                governed by, and construed and enforced in accordance with, the laws
                of
                the State of Illinois applicable to contracts made and performed
                in such
                state, without regard to the principles thereof regarding conflicts
                of
                laws.

            

    

     

    
      	13.  	
              Counterparts.
                This Seventh Amendment may be executed in any number of separate
                counterparts, each of which shall, collectively and separately, constitute
                one agreement.

            

    

     

    (Signature
      Page Follows)

     

    

    
      
        
           

        

        
        

      

      
        11

        
          

        

      

      
        
        

        
        

      

    

    (Signature
      Page to Seventh Amendment to Loan Agreement)

     

    IN
      WITNESS WHEREOF,
      this
      Seventh Amendment has been duly executed on the day and year specified at the
      beginning of this Seventh Amendment.

     

     

    
      	 	
              KATY
                INDUSTRIES, INC.

               

              By:
                /s/ Amir Rosenthal

              Name:
                Amir Rosenthal

              Title:
                Vice President and CFO

               

            

    

    

    

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    (Signature
      Page to Seventh Amendment to Loan Agreement)

     

    

    
      	 	
              CEH
                LIMITED

               

              By:
                /s/ Christopher W. Anderson

              Name:
                Christopher W. Anderson

              Title:
                Authorized Manager

               

              and

               

              By:
                /s/ Christopher Lacovara

              Name:
                Christopher Lacovara

              Title:
                Authorized Manager

               

            
	 	
              CONTICO
                MANUFACTURING LIMITED

               

              By:
                /s/ Christopher W. Anderson

              Name:
                Christopher W. Anderson

              Title:
                Authorized Manager

               

              and

               

              By:
                /s/ Christopher Lacovara

              Name:
                Christopher Lacovara

              Title:
                Authorized Manager

               

            

    

    

    

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    

    (Signature
      Page to Seventh Amendment to Loan Agreement)

     

    

    
      	 	
              WOODS
                INDUSTRIES (CANADA) INC.

               

              By:
                /s/ Amir Rosenthal

              Name:
                Amir Rosenthal

              Title:
                Secretary

               

            

    

    

    

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    
 

    (Signature
      Page to Seventh Amendment to Loan Agreement)

     

    

    
      	 	
              BANK
                OF AMERICA, N.A.,

              as
                predecessor-in-interest to Fleet Capital Corporation,

              as
                Agent and as a Lender

               

               

              By:
                /s/ Jason Riley

              Name:
                Jason Riley

              Title:
                Vice President

               

            
	 	
              2004
                Term Loan: $4,760,355.44

               

              2006
                Term Loan: $557,826.38

               

              Term
                Loan: $5,318,181.82

               

            

    

    

    

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    
 

    (Signature
      Page to Seventh Amendment to Loan Agreement)

     

    

    
      	 	
              WELLS
                FARGO FOOTHILL LLC,
                

              as
                Syndication Agent and Lender

               

               

              By:
                /s/ Yelena Kravchuk

              Name:
                Yelena Kravchuk

              Title:
                Assistant Vice President

               

            
	 	
              2004
                Term Loan: $3,173,570.30

               

              2006
                Term Loan: $371,884.25

               

              Term
                Loan: $3,545,454.55

               

            

    

    

    

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    
 

    (Signature
      Page to Seventh Amendment to Loan Agreement)

     

    

    
      	 	
              LASALLE
                BANK NATIONAL ASSOCIATION,
                

              as
                Documentation Agent and as a Lender

               

               

              By:
                /s/ Mark Mital 

              Name:
                Mark Mital

              Title:
                Senior Vice President

               

            
	 	
              2004
                Term Loan: $2,644,641.91

               

              2006
                Term Loan: $309,903.54

               

              Term
                Loan: $2,954,545.45

               

            

    

    

    

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    (Signature
      Page to Seventh Amendment to Loan Agreement)

     

    

    
      	 	
              UPS
                CAPITAL CORPORATION,
                as a Lender

               

               

              By:
                /s/ John P. Holloway

              Name:
                John P. Holloway

              Title:
                Director of Portfolio Management

               

            
	 	
              2004
                Term Loan: $1,057,856.77

               

              2006
                Term Loan: $123,961.41

               

              Term
                Loan: $1,181,818.18

               

            

    

    

    

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    (Signature
      Page to Seventh Amendment to Loan Agreement)

     

    

    
      	 	
              BANK
                OF AMERICA, N.A.,
                London branch, 

              as
                U.K. Agent and U.K. Lender

               

               

              By:
                /s/ Justin Charles Van Ast

              Name:
                Justin Charles Van Ast

              Title:
                Assistant Vice President

               

            

    

    

    

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

     

    (Signature
      Page to Seventh Amendment to Loan Agreement)

     

    

    
      	 	
              BABC
                GLOBAL FINANCE, INC.,
                

              as
                Canadian Agent and Canadian Lender

               

               

              By:
                /s/ L.M. Junior Del Brocco

              Name:
                L.M. Junior Del Brocco

              Title:
                Senior Vice President

               

            

    

    

    

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    (Signature
      Page to Seventh Amendment to Loan Agreement)

     

    Accepted
      and Agreed to this 27th day of November, 2006.

