1 Definitions and interpretation

2 Agreement to Sell and Purchase

3 Consideration

4 Adjustment to the Initial Stock Value

5 Conditions Precedent

6 Break-up fee

7 Exchange

8 Completion

9 Conduct of Business prior to Completion

10 Warranties

11 Buyer’s remedies

12 Property

13 Employees

14 Business Contracts

15 Mutual covenants and apportionments

16 Book Debts and Creditors

17 Obligations of the Seller and Buyer after Completion

18 Restrictive Covenants

19 Confidentiality

20 Value Added Tax

21 OROLIA Guarantee

22 DC Guarantee

23 Announcements and publicity

24 Notices

25 Successors, assigns and third parties

26 Variation

27 Waiver

28 Costs

29 Severance

30 Further assurance

31 Entire Agreement

32 Counterparts

33 Miscellaneous

34 Applicable law and jurisdiction and remedy and agents for services

35 Post-completion effect

Schedule 1

Apportionment of the Consideration

Schedule 2

Warranties

Schedule 3

Seller Protection Provisions

Schedule 4

The Employees

Schedule 5

The Customer Contracts

Schedule 6

The Supplier Contracts

Schedule 7

Products

Schedule 8

Registered Intellectual Property

Schedule 9

Schedule 10

The Plant

Schedule 11

Leasing/Hire Agreements

Schedule 12

Schedule 13

Schedule 14

SIGNATURE INDUSTRIES Limited, a company registered in England (registered number 2800561) whose registered office is at Tom Cribb Road, Thamesmead, London SE28 0BH (the “Seller”);

MCMURDO LIMITED, a company registered in England (registered number 6952856 whose registered office is at Silver Point, Airport Service Road, Portsmouth PO3 5PB (the “Buyer” or “McMurdo Limited”);

Digital Angel Corporation, a company incorporated under the laws of the state of Delaware, whose registered office is 490 Villaume Avenue, South St, Paul MN 55075 -2433 USA (“DC”).

OROLIA SA, a company incorporated under the laws of France, whose registered office is at 3 Avenue Du Canada, 91 974 Les Ulis cedex, France (“OROLIA”).

In this Agreement, unless the context otherwise requires, the following words will have the following meanings:

Accounting Date

 

Accounts

the audited financial statements of the Seller for the accounting reference period ended on the Accounting Date comprising a balance sheet, profit and loss account, notes, the directors’ and auditors’ reports;

 

Actual Stock Value

the aggregate value of the Stock as shown in the Completion Statement as agreed or determined in accordance with Schedule 12;

 

Aged Creditors List

the aged creditors list relating to the Due Creditors and the Creditors’ Sums dated and issued by the Seller to OROLIA immediately before Completion and showing the sums due to those Creditors in decreasing order of value, initialled and agreed between the Seller, the Buyer and OROLIA;

 

Anniversary Date

the first anniversary of the Transfer Date;

 

Assets

the assets of the Business agreed to be sold and purchased pursuant to this Agreement as described in clause 2.1;

 

Book Debts

all trade and other debts owing to the Seller on the Transfer Date in relation to the Business;

 

Brands

 

Business

the business of the design, manufacture and sale of marine personal location beacons and complimentary maritime safety products including the Products carried on by the Seller at the Transfer Date, from the Property (other than the Retained Business);

 

Business Contracts

the Customer Contracts, Suppliers Contracts, IP Licences, Leasing/Hire Agreements, and all other contracts, arrangements, licences and other commitments whether conditional or unconditional and whether by deed, under hand, oral or otherwise relating to the Business entered into on or before the Transfer Date, and which remain to be performed in whole or in part at the Transfer Date, which have been entered into by or for the benefit of the Seller, or the benefit of which is held in trust for or has been assigned or subcontracted to the Seller, but excluding the Liabilities;

Business Day

any day which is not a Saturday, a Sunday or a bank or public holiday in England and Wales;

 

Business Information

all information, documentation, papers, books, records, know-how and techniques (whether or not confidential and in whatever form held) (if any) which exclusively relates to:

 

 

 

 

 

 

 

 

 

 

 

Business Intellectual Property

all Intellectual Property owned or lawfully used by the Seller exclusively in connection with the Business as carried on by the Seller as at the Transfer Date including:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

whether registered or not, and the right to apply for the same, and to renew or extend such rights, anywhere in the world;

Business Names

‘McMurdo’ and ‘McMurdo a division of Signature Industries’;

 

Buyer’s Group

the Buyer, OROLIA and all companies and undertakings which now or in the future become subsidiaries or subsidiary undertakings of the Buyer, OROLIA or of any such holding company;

 

CAA

 

Chemring Stock

the items of stock-in-trade disclosed in M1.002 of the Disclosure Bundle;

 

Completion

completion of the sale and purchase of the Business and the Assets in accordance with clause 8;

 

Completion Date

(subject to clause 5) the date which is the earlier of:

 

 

 

 

 

 

 

Completion Statement

the completion statement prepared in accordance with the clause 4.1 and Schedule 12;

 

Computer System

all computer hardware and associated peripheral equipment, software, networks and technical and other documentation related thereto owned or used by the Business including all arrangements relating to the provision of maintenance and support, security, disaster recovery, facilities management, bureau and on-line services to the Business;

 

Conditions

the conditions precedent set out in clause 5.1;

 

Consideration

the total purchase price payable by the Buyer to the Seller in accordance with clause 3.1;

 

Creditors

all trade and other debts, accrued charges and all other amounts owing by the Seller in connection with the Business on the Transfer Date;

 

Creditors’ Fund

the amount representing the Creditors’ Sums;

 

Creditors’ Sums

the sums set out in the Aged Creditors List due by the Seller to the Creditors other than the sums owed to the Due Creditors to be paid by the Buyer after Completion out of the Creditors’ Fund to certain Creditors other than the Due Creditors;

 

Customers

the persons, firms or companies who or which were at or before the Transfer Date a customer or prospective customer of the Business;

Customer Contracts

those contracts, engagements or orders entered into on or prior to the Transfer Date by or on behalf of the Seller with Customers in connection with and in the ordinary course of the Business which at the Transfer Date remain to be performed in whole or in part by the Seller including those contracts listed in Schedule 5 and subject to clause 9 (Conduct of the Business prior to Completion) any further such contracts entered into after or on today’s date. For the avoidance of doubt this excludes the Kelvin Hughes Contract, the RNLI Contract and any customer and/or distribution agreement, purchase order or arrangement relating to the product sold or supplied by the Seller under the Dive Canister Contract;

 

Disclosure Bundle

has the meaning given in the Disclosure Letter;

 

Disclosure Letter

a letter dated the same date as this Agreement from the Seller to the Buyer and OROLIA;

 

Dive Canister Contract

the trade agreement dated 27 February 2009 between the Seller (1) and Dive Containers New Zealand Ltd (2) , a copy of which is document D21.008 of the Disclosure Bundle;

 

Domain Names

the domain names required for the carrying on of the Business details of which are given in Schedule 8;

 

Due Amount

the amount (if any) due to the Buyer being settled as defined in paragraph 2.4 of Schedule 9;

 

Due Creditors

any overdue insurance premium, any overdue rent and service charges relating to the Property, and the first 20 trade Creditors in value as at the Completion Date based on the Aged Creditors List;

 

Employees

the persons whose names are set out in Schedule 4 and subject to clause 9 (Conduct of the Business prior to Completion) any further persons who are employed by the Seller as employees in the Business on or after today’s date up to and including the Transfer Date;

 

Escrow Account

an interest bearing bank account in the joint names of the Seller’s Solicitors and OROLIA’s Solicitors and designated as required by the Instruction Letter;

 

Escrow Agents

the Seller’s Solicitors and OROLIA’s Solicitors;

 

Escrow Agreement

the agreement, in the agreed form, to be signed by the parties instructing and authorising the Escrow Agents to establish and operate the Escrow Account in the form set out in Schedule 9;

Excluded Assets

the following assets which are excluded from the sale to the Buyer under this Agreement: (i) the Retained Business; (ii) the Book Debts and all records relating to the same; (iii) the statutory books and books relating to the Retained Business and all of the records of the Seller relating to the Retained Business; (iv) cash in hand or at the bank and all cheques and other securities representing the same; (v) any right to use or continue to use after Completion any trade or service name or mark of the Seller or any member of the Seller’s Group other than the Business Names; (vi) the Property; (vii) the intellectual property associated with Sarbe ‘stubby’ antenna McMurdo Pt No. 83-200A; (viii) the intellectual property associated with the Sarbe PELS remote antenna Pt No. 33806-1-6; ; (ix) all assets, property rights and other interests of the Seller other than the Assets; (x) all corporation tax repayments, withholding tax refunds, VAT refunds due from HM Revenue & Customs; (xi) the VAT Records; (xii) the Creditors; (xiii) the RNLI Contract; (xiv) the Kelvin Hughes Contract; (xv) the Dive Canister Contract; (xvi) all properties, any leases or subleases of Properties or rights in any real properties of the Seller; (xvii) all shares or securities held in by the Seller in the capital of any company or undertaking including Keyswitch Varley Limited, Sarbe Limited, and McMurdo Limited; (xviii) the Seller’s Scheme and (xix) all Leasing/Hire agreements other than the Vehicle Leases and (xx) all employees’ benefits of the Retained Business and which are not capable of being transferred under this Agreement and (xxi) all assets relating to NAV5, NAV5+, NAV6, NAV DUAL, NAV6 plus, NAV6A plus and NAV6 Repeater products and (xxii) the Nav 7 demodulation library source code;

 

General Retention

 

Goodwill

the goodwill custom interest and connection of the Seller in and concerning the Business together with the exclusive right for the Buyer and its successors and assigns to carry on the Business under the Business Names (and all other names associated with the Business) and respectively to represent themselves as carrying on the Business in succession to the Seller;

 

Guaranteed Agreements

has the meaning given in clause 21.1;

 

Initial Consideration

has the meaning ascribed to it in clause 3.2.1;

 

Initial Stock Value

the net book value of the Stock agreed between the Seller and OROLIA as being £1,300,000 ;

 

Insolvency Event

(a) the passing of a resolution for the liquidation of the party other than a solvent liquidation for the purpose of the reconstruction or amalgamation of all or part of the Seller’s Group or the Buyer’s Group (the structure of which has been previously approved by the other party in writing) in which a new company assumes (and is capable of assuming) all the obligations of the party; or

 

 

(b) the presentation at court by any competent person of a petition for the winding up of the Seller or the Buyer and which has not been withdrawn or dismissed within fourteen days of such presentation; or

 

 

(d) the issue at court by any competent person of a notice of intention to appoint an administrator to the Seller or the Buyer, a notice of appointment of an administrator to the Seller or the Buyer or an application for an administration order in respect of the Seller or the Buyer; or

 

 

(e) any step is taken by any person to appoint a receiver, administrative receiver or manager in respect of the whole or a substantial part of the assets or undertaking of the Seller or the Buyer; or

 

 

(f) a non frivolous statutory demand outstanding against the Seller or the Seller or the Buyer being unable to pay its debts as they fall due for the purposes of section 123 of the Insolvency Act 1986

Instruction Letter

the letter from the Seller and the Buyer to the Seller’s Solicitors and OROLIA’s Solicitors relating to the Retention in the form agreed as set out in Part 2 of Schedule 9;

 

Intellectual Property

patents, right to invention, know-how, goodwill, registered and unregistered trademarks and service marks, domain names, registered designs, design rights, utility models, copyright (including all such rights in computer software, information and any databases), Logos, Brands, database rights, moral rights and topography rights, trade secret and other similar confidential information, rights in the nature of unfair competition rights and right to sue for passing off and any other similar intellectual proprietary knowledge or information or commercial right (in each case whether or not registered or registrable for the full period thereof and all extensions and renewals thereof), applications for any of the foregoing and the right to apply for any of the foregoing in any part of the world and any similar rights situated in any country;

 

IP Licences

any licences, authorisations and permissions in any form whatsoever whether express or implied, written or unwritten (a) pertaining to the use, enjoyment and exploitation by the Seller of any Business Intellectual Property in connection with the Business as carried on at the Transfer Date;

 

Kelvin Hughes Contract

the development and supply agreement dated 30 December 2005 between the Seller (1) and Kelvin Hughes (2) , a copy of which is document D21.004 of the Disclosure Bundle;

 

Lease

a lease of the Property dated 25 February 2008 made between Chemring Group plc and Signature Industries Limited together with any documents ancillary or supplemental to it.

 

Leasing/Hire Agreements

those leasing and hire agreements entered into on or prior to the Transfer Date by or on behalf of the Seller for the lease or hire of equipment exclusively in connection with and in the ordinary course of the Business which at the Transfer Date remain to be performed in whole or in part being those contracts listed in Part 2 of Schedule 11;

 

Legal Opinion

the legal opinion in agreed form given in relation to DC or OROLIA (as appropriate) entering into this Agreement;

 

Liabilities

all liabilities relating directly or indirectly to the Retained Business and the Excluded Assets, the Seller’s Schemes and all other liabilities or obligations relating to the Business or Assets and outstanding on, or accrued or referable to the period up to and including, the Transfer Date or arising by virtue of the sale and purchase recorded by this Agreement, including any and all liabilities in respect of Taxation attributable to the Seller in respect of the Business or the Assets relating to the period ending on the Transfer Date and all bank and other overdrafts and loans owing by the Seller other than those specified to be transferred in this Agreement or any of the Transaction Documents;

 

Licence to Occupy

the licence to occupy the Property between the Seller and the Buyer in the agreed form as set out in Schedule 13 to be entered into between the Seller (1) and the Buyer (2) on Completion;

 

Logos

the logos used in connection with the Business excluding all and any owned or used by the Seller in connection with the Retained Business;

Long Stop Date

18 December 2009 (or such other date the Seller and OROLIA may agree in writing);

 

Management Accounts

unaudited profit and loss account and balance sheet for the Business as at and for the period to August 2009, a copy of which is in the Disclosure Bundle;

 

Mandate Letters

the letters of instruction from the Seller’s Solicitors and OROLIA’s Solicitors in the agreed form;

 

McMurdo Limited or
the “Buyer”

a dormant company being a wholly owned subsidiary of the Seller, incorporated on 6 July 2009 under Company Number 6952856 by the Seller for the purpose of selling that company to OROLIA immediately prior to the Completion Date of this Agreement, in accordance with the terms of McMurdo Ltd Sale and Purchase Agreement referred to in Schedule 14;

 

McMurdo Ltd Sale and Purchase Agreement

the agreement to be entered into by the Parties as set forth in Schedule 14 for the acquisition by OROLIA of the entire issued share capital of McMurdo Limited;

 

Nav 5 Stock

all stock relating to NAV5 and NAV5+ products

 

Nav 6 Stock

all stock relating to NAV6+, NAV Dual, NAV6 plus, NAV6A plus and NAV6 Repeater products

 

OROLIA’s Confidential Information

has the meaning as ascribed to it in clause 19.1;

 

OROLIA’s Solicitors

Pritchard Englefield Solicitors, 14 New Street, London EC2M 4HE;

 

Parties

the parties to this Agreement (and Party means any of them depending on the context);

 

Patent Assignment

the patent assignment in the agreed form to be entered into between the Seller (1) and the Buyer (2);

 

Plant

fixed or moveable fixtures and fittings, plant, equipment, hardware items of office equipment and Computer System used at the Property , machinery wherever situate, including tools (including to the extent owned by the Seller the tools relating to MOB Guardian products sold under the RNLI Contract disclosed in the Disclosure Letter) and jigs in the possession of suppliers, belonging to the Seller and used exclusively in connection with the Business including those listed in Schedule 10 and the offsite tooling disclosed in the Disclosure Letter, and subject to Clause 9 (Conduct of Business Prior to Completion) together with any other such items acquired by the Seller after today’s date but before Completion for use exclusively in connection with the Business and less any items on such list which are disposed of by the Seller after today’s date but before Completion;

