Exhibit 10.81 Asset Sale and Purchase Agreement





Exhibit 10.81




Date      November 20, 2009




Signature Industries Limited (1)




McMurdo Limited (2)




Digital Angel Corporation (3)




Orolia SA (4)




 






Asset Sale and Purchase Agreement




relating to




certain assets of




Signature Industries Limited’s marine business

“McMurdo”




 











Power House, Harrison Close, Knowlhill

Milton Keynes MK5 8PA




Tel: (01908) 668555

Fax: (01908) 685085

www.kimbells.com




Ref: DIG4-5





 


 









 







CONTENTS




	 	 	 	 	 
	Clause	 	Page	 
	1 Definitions and interpretation

	 	 	3	 
	2 Agreement to Sell and Purchase

	 	 	13	 
	3 Consideration

	 	 	14	 
	4 Adjustment to the Initial Stock Value

	 	 	15	 
	5 Conditions Precedent

	 	 	15	 
	6 Break-up fee

	 	 	16	 
	7 Exchange

	 	 	17	 
	8 Completion

	 	 	18	 
	9 Conduct of Business prior to Completion

	 	 	20	 
	10 Warranties

	 	 	21	 
	11 Buyer’s remedies

	 	 	22	 
	12 Property

	 	 	22	 
	13 Employees

	 	 	23	 
	14 Business Contracts

	 	 	25	 
	15 Mutual covenants and apportionments

	 	 	26	 
	16 Book Debts and Creditors

	 	 	28	 
	17 Obligations of the Seller and Buyer after Completion

	 	 	28	 
	18 Restrictive Covenants

	 	 	29	 
	19 Confidentiality

	 	 	30	 
	20 Value Added Tax

	 	 	31	 
	21 OROLIA Guarantee

	 	 	31	 
	22 DC Guarantee

	 	 	33	 
	23 Announcements and publicity

	 	 	36	 
	24 Notices

	 	 	36	 
	25 Successors, assigns and third parties

	 	 	37	 
	26 Variation

	 	 	37	 
	27 Waiver

	 	 	37	 
	28 Costs

	 	 	37	 
	29 Severance

	 	 	37	 
	30 Further assurance

	 	 	38	 
	31 Entire Agreement

	 	 	38	 
	32 Counterparts

	 	 	38	 
	33 Miscellaneous

	 	 	38	 
	34 Applicable law and jurisdiction and remedy and agents for services

	 	 	39	 
	35 Post-completion effect

	 	 	39	 
	Schedule 1

	 	 	40	 
	Apportionment of the Consideration

	 	 	40	 
	Schedule 2

	 	 	41	 
	Warranties

	 	 	41	 
	Schedule 3

	 	 	56	 
	Seller Protection Provisions

	 	 	56	 
	Schedule 4

	 	 	60	 
	The Employees

	 	 	60	 
	Schedule 5

	 	 	63	 
	The Customer Contracts

	 	 	63	 
	Schedule 6

	 	 	64	 
	The Supplier Contracts

	 	 	64	 
	Schedule 7

	 	 	65	 
	Products

	 	 	65	 
	Schedule 8

	 	 	66	 
	Registered Intellectual Property

	 	 	66	 
	Schedule 9

	 	 	67	 
	Schedule 10

	 	 	75	 
	The Plant

	 	 	75	 
	Schedule 11

	 	 	76	 
	Leasing/Hire Agreements

	 	 	76	 
	Schedule 12

	 	 	77	 
	Schedule 13

	 	 	81	 
	Schedule 14

	 	 	82	 





 


2









 





This Agreement is dated            2009




Parties





	(1)	 	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”);

	 
	(2)	 	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”);

	 
	(3)	 	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”).

	 
	(4)	 	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”).






Agreed terms:





	1	 	Definitions and interpretation







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






	 	 	 
	Accounting Date

	 	31 December 2008;
	 
	 	 
	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

	 	the names or code references by which products are known and which may
or may not include a Logo and/or Trademark in their description;
	 
	 	 
	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;







 


3









 





	 	 	 
	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:

	 
	 	 
	 

	 	(a)  all or any part of the Business and Assets (including all books,
accounts, credit reports, price lists, cost records, warranty records,
work tickets, catalogues, certificates of title (including all
correspondence with the patent and trade mark agents relating to any
registered Business Intellectual Property and all registration
certificates therefor));


	 
	 	 
	 

	 	(b)  any products manufactured or sold or services rendered by the
Business (including formulae, designs, processes, specifications,
drawings, data, manuals or instructions, plans, product descriptions,
user or test reports, type approval papers or certificates,
instructional and promotional material and other technical material
together with any plates, blocks, negatives and similar material
relating thereto);


	 
	 	 
	 

	 	(c)  any products or processes which are or were the subject of any
research or development undertaken exclusively by the Business (whether
or not completed or abandoned);