     

    

     

    
      	
              GUARANTORS:

               

              KKTY
                HOLDING COMPANY, L.L.C.

               

              By:
                /s/ Christopher W. Anderson

              Name:
                Christopher W. Anderson

              Title:
                Authorized Manager

               

            
	
              AMERICAN
                GAGE & MACHINE CO.

               

              By:
                /s/ Amir Rosenthal

              Name:
                Amir Rosenthal

              Title:
                Vice President

               

            
	
              CONTINENTAL
                COMMERCIAL PRODUCTS, LLC

               

              By:
                /s/ Amir Rosenthal

              Name:
                Amir Rosenthal

              Title:
                Vice President

               

            
	
              PTR
                MACHINE CORP.

               

              By:
                /s/ Amir Rosenthal

              Name:
                Amir Rosenthal

              Title:
                Secretary

               

            
	
              SAVANNAH
                ENERGY SYSTEMS COMPANY

               

              By:
                /s/ Amir Rosenthal

              Name:
                Amir Rosenthal

              Title:
                Secretary

               

            
	
              WOODS
                INDUSTRIES, INC.

               

              By:
                /s/ Amir Rosenthal

              Name:
                Amir Rosenthal

              Title:
                Vice President

            

    

    

    

    
      
        
           

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT 7.3

     

    FINANCIAL
      COVENANTS

     

    DEFINITIONS

     

    Consolidated
      EBITDA
      - for
      any period, the sum, without duplication, of the amounts for such period of
      (i)
      Consolidated Net Income, (ii) interest expense, (iii) provisions for taxes
      based
      on income, (iv) total depreciation expense, (v) total amortization expense,
      (vi)
      all unusual expenses and all other non-capitalized restructuring expenses
      (including costs and expenses attributable to employee severance obligations
      and
      facility consolidation costs) for such period to the extent not disallowed
      by
      Agent in its sole discretion, (vii) any payment of or accrual for the Management
      Fee under the Management Agreement, (viii) all other payments made to K&C
      and its Affiliates during such period for expenses incurred on behalf of Parent,
      Katy or any of their respective Subsidiaries pursuant to Kohlberg Agreements,
      (ix) any non-cash expense incurred with respect to Katy’s stock appreciation
      rights plan (“SAR”) and (x) any non-cash expense with respect to changes in
      market value of any options to purchase Katy’s Common Stock and (xi) other
      non-cash items (other than any such non-cash item to the extent that it
      represents an accrual of or reserve for cash expenditures in any future period),
      but only, in the case of clauses (ii)-(xi), to the extent deducted in the
      calculation of Consolidated Net Income less other non-cash items added in the
      calculation of Consolidated Net Income (other than any such non-cash item to
      the
      extent that it will result in the receipt of cash payments in any future
      period), all of the foregoing as determined on a consolidated basis for Katy
      and
      its Subsidiaries in conformity with GAAP; provided that there shall be
      subtracted from the sum of items (i) through (xi) above (x)
      the
      amount of any cash expenditure made within the applicable period pursuant to
      the
      SAR, to the extent that the amount of such cash expenditure was expensed or
      will
      be expensed against a prior or future period’s Consolidated Net Income and (y)
      the amount of cash expenditure incurred in connection with the reduction of
      any
      restructuring or similar reserve, unless such amount was already charged against
      Consolidated Net Income for the applicable period (for fiscal periods ending
      prior to December 31, 2006, said amount shall be deemed to be $175,000 per
      fiscal quarter); provided, further, that (a) in the event any Loan Party makes
      an acquisition of any Person or any division or any business unit permitted
      hereunder or consented to by Majority Lenders during such period, if Katy
      provides Agent and Lenders financial statements with respect to the business
      so
      acquired (which financial statements shall have been audited by one of the
“Big
      4” accounting firms or another nationally recognized accounting firm reasonably
      satisfactory to Agent or financial statements otherwise satisfactory to Agent)
      reasonably satisfactory to Majority Lenders, Consolidated EBITDA for such period
      shall be calculated on a pro forma basis, taking into account the elimination
      of
      non-recurring expenses, based on the results of such acquired Person or acquired
      assets as if such acquisition had occurred on the first day of such period,
      and
      (b) in the event any Loan Party makes a Permitted Disposition (or any other
      disposition of any Person or any division or any business unit permitted
      hereunder or consented to by the Majority Lenders) during such period,
      Consolidated EBITDA for such period shall be calculated on a pro forma basis,
      based on the results of such disposed Person or disposed assets as if such
      Permitted Disposition (or such other disposition) had occurred on the first
      day
      of such period.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Consolidated
      Fixed Charges,
      with
      respect to any period, the sum of: (i) scheduled principal payments required
      to
      be made during such period in respect to Indebtedness for Money Borrowed
      (including the principal portion of Capitalized Lease Obligations), plus (ii)
      Consolidated Interest Expense payable in cash for such period, all as determined
      for Borrowers and their Subsidiaries on a Consolidated basis and in accordance
      with GAAP. For fiscal periods ending on or prior to December 31, 2006,
      scheduled principal payments with respect to the Term Loan shall be deemed
      to be
      $375,000 per fiscal quarter.