 

Post Exchange Breach

has the meaning given in clause 10.6;

 

Products

the products listed at Schedule 7;

 

Property

the property known as Silver Point, Airport Service Road, Portsmouth PO3 5PB and any part or parts thereof as further demised and described in the Lease;

Relevant Claim

any claim by the Buyer for breach of or liability under any of the representations, undertakings, agreements, covenants, warranties (including the Warranties) and indemnities made against the Seller or DC under or pursuant to this Agreement and any Transaction Documents save for the Seller’s obligations to pay for the services set out in Transitional Service Agreement unless any such monies remain outstanding from the Seller to the Buyer under the Transitional Services Agreement immediately before the Anniversary Date;

 

Request Letter

the letter from the Escrow Agent to the relevant bank relating to the Retention in the form agreed as set out in Part 2 of Schedule 9;

 

Retained Business

any businesses including without limitation all the assets, contracts and any other property and rights in connection with such businesses (other than the Business and Assets) carried on or previously carried on by the Seller including any arrangements of the Seller between the Business and the Seller’s other businesses and including the business relating to the Nav 5 and 6 series products;

 

Retention

the General Retention in accordance with clause 3.2.2;

 

RNLI Contract

the manufacturing and marketing licensing agreement for the MOB Guardian dated 16 November 2007 between the Seller (1) and RNLI (2) , corresponding to document J3.000 of the Disclosure Bundle;

 

Schedule of Apportionments

the schedule of apportionments pursuant to clause 15.12;

 

Seller’s Solicitors

Kimbells LLP, Power House, Harrison Close, Knowlhill, Milton Keynes MK5 8PA;

 

Seller’s Solicitors Account

National Westminster Bank plc Solicitors Corporate Service Team, PO Box 333, Silbury House ,300 Silbury Boulevard, Milton Keynes MK9 2ZF

Sort Code: 60-14-55

Client Account: 60546085;

 

Security Interest

any encumbrance, mortgage, charge (fixed or floating), assignment for the purpose of security, pledge, lien, right of set-off, security interest (including any created by law), retention of title or hypothecation for the purpose, or which has the effect, of granting security interest of any kind whatsoever and any agreement or arrangement, whether conditional or otherwise, to create any of the foregoing (including any right to acquire, option or right of pre-emption);

 

Seller’s Confidential Information

has the meaning ascribed to it in clause 19.1;

 

Seller’s Group

the Seller, its holding company and all companies and undertakings which now or in the future become subsidiaries or subsidiary undertakings of the Seller or of any such holding company;

Seller’s Scheme(s)

all agreements or arrangements (whether legally enforceable or not) for the payment of any pensions, allowances, lump sums or other like benefits on retirement for the benefit of any Employee or Other Employee (as defined in Clause 13.2.1) of the Seller or for the benefit of the dependants of such any person including the Prudential Money Purchase Master Plan and the Prudential Stakeholder Plan;

 

Solicitors

OROLIA’s Solicitors and the Seller’s Solicitors;

 

Special Provisions Order

 

Stock

the stock-in-trade exclusively relating to the Business at the Transfer Date including (without limitation) raw materials, goods and other assets purchased for resale, stores, component parts, work in progress, together with finished products, packaging and promotional material owed by the Seller, all exclusively relating to the Business but for the avoidance of doubt, excluding , the Chemring Stock, the Nav 5 Stock and the Nav 6 Stock and stock relating to the C1 SVDR Capsule product;

 

Supplier Contracts

those contracts, engagements or orders entered into on or prior to the Transfer Date by or on behalf of the Seller for the supply or sale of goods or services to the Seller exclusively in connection with and in the ordinary course of the Business which at the Transfer Date remain to be performed in whole or in part including those contracts listed in Schedule 7 but excluding any liabilities thereunder (other than the Creditors’ Sums) and excluding any supplier contracts relating to the Excluded Assets and the Retained Business;

 

Tax or Taxation

all taxes, levies, duties, imposts, charges, contributions and withholdings of any nature whatsoever or wheresoever imposed and all penalties, fines, charges, surcharges and interest relating thereto;

 

Trade Mark

the registered or unregistered trade marks used in connection with the Business including those listed in Schedule 8 together with all trade or service mark applications or registered trade or service marks, registered protected designations of origin, registered protected geographic origins, refilings, renewals or reissue thereof, unregistered trade or service marks, get up and company names in each case with any and all associated goodwill and all rights or forms of protection of a similar or analogous nature including rights which protect goodwill whether arising or granted under the law of England or of any other jurisdiction;

 

Trade Mark Assignment

the “McMurdo” trade mark assignment in the agreed form to be entered into between the Seller (1) and the Buyer (2) on Completion;

 

Transaction Documents

Disclosure Letter, Transitional Services Agreement, McMurdo Ltd Share Purchase Agreement, Trade Mark Assignment, Licence to Occupy, Patent Assignment, Escrow Agreement and any other documents ancillary to this Agreement;

 

Transfer Date

the close of business on the Completion Date;

 

Transitional Services Agreement

an agreement in respect of certain transitional services between the Seller and the Buyer to be entered into on Completion;

 

TULRA

the Trade Union and Labour Relations (Consolidation) Act 1992;

TUPE

the Transfer of Undertakings (Protection of Employment) Regulations 2006 (as amended) (and, where the context so requires, the Transfer of Undertakings (Protection of Employment) Regulations 1981;

 

VAT

Value Added Tax or any equivalent tax outside of the United Kingdom;

 

VATA

 

Vehicle Leases

 

Warranties

 

Warranty Claim

In this Agreement, unless the context requires otherwise:

save as otherwise provided in the Agreement, words and expressions used in this Agreement that are defined in the provisions of the Companies Act 2006 or the Insolvency Act 1986 in force at the date of this Agreement shall be read as having those meanings;

a document in the agreed form is a document which has been agreed by the parties before today’s date and which has been initialled by them or on their behalf for identification;

references to a Clause or Schedule are to a clause of or a schedule to this Agreement; references to this Agreement include its schedules; and references in a Schedule to a paragraph are to a paragraph of that Schedule;

all words and terms defined in a Schedule have the same meaning when used elsewhere in this Agreement;

references to this Agreement or any other document are to this Agreement or that document as amended from time to time;

the singular includes the plural and vice versa; references to any gender include every gender, and references to persons include corporations, partnerships and other unincorporated associations or bodies of persons;

all headings and subheadings are for convenience, have no legal effect and should be ignored in the interpretation of this Agreement;

the words other, otherwise, including and in particular or any similar expression do not limit the generality of any preceding words;

any obligation not to do anything is deemed to include an obligation not to suffer, permit or cause that thing to be done if it is within the power of the relevant person to prevent that thing being done;

agreements includes any agreement, arrangement, contract, commitment, scheme or understanding (whether or not made in writing) whether legally binding or not and references to being party to an agreement will be construed accordingly;

enactment means any statute or statutory provision (of the United Kingdom or elsewhere) and any subordinate legislation made under any statute or statutory provision;

a reference to any enactment includes a reference to:

any enactment which that enactment has directly or indirectly replaced (with or without modification); and

that enactment as re-enacted, replaced or modified at any time except to the extent that the liability of any party would be increased or extended as a result.

subsidiary and holding company have the meanings given to them by section 1159 Companies Act 2006 and subsidiary undertaking and parent undertaking will have the meanings given to them by section 1162 Companies Act 2006; and

any reference to “persons” shall include references to natural persons, firms corporations or unincorporated associations or, governments, governmental agencies and departments, statutory bodies or other entities, in each case whether or not having a separate legal personality, and shall include such person’s successor;

a reference to a “company” shall include any company, corporation or other body corporate, wherever and however incorporated or established and a “body corporate” shall be construed so as to include any company, corporation or other body corporate and limited liability partnership wherever and howsoever incorporated or established;

any reference to any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official, person or any other legal concept shall, in respect of any other jurisdiction, be treated as including that which in its nature and effect most nearly approximates in that jurisdiction to the English legal term;

any amount expressed in US Dollars (US$) or pounds sterling (£) shall, to the extent that it requires in whole or in part to be expressed in any other currency in order to give due effect to this Agreement, be deemed for that purpose to have been converted into the relevant currency immediately before the close of business on Completion (or, if that is not a Business Day, the Business Day immediately preceding such day). Subject to any applicable legal requirements governing conversions into that currency, the rate of exchange shall be National Westminster Bank plc’s mid-point spot rate for the purchase of that currency with dollars or sterling (as applicable) at the time of the deemed conversion; and

where it is necessary to determine whether a monetary limit or threshold set out in paragraph 4 of Schedule 3 (or any other threshold or limit in this Agreement and/or any Transaction Documents (if any)) has been reached or exceeded and the value of the Relevant Claim is expressed in a currency other than pound sterling (£), the value of that Relevant Claim shall be translated into pound sterling at the closing mid-point spot rate applicable to that amount of that non-sterling currency at close of business in London on the date of receipt by the Seller of written notification from the Purchaser (in accordance with the relevant provisions of this Agreement) of the existence of such claim (or, if such day is not a Business Day, on the Business Day immediately preceding such day) and subject to any applicable legal requirements governing conversions into that currency, the rate of exchange shall be National Westminster Bank plc’s mid-point spot rate for the purchase of that currency with sterling on the next following day.

Any reference to an indemnity shall be construed as an undertaking by one party to the other to fully indemnify and keep fully indemnified the relevant party against all losses, liabilities (including liabilities to Tax), damages, costs, actions, awards, penalties, fines, proceedings, claims, demands and reasonable and proper legal and professional fees and expenses arising directly out of the breach and the word indemnify shall be construed accordingly.

Subject to clause 5, with effect from the Transfer Date the Seller will sell and the Buyer relying on the Warranties and clause 22, will purchase the Business as a going concern together with the following assets:

the Goodwill;

the Plant;

the Stock;

the benefit (subject to the burden) of the Business Contracts;

the Business Intellectual Property (excluding the Business Information (see below));

the Business Information; and

all the Seller’s rights against third parties including all rights under any of the warranties, conditions, guarantees or indemnities or under the Sale of Goods Act 1979 exclusively relating to any of the Assets and the benefit of all sums to which the Seller is entitled from third parties or insurers in respect of damage to those Assets listed in clauses 2.1.1 to 2.1.6 (inclusive);

but for the avoidance of doubt, excluding the Excluded Assets.

The Seller will sell the Business and the Assets to the Buyer with full title guarantee free from all Security Interests.

Title to and beneficial ownership of each of the Assets will pass to the Buyer on Completion.

Nothing in this Agreement shall pass to OROLIA or the Buyer, or shall be construed as acceptance by OROLIA or the Buyer, of any liability, debt or other obligation of the Seller, other than as expressly set out in this Agreement.

The Seller shall indemnify OROLIA and the Buyer in relation to:-

the Liabilities which are attributable to the period up to and including the Transfer Date;

all outstanding charges and other security interests relating to any Assets and subsisting at Completion;

all supplier accounts relating to any of the Assets acquired by or any service supplied to the Business, whether such accounts are rendered before or after Completion.

The consideration (“the Consideration”) for the sale and purchase of the Business Assets shall be USD 10,000,000 (ten million US dollars) as adjusted in accordance with clause 3.4, clause 4 and Schedules 9 and 12.

The Consideration will be paid by the Buyer as follows:

USD 9,000,000 (“Initial Consideration”) will be paid in cash on Completion to the Seller in accordance with clause 8.1.5(h); and

USD 1, 000,000 (“General Retention”) will be paid in cash on Completion into the Escrow Account in accordance with clause 8.1.5(i).

The provisions of Schedule 9 apply to the Retention once it has been deposited in the Escrow Account. The Buyer and the Seller shall instruct the Escrow Agents to open the Escrow Account using the Escrow Agreement in the agreed form as set forth in Schedule 9.

On Completion, the Buyer shall retain the Creditors’ Sums and USD250,000 as a contribution towards the cost of developing new intellectual property and the Initial Consideration shall be adjusted accordingly.

The Consideration shall (subject as aforesaid, to clauses 3.4 and 4 and Schedules 9 and 12) be apportioned between the Assets in the manner set out in Schedule 1.

The apportionment of Consideration referred to in Schedule 1 is given for the sake of convenience only and the Seller agrees that OROLIA and/or the Buyer’s remedies shall not in any way be limited or affected by the amount apportioned to any particular Business Asset or category of Assets.

All sums payable by the Buyer are stated exclusive of VAT which shall (if applicable) be payable in addition to such sums on the presentation by the Seller of the relevant VAT invoices.

OROLIA, the Buyer and the Seller will ensure that the Completion Statement is prepared in accordance with Schedule 12.

If the Actual Stock Value:

is equal to the Initial Stock Value there shall be no adjustment of the Initial Consideration;

is less than the Initial Stock Value the Initial Consideration will be reduced by an amount equal to the deficiency, provided always that the Seller shall not be required pursuant to this clause to repay an amount which is more than Initial Stock Value; or

is more than the Initial Stock Value the Buyer will pay to the Seller an additional amount of consideration, such amount being equal to the excess.

Any payment required to be made under clause 4.2 will be made in cleared funds by electronic funds transfer on Completion or on determination if later in accordance with Schedule 12.

Subject to clause 5, completion of the sale and purchase of the Business under this Agreement is subject to the Seller satisfying each of the following Conditions:

the Buyer receiving to its satisfaction, evidence of the release of all charges over the Business and Assets in accordance with clause 8.1.4(g);

the Buyer receiving the Trade Mark Assignment duly executed by the Seller;

the Buyer receiving the Patent Assignment duly executed by the Seller;

the Schedule of Condition as set out in the Licence to Occupy, duly agreed between the Seller and OROLIA;

the Buyer receiving the Transitional Services Agreement duly executed by the Seller;

the Buyer receiving the ISO 9001:2008 certificate pursuant to the quality audit performed in July 2009 in relation to the Business conditional on Completion taking place);

the Buyer receiving (conditional on Completion taking place) the Qinetiq ‘Module B’ certificate (in the form shown at document R1.013-R1.025 of the Disclosure Bundle);

the Buyer receiving (conditional on Completion taking place) the Qinetiq ‘Module D’ certificate (in the form shown at document R1.087 of the Disclosure Bundle);

the Buyer receiving the (conditional on Completion taking place) the COSPAS SARSAT type approval certificates (in the form shown at R1.064-R1.068 of the Disclosure Bundle);

the Buyer receiving the consent of Davis Instruments Corp to the assignment (conditional on Completion taking place) of the Distribution Agreement dated 12 December 2002 between the Seller (1) and Davis Instruments Corp (2) (document D.11.001 of the Disclosure Bundle) in accordance with the terms of such agreement or in such other manner or form as the Seller, OROLIA and the Buyer may agree;

the Buyer receiving the consent of Simrad Limited (under its current identity) to the assignment (conditional on Completion taking place) of the Commercial Agreement dated 10 July 2006 between McMurdo Ltd and Simrad Limited (document D7.002 of the Disclosure Bundle) novated to the Seller pursuant to the Deed of Novation dated 28 March 2007 (Document D7.002.2 of the Disclosure Bundle) in accordance with the terms of such agreement or in such other manner or form as the Seller, OROLIA and the Buyer may agree;

the Buyer receiving the consent of Simrad Limited (under its current identity) to the assignment (conditional on Completion taking place) of the Commercial Agreement dated 7 February 2003 between McMurdo Ltd and Simrad Limited (document D21.001.1 of the Disclosure Bundle) novated to the Seller pursuant to the Deed of Novation dated 28 March 2007 (Document D21.001.2 of the Disclosure Bundle) in accordance with the terms of such agreement or in such other manner or form as the Seller, OROLIA and the Buyer may agree;

the Buyer receiving satisfactory evidence of ownership for the recordal by the Seller of the US FastFind trademark;

the Buyer receiving satisfactory evidence from the Seller that the Seller has removed all Chemring Stock from the Property; and

the Buyer receiving confirmation in writing by the Seller and Jeremy Harrison that the Seller and Jeremy Harrison have reached an agreement that the Seller will after Completion pay to Jeremy Harrison any bonus, commission or any sum due under any incentive scheme agreed for Jeremy Harrison for fiscal year 2009 and that he will have no stock option rights in DC.