	 
	 	 
	 

	 	(d)  the operations, management, administration, or financial affairs of
the Business (including all employee records and interview records); and


	 
	 	 
	 

	 	(e)  the sale or marketing of any of the products manufactured and/or
sold or services rendered by the Business including, without limitation,
all Customers and suppliers names and lists limited to the Customers and
suppliers of the Business since the period of the Seller’s ownership of
the Business, sales advertising and marketing information (including
without limitation, targets, sales and market share statistics, market
surveys and reports on research commissioned by the Seller and terms and
conditions of sale or supply;


	 
	 	 
	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:

	 
	 	 
	 

	 	(a)  those items of registered Intellectual Property (and applications
therefor) described in Schedule 8;


	 
	 	 
	 

	 	(b)  the Business Information;


	 
	 	 
	 

	 	(c)  the Business Names;


	 
	 	 
	 

	 	(d)  the know-how and trade secrets;


	 
	 	 
	 

	 	(e)  the Brands, design rights, Logos, patents, Trade Marks, copyright,
Domain Names, the website, and email addresses; and


	 
	 	 
	 

	 	(f)  any other confidential and proprietary knowledge and information;


	 
	 	 
	 

	 	(g)  all the Intellectual Property Rights to the plastics, mechanics,
electronics and software making up the Nav 7 Product (save for the
demodulation library source code);


	 
	 	 
	 

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







 


4









 





	 	 	 
	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

	 	the Capital Allowances Act 2001;
	 
	 	 
	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:

	 
	 	 
	 

	 	(a)  5 Business Days after notice has been given in accordance with
clause 5 by the relevant Party that the last unsatisfied Condition has
been satisfied;


	 
	 	 
	 

	 	(b)  5 Business Days after OROLIA has waived the last unsatisfied
Condition or Conditions in accordance with clause 5.4; or


	 
	 	 
	 

	 	(c)  or such other date as OROLIA and the Seller may agree in writing;


	 
	 	 
	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;







 


5









 





	 	 	 
	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;







 


6









 





	 	 	 
	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

	 	the sum of US$1,000,000 further referred to in Clause 3.2.2;
	 
	 	 
	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







 


7









 





	 	 	 
	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;







 


8









 





	 	 	 
	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;







 


9









 





	 	 	 
	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;







 


10









 





	 	 	 
	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

	 	the VAT (Special Provisions) Order 1995 SI 1995/1268;
	 
	 	 
	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;







 


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	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

	 	Valued Added Tax Act 1994;
	 
	 	 
	Vehicle Leases

	 	the vehicle leases listed in Part 1 of Schedule 11;
	 
	 	 
	Warranties

	 	the warranties set out in clause 10.1 and Schedule 2;
	 
	 	 
	Warranty Claim

	 	a claim for a breach of Warranty.







	 	1.2	 	In this Agreement, unless the context requires otherwise:







	 	1.2.1	 	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;

	 
	 	1.2.2	 	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;

	 
	 	1.2.3	 	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;

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

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

	 
	 	1.2.6	 	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;

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

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

	 
	 	1.2.9	 	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;

	 
	 	1.2.10	 	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;

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

	 
	 	1.2.12	 	a reference to any enactment includes a reference to:







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

	 
	 	(b)	 	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.





 


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	 	1.2.13	 	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

	 
	 	1.2.14	 	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;

	 
	 	1.2.15	 	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;

	 
	 	1.2.16	 	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;

	 
	 	1.2.17	 	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

	 
	 	1.2.18	 	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.

	 
	 	1.2.19	 	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.







	2	 	Agreement to Sell and Purchase







	 	2.1	 	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:







	 	2.1.1	 	the Goodwill;

	 
	 	2.1.2	 	the Plant;

	 
	 	2.1.3	 	the Stock;

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





 


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

	 
	 	2.1.6	 	the Business Information; and

	 
	 	2.1.7	 	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.

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

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

	 
	 	2.4	 	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.

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







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

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

	 
	 	2.5.3	 	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.







	3	 	Consideration







	 	3.1	 	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.

	 
	 	3.2	 	The Consideration will be paid by the Buyer as follows:







	 	3.2.1	 	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

	 
	 	3.2.2	 	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).







	 	3.3	 	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.

	 
	 	3.4	 	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.

	 
	 	3.5	 	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.

	 
	 	3.6	 	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.

	 
	 	3.7	 	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.





 


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	4	 	Adjustment to the Initial Stock Value







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

	 
	 	4.2	 	If the Actual Stock Value:







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

	 
	 	4.2.2	 	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

	 
	 	4.2.3	 	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.







	 	4.3	 	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.