     

    Consolidated
      Interest Expense-
      for any
      period, total interest expense of Katy and its Subsidiaries on a consolidated
      basis with respect to all outstanding Indebtedness for Money Borrowed of Katy
      and its Subsidiaries, including, without limitation, net costs under Interest
      Rate Agreements, but excluding, however, (i) any amounts referred to in the
      Fee Letter or amortization thereof, (ii) any deferred financing fees or
      amortization thereof, (iii) commissions, discounts and other fees and
      charges owed with respect to letters of credit and bankers’ acceptance
      financing, (iv) unused line charges, (v) non-cash charges included in
      interest expense other than in clauses (i) and (ii) and (vi) to the
      extent included in interest expense, costs associated with the unsuccessful
      second lien financing abandoned prior to the Closing Date. For fiscal periods
      ending on or prior to December 31, 2006, interest expense shall be deemed
      to be $950,000 per fiscal quarter.

     

    Consolidated
      Net Income,
      for any
      period, the net income (or loss) of Katy on a Consolidated basis for such period
      taken as a single accounting period determined in conformity with GAAP; provided
      that there shall be excluded (i) the income (or loss) of any Person (other
      than
      a Subsidiary of Katy) in which any other Person (other than Katy or any of
      its
      Subsidiaries) has a joint interest, except to the extent of the amount of
      dividends or other distributions actually paid to Katy or any of its
      Subsidiaries by such Person during such period, (ii) the income (or loss) of
      any
      Person accrued prior to the date it becomes a Subsidiary of Katy or is merged
      into or consolidated with Katy or any of its Subsidiaries or that Person’s
      assets are acquired by Katy or any of its Subsidiaries, (iii) the income of
      any
      Subsidiary of Katy to the extent that the declaration or payment of dividends
      or
      similar distributions by that Subsidiary of that income is not at the time
      permitted by operation of the terms of its charter or any agreement, instrument,
      judgment, decree, order, statute, rule or governmental regulation applicable
      to
      that Subsidiary, (iv) any after-tax gains or losses attributable to Asset Sales
      or returned surplus assets of any Pension Plan, (v) any LIFO reserves of CCP
      to
      the extent such LIFO reserves decrease or increase net income of CCP, and
      (vii)(to the extent not included in clauses (i) through (v) above) any net
      extraordinary gains or net extraordinary losses.

     

    Fixed
      Charge Coverage Ratio,
      with
      respect to any period, the ratio of (i) Consolidated EBITDA for such period
      minus
      the sum
      of (a) any income taxes paid in cash during such period plus (b) non-financed
      Capital Expenditures during such period, to (ii) Consolidated Fixed Charges
      for
      such period, all as determined for Borrowers and their Subsidiaries on a
      Consolidated basis and in accordance with GAAP. In the event Consolidated EBITDA
      is adjusted on a pro forma basis as provided in the definition thereof as a
      result of a permitted acquisition or Permitted Disposition, Consolidated Fixed
      Charges, income taxes and Capital Expenditures shall also be appropriately
      adjusted in a manner satisfactory to Agent in its Permitted Discretion on a
      pro
      forma basis to reflect changes resulting from such transaction as if all such
      events had occurred on the first day of such period.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    A. Fixed
      Charge Coverage Ratio.
      Katy
      shall not permit the Fixed Charge Coverage Ratio for any period set forth below
      to be less than the ratio set forth below opposite such period:

     

    
      	
              Period

               

            	
              Ratio

               

            
	
              Four
                Fiscal Quarters Ending December 31, 2006 and each March 31, June
                30,
                September 30 and December 31 thereafter

               

            	
              1.10
                to 1

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