The Seller and the Buyer shall respectively use all reasonable endeavours to ensure the satisfaction of all the Conditions as soon as possible so far as lies within their respective power so to do and OROLIA shall use all reasonable endeavours to co-operate and assist the Seller and the Buyer to ensure the satisfaction of all of the Conditions. Each Party shall give notice in writing to the other Parties of the satisfaction of the relevant Conditions within two Business Days of becoming aware of the same.

All costs and expenses relating to obtaining the consents or approvals or other matters referred to in clauses 5.1 will be borne by the Seller and the Seller shall indemnify each of the Buyer and OROLIA against any such costs and expenses.

OROLIA may waive in writing all or any of the Conditions set out in clause 5.1.

Without prejudice to clauses 5.2 and 6.2 (in so far as it relates to clause 5.2), if all the Conditions are not satisfied to the reasonable satisfaction of OROLIA or waived in accordance with clause 5.4 on or before 4 December 2009 or such other date as the Seller and OROLIA in their absolute discretion may agree in writing that this Agreement (save for clauses 19 (Confidentiality) 23 (Announcements and Publicity), 24 (Notices), clause 33.3 and clause 34 which shall remain in force) shall become null and void and no party shall be entitled to make a claim against any other party in connection with this Agreement save for any claim which arises in respect of such clauses.

The Buyer shall not be entitled to waive or vary any conditions or terms of this Agreement (including those set out in clause 8.1) without the prior written consent of OROLIA.

If all the Conditions are satisfied in accordance with Clause 5.1 and OROLIA fails to complete the purchase of the Business and the Assets under clause 8 on the Completion Date or rescinds or terminates this Agreement (other than where it properly rescinds or terminates this Agreement in accordance with its terms or the Seller is subject to an Insolvency Event) then OROLIA shall pay promptly and in any event within 30 Business Days of a notice in writing issued by the Seller to OROLIA, to the Seller a break-up fee of USD 500,000.00 and this Agreement (save for clause 5.5, this clause 6, clause 19 (Confidentiality), clause 22 (DC Guarantee), clause 33.3 and clause 34 which shall remain in force) shall become null and void and no Party shall be entitled to make a claim against any other party in connection with this Agreement save for any claim which arises in respect of clauses 5.5, 6, 19, 22 (DC Guarantee).

If all the Conditions are not satisfied or waived in accordance with clause 5.4 on or before 4 December 2009 or such other date as the Seller and OROLIA in their absolute discretion may agree in writing or OROLIA terminates the Agreement pursuant to clause 11.1.2, neither the Seller nor OROLIA shall be entitled to any break-up fee. However if under clause 5.2 the Seller and the Buyer fail respectively to use all reasonable endeavours to ensure the satisfaction of all the Conditions in accordance with that clause, then the Seller or DC shall promptly and in any event within 30 Business Days of a notice in writing issued by OROLIA to the Seller, pay to OROLIA a break-up fee of USD 500,000.00 and this Agreement (save for clause 5.5, this clause 6, clause 19 (Confidentiality) and clause 22 (DC Guarantee), clause 33.3 and clause 34 which shall remain in force) shall become null and void and no Party shall be entitled to make a claim against any other party in connection with this Agreement save for any claim which arises in respect of clause 5.5, 6, 19, 22 (DC Guarantee).

If all the Conditions are satisfied and the Seller or the Buyer (provided that the Buyer is still wholly under the Seller’s control) fails to complete the sale of the Business and the Assets under clause 8 on the Completion Date or rescinds or terminates this Agreement (other than where they properly rescind or terminate this Agreement in accordance with this Agreement) then the Seller or DC shall promptly and in any event within 30 Business Days of a notice in writing issued by OROLIA to the Seller, pay to OROLIA a break-up fee of USD 500,000.00 and this Agreement (save for clause 5.5, this clause 6, clause 11,clause 23, clause 33.3 and clause 34 which shall remain in force) shall become null and void and no Party shall be entitled to make a claim against any other party in connection with this Agreement save for any claim which arises in respect of clause 5.5, 6, 19 and 22.

Exchange will take place at the offices of the Seller’s Solicitors on today’s date (or such other place as the parties may agree), when the following will take place:

the Seller will deliver, or procure delivery, to OROLIA of:

the Seller obtaining and providing to the Buyer all licences, consents and approvals required from Laurus;

the Disclosure Letter;

a certified copy of an extract from the minutes of a meeting of the directors of the Seller and DC in the agreed form authorising the execution by such party of this Agreement and of any other documentation that may be necessary or desirable arising out of or in connection with this Agreement and appointing the relevant signatory or signatories to sign the same;

a certified copy of the minutes of a meeting of the directors of the Buyer in the agreed form authorising the execution by the Buyer of this Agreement and of any other documentation that may be necessary or desirable arising out of or in connection with this Agreement and appointing the relevant signatory or signatories to sign the same; and

the Legal Opinion in relation to DC duly given by the relevant lawyers;

against compliance by the Seller with its obligations under clause 7.1.1 OROLIA will deliver, or procure delivery, to the Seller of:

a certified copy of the minutes of a meeting of the directors of OROLIA in the agreed form authorising the execution by OROLIA of this Agreement and of any other documentation that may be necessary or desirable arising out of or in connection with this Agreement and appointing the relevant signatory or signatories to sign the same;

a duly countersigned copy of the Disclosure Letter by OROLIA and the Buyer;

the Legal Opinion in relation to OROLIA duly given by the relevant lawyers; and

written evidence to the reasonable satisfaction of the Seller that the Buyer will be able to fund the payments this Agreement requires it is to make on Completion.

The parties will deliver, or procure delivery to each other of all other documents required to be in agreed form pursuant to this Agreement. For the avoidance of doubt, these are as follows:-

the Licence to Occupy;

the Escrow Agreement;

the McMurdo Ltd Sale and Purchase Agreement;

the Trade Mark Assignment; and

the Patent Assignment.

Subject to clause 5, Completion will take place at the offices of the Seller’s Solicitors on the Completion Date (or such other place as the parties may agree), when the following will take place:

the Seller will sell and OROLIA will acquire the entire issued share capital of McMurdo Limited (relying on the Warranties and the warranties set out in the McMurdo Ltd Sale and Purchase Agreement) for a consideration of £1 according to the McMurdo Ltd Share Purchase Agreement as attached to Schedule 14. The Seller hereby procures that the board of directors of the Buyer will consent to the transfer of the entire issued share capital of the Buyer to OROLIA;

the Seller will deliver, or procure delivery to OROLIA of duly executed share transfers, written resignations and releases of the relevant officers of the Buyer, share certificates, statutory books, or other documents of title and all other documents effecting or ancillary to the transfer of the entire issued share capital of the Buyer to OROLIA as further set out in and pursuant to the terms of the McMurdo Ltd Share Purchase Agreement;

the Seller shall instruct the Seller’s solicitors to pay the Due Creditors in accordance with clause 16.5;

the Seller will deliver, or procure delivery, (in the case of items (a) to (f) below at the Property) to the Buyer of:

all the Assets capable of passing by delivery (and title to those assets will pass by delivery);

all documents of title and certificates it may hold exclusively relating to the lawful operation and use of, and all service documents pertaining to the Plant, and the Stock;

all documents, information and requirements set out in Clause 5.1;

the Aged Creditors List duly initialled by the Seller;

all documents of title, certificates, deeds, licences, agreements and other documents it may hold exclusively relating to the Business Intellectual Property (including any correspondence with the patent and trade mark agents relating to any registered Business Intellectual Property and all registration certificates therefor) and all manuals, drawings, plans, documents and other materials and media it may hold on which the Business Information is exclusively recorded;

the Business Contracts to the extent they are written;

the duly executed discharge for all outstanding mortgages, charges, pledges, securities and guarantees affecting the Business and Assets (including MG04 forms duly sworn with reference to the partial releases of the same and the following consents, authorisations, letters of non crystallisation or similar clearances being granted in terms satisfactory to OROLIA acting reasonably;

the McMurdo Ltd Sale and Purchase Agreement duly executed by the Seller;

the Licence to Occupy duly executed by the Seller;

the Trade Mark Assignment duly executed by the Seller;

the Transitional Services Agreement duly signed by the Seller;

the Patent Assignment duly executed by the Seller; and

the Escrow Agreement duly executed by the Seller.

against compliance by the Seller with its obligations under clauses 8.1.1 to 8.1.4 the Buyer will deliver, or procure delivery, to the Seller of:

the Aged Creditors List duly signed by the Buyer and OROLIA;

the McMurdo Ltd Sale and Purchase Agreement duly executed by the OROLIA;

the Licence to Occupy duly executed by the Buyer;

the Trade Mark Assignment duly executed by the Buyer;

the Transitional Services Agreement duly signed by the Buyer;

Patent Assignment duly executed by the Buyer;

the Escrow Agreement executed by the Buyer;

pay the Initial Consideration by electronic transfer to the Seller’s Solicitors’ Account and the Seller’s Solicitors are hereby authorised to receive the same and whose receipt will be an absolute discharge of the Buyer;

pay the Retention by electronic transfer to the Escrow Account; and

written confirmation from OROLIA pursuant to clause 8.2.

The Buyer shall not be entitled to complete this Agreement without the consent of OROLIA provided always OROLIA shall not withhold or delay in giving such consent where the provisions of clauses 8.1.1 to 8.1.4 have been satisfied.

Neither OROLIA nor the Buyer will be obliged to complete the purchase of any of the Assets unless the purchase of all the Assets is completed in accordance with this Agreement. Neither OROLIA nor the Buyer will be obliged to complete if the Seller or DC has suffered an Insolvency Event which is continuing.

At Completion the Seller and the Buyer shall sign the Escrow Agreement and the Instruction Letters and procure that the Escrow Agents sign the Request Letter.

OROLIA may, acting reasonably, waive any requirement contained in clauses 8.1.1 to 8.1.4. The Seller may, acting reasonably, waive any requirement contained in clause 8.1.5.

If any of the provisions or obligations set out in clause 8.1 are not fully complied with on the Completion Date by OROLIA or the Seller (as the case may be) (the “Party in Default”) the Party to whom the relevant obligation is owed may, on one or more occasions, by written notice to the Party in Default:

defer Completion to a date not more than 10 Business Days following the intended Completion Date or the next following intended Completion Date if Completion has already been deferred under this Clause (and the provisions of clause 8 apart from this clause 8.6 will apply to the deferred Completion) provided always it shall not be deferred past the Long Stop Date; or

proceed to Completion so far as practicable (without prejudice to its rights under this Agreement); or

rescind this Agreement.

If this Agreement is rescinded pursuant to clause 8.6, it shall become null and void (save for clauses 19 (Confidentiality) 22 (DC Guarantee), 23 (Announcement and Publicity), 24 (Notices) and 34 (Applicable law and Jurisdiction etc...) which shall remain in force) and no Party shall be entitled to make a claim against any other party in connection with this Agreement save for any claim which arises in respect of such clauses.

Pending the Transfer Date, ownership of the Assets shall be retained by and risk in the Assets shall remain with the Seller.

Subject to the provisions of clause 9.3, the Seller shall continue to carry on the Business for its own benefit and at its own risk up to the Transfer Date.

Save in circumstances where in the Seller’s reasonable opinion a failure to take or make the relevant act or omission may prejudice the interests of any company in the Seller’s group, the Seller undertakes to OROLIA that pending the Completion Date unless it has obtained the prior written consent of OROLIA to the contrary (such consent not to be unreasonably withheld or delayed):

the Buyer will not enter into any commitment whatsoever or commence trading;

the Business will in all material respects continue to be carried on in the same manner as it is presently carried on as regards the nature, scope and manner of conducting it and so as to maintain it as a going concern;

the Seller will not enter into a long term contract (being a contract which cannot be terminated by the Seller on less than 3 months notice) or a contract with an aggregate contract value of more than £50,000 in relation to the Business or any onerous or unusual agreements or obligations;

the Seller will not engage any person as an employee of the Business other than the Employees;

the Seller will not create, issue or grant or agree to create, issue or grant any Security Interest over any of the Assets unless, the Assets will be released from such Security Interest on or prior to the Completion;

there shall be no merger or amalgamation of the Business with any other company or business;

the Seller shall not (and shall procure that no member of the Seller’s Group) directly or indirectly acquire any business which is competitive with any business carried on by the Business;

no scheme of arrangement will be entered into in relation to the Seller or the Buyer;

there shall be no change to the corporate and/or trading names currently used by the Seller or the Buyer;

no resolution for the cessation of business or the winding-up of the Seller or the Buyer shall be proposed, made or take place except in the event of the insolvency of the Seller;

the Seller will not directly request or procure the appointment of a receiver or an administrative receiver of the whole or any part of the Assets;

the Seller will not commence any legal or arbitration proceedings (other than routine debt collection) in relation to the Business;

neither the Seller nor the Buyer will sell or dispose of any part of the Business or the Assets or other assets or property of the Business to any third party other than any such assets or goods intended to be sold in the ordinary course of business; and

in relation to the Property, the Seller will not to terminate, or give notice to terminate, a lease, Licence to Occupy or licence which would have the effect of preventing the right granted by the Seller to the Buyer to occupy the Property under the Licence to Occupy.

Pending Completion or earlier termination of the Agreement pursuant to this Agreement, OROLIA, the Buyer and the Seller will use reasonable endeavours to resolve constructively any issues that arise in relation to the Business so as to achieve an orderly transfer under this Agreement.

Pending Completion the Seller will, on OROLIA’s reasonable request, give to OROLIA or its professional advisers such facilities and information and assistance (including access to Employees and premises) regarding the Business and Assets.

Pending Completion the Seller will have Jean-Yves Courtois telephone Jeremy Harrison together with Parke Hess on a weekly basis to give him a business update in relation to the Business.

Pending Completion the Seller will provide OROLIA with monthly management accounts (in a form consistent with the Management Accounts) relating to the Business.

The Seller shall carry out at its own costs before Completion all necessary repairs to the roof of the Property relating to the leak referred to in the Disclosure Letter. The costs of such repairs shall not be comprised in the Creditor’s Sums or transferred to the Buyer post Completion.

Pending Completion the Seller will immediately notify OROLIA and the Buyer in writing of all adverse events or circumstances arising in connection with or relating to any Business Contracts of which the Seller becomes aware.

The Seller warrants to the Buyer in the terms set out in Schedule 2 and acknowledges that OROLIA and the Buyer are entering into this Agreement in reliance on the Warranties.

The Warranties are given subject only to matters accurately and fairly disclosed in the Disclosure Letter and for this purpose fairly disclosed means disclosed in a manner and with sufficient detail to enable a reasonable buyer to make a reasonably informed assessment of the matter concerned.

Where any Warranty is qualified by “to the best of the Seller’s knowledge and belief” or “so far as the Seller is aware” or other similar qualification, such warranty will be deemed to mean that it has been made after reasonable enquiry of Jeremy Harrison, Dave Jones, Steve Foster, Alison Delaney, Mike Cook and Parke Hess of the Seller (with the Seller having taken professional advice where appropriate) and the Seller will be deemed to have knowledge only of that information revealed by such enquiries.

Each of the Warranties is separate and independent of other Warranties and are not limited or restricted by any other Warranty or by other terms of this Agreement or the Transaction Documents.

The Parties agree that any claims under the Warranties and indemnities set out in this Agreement or the Transaction Documents will be limited in accordance with Schedule 3.