	5	 	Conditions Precedent







	 	5.1	 	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:







	 	5.1.1	 	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);

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

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

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

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

	 
	 	5.1.6	 	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);

	 
	 	5.1.7	 	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);

	 
	 	5.1.8	 	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);

	 
	 	5.1.9	 	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);

	 
	 	5.1.10	 	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;

	 
	 	5.1.11	 	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;





 


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	 	5.1.12	 	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;

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

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

	 
	 	5.1.15	 	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.







	 	5.2	 	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.

	 
	 	5.3	 	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.

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

	 
	 	5.5	 	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.

	 
	 	5.6	 	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.







	6	 	Break-up fee







	 	6.1	 	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).

	 
	 	6.2	 	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).





 


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	 	6.3	 	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.







	7	 	Exchange







	 	7.1	 	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:







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







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

	 
	 	(b)	 	the Disclosure Letter;

	 
	 	(c)	 	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;

	 
	 	(d)	 	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

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







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







	 	(a)	 	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;

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

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

	 
	 	(d)	 	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.





 


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	 	7.1.3	 	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:-







	 	(a)	 	the Licence to Occupy;

	 
	 	(b)	 	the Escrow Agreement;

	 
	 	(c)	 	the McMurdo Ltd Sale and Purchase Agreement;

	 
	 	(d)	 	the Trade Mark Assignment; and

	 
	 	(e)	 	the Patent Assignment.







	8	 	Completion







	 	8.1	 	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:







	 	8.1.1	 	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;

	 
	 	8.1.2	 	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;

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

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







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

	 
	 	(b)	 	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;

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

	 
	 	(d)	 	the Aged Creditors List duly initialled by the Seller;

	 
	 	(e)	 	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;

	 
	 	(f)	 	the Business Contracts to the extent they are written;

	 
	 	(g)	 	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;

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

	 
	 	(i)	 	the Licence to Occupy duly executed by the Seller;





 


18









 





	 	(j)	 	the Trade Mark Assignment duly executed by the Seller;

	 
	 	(k)	 	the Transitional Services Agreement duly signed by the
Seller;

	 
	 	(l)	 	the Patent Assignment duly executed by the Seller; and

	 
	 	(m)	 	the Escrow Agreement duly executed by the Seller.







	 	8.1.5	 	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:







	 	(a)	 	the Aged Creditors List duly signed by the Buyer and
OROLIA;

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

	 
	 	(c)	 	the Licence to Occupy duly executed by the Buyer;

	 
	 	(d)	 	the Trade Mark Assignment duly executed by the Buyer;

	 
	 	(e)	 	the Transitional Services Agreement duly signed by the
Buyer;

	 
	 	(f)	 	Patent Assignment duly executed by the Buyer;

	 
	 	(g)	 	the Escrow Agreement executed by the Buyer;

	 
	 	(h)	 	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;

	 
	 	(i)	 	pay the Retention by electronic transfer to the Escrow
Account; and

	 
	 	(j)	 	written confirmation from OROLIA pursuant to clause 8.2.







	 	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.

	 
	 	8.3	 	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.

	 
	 	8.4	 	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.

	 
	 	8.5	 	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.

	 
	 	8.6	 	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:







	 	8.6.1	 	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

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

	 
	 	8.6.3	 	rescind this Agreement.







	 	8.7	 	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.





 


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	9	 	Conduct of Business prior to Completion







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

	 
	 	9.2	 	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.

	 
	 	9.3	 	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):







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

	 
	 	9.3.2	 	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;

	 
	 	9.3.3	 	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;

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

	 
	 	9.3.5	 	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;

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

	 
	 	9.3.7	 	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;

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

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

	 
	 	9.3.10	 	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;

	 
	 	9.3.11	 	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;

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

	 
	 	9.3.13	 	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

	 
	 	9.3.14	 	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.







	 	9.4	 	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.

	 
	 	9.5	 	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.





 


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	 	9.6	 	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.

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

	 
	 	9.8	 	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.

	 
	 	9.9	 	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.







	10	 	Warranties







	 	10.1	 	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.

	 
	 	10.2	 	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.

	 
	 	10.3	 	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.

	 
	 	10.4	 	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.

	 
	 	10.5	 	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.

	 
	 	10.6	 	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).

	 
	 	10.7	 	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.

	 
	 	10.8	 	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.





 


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	11	 	Buyer’s remedies







	 	11.1	 	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:







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

	 
	 	11.1.2	 	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.







	 	11.2	 	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.

	 
	 	11.3	 	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.

	 
	 	11.4	 	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.

	 
	 	11.5	 	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.

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

	 
	 	11.7	 	If the Completion Date has already passed:







	 	11.7.1	 	before the expiration of the notice period at clause 11.1;

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

	 
	 	11.7.3	 	when the Expert has made his determination







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

	 
	12	 	Property







	 	12.1	 	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.

