I hearby would like to inform you on behalf of the Management Team of Elliott Industries, that the most points of the condition precedent have been already fulfilled.

To give you a more exact picture about the current situation of the buyout running, I would like to point out the following positions with the indicated progress reports:

Pos.1.0_Improvement of the current finance situation
Progress report: The finance management has been strengthened by the appointment of a new Finance Director.

Pos:2.0_Reducing of negative costs
Progress report: Part of the DIY Division has been sold and the remainder wound up for a book loss of ₤350000,-

Pos.3.0_Comprehensive data processing and management information system
Progress report: The new data processing system is being installed but not fully operational.
The vital stock control program will be operational in two weeks time.

Pos.4.0_Alternative source for the key raw material
Progress report: Rudge Pressings Ltd. is ready to go on the market and an offer must be made soon.

As you can see, the improvement process defined under position one’Pos.1.0’ and two ’Pos.2.0’ have been done completely.

At the present situation we are concentrating on Pos.3.0 and Pos.4.0, because these items are currently open yet.

To save more precious time during the establishment of new data processing information system we decided to implement a new system in stages. This could give us a good opportunity to have a short reaction ways in the fall the system will work wrong. Therefore we created a time table for the project called “Implementation of data processing information system in stages”, which I enclosed to this letter.

In relation to Pos.4.0 of condition precedent we need urgently your finance intervention.
In effort to provide our company with an assured supply of the key raw materials and to create a financially sound grouping we certainly have to go ahead towards acquisition of the Rudge Pressings Ltd. Therefore I would like to ask you to give urgent attention to arranging the bank loan, as Rudge Pressings Ltd. is already on the market and we are not in position to loss any time.

Based on the current situation creating a reaction finance force I would like to invite your bank’s representatives to visit our company for two weeks.

I would like you to come prepared to outline your suggestions to the meeting in relation to the strategy development of Rudge Pressings’ acquisition and arrangement of the further bank loan.

To arrange an appointment with us, please, fill free to contact my secretary Mrs. Pope.

I am looking forward to seeing you.

Yours faithfully

Mr. Christian
Managing Director
Elliott Industries