The Seller undertakes that pending Completion it will as soon as reasonably practicable notify OROLIA in writing of any fact, matter or circumstance arising after today’s date of which it becomes aware (such awareness being deemed to be the actual knowledge of Jeremy Harrison, Dave Jones, Steve Foster, Alison Delaney, Mike Cook and Parke Hess) which causes (a) any of the Warranties, whether given at today’s date and repeated immediately before Completion and/or (b) the terms of clauses 9.3.1, 9.3.5, 9.3.6, 9.3.8 to 9.3.14, to be breached or (c) an Insolvency Event (Post Exchange Breach).

DC warrants to Orolia and the Buyer as at the date of this Agreement and at Completion that it has the right, power and authority, and has taken all actions necessary, to execute, deliver and exercise its rights and perform its obligations under this Agreement and each of the Transaction Documents to which it is expressed to be a party and this Agreement and each of the Transaction Documents creates legally binding obligations fully enforceable against DC in accordance with their terms and do not conflict with, violate or result in a breach of the terms, provisions or conditions of any arrangements entered into by DC or any law, undertaking to or judgments, order, injunction or decree of any court.

OROLIA warrants to the Seller at the date of this Agreement it is not actually aware of any matter other than the matters disclosed in the Disclosure Letter which would enable it or the Buyer to make a Warranty Claim and this Warranty shall be repeated on Completion.

If, on or before Completion the Seller notifies OROLIA that there has been one or more Post Exchange Breach in respect of which the aggregate quantum of damages is agreed or determined to be more than US$150,000, OROLIA may within 10 Business Days (and in any event before the Long Stop Date) of receipt of such notice, either:

elect to proceed to Completion and make a Relevant Claim; or

elect to terminate this Agreement (save for clause 5.5, clause 6.2, clause 19, clause 22 (DC Guarantee) clause 23, clause 33.3 and clause 34 which shall remain in force) by serving written notice on the Seller and following such termination the Agreement shall become null and void and no Party shall be entitled to make a claim against any other party in connection with this Agreement save for any claim which arises in respect of clause 5.5, clause 6.2, clause 19, clause 22 (DC Guarantee) clause 23, clause 33.3 and clause 34.

If on or before Completion the Seller notifies OROLIA of one or more Post Exchange Breach in respect of which the aggregate quantum of damages is agreed or determined to be not more than US$150,000 OROLIA (“Minor Breach”), OROLIA and the Buyer shall be obliged to proceed to Completion and the Buyer shall be entitled to make a Relevant Claim. Nothing in this clause shall prejudice or affect adversely the rights of the Buyer and OROLIA to pursue after Completion any remedy for and make recovery in respect of the disclosure so made pursuant to this Clause and the Seller hereby indemnify OROLIA, the Buyer and any member of the OROLIA’s Group in respect of a disclosure pursuant to this clause in the event that such disclosure fails to be a “Minor Breach” within 18 months from Completion, through no fault of the Buyer.

If there is a dispute as to whether the relevant such breach is a Minor Breach, OROLIA and the Seller shall acting reasonably attempt to agree the level of such quantum. The Parties hereby agree that Post Exchange Breach shall be assessed at the date of the notice and within one year of such notice so as to take into account the nature of the Business and the likely adverse effect on the Business of the said Post Exchange Breach.

If they have not agreed it within 5 Business Days, either of them may refer the matter for determination by an independent chartered accountant or other suitable expert (the “Expert”) agreed on by them (or appointed by the President for the time being of the Institute of Chartered Accountants of England and Wales on the request of either of them). The Expert shall act as an expert (not an arbitrator) and his determination shall (in the absence of manifest error) be conclusive. The Expert’s fees shall be paid as he determines equitable.

If the Expert’s determination is sought and he determines that it is a Minor Breach, the 10 Business Day period specified in clause 11.1 shall be deemed to end 10 Business Days after the Expert issues his determination.

If the Expert’s determination is sought and he determines that it is not a Minor Breach then clause 11.1 applies.

If the Completion Date has already passed:

before the expiration of the notice period at clause 11.1;

when an agreement is reached by OROLIA and the Seller; or

when the Expert has made his determination

then Completion shall take place 10 Business Days after the date of each of the above.

The Seller shall grant and the Buyer shall accept the Licence to Occupy to occupy the Property in accordance with the terms of the Licence to Occupy from the Transfer Date.

For the avoidance of doubt, neither OROLIA nor the Buyer are under any obligation to enter into any direct covenant with any of the relevant landlords or superior landlords relating to the repair, condition, decoration of the Property other than in respect of the period of occupation stated in the Licence to Occupy. 

The parties acknowledge and agree that irrespective of any determination by a court of competent jurisdiction to the contrary that the sale and purchase pursuant to this Agreement will constitute a relevant transfer for the purposes of TUPE and accordingly that it will not operate so as to terminate any of the contracts of employment of the Employees and such contracts will be transferred to the Buyer pursuant to TUPE with effect from the Transfer Date which will be the time of transfer under TUPE.

The Seller undertakes to the Buyer and OROLIA to indemnify the Buyer from:-

any claim or other legal recourse by all or any of the Employees or any person who is not an Employee but deemed to be an employee of the Business at the Transfer Date (the “Other Employees”)in respect of any fact or matter concerning or arising from employment with the Seller prior to the Transfer Date including those claims or legal recourses or threat of claims or legal recourses set out in the Disclosure Letter and in particular in connection with David Richold, Ron Peckham, Sasha Smart (including any eventual costs of reinstatement), Paul Slee and Dave Jones;

any claim or other legal recourse by any trade union or staff association or employee representatives in respect of all or any of the Employees or any of the Other Employees arising from or connected with the failure by the Seller to comply with its legal obligations to such trade union or staff association or employee representatives; and

any act or omission done or omitted to be done by the Seller in relation to the Employees or any other employee of the Seller which by virtue of TUPE is deemed to be an act or omission of the Buyer; and

any failure by the Seller to comply with its obligations under this clause 13.

If any contract of employment or collective agreement not disclosed to the Buyer and OROLIA will have effect as if originally made between the Buyer and any of the Employees or any of the Other Employees or a trade union as a result of the provisions of TUPE:

the Buyer may, within 28 days of the Transfer Date, terminate such contract or agreement provided that the Buyer gives the Seller prior written notification of its intention to do so; and

the Seller undertakes to indemnify the Buyer and OROLIA from such termination or arising from such contracts of employment or collective agreement before and after the Transfer Date provided that the Buyer acts reasonably when terminating such contracts or agreements and in accordance with the terms of the relevant contract or agreement and in accordance with the law.

Without prejudice to the other provisions of this clause, the Seller will, at its own expense, give the Buyer such assistance as the Buyer or OROLIA may reasonably require to contest any claim by any person employed in the Business at or prior to Completion resulting from or in connection with this Agreement.

The Buyer will perform and observe all the employer’s obligations, whether under the contract of employment or otherwise, arising out of or in connection with any employee’s employment including, without limitation, payment for wages or salaries, accrued holiday pay, sick pay, maternity pay, liability to Tax, accrued bonuses or commissions and other periodic payment for any period after the Transfer Date and indemnify the Seller against any breach of this clause.

The Buyer confirms and acknowledges that it has supplied the Seller in writing with all relevant information for the purposes of Regulation 13 of TUPE on a timely basis in connection with the sale and purchase of the Business.

The Seller undertakes to the Buyer and OROLIA unless otherwise agreed by the OROLIA:-

that it has complied with, and shall up to and including the Transfer Date, comply with all of its obligations and those of any of its predecessors (whether or not legally binding or in respect of which it would be expected to comply by any regulatory or other body to which it is subject) due to or in connection with the Employees, the Other Employees and former employees or any body representing them (or any of the said obligations the Seller would have had under or in connection with such contracts of employment but for TUPE);

that it has paid and shall pay all sums due to or in relation to the Employees, the Other Employees and former employees up to and including the Transfer Date (whether arising under common law, statute, equity or otherwise) including all salaries, wages, holiday pay, sick pay, bonus or commission, expenses, National Insurance and pension contributions, liability to Taxation and other sums payable in respect of any period up to the Transfer Date;

that it shall be solely responsible for and will promptly discharge all its obligations to make redundancy payments (whether statutory or contractual) and all other payments howsoever arising in relation to any employee of the Seller (including the Other Employees) who leave his or her employment or receive notice of termination of his or her employment before the Transfer Date for whatever reason;

that there are no sums owing to or from any Employee, Other Employee or former employee other than reimbursement of expenses for the current month, wages for the current salary period and holiday pay for the current holiday year; and

that it has complied and shall comply in all respects with its obligations under regulations 11 and 13 of TUPE and Part IV of TULRCA, and that, in connection with regulation 13 of TUPE the Seller has provided and shall provide to the Buyer such information as the Buyer may request in writing in order to verify such compliance.

The Buyer undertakes to the Seller to indemnify the Seller from:

any act or omission of the Buyer in relation to an Employee occurring after the Transfer Date;

any claim or allegation by an Employee that as a direct result of the sale of the Business to the Buyer where there has been or will be a detrimental change in that Employee’s working conditions;

any claim or action by an Employee or by any representative (as defined by TUPE) by virtue of Regulation 13 of TUPE to the extent that it arises solely out of the failure of the Buyer to comply with its obligations under Regulation 13 of TUPE; or

any act or omission of OROLIA or its officers or employees in respect of the Employees which directly results in an Employee not transferring by virtue of this Agreement.

If the Seller employs any person in connection with the Business between today’s date and Completion then, if the OROLIA’s written consent to this employment has been obtained (but not otherwise) that person is deemed to be an Employee. This shall be without prejudice to the indemnity given by the Seller to the Buyer provided pursuant to this clause 13.

If any person employed in connection with the Business is dismissed or his employment otherwise terminates for any reason between today’s date and Completion then that person is deemed not to be an Employee but this shall be without prejudice to the indemnity given by the Seller to the Buyer provided pursuant to this clause 13.

All wages and salaries and other emoluments including overtime pay, holiday pay, sick pay, maternity pay and commission payments or bonuses, pension contributions and sums relating to other benefits enjoyed by the Employees (or Other Employees if applicable), liability to Tax and other period payments that have become due and payable at or refer to the period up to and including the Transfer Date relating to Employees and the Other Employees, shall be borne by the Seller up to and including the Transfer Date and all necessary apportionments shall be made accordingly.

The Seller will indemnify Buyer against all claims in connection with the Seller’s failure to pay wages or salaries, accrued holiday pay, sick pay, maternity pay, liability to Tax, accrued bonuses or commissions and other periodic payments in connection with any of the Employees and any of the Other Employees or former employees in respect of the period up to and including the Transfer Date.

With effect from the Transfer Date the Buyer will:

become entitled to the benefit of the Seller under the Business Contracts; and

carry out and perform and complete all the obligations and liabilities created by or arising under the Business Contracts (except to the extent that any obligations or liabilities which are attributable to a breach on the part of the Seller or its employees, agents or sub-contractors prior to the Transfer Date).

With effect from the Transfer Date the Seller hereby assigns to the Buyer all the Business Contracts which are capable of assignment without the consent of other parties.

If any of the Business Contracts cannot be assigned to the Buyer without the agreement of or novation by or consent to the assignment from another party this Agreement will not constitute an assignment or attempted assignment if the same would constitute a breach of such Business Contracts. In the event that consent or novation is required to such assignment:

at the Buyer’s request the Seller will use all reasonable endeavours with the co-operation of the Buyer to procure such novation or assignment on terms reasonably satisfactory to the Buyer; and

unless and until any such Business Contract will be novated or assigned the Seller will continue its corporate existence and will hold such Business Contract on trust for the Buyer and its successors in title absolutely and the Buyer will perform all the obligations of the Seller under such Business Contract as the Seller’s sub-contractor (if such sub-contracting is permissible and lawful under the Business Contract in question) or as the Seller’s distributor (if such distributorship is permissible and lawful under the Business Contract in question).

If the Seller receives any payment in respect of the Business Contracts on or after the Transfer Date the Seller will hold the same as trustee, record such payment separately in its books and will account to the Buyer for the same within 5 Business Days of receipt.

The Buyer will indemnify the Seller in respect of the non-performance or defective or negligent performance by the Buyer of the Business Contracts after the Transfer Date.

Save as otherwise herein expressly provided, the Seller will indemnify the Buyer in respect of the non-performance or defective or negligent performance by the Seller of the Business Contracts or in connection with customer complaints disclosed in the Disclosure Letter or products manufactured or sold by the Seller prior to the Transfer Date or products manufactured by the Seller before the Transfer Date and sold by the Buyer after the Transfer Date including in relation to those Business Contracts or products referred to in the Disclosure Letter and any third party claims relating thereto.

The trade agreement with Dive Containers New Zealand Limited in relation to dive canisters (document D21.008 of the Disclosure Bundle) shall not be a Business Contract for the purposes of this Agreement and all and any liability (including any liability to any third party claims) in relation to it or the products sold by the Seller to third parties will remain with the Seller. The Seller confirms that any claims arising from the Dive Canister 50 (Part No. 91-061A, part of the FastFind 200 Series) that could not be shipped back as described in document D21.006 of the Disclosure Bundle are the sole liability of the Seller and the Seller shall indemnify the Buyer from any liabilities under the relevant customer contracts.

The supply contract with Kelvin Hughes in relation to S-VDR Capsule recorders (document D21.004 and documents D21.004.1 to D21.004.7 of the Disclosure Bundle) shall not be a Business Contract for the purposes of this Agreement and the liability in relation to it will remain with the Seller. The Seller confirms that any claims arising in relation to the S-VDR Capsule products are the sole liability of the Seller and the Seller shall indemnify the Buyer from any liabilities under the relevant contracts.

The Seller shall indemnify the Buyer from any liabilities that the Buyer may suffer:

as a result of the Seller not owning the intellectual property rights in the beacon circuit board and the antenna receiver for the SEPIRB provided that the Buyer shall be under a duty to mitigate its loss in relation to any such claims; or

relating to any infringement or alleged infringement of intellectual property rights of Spot LLC connected with the disclosure no. 10.6.1 of the Disclosure Letter.

Save as otherwise herein expressly provided the Seller covenants with OROLIA that the Seller will pay, satisfy, discharge and fulfil all costs, claims, expenses, liabilities, obligations and undertakings whatsoever relating to the Business arising in respect of or by reference to any period up to and including the Transfer Date and will indemnify the Buyer in respect of the same.

Save as otherwise herein expressly provided the Buyer covenants with the Seller that it will pay, satisfy, discharge and fulfil all costs, claims and expenses, liabilities, obligations and undertakings whatsoever relating to the Business in respect of any period commencing immediately after the Transfer Date and will indemnify the Seller in respect of the same.

Subject to the remainder of this clause 15, all costs, claims, expenses, liabilities, obligations and undertakings whatsoever (“Remedial Costs”) resulting from any defects in, or alleged defects in, goods or parts of goods sold or supplied or services provided in the course of the Business prior to the Transfer Date shall be the responsibility of the Seller and not the Buyer.

Notwithstanding the foregoing, the Parties agree that to protect the Goodwill, certain services will be performed by the Seller and the Buyer under the Transitional Services Agreement.

If the Buyer receives notice from a customer (past or present) of the Business of any defect or alleged defect of the type referred to in clause 15.3, the Buyer shall be entitled to or at the request of the Seller be obliged to carry out repair or replacement work on behalf of the Seller in relation to such defect or alleged defect provided always that the cost of such repair or replacement does not exceed £250 (excluding VAT). In calculating the cost of such work parts and stock will be charged at cost price and labour shall be charged at the rates the Buyer is entitled to charge under the Transitional Services Agreement for the relevant work. For the avoidance of doubt the Buyer requires the consent of the Seller before it initiates a product recall.

If following Completion the Buyer receives notice of claims relating to defects or alleged defects of the kind referred to in clause 15.3, it shall promptly give notice of such claims to the Seller. Save where the relevant costs fall within clause 15.5, the Buyer shall not take any preventative action in order to avoid claims relating to defects or alleged defects of the kind referred to in clause 15.3 or carry out any maintenance and/or repair work and/or replace any items in connection with such claims without the prior written approval of the Seller (such approval not to be unreasonably withheld or delayed). The Buyer shall be under no obligation to carry out repair or replacement of obsolete or quarantine stocks.

To the extent the Buyer carries out work in accordance with clause 15.5 and clause 15.6 and the Transitional Services Agreement, it shall be entitled to recover the costs from the Seller by submitting a monthly invoice at the end of each month together with papers reasonably supporting such invoice and a statement of work carried out in the period to which the invoice relates. The Seller shall pay such invoice within 30 days of receipt.

The Buyer shall indemnify the Seller against any increase in its liability arising under claims relating to defects or alleged defects of the kind referred to in clause 15.3 where such increased liability arises as a result of work carried out by the Buyer pursuant to this clause 15.

All rates, gas, water, electricity and telephone charges and other outgoings relating to or payable in respect of the Business in its ordinary and normal course up to and including the Transfer Date and all wages, salaries, other emoluments including overtime pay, holiday pay, sick pay and maternity pay, commission payments or bonuses, pension contributions and sums relating to other benefits enjoyed by the Employees (or Other Employees if applicable), liability to Tax and other period payments and outgoings related to the Employees or any Other Employees (as defined in clause 13.2.1) up to and including the Transfer Date shall be borne by the Seller and as from the Transfer Date shall be borne by the Buyer and all insurance premiums, royalties and other periodical payments receivable in respect of the Business up to and including the Transfer Date shall belong to and be payable to the Seller and as from the Transfer Date shall belong to and be payable to the Buyer. Such outgoings and payments receivable shall if necessary be apportioned accordingly.

Purchase orders and Business Contracts shall be executed according to the contractual delivery dates as requested by the customers. All amounts payable for deliveries made by the Seller before the contractual delivery dates and before the Transfer Date shall be payable by the Seller to the Buyer if such deliveries to a customer exceed £25,000.

Prepayments and payments in advance made to the Seller on or before the Transfer Date in respect of goods or services to be supplied by the Buyer after Completion shall be payable by the Seller to the Buyer and prepayments and payments in advance made by the Seller in respect of goods ordered but not delivered and services contracted for but not rendered to the Seller in connection with the Business prior to Completion shall be refundable by the Buyer to the Seller. All necessary apportionments shall be made by the Seller and the Buyer.

Immediately after Completion the Seller shall prepare the Schedule of Apportionments in accordance with clauses 15.13 to 15.15.

The Schedule of Apportionments will be delivered to the Buyer and OROLIA by the Seller as soon as practicable after Completion and, in any event, not later than 30 Business Days after Completion. Before delivery, the Seller and the Buyer will so far as practicable consult with each other with a view to reducing the potential areas of future disagreement.

If the Buyer or OROLIA does not within 30 Business Days of receiving the Schedule of Apportionments give written notice to the Buyer that it disagrees with the Schedule of Apportionments or any item in them, this notice stating the reasons for the disagreement in reasonable detail, (Apportionments Objection Notice), the Schedule of Apportionments will be final and binding on the Parties. If OROLIA or the Buyer gives an Apportionments Objection Notice within the 30 Business Day period, OROLIA, the Buyer and the Seller will attempt in good faith to reach agreement in respect of it and, if they are unable to do so within 30 Business Days of the notification, either such Party may refer the matter to an independent accountant to be agreed by such Parties or, failing agreement within 5 Business Days, to be appointed by the President of the Institute of Chartered Accountants in England and Wales (Independent Accountants) at the instance of whichever such Party first applies to it.

The balancing payment so agreed or determined shall be paid by OROLIA (or on behalf of OROLIA) to the Seller or vice versa (as appropriate) within 10 Business Days of agreement or determination of the Schedule of Apportionments.

The Seller and the Buyer agree that the “US Battery for life” promotion agreement with Revere dated 26 November 2007 (document D23.009 of the Disclosure Bundle) shall not pass on to the Buyer, and that the Buyer is entitled to charge under the Transitional Services Agreement for the relevant work that will be required to assume the liabilities under this promotion agreement.

The Seller and the Buyer agree that the sales rebate scheme dated 3 February 2009 granted to Revere (document D23.005 of the Disclosure Bundle) shall fully pass on to the Buyer, which shall issue a credit note for the full rebate amount that may be due to Revere per that rebate.

The Seller is entitled, for its own account, to collect the Book Debts. The Buyer is under no obligation to collect the Book Debts.

The Buyer will hold on trust for the Seller any payment which it may receive after the Transfer Date in respect of the Book Debts and will account to the Seller for the same at the end of the week following Completion and thereafter at weekly intervals.

Any sum received by the Buyer in respect of the Business which is not specifically appropriated by the debtor to a particular transaction will be appropriated first to the oldest debt outstanding (whether due to the Buyer or a Book Debt).

The Seller will collect the Book Debts in an orderly manner and in a manner which is consistent with the way in which the Seller has collected trade and other debts in the course of carrying on the Business prior to the Transfer Date.

The Seller shall procure that an amount equal to the aggregate of the invoices of the Due Creditors is paid into the Seller’s Solicitors Account and shall be exclusively used as soon as reasonably practicable (and in any event within 2 Business Days from the receipt of the Initial Consideration) to pay and discharge the Due Creditors provided always such Due Creditors shall be paid in accordance with their payment terms and indemnify the Buyer against any failure to do so. For the avoidance of doubt, the General Retention shall not be released at the Anniversary Date if there remains unpaid Due Creditors by the Seller.

The Seller shall notify in writing immediately OROLIA and the Buyer of the existence of a genuine dispute in respect of any Creditor’s invoices setting out precisely particulars of the nature of the dispute and amount claimed and proposals to resolve it.

Following Completion the Buyer shall pay and discharge the certain Creditors (other than the Due Creditors) to whom the Creditors’ Sums relates in accordance with their contractual payment terms and indemnify the Seller against any failure to do so save that the Buyer shall not be obliged to pay a Creditors’ Sum in the event of the existence of a genuine dispute in respect of that Creditor’s invoices in which case, the Buyer shall notify in writing immediately the Seller of the existence of such dispute setting out precisely particulars of the nature of the dispute and amount claimed and proposals to resolve it. For the avoidance of doubt, the Buyer shall not pay any Creditors which are not described as being within the definition of Creditors’ Sums in the Aged List of Creditors and the Seller shall indemnify the Buyer accordingly.

For the 12 months following Completion, the Seller:

will promptly refer to the Buyer all enquiries (including any payment, notice, correspondence and information) relating to the Business and assign to the Buyer all orders relating to the Business, including enquiries relating to orders for any stocks, spares, parts, accessories and other equipment manufactured or sold, or any services provided in connection with the Business, which the Seller may receive after Completion;

will retain for the period required by law, the books, accounts, records (including VAT records), returns of the Seller relating exclusively to or exclusively in connection with the Business and the type approvals, licences and national authorisations in respect of the Products (“Product Consents”) held by the Seller and will give to the Buyer reasonable access to such books, accounts, records, returns, and Product Consents as the Buyer may reasonably require (including the right to take copies and extracts on reasonable advance notice at the Buyer’s expense, subject to prior written notice and during normal business hours) and will keep them in good order to the extent required by the Buyer for the continuation of the Business.

without prejudice to clause 5, co-operate with the Buyer at the reasonable costs of the Seller for a period of one year following the Transfer Date in applying to arrange for the issue to the Buyer of all relevant consents required by it to carry on the Business after the Transfer Date and all or any other consents, authorisations, permits and licences required to transfer the Business in compliance with any and all laws, regulations and other legal obligations; and

procure the transfer (free of charge) of the Domain Names to the Buyer.

The Buyer:

will promptly refer to the Seller all enquiries relating to the Retained Business and assign to the Seller all orders relating to the Retained Business, including enquiries relating to orders for any stocks, spares, parts, accessories and other equipment manufactured or sold, or any services provided in connection with the Retained Business, which the Buyer may receive after Completion;

will retain, for the period required by law, the books, accounts, records and returns of the Buyer relating exclusively to or exclusively in connection with the Business (in so far as they related to the pre-transfer Business) and will give to the Seller reasonable access to such books, accounts, records and returns (insofar as they relate to the pre-transfer Business) as the Seller may reasonably require (including the right to take copies and extracts on reasonable advance notice at the Seller’s expenses during normal business hours) and will keep them in good order.

The Buyer will allow the Seller to use the name and trade mark “McMurdo” alone or in combination with other words and marks solely for the purposes of:

selling or otherwise supplying any products carrying the McMurdo mark according to the Transitional Services Agreement but the Seller shall not enter into any new arrangements with third parties in relation to its supply of the products;

collecting any Book Debts or paying any Creditor relating to the Business.

Subject always to clause 18.2, the Seller covenants with the Buyer that it will not and will procure that any other member of the Seller’s Group will not either on its or their own account or through or in conjunction, association or by arrangement with or on behalf of any person or persons whether for its own benefit or that of others and whether directly or indirectly for the period of five years from Completion:

in competition with the Business as carried on at Completion supply products or provide services to any person, firm or company who or which was either at Completion or during the period of 24 months prior to Completion a client or customer of the Business where such goods or services are the same as or similar to or compete with products sold or services provided by the Business to that person, firm or company at or during the period of 24 months prior to Completion (for the avoidance of doubt these goods include any Man-Over-Board (MOB) product such as the ones currently supplied by the Seller under the RNLI Contract or similar products thereof);

in competition with the Business as carried on at Completion solicit or endeavour to solicit the custom of or canvas or approach any person, firm or company who or which was either at Completion or during the period of 24 months prior to Completion had been a client or customer of the Business, for the supply of products or the provision of services which are the same as or similar to or compete with those products sold or services provided by the Business to that person, firm or company at or during the period of 24 months prior to Completion (for the avoidance of doubt these goods include any Man-Over-Board (MOB) product such as the ones currently supplied by the Seller under the RNLI Contract or similar products thereof);

other than by way of general advertisement solicit or entice away or endeavour to solicit or entice away from the Buyer any officer, manager, or other senior employee who was either at Completion or during the period of 12 months prior to Completion engaged in the Business whether or not such person would commit a breach of his contract of employment by reason of leaving service;

carry on or be engaged, concerned or interested in any business which competes with the Business as the same was carried on at Completion (other than as a holder of securities listed on a recognised investment exchange or provided that such holding will not exceed five per cent of the class of securities of which the said holding forms part); or

employ or conclude any contract for services with any director, senior manager, or senior employee (being an employee with an annual salary of more than £50,000) who worked in the Business at Completion.

Each restriction in clause 18.1 constitutes an entirely independent restriction on the Seller.

If any restriction in clause 18.1 is determined to be unenforceable in whole or in part, its unenforceability will not affect the enforceability of the remaining restrictions or (in the case of restrictions enforceable in part) the remainder of that restriction.

Nothing in this clause 18 prevents the Seller from carrying on the Retained Businesses, dealing with any retained liabilities in accordance with this Agreement, Excluded Assets or complying with the provisions of the Transitional Services Agreement but this clause 18.4 shall be without prejudice to the restrictions set out in this clause 18 in so far as they relate to any Man-Over-Board (MOB) product such as the ones currently supplied by the Seller under the RNLI Contract or any other similar or competing products.

Subject to clause 23 (Announcements and Publicity), the Seller undertakes and will procure that all member of the Seller’s Group will undertake to keep confidential and not at any time to disclose or make known to anyone whatsoever or use for their own or any other person’s benefit all Business Information or any information regarding OROLIA and OROLIA’s Group (OROLIA’s Confidential Information) and the Buyer and OROLIA undertakes and will procure that any member of the OROLIA’s Group will undertake to keep confidential and not at any time to disclose or make known to anyone whatsoever or use for their own or any other person’s benefit all any information (excluding the Business Information) regarding the Seller’s Group (Seller’s Confidential Information).

The Seller and DC shall not, except with the prior written consent of the Buyer and OROLIA, publish or otherwise disclose to any person any OROLIA Confidential Information and the Buyer and OROLIA shall not except with the prior written consent of the Seller and DC to publish or otherwise disclose to any person any Seller’s Confidential Information, except to the extent required by order of a court or regulatory body or in law (and only to that extent).

The obligations imposed by the provisions of clauses 19.1 and 19.2 will not apply to the extent that the Business Information in question:

is or comes into the public domain without fault on the part of the party to whom the same was disclosed, or to whose attention the same has come;

has been lawfully disclosed to the relevant party by a third party;

is required to be disclosed by law provided that any such disclosure shall not be made without the prior consultation of the relevant Parties; or

is required to be disclosed by a contractual obligation existing at the date of this Agreement provided that any such disclosure shall not be made without prior notice and consultation with the relevant Parties.

All amounts expressed in this Agreement as being payable by the Buyer are expressed exclusive of any VAT which may be chargeable and the Buyer will pay to the Seller in addition to such amounts an amount equal to any VAT (to include any interest and penalties) for which the Seller is liable to account to HM Revenue and Customs in respect of any supply made by it to the Buyer under or in connection with this Agreement.

The parties intend that section 49 VATA and paragraph 5 of the Special Provisions Order will apply to the transfer of the Business and the Seller and the Buyer will each use its reasonable endeavours to secure that pursuant to the provisions referred to above the sale of the Business is treated as neither a supply of goods nor a supply of services for the purposes of VAT but as the transfer of a business as a going concern.

If HM Revenue and Customs do not agree that the sale of the Business pursuant to this Agreement falls within section 49 VATA and paragraph 5 of the Special Provisions Order the Seller will issue to the Buyer a valid VAT invoice in respect of the sale of the Business. The Buyer will forthwith on receipt of such invoice pay to the Seller the VAT (to include any interest and penalties) charged on the sale of the Business in addition to the Consideration.

The Seller warrants that McMurdo Limited is registered for VAT purposes in the United Kingdom or that McMurdo Limited will be registered conditional on Completion taking place pursuant to a proper submission for VAT registration to the relevant authorities.

OROLIA warrants that McMurdo Limited will use the Assets to be transferred under this Agreement with the intention of continuing the Business without a break in trade immediately after Completion.

The Seller warrants that it is duly registered for VAT purposes in the United Kingdom.

The Seller will retain and preserve all records relating to the Business which are required to be preserved by paragraph 6(1) of Schedule 11 VATA and any regulations made under that section.

Subject to and in consideration of OROLIA entering into the McMurdo Limited Share Purchase Agreement and acquiring the entire issued share capital in McMurdo Limited and from the date of such acquisition (but subject to the Seller exercising its right pursuant to clause 4.6 of McMurdo Limited Share Purchase Agreement in which case this Guarantee shall be limited to the obligation of the Buyer to sell back the entire issued share capital of McMurdo Limited in accordance with the terms of the McMurdo Limited Share Purchase Agreement and no party shall be entitled to make any claim whatsoever under it for anything else), OROLIA unconditionally and irrevocably guarantees to the Seller and its successors, transferees and assigns:

the due and punctual performance and observance by the Buyer of all the Buyer’s obligations; and

the punctual discharge by the Buyer of all the Buyer’s liabilities to the Seller;

contained in or arising under this Agreement, McMurdo Limited Share Purchase Agreement, the Escrow Agreement, the Transitional Services Agreement, the Licence to Occupy, the Trade Mark Assignment and the Patent Assignment arising on or after Completion of this Agreement (the Guaranteed Agreements).

If the Buyer defaults in the payment when due of any amount payable to the Seller under the Guaranteed Agreements OROLIA will immediately on demand by the Seller pay to the Seller the amount payable by the Buyer and perform and discharge all obligations of the Buyer in the manner prescribed in the relevant Guaranteed Agreement and as if OROLIA were the principal obligor in respect of that amount.

As an independent and primary obligation and without prejudice to clauses 21.1 and 21.2 OROLIA will unconditionally and irrevocably indemnify the Seller against any failure of the Buyer to comply with any of its obligations or discharge any of its obligations under the Guaranteed Agreements.

The guarantee and indemnity contained in this clause 21 (OROLIA Guarantee Obligations):

is a continuing guarantee and indemnity and will continue in full force and effect until all liabilities or purported liabilities of the Buyer arising under, and all monies owing or payable or purported to be owing or payable by the Buyer under the Guaranteed Agreements have been paid, discharged or satisfied in full and notwithstanding any insolvency of the Buyer or any change in name or status of the Buyer; and

is in addition to and is not in any way prejudiced by any other security now or subsequently held by the Seller.

The OROLIA Guarantee Obligations occurring after Completion (subject always to clause 21.1) will not be discharged, diminished or in any way adversely affected as a result of any of the following:

any time, consent or waiver given to, or composition made with, the Buyer or any other person;

any amendment to, or replacement of, any Guaranteed Agreement (however fundamental) or any other agreement or security entered into by the Buyer;

the taking, variation, compromise, exchange, renewal, release or refusal or neglect to take, perfect or enforce any rights or remedies against or security over the assets of the Buyer or any other person or any non-observance of any formality or other requirement under any Guaranteed Agreement or any failure to realise the full value of any security;

the release of the Buyer, any other guarantor or other person under the terms of any composition or arrangement, including any corporate or individual voluntary arrangement;

any incapacity, lack of power, authority or legal personality of or dissolution or change in the members or status of the Buyer or any other person;

any unenforceability, illegality or invalidity of any obligation of any person under any Guaranteed Agreement or any other document or security;

any insolvency or similar proceedings; and

any other act, omission, circumstance, matter or thing which, but for this clause 21.5, might operate to release, reduce or otherwise exonerate OROLIA but which would not have discharged a person primarily liable in respect thereof.

OROLIA may not determine its liabilities under the guarantees and indemnities given in this clause 21.

The Seller will not be obliged to enforce any other rights, security or claims it may have against the Buyer or any other person before claiming under the guarantees and indemnities given by this clause 21.

Until all amounts which may be or become payable by the Buyer under or in connection with the Guaranteed Agreements have been irrevocably paid in full OROLIA agrees that it will not exercise any rights which it may have:

to be subrogated to or otherwise to share in any security or monies held, received or receivable by the Seller or, to claim any right of contribution in relation to any payment made by OROLIA under this Agreement;

to enforce any of its right of subrogation, indemnity, or to make any application for quia timet relief against or in respect of the Buyer or OROLIA;

following a claim made on OROLIA under the OROLIA Guarantee Obligations, to demand or accept repayment of any monies due from the Buyer or to claim any set off or counter claim against the Buyer; or

to claim or prove in any liquidation or other insolvency proceeding of or affecting the Buyer or any co-surety in competition with the Seller.

Following the making of a demand on OROLIA under the OROLIA Guarantee Obligations, OROLIA will (at its own cost) promptly take such steps or action as are referred to in clauses 21.1 and 21.8 above as the Seller may from time to time stipulate.

For the avoidance of doubt, in no event shall OROLIA Guarantee Obligations impose any greater obligation or liability on OROLIA than if OROLIA were jointly and severally liable with the Buyer of Guaranteed Agreements.

All amounts payable in respect of the OROLIA Guarantee Obligations will be paid by OROLIA without set off, deduction or counterclaim of any kind being made.

OROLIA warrants to the Seller as follows:

OROLIA is duly incorporated under the laws of France and has full power and authority and has taken all necessary corporate action to enable it to enter into, complete and perform this Agreement and all agreements to which it is a party and entered into pursuant to this Agreement.

OROLIA does not require the consent, approval or authority of any other person to enter into or perform its obligations under this Agreement and all agreements to which it is a party and entered into pursuant to this Agreement.

is not engaged in any litigation or arbitration proceedings which might have an effect upon its capacity or ability to perform its obligations under this Agreement and all agreements to which it is a party and entered into pursuant to this Agreement.

OROLIA’s entry into and performance of this Agreement and all agreements to which it is a party and entered into pursuant to this Agreement will not constitute any breach of or default under any contractual, governmental or public obligation binding upon it.

OROLIA is solvent and able to pay its debts as they fall due.

OROLIA’s obligations under this Agreement, the Guaranteed Agreements and all ancillary documents to be entered into pursuant to this Agreement are and will be valid, binding and enforceable.

In consideration of OROLIA and the Buyer entering into this Agreement DC unconditionally and irrevocably guarantees to the Buyer and OROLIA and their respective successors, transferees and assigns:

the due and punctual performance and observance by the Seller of all the Seller’s obligations; and

the punctual discharge by the Seller of all the Seller’s liabilities to the Buyer and/or OROLIA;

contained in or arising under the Guaranteed Agreements.

If the Seller defaults in the payment when due of any amount payable to the Buyer and/or OROLIA under the Guaranteed Agreements DC will immediately on demand by the Buyer or OROLIA pay to the Buyer or OROLIA (as OROLIA may direct from time to time) the amount payable by the Seller and perform and discharge all obligations of the Seller in the manner prescribed in the relevant Guaranteed Agreement and as if DC were the principal obligor in respect of that amount.

As an independent and primary obligation and without prejudice to clauses 22.1 and 22.2, DC will unconditionally and irrevocably indemnify the Buyer and OROLIA against any failure of the Seller to comply with any of its obligations or discharge any of its obligations under the Guaranteed Agreements.

The guarantee and indemnity contained in this clause 22 (DC Guarantee Obligations):

is a continuing guarantee and indemnity and will continue in full force and effect until all liabilities or purported liabilities of the Seller arising under, and all monies owing or payable or purported to be owing or payable by the Seller under the Guaranteed Agreements have been paid, discharged or satisfied in full and notwithstanding any insolvency of the Seller or any change in name or status of the Seller; and

is in addition to and is not in any way prejudiced by any other security now or subsequently held by the Buyer and/or OROLIA.

The DC Guarantee Obligations will not be discharged, diminished or in any way adversely affected as a result of any of the following:

any time, consent or waiver given to, or composition made with, the Seller or any other person;

any amendment to, or replacement of, any Guaranteed Agreement (however fundamental) or any other agreement or security entered into by the Seller;

the taking, variation, compromise, exchange, renewal, release or refusal or neglect to take, perfect or enforce any rights or remedies against or security over the assets of the Seller or any other person or any non-observance of any formality or other requirement under any Guaranteed Agreement or any failure to realise the full value of any security;

the release of the Seller, any other guarantor or other person under the terms of any composition or arrangement, including any corporate or individual voluntary arrangement;

any incapacity, lack of power, authority or legal personality of or dissolution or change in the members or status of the Seller or any other person;

any unenforceability, illegality or invalidity of any obligation of any person under any Guaranteed Agreement or any other document or security;

any insolvency or similar proceedings including the winding up, liquidation or dissolution of the Seller, the making of an administration order in relation to the Seller or the appointment of a receiver or administrator in respect of some or all of the assets of the Seller; and

any other act, omission, circumstance, matter or thing which, but for this clause 22.5 might operate to release, reduce or otherwise exonerate DC but which would not have discharged a person primarily liable in respect thereof.

DC may not determine its liabilities under the guarantees and indemnities given in this clause 22.

The Buyer and/or OROLIA will not be obliged to enforce any other rights, security or claims they may have against the Seller or any other person before claiming under the guarantees and indemnities given by this clause 22.

Until all amounts which may be or become payable by the Seller under or in connection with the Guaranteed Agreements have been irrevocably paid in full DC agrees that it will not exercise any rights which it may have:

to be subrogated to or otherwise to share in any security or monies held, received or receivable by the Buyer and/or OROLIA or, to claim any right of contribution in relation to any payment made by DC under this Agreement;

to enforce any of its right of subrogation, indemnity, or to make any application for quia timet relief against or in respect of the Seller or DC;

following a claim made on DC under the DC Guarantee Obligations, to demand or accept repayment of any monies due from the Seller or to claim any set off or counter claim against the Seller; or

to claim or prove in any liquidation or other insolvency proceeding of or affecting the Seller or any co-surety in competition with the Buyer and/or OROLIA.

Following the making of a demand on DC under the DC Guarantee Obligations, DC will (at its own cost) promptly take such steps or action as are referred to in clauses 22.2 and 22.8 above as the Buyer and/or OROLIA may from time to time stipulate.

For the avoidance of doubt, in no event shall the DC Guarantee Obligations impose any greater obligation or liability on DC than if DC were jointly and severally liable with the Seller of Guaranteed Agreements.

All amounts payable in respect of the DC Guarantee Obligations will be paid by DC without set off, deduction or counterclaim of any kind being made.

DC warrants to the Buyer and/OROLIA as follows:

DC is duly incorporated under the laws of Delaware and has full power and authority and has taken all necessary corporate action to enable it to enter into, complete and perform this Agreement and all agreements to which it is a party and entered into pursuant to this Agreement.

DC does not require the consent, approval or authority of any other person to enter into or perform its obligations under this Agreement and all agreements to which it is a party and entered into pursuant to this Agreement.

is not engaged in any litigation or arbitration proceedings which might have an effect upon its capacity or ability to perform its obligations under this Agreement and all agreements to which it is a party and entered into pursuant to this Agreement.

DC’s entry into and performance of this Agreement and all agreements to which it is a party and entered into pursuant to this Agreement will not constitute any breach of or default under any contractual, governmental or public obligation binding upon it.

DC is solvent and able to pay its debts as they fall due.

DC’s obligations under this Agreement, the Guaranteed Agreements and all ancillary documents to be entered into pursuant to this Agreement are and will be valid, binding and enforceable.

Notwithstanding the foregoing, all obligations of DC as Guarantor as set forth and evidenced in this clause 22 shall be subordinated in right of payment and priority to the payment in full of DC’s obligations to its senior lender, Laurus Master Fund, Ltd. and its affiliates (including Valens Offshore SPV I, Ltd., Valens Offshore SPV II, Corp., Psource Structure Debt Limited, Kallina Corporation, and Valens U.S. SPV I, LLC), pursuant to that certain (a) Secured Term Note dated August 24, 2006 from Digital Angel Corporation (as amended or modified) and the related Securities Purchase Agreement and ancillary documents of same date; (b) Secured Term Note dated August 31, 2007 from Digital Angel Corporation (as amended or modified) and the related Securities Purchase Agreement and ancillary documents of same date, and (c) Revolving Facility and Security Agreement dated August 31, 2007 from Digital Angel Corporation’s subsidiary Destron Fearing Corporation and certain of its subsidiaries (as amended or modified) and related agreements.

No announcement or circular or other publicity in connection with the subject matter of this Agreement (other than as permitted by this Agreement) will be made by or on behalf of the Seller and OROLIA without the approval of the other as to its content, form and manner of publication (such approval not to be unreasonably withheld or delayed) save that any announcement, circular or other publicity required to be made or issued by any of the parties pursuant to any legal or regulatory authority may be made or issued without such approval.

Any notice or other communication required to be given under this Agreement or in connection with the matters contemplated by it shall, except where otherwise specifically provided, be in writing in the English language and shall be addressed as provided in clause 24.2 and may be:

personally delivered, in which case it shall be deemed to have been given upon delivery at the relevant address; or

if within the United Kingdom, sent by first class pre-paid post, in which case it shall be deemed to have been given two Business Days after the date of posting; or

if from or to any place outside the United Kingdom, sent by pre-paid priority airmail, in which case it shall be deemed to have been given seven Business Days after the date of posting; or

sent by fax, in which case it shall be deemed to have been given when despatched, subject to confirmation of uninterrupted transmission by a transmission report provided that any notice despatched by fax after 5 pm (at the place where such fax is to be received) on any day shall be deemed to have been received at 8am on the next Business Day.

The addresses and other details of the parties referred to in clause 24.1 are, subject to clause 24.3:

For the attention of: Mr Mike Cook

Address: Tom Cribb Road, Thamesmead, London SE28 0BH England

Fax number: +44 (0) 1256 322 695

with a copy to Kimbells LLP, Jonathan Hambleton, ref: DIG4-5; Fax: 01908 685054

For the attention of: Christophe François

Address: 291 rue Albert Caquot, 06560 Sophia Antipolis, France

Fax number: + 33 (0) 4 92 38 09 75

with a copy to Pritchard Englefield, 14 New Street, London EC2M 4HE ref: GF/AHH/123722.6, Fax: +44 (0)20 7972 9721.

For the attention of: Patricia Petersen

Address: 490 Villaume Avenue, South St, Paul MN 55075 -2433 USA

Fax number: +00 (1) 561-431-8562

For the attention of: Christophe François

Address: 291 rue Albert Caquot, 06560 Sophia Antipolis, France

Fax number: + 33 (0) 4 92 38 09 75

Any party to this Agreement may notify the other parties of any change to its address or other details specified in clause 24.3, provided that such notification shall be effective only on the date specified in such notice or five Business Days after the notice is given, whichever is later.

This Agreement will be binding upon and ensure for the benefit of each party’s successors. No party to this Agreement can assign or establish a trust of the benefit to this Agreement save that (i) provided that the Seller’s liability under this Agreement (including the Warranties) shall not be increased as a result of such assignment, the Buyer may freely assign the benefit of this Agreement (including the Warranties) to another company in the Buyer’s Group provided that such assignee is of the equivalent or of a better financial standing than the Buyer and if any such assignee shall leave the Buyer’s Group, prior to leaving it shall re-assign to the Buyer any rights assigned under this clause and (ii) provided that OROLIA’s and the Buyer’s rights under this Agreement (including the Warranties) shall not be adversely affected, the Seller may assign its rights under this Agreement to another company in the Seller’s Group provided such assignee is in a better financial standing than the Seller.

The Parties agree that (save where may be expressly stated otherwise in this Agreement) for the purposes of the Contracts (Rights of Third Parties) Act 1999 they do not intend any person other than a party to this Agreement to be able to enforce any term of this Agreement.

No variation or amendments of this Agreement will be valid unless made in writing and signed by or on behalf of each of the parties and the Buyer shall not grant any waiver, time or indulgence to the Seller or DC without prior written OROLIA’s consent.

Any waiver of any provision of this Agreement must be in writing and signed by or on behalf of each of the parties. No failure or delay by any party in exercising any right, power or privilege under this Agreement will operate as a waiver thereof nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

Any waiver by any party of a breach of any provision of this Agreement will not be a waiver of any subsequent breach of the same or any other provision.

All the Parties’ respective rights and remedies under this Agreement or by law are cumulative so a reference to or the exercise of one remedy does not affect any of the others and any failure to exercise or delay in exercising any rights or remedies, will not operate as a waiver or prevent any further exercise of them.

The Parties will pay their own costs and expenses in relation to the negotiation, preparation, execution and implementation of this Agreement.

If any provision of this Agreement will be found by any court or administrative body of competent jurisdiction to be invalid or unenforceable such invalidity or unenforceability will not affect the other provisions of this Agreement which will remain in full force and effect.

The Seller will (at the Seller’s expense) do, execute and perform and will procure to be done, executed and performed all such further acts, deeds, documents and things as OROLIA and/or the Buyer may reasonably require from time to time in order to carry out, evidence and confirm their rights and the intended purpose of this Agreement in order to vest the Assets in the Buyer on the terms of this Agreement and otherwise to give to OROLIA and/or the Buyer the full benefit of this Agreement.

Save as otherwise provided in this Agreement, the Buyer and OROLIA will (at the Buyer or OROLIA’s expense) do, execute and perform and will procure to be done, executed and performed all such further acts, deeds, documents and things as the Seller may reasonably require from time to time in order to carry out, evidence and confirm the Seller’s rights and the intended purpose of this Agreement and to give to the Seller the full benefit of this Agreement.

This Agreement and the Transaction Documents entered, or to be entered into, pursuant to the terms of this Agreement or entered into between the Seller and the Buyer in writing and expressly referring to this Agreement:

together constitute the entire agreement and understanding between the parties with respect to the subject matter of this Agreement; and

(in relation to such subject matter) supersede all prior discussions, understandings and agreements between the parties and their agents (or any of them) and all prior representations and expressions of opinion by any party (or its agent) to any other party (or its agent) including any heads of terms and confidentiality agreements entered into by any of the parties in connection with the purpose of this Agreement.

The Parties also agree and acknowledge between each other that the letter of intent (as amended) entered into on 19 June 2009 and any confidentiality agreement or arrangement which may have been entered into between the Parties and/or any member of the Seller’s Group or the Orolia’s Group are hereby terminated and each of the Parties waives or procures the waiver of all or any claims (known or unknown) arising on or prior to the date of this Agreement that it may have against the other parties in respect of any breach of any obligations set out therein. Each Party confirms to the others that it has no knowledge of any breach by any party of the provisions of the letter of intent or any confidentiality agreement or arrangement which may have occurred on or prior to the date of this Agreement.

Each of the Parties acknowledges that it is not relying on any statements, warranties or representations given or made by any of them in relation to the subject matter hereof, save those expressly set out in this Agreement, and other documents referred to in clause 31.1, and that it will have no rights or remedies with respect to such subject matter otherwise than under this Agreement (and the documents executed at the same time as it or on Completion or referred to in it) save to the extent that they arise out of the fraud, fraudulent misrepresentation or fraudulent concealment of any party.

This Agreement may be entered into in any number of counterparts, each of which when executed and delivered will be an original, but all the counterparts will together constitute one and the same agreement.

No failure to exercise nor any delay in exercising any right, power, privilege or remedy under this Agreement shall in any way impair or affect the exercise thereof or operate as a waiver thereof in whole or in part. No single or partial exercise of any right, power, privilege or remedy under this Agreement shall prevent any further or other exercise thereof or the exercise of any other right, power, privilege or remedy.

If any provision of this Agreement shall be held to be illegal, void, invalid or unenforceable under the laws of any jurisdiction, the legality, validity and enforceability of the remainder of this Agreement in that jurisdiction shall not be affected, and the legality, validity and enforceability of the whole of this Agreement in any other jurisdiction shall not be affected.

If any dispute arises in connection with this Agreement the Parties will first attempt to settle it by mediation in accordance with the Centre for Effective Dispute Resolution (CEDER) Model Mediation Procedure. Unless otherwise agreed by the Parties the mediator will be nominated by CEDR. For the avoidance of doubt, this will not preclude a party to issue proceedings in accordance with lause 34, such proceedings being, when appropriate, stayed pending determination of the mediator under this clause 33.3.

English law governs this Agreement. Each party irrevocably agrees to submit to the exclusive jurisdiction of the courts of England over any claim or matter arising out of or in connection with this Agreement and waives any objection to proceedings in such courts on the grounds of venue or on the grounds that the proceedings have been brought in an inconvenient forum.

Save as otherwise provided in this Agreement, the only remedy available to a party for breach of any of the provisions of this Agreement is for breach of contract under the terms of this Agreement.

Nothing in clauses 31, 34.2 or Schedule 3 will operate to limit or exclude any liability for fraud.

DC irrevocably appoints the Seller’s Solicitors as its agent to receive on its behalf in England or Wales service of any proceedings arising out of or in connection with this Agreement and such other documents entered into pursuant to this Agreement.

OROLIA irrevocably appoints Pritchard Englefield Solicitors as its agent to receive on its behalf in England or Wales service of any proceedings arising out of or in connection with this Agreement and such other documents entered into pursuant to this Agreement.

This Agreement will remain in full force and effect after and notwithstanding Completion in respect of all obligations, agreements, covenants, undertakings or conditions contained in or implied by this Agreement which have not been done, observed or performed at or prior to Completion and all warranties and indemnities contained in or implied by this Agreement (including the Warranties) will continue in full force and effect after and notwithstanding Completion and the parties may take action for any breach of non-fulfilment of any of them after Completion.

The Price will be apportioned as follows:-

Goodwill

Plant

Stock (Initial Stock Value — GBP1,300,000)

Business Contracts

Business Intellectual Property

Business Information

Rights against third parties referred to in clause 2.1.7

 

 

The information in the Schedules to this Agreement is complete, true, accurate and not misleading. The information in the Disclosure Letter is complete, true, accurate and not misleading and the documents in the Disclosure Bundle are true and complete copies of the originals.

The Seller:

is a limited company duly incorporated under English law;

have full power and authority and have taken all necessary corporate action to enable them to enter into, complete and perform this Agreement and all agreements to be entered into pursuant to this Agreement;

does not require the consent, approval or authority of any other person to enter into or perform its obligations under this Agreement and all agreements to which it is a party and entered into pursuant to this Agreement; and

is not engaged in any litigation or arbitration proceedings which might have an effect upon its capacity or ability to perform its obligations under this Agreement and all agreements to which it is a party and entered into pursuant to this Agreement and no such legal or arbitration proceedings have been threatened against it.

The Seller’s entry into and performance of this Agreement and all agreements to which it is a party and entered into pursuant to this Agreement will not constitute any breach of or default under any contractual, governmental or public obligation binding upon it.

The Seller’s obligations under this Agreement and each agreement to be entered into pursuant to this Agreement will be valid, binding and enforceable.

The Business is not carried on by or for the benefit of any person, firm or corporation other than the Seller.

The Seller does not conduct and has not conducted any part of the Business through a branch, agency or permanent establishment anywhere in the world other than at the Property.

The Seller has at all times carried on the Business in all respects in accordance with its memorandum and articles of association for the time being in force and any other documents relating to the Business to which it is or has been a party.

The Seller in connection with the Business is not a party to and is not liable (including contingently liable) under a guarantee, indemnity or other obligation to secure or incur a financial or other obligation with respect to another person’s obligation.

Neither the Seller nor any persons connected (as that expression is defined in section 839 Income and Corporation Taxes Act 1998) with the Seller has any direct or indirect interest in any business which has a close trading relationship with the Business or which is, or is likely to become, competitive with the Business.

All books, accounts and records of a material nature required by law to be maintained in connection with the Business:

are in possession of the Seller; and

during the period of the Seller’s ownership have at all times been properly maintained written up to date and will be so kept up to Completion; do not contain any material inaccuracies or discrepancies. During the period prior to the Seller’s ownership, they have been maintained to a reasonable standard.

are kept on computer, the Seller is the owner of all hardware and all software licences necessary to enable it to use any of those books, accounts and records in the manner in which they have been used prior to the date of this Agreement, and the Seller does not share any such hardware or software with any other person.

No notice has been received or allegation made to the Seller that any of the records are incorrect or should be rectified.

The Accounts:

were prepared on a proper and consistent basis with that used for the preparation of the Seller’s accounts for the preceding three financial years and comply with the requirements of the Companies Act 2006 and other relevant statutes and generally accepted accounting principles and standards in the United Kingdom;

give a true and fair view of and properly reflect the financial position of the Business as at the Accounting Date;

have been audited by an auditor or firm or accountants qualified to act as auditors in the UK and the auditors’ report required to be annexed to the accounts is unqualified;

contain proper and adequate provisions or reserves for bad and doubtful debts, old, depreciated, obsolete, unsaleable or slow-moving stock, for depreciation on fixed assets as at the Accounts Date;

are not affected by any unusual or non-recurring items;

provide for all known actual or known contingent liabilities of the Business (whether or not unquantified or disputed), including but not limited to, finance lease commitments, pension liabilities, contingent liabilities to customers at the Accounts Date; and

reflect all the fixed and loose plant, machinery, equipment, furniture, fittings and vehicles owned by the Business at the Accounts Date.

With respect to valuation of Stock, the accounting policies and bases, and the method of valuing Stock used in the preparation of the Accounts, were the same as those adopted in the accounts of the Business for the three financial periods immediately preceding the Accounts Date.

The Management Accounts have been properly and diligently prepared in a manner consistent with the bases and policies adopted in preparing the management accounts for the previous management accounting period August 2009 and, except as expressly disclosed in them, there were no unusual, exceptional, non-recurring or extraordinary items which materially affected such accounts. The Management Accounts contain accurate details of sales, stocks, margin and mark drawings and accurately, clearly and fairly state the assets, liabilities and position of the Business at the date of the Management Accounts and their results for the period ended on that date.

Since the Accounting Date:

the Business has been carried on in the ordinary and usual course both as regards the nature, scope and manner of conducting the same and so as to maintain the same as a going concern;

the Business has paid its creditors within the times agreed with such creditors and there are no debts outstanding which have been due for more than twelve weeks;

there has been no unusual change in the stock levels , current assets or liabilities of the Business;

there has been no material reduction in the value of the Plant, to the extent that they are still owned by the Seller;

none of the Plant have been lost, damaged or destroyed;

none of the Stock reflected in the Accounts has realised an amount less than the value that was placed on it in the Accounts;

the Seller has not acquired or disposed of, or agreed to acquire or dispose of, any asset other than trading stock in the ordinary and usual course of business, or assumed or incurred, or agreed to assume or incur, any capital commitment or liability (actual or contingent);

no unusual or abnormal contracts differing from the ordinary contracts necessitated by the nature of the Business have been entered into by the Seller;

no contract has been entered into by the Seller involving expenditure by it on capital account;

the Business has not been adversely affected by:

the loss of or material reduction in regular orders from any customer;

the loss of or material reduction in any regular source of supply;

any abnormal factor not affecting similar businesses to a like extent.

there has been no material adverse change in the financial position of the Business; and

the Seller has not knowingly done or omitted to do anything to prejudicially affect the Goodwill in a material way.

There are no agents or distributors of the Business and there are no persons, firms or companies whether in the United Kingdom or elsewhere with whom formal or informal arrangements exist or have existed concerning the manufacture, sale, distribution, hire, lease or promotion or licensing of any goods or services connected with the Business and no such agent or distributor has any right to any indemnity or compensation whatsoever upon termination of any arrangement in connection with the Business.

There are no existing joint venture agreements, partnership agreements, market sharing agreements relating to the Business. Any such agreements or arrangements have been terminated with no liability on either party to them.

So far as it is aware the Seller has not:

given any guarantee or warranty (other than any implied by law) or made any representation in respect of any products or services sold or supplied by the Business;

accepted any liability to service, maintain, repair or otherwise do or refrain from doing anything in relation to such goods or services after they have been sold or supplied by it;

except for those contained in its standard conditions of trading, complete and accurate copies of which are contained in the Disclosure Letter.

The Assets (excluding the Excluded Assets) comprise all assets now used in the Business and which are necessary or reasonably required for the continuation of the Business as carried on by the Seller.

The Assets:

the absolute property of the Seller and are in the Seller’s possession and control;

are free from any Security Interest, agreement of hire or hire purchase or for payment on deferred terms, bill of sale or any obligation to pay any outstanding sums in respect of them;

No person other than the Seller has or claims any rights in relation to the Assets or any of them or the proceeds of any sale of the Assets or any of them and the Assets are not subject to or potentially subject to any floating charge or guarantee given by the Seller or by any person or company connected with the Seller.

The Business does not depend on the use of assets owned by, or facilities provided by, the Seller which are not being acquired under this Agreement.

The Seller has not agreed to dispose of or granted or agreed to grant any security, charges, liens or other encumbrance in respect of any of the Assets and none of the Assets is subject to, and there is no agreement or commitment to give or create, any option, lien or encumbrances on or over the Business Assets.

There has been no exercise or purported exercise of any charge, lien, encumbrance or equity over any of the Assets and no claim has been made by any person to be entitled to any of the foregoing and there is no dispute directly or indirectly relating to any of the Assets.

So far as the Seller is aware the Plant:

is in good repair, condition and working order having regard to its age and level of use;

has been properly maintained;

includes no items with a value of more than £5,000 which are surplus to the requirements of the Business;

has been written down correctly;

is used exclusively in connection with the Business; and does not contravene any material legal requirement or restriction.

The Products referred to in Schedule 7 are all the material products sold or supplied by the Business.

The Stock:

is sufficient for the normal requirements of the Business as carried on at the date of this Agreement and at Completion and relates exclusively to the Business;

is in good condition or, if not, its value has been appropriately written down; and

(including work-in-progress) is not excessive in quantity and is capable of being used in the ordinary course of business and the work-in-progress of the Business and the amounts ordered for stock is at its normal level having regard to current orders and to orders reasonably anticipated from customers of the business None of the Stock is old, obsolete, slow moving, unsaleable, unusable or unmarketable. All work in progress hereby agreed to be transferred (if any) is wholly re-chargeable to clients.

(in the case of completed goods) is capable of being sold in the ordinary and usual course of business in accordance with current price lists and without discount, rebate or allowance to a buyer.

complies fully, and will on sale in the ordinary and usual course of the Business comply fully, with all applicable laws, regulations, standards (including British and European Union Standards) and specifications agreed with Customers.

The Seller had and has the legal power and authority to enter into and perform the Business Contracts.

So far as the Seller is aware all the Business Contracts are in full force and effect and the Seller has complied with them in all material respects.

All the material terms of each of the material Business Contracts have been disclosed to the Buyer and none of the Business Contracts and no contract, agreement or arrangement (whether oral or documented) in relation to the Business or the Assets (whether or not disclosed):

was entered into otherwise than in the ordinary and usual course of business of the Business;

is not on an arm’s length basis.

None of the Business Contracts is the subject of any material claim, dispute or proceeding, whether actual, pending or threatened and of which the Seller has received written notice.

The Customer Contracts are the only contracts entered into prior to today’s date by or on behalf of the Seller with customers for the sale or hire of goods or equipment or provision of services by the Seller in connection with the Business which at today’s date remain to be performed in whole or in part by the Seller.

No more than 25% of the aggregate amount of all sales of the Business in the preceding 12 months were made to the same customer.

The Leasing/Hire Agreements are the only leasing or hire agreements relating to the Business existing at today’s date.

The Supplier Contracts are the only contracts, engagements and orders entered into prior to today’s date by or on behalf of the Seller for the supply or sale of goods or services in connection with the Business which at today’s date remain to be performed in whole or in part by the Seller.

No more than 25% of the aggregate amount of all purchases of the Business in the preceding 12 months were obtained from the same supplier.

The Seller has not waived any rights or privileges under the Business Contracts.

The Seller is not in breach of any material obligation or restriction, agreement or arrangement (including without limitation the Business Contracts) which it has entered into for the purpose of, or which is used in the operation of, the Business and the Assets. So far as the Seller is aware no matter exists which might give rise to such breach.

So far as the Seller is aware no event has occurred, is subsisting which, with the giving of notice and/or lapse of time will, constitute or result in a default or the acceleration of any obligation of the Seller under any agreement or arrangement which it has entered into for the purpose of, or which is used in the operation of, the Business and Assets.

No threat or claim of default under any of the Business Contracts or any other agreement, instrument or arrangements to which the Seller is a party relating to the Business or the Assets has been made and is outstanding against the Seller and there is no circumstances whereby any of the Business Contracts or any such other agreement, instrument or arrangement may be terminated or rescinded by any other party or whereby the terms may be worsened as against the Seller or the Buyer or whereby the Business or the Assets may be prejudiced as a result of anything done or omitted or permitted to be done by the Seller.

So far as the Seller is aware neither the Seller nor any of its officers, agents or employees (in the course of their employment with the Seller and where the Seller is liable for the relevant act or omission) has done or omitted to do any act or thing which is in contravention or breach of or the subject of enquiry, investigation or proceedings under the provisions of any Act, Order, Regulation or the like whether made in or pertaining to the United Kingdom giving rise to any material fine, penalty, default, proceedings or other such material liability in relation to the Business or any of the Assets.

So far as the Seller is aware (having received no notice of the same) all legislation and all orders, provisions, directions and conditions relating to the Assets or the conduct of the Business (including VAT) have been duly complied with in all material respects.

So far as the Seller is aware all necessary material licences, consents, permits, agreements, arrangements, norms and authorities (public and private) necessary to enable the Seller to carry on the Business effectively in the manner in which it is now carried on:

have been obtained;

are valid and subsisting; and

are detailed in the Disclosure Letter;

and the Seller is not in material breach of any of them.

In particular, the Seller warrants that the contract and licenses as provided or listed in Documents K2.002-K2.014, K2.016-K2.023 are fully valid and in force at the Completion Date.

For the purpose of this paragraph 6 the terms data subject, personal data, processing and data protection principles will have the same meanings as in the Data Protection Act 1998 (DPA 1998).

The Seller has complied in all material respects with the DPA 1998 in relation to the Business and in particular but without limitation:

the Seller has complied in all material respects with all the data protection principles;

the Seller has made a notification in respect of the Business in accordance with the DPA 1998, and the details given in such notification have been kept accurate and up to date, and the notification has not expired.

So far as it is aware, the Seller has not at any time in the 12 months immediately preceding the date of this Agreement received in writing:

any complaint from any data subject;

any compensation claim from any data subject in relation to its processing of personal data in relation to the Business;

any notice from the Office of the Information Commissioner (or any similar supervisory authority) in relation to the Business including but not limited to any information, special information, enforcement, deregistration or transfer prohibition notices.

So far as the Seller is aware the Seller, in relation to the Business, is not and has not been a party to or concerned in any agreement, practice or arrangement and has not engaged in any course of conduct or practice which in whole or in part:

contravened any of the provisions of the Restrictive Trade Practices Acts 1976 and 1977 or was or should have been registered under those or either of those Acts,

contravened any of the provisions of the Resale Prices Act 1976,

contravenes or has contravened the Trade Descriptions Acts 1968 and 1972,

contravenes or has contravened any of the provisions of the Competition Act 1998 or the Enterprise Act 2002;

it has not received any written notice informing it is the subject of any enquiry or investigation under the Fair Trading Act 1973, the Competition Act 1980, the Competition Act 1998, the Enterprise Act 2002 or under any competition or anti trust law anywhere in the world;

it has not received any written notice informing the Seller the Business infringes or has infringed any of the provisions of the European Communities Act 1972 or Articles 81 and/or 82 of the EC Treaty (or any regulations or directives made pursuant to the Treaty) or Articles 53 and/or 54 of the EEA Agreement;

infringes or has infringed any competition, anti-trust, anti-cartel or restrictive trade practices law, rule, regulation, order or the like anywhere in the world;

is or has been the subject of any measure, including any undertaking on the part of the Seller to, or any requirement or order of, the Restrictive Practices Court, the Director General of Fair Trading, the Office of Fair Trading, the Secretary of State for Trade and Industry, the European Commission, the Court of Justice of the European Communities or the Competition Appeal Tribunal or to any other competition or regulatory authority, tribunal or court anywhere in the world; or

is unenforceable or void (whether in whole or in part) or renders the Seller liable to civil, criminal or administrative proceedings by virtue of any competition or anti-trust legislation anywhere in the world.

The Seller, in relation to the Business:

has not given any undertaking or assurance (whether or not legally binding) to; and

has not received any request for information from

any regulatory authority under any competition, anti trust, or restrictive trade practice legislation, law, rule or regulation anywhere in the world.

The Seller, in relation to the Business is not and has not been a party to or concerned in any agreement or arrangement in respect of which:

an application under Article 81 and/or Article 82 of the EC Treaty for negative clearance or exemption has been made to the European Commission; and/or

an application under sections 13, 14, 21 or 22 of the Competition Act 1998 has been made to the Office of Fair Trading or any sectoral regulator.

So far as the Seller is aware no investigations, enquiries, reports or orders by or by reference to any regulatory authority under any competition, anti trust, or restrictive trade practice legislation, law, rule or regulation anywhere in the world have been made are pending or in existence:

in respect of the Seller, the Business or any of the Assets or in which the Business may be involved ; or

in respect of activities or behaviour in which the Business or the Seller (in respect of the Business) is or has been or is alleged to be or have been involved.

The Business is not and has not been in receipt of any aid which could be construed as falling within Article 87(1) of the EC treaty other than aid or any alteration to existing aid falling within Article 87(3) which has been duly notified to the European commission pursuant to Article 88(3), and the Seller is not aware of any investigation, complaint, action or negative decision in relation to the receipt or alleged receipt by the Business of any aid or alleged aid or any threatened such investigation , complaint, action or negative decision.

The Seller, in relation to the Business, is not and has not been a party to any agreement, arrangement, understanding or practice restricting its freedom to:

supply and receive goods and services to and from such persons by such means and into or from such places as it may from time to time think fit; or

carry on the whole or any part of the Business or to use or exploit any of the Assets in any part of the world in such manner as it from time to time thinks fit.

So far as the Seller is aware there are no outstanding claims or circumstances that could give rise to a claim against the Seller in respect of defects in quality or delays in delivery or completion of contracts or deficiencies of design or performance of equipment, non compliance with specifications or otherwise relating to liability for goods or services supplied or to be supplied by the Seller in relation to the Business and so far as the Seller is aware no such claims are threatened or anticipated. A list showing any such claims (or series of claims arising from the same fact, matter or circumstances) having a value of more than £2,000 which have been made against the Seller in the period from the preceding 12 months is attached to the Disclosure Letter.

During the period of the Seller’s ownership of the Business the Seller has not:-

instigated any product recall programme in respect of any of the Products; or

save as disclosed in the Disclosure Letter, accepted any liability or obligation to service, repair, maintain, take back or otherwise do or not do anything in respect of any goods or products or services that would apply to after the goods or products have been delivered by it or services provided.

The Seller has not received a prohibition notice, a notice to warn or a suspension notice under the Consumer Protection Act 1987 in relation to the Business.

Details of all material customer claims, complaints or returns relating to the Business that have occurred during the 12 months preceding today’s date are set out in the Disclosure Letter.

Neither the Seller nor so far as the Seller is aware any person for whose acts or omissions it may be vicariously liable is engaged (whether as a claimant, defendant or otherwise) in or subject to any civil, administrative, criminal or arbitration proceedings in relation to the Business or the Assets or any of them and has not received notice informing the Seller it or any person for whose acts or omissions it may be vicariously liable is the subject of any investigation, inquiry or enforcement proceedings by any governmental, administrative or regulatory body in relation to the Business or the Assets, and:

so far as the Seller is aware there are no such proceedings pending or threatened by or against the Seller or against any such person;

so far as the Seller is aware there are no facts or circumstances likely to give rise to any such proceedings;

there are no judgements and/or awards outstanding against the Seller which affect or might affect any of the Assets; or

there is no undertaking or assurance given to any court or governmental agency or injunction relating to the Business which is still in force.

No application has been made or notice given or other step taken by the Seller or its directors or any other person to appoint an administrator in respect of the Seller.

No request has been made by the Seller or its directors to any person for the appointment of an administrator, administrative receiver or receiver in respect of the Seller or the whole or any part of the Business or Assets.

No administrator, administrative receiver or receiver has been appointed in respect of the Seller or the Business or the Assets or any of them and no mortgagee has taken possession of the whole or any part of the Business or the Assets.

No order has been made or petition presented or application made or meeting convened or resolution passed for the winding up or bankruptcy or striking off or dissolution of the Seller or for any related interim order.

No composition in satisfaction of the debts of the Seller or scheme of arrangement of its affairs or compromise or arrangement between it and either or both of its creditors or members or any class of either or both of its creditors or members has been proposed, sanctioned or approved and no proceedings have been commenced in respect of the Seller under any law, regulation or procedure relating to the reconstruction or readjustment of debt.

No distress, charging order, third party debt order, execution or other process has been levied or applied for in respect of the whole or any part of the Business or the Assets and no action has been taken to repossess any of the Assets.

No event has occurred causing (and there are no circumstances likely to cause , or which upon intervention or notice by any third party may cause) any floating charge created by the Seller to crystallise over the Business or the Assets or any of them or any charge created by it to become enforceable over the Business or the Assets or any of them nor has any such crystallisation occurred nor is such enforcement in process.

The Seller is not insolvent, is not unable or deemed unable to pay its debts within the meaning of section 123 of the Insolvency Act 1986 or the insolvency legislation applicable to the Seller and the Seller has not stopped or threatened to stop paying its debts as they fall due.

No judgement is outstanding against the Seller and no demand has been served on the Seller under section 123(1)(a) of the Insolvency Act 1986.

No event has occurred or proceedings taken in respect of the Seller in any jurisdiction to which it is subject which has an effect equivalent or analogous to any of the events mentioned in paragraphs 7.6 to 7.14 (inclusive) above.

No person is employed or engaged in the Business (whether temporarily or permanently and whether under a contract of service or contract for services) other than the Employees and the Employees are all employed directly by the Seller and each of the Employees is employed wholly and mainly in the Business.

There are no employees employed or engaged in the Retained Business at the Property.

The Disclosure Letter contains copies of all service contracts and contracts for services and full particulars of the current terms of employment or engagement of all Employees and agents of the Business (including all information required by law to be included in particulars of terms of employment and all information relating to any collective agreements) and all of such particulars are true and accurate and complete in all respects.

The Seller has not offered any contract of employment or contract for services to any person (except to any of the Employees) and there is not now outstanding any contract of service or for services with any of the Employees or agents of the Business which is not determinable by the Seller at any time on one month’s notice or less without compensation (other than under the Employment Rights Act 1996) or any liability (other than for salary, wages, commission or pension) on the part of the Business to or for the benefit of any person who is an Employee or agent of the Business.

The Seller has not offered, promised or agreed for the future any variation in any contract of employment or any contract for services in respect of the Employees or any other person employed by the Seller in respect of whom liability may be deemed by TUPE to pass to the Buyer.

There are no enquiries or investigations existing, pending or threatened into the Seller or the Business by the Equal Opportunities Commission or the Commission for Racial Equality or the Disability Rights Commission other similar authorities.

There is no person other than an Employee who now has or may in the future have a right to return to work (whether for reasons connected with maternity leave or absence by reason of illness or incapacity or otherwise) or a right to be reinstated or re-engaged in the Business or to any other compensation.

There are not in existence and the Seller has not proposed or is not proposing to introduce any bonus, profit sharing scheme, share option scheme, share incentive scheme or any other scheme or arrangement under which the Employees or any of them are or is or would be entitled to participate in the profits of the Business.

The Seller is not engaged or involved in any dispute, claim or legal proceedings (whether arising under contract, common law, statute or in equity) with any of the Employees nor with any other person employed by the Seller in respect of whom liability is deemed to pass to the Buyer by virtue of TUPE, and so far as the Seller is aware there is no likelihood of any such dispute, claim or proceedings arising at any time.

There is no industrial action or dispute threatened or existing or anticipated in respect of or concerning any of the Employees.

The Seller has not recognised any trade union, works/staff councils or association of trade unions or any other organisation of employees in respect of the Employees or any of them.

There is no collective agreement or other agreement or arrangement (whether in writing, or by custom and practice) with any trade union, staff association, staff works council or other organisation of employees in relation to the Business and the Seller is not involved or likely to be involved in connection with the Business in any industrial or trade dispute or negotiation with any trade union or other organisation of employees nor any application for recognition pending before the Central Arbitration Committee under the Employment Relations Act 1999 nor any prior notice of such.

Within the period of one year ending on the date of this Agreement and in relation to the Employees, the Seller has not:

given notice of any redundancies to the relevant Secretary of State or started consultations with any trade union under Part IV TULRA or under TUPE nor has Seller failed to comply with any of its obligations under Part IV of that Act; or

been a party to any relevant transfer as defined in TUPE nor has the Seller failed to comply with any duty to inform and consult any trade union under TUPE and will not before Completion do any of such things.

There are no agreements or arrangements for the payment to any person of or the contribution to any scheme for benefits on the retirement or death of any Employee or any dependant of any such person and no proposal to establish any such scheme or arrangement has been announced to the Employees other than the Seller’s Scheme.

As regards the Seller’s Scheme there are annexed to the Disclosure Letter a copy of the current Member’s Handbook and of any announcements to Members which have not yet been incorporated into the Handbook.

The names of the Employees who are members of the Seller’s Scheme are listed in the Disclosure Letter and no other Employees are members of the Seller’s Scheme.

The Seller’s Scheme is a registered scheme under section 153 Finance Act 2004.

The Seller’s Scheme is a contracted out scheme within the meaning of the Pension Schemes Act 1993.

So far as the Seller is aware there are no actions, proceedings or claims (other than routine claims for benefits) outstanding, by the Employees or any of them in respect of the Seller’s Scheme relating to any act, event, omission or other matter arising out of or in connection with the Seller’s Scheme.

No Employee has been excluded or prevented from membership of the Seller’s Scheme on the grounds of part-time employment, marital status or otherwise where such exclusion, prevention or restriction constitutes (or could reasonably constitute) discrimination in breach of Article 141 of the EU Treaty or any European directive.

Details of all registered Business Intellectual Property (including applications for such rights) are set out in Schedule 8 which are accurate in all material respects. All such Business Intellectual Property are used, enjoyed and exploited exclusively in connection with the Business.

The Business Intellectual Property constitutes all Intellectual Property required in order to carry out the Business as carried on at the Transfer Date. The Seller does not own or use in connection with the Business any Business Intellectual Property which has not been disclosed.

Save in respect of any Business Intellectual Property which is the subject of an IP Licence, or the subject of any licence, authorisation or permission (in any form whatsoever, whether express or implied, written or unwritten) from a member of the Seller’s Group or incorporated into any Customer Contract or Supplier Contract, the Seller is the sole legal and beneficial owner of all Business Intellectual Property and free from all Security Interests, licences and adverse rights of any description.

None of the Business Intellectual Property so disclosed is jointly owned by the Seller and any third party.

None of the Business Intellectual Property so disclosed is jointly used by the various businesses of the Seller.

The Business Intellectual Property owned by the Seller is valid and enforceable, in full force and effect and nothing has been done or not been done as a result of which any of them has ceased or might cease to be valid, subsisting or enforceable. The Seller has not received written notice that it is:

subject to any claim, challenge disputes or proceedings, pending or threatened, in relation to the ownership, validity or use of such rights by a third party or competent authority; or

subject to an application for cancellation, revocation, amendment or licence of right or compulsory licence; or

being claimed or opposed by any other person.

So far as the Seller is aware there has been no infringement by any third party of any Business Intellectual Property, nor any third party breach of confidence, passing off or actionable act of unfair competition in relation to the Business and no such infringement, breach of confidence, passing off or actionable act of unfair competition is current or anticipated.

All application, renewal and other official statutory and regulatory fees and all professional advisers fees payable in connection with any Business Intellectual Property owned by the Seller have been paid and reasonable steps have been taken to ensure the maintenance and protection of all such Business Intellectual Property.

Particulars of all material IP Licences are set out in the Disclosure Letter. So far as the Seller is aware the Seller is not in breach of any IP Licence. So far as the Seller is aware all such IP Licences are valid and enforceable, in full force and effect and will not terminate or be capable of termination by reason of the execution and performance of this Agreement.

So far as the Seller is aware none of the activities involved in the conduct of the Business, (save in relation to the Excluded Assets) infringe or have infringed any Intellectual Property or constitute or have constituted breach of confidence, passing off or actionable unfair competition in any jurisdiction. So far as the Seller is aware no such activities give or have given rise to any obligation to pay any royalty, fee, compensation or any other sum whatsoever.