	 
	 	12.2	 	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. 





 


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	13	 	Employees







	 	13.1	 	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.

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







	 	13.2.1	 	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;

	 
	 	13.2.2	 	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

	 
	 	13.2.3	 	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

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







	 	13.3	 	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:







	 	13.3.1	 	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

	 
	 	13.3.2	 	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.







	 	13.4	 	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.

	 
	 	13.5	 	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.

	 
	 	13.6	 	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.





 


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







	 	13.7.1	 	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);

	 
	 	13.7.2	 	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;

	 
	 	13.7.3	 	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;

	 
	 	13.7.4	 	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

	 
	 	13.7.5	 	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.







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







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

	 
	 	13.8.2	 	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;

	 
	 	13.8.3	 	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

	 
	 	13.8.4	 	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.







	 	13.9	 	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.

	 
	 	13.10	 	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.

	 
	 	13.11	 	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.





 


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	 	13.12	 	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.







	14	 	Business Contracts







	 	14.1	 	With effect from the Transfer Date the Buyer will:







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

	 
	 	14.1.2	 	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).







	 	14.2	 	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.

	 
	 	14.3	 	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:







	 	14.3.1	 	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

	 
	 	14.3.2	 	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).







	 	14.4	 	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.

	 
	 	14.5	 	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.

	 
	 	14.6	 	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.

	 
	 	14.7	 	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.





 


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	 	14.8	 	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.

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







	 	14.9.1	 	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

	 
	 	14.9.2	 	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.







	15	 	Mutual covenants and apportionments







	 	15.1	 	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.

	 
	 	15.2	 	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.

	 
	 	15.3	 	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.

	 
	 	15.4	 	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.

	 
	 	15.5	 	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.

	 
	 	15.6	 	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.





 


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	 	15.7	 	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.

	 
	 	15.8	 	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.

	 
	 	15.9	 	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.

	 
	 	15.10	 	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.

	 
	 	15.11	 	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.

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

	 
	 	15.13	 	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.

	 
	 	15.14	 	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.

	 
	 	15.15	 	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.





 


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	 	15.16	 	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.

	 
	 	15.17	 	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.







	16	 	Book Debts and Creditors







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

	 
	 	16.2	 	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.

	 
	 	16.3	 	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).

	 
	 	16.4	 	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.

	 
	 	16.5	 	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.

	 
	 	16.6	 	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.

	 
	 	16.7	 	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.







	17	 	Obligations of the Seller and Buyer after Completion







	 	17.1	 	For the 12 months following Completion, the Seller:







	 	17.1.1	 	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;





 


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	 	17.1.2	 	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.

	 
	 	17.1.3	 	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

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







	 	17.2	 	The Buyer:







	 	17.2.1	 	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;

	 
	 	17.2.2	 	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.







	 	17.3	 	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:







	 	17.3.1	 	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;

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







	18	 	Restrictive Covenants







	 	18.1	 	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:







	 	18.1.1	 	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);





 


29









 











	 	18.1.2	 	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);

	 
	 	18.1.3	 	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;

	 
	 	18.1.4	 	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

	 
	 	18.1.5	 	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.







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

	 
	 	18.3	 	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.

	 
	 	18.4	 	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.







	19	 	Confidentiality







	 	19.1	 	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).

	 
	 	19.2	 	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).





 


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	 	19.3	 	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:







	 	19.3.1	 	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;

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

	 
	 	19.3.3	 	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

	 
	 	19.3.4	 	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.







	20	 	Value Added Tax







	 	20.1	 	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.

	 
	 	20.2	 	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.

	 
	 	20.3	 	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.

	 
	 	20.4	 	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.

	 
	 	20.5	 	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.

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

	 
	 	20.7	 	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.







	21	 	OROLIA Guarantee







	 	21.1	 	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:







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





 


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	 	21.1.2	 	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).








	 	21.2	 	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.

	 
	 	21.3	 	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.

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







	 	21.4.1	 	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

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







	 	21.5	 	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:







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

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

	 
	 	21.5.3	 	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;

	 
	 	21.5.4	 	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;

	 
	 	21.5.5	 	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;

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

	 
	 	21.5.7	 	any insolvency or similar proceedings; and

	 
	 	21.5.8	 	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.







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





 


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	 	21.7	 	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.

	 
	 	21.8	 	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:







	 	21.8.1	 	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;

	 
	 	21.8.2	 	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;

	 
	 	21.8.3	 	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

	 
	 	21.8.4	 	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.







	 	21.9	 	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.

	 
	 	21.10	 	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.

	 
	 	21.11	 	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.

	 
	 	21.12	 	OROLIA warrants to the Seller as follows:







	 	21.12.1	 	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.

	 
	 	21.12.2	 	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.

	 
	 	21.12.3	 	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.

	 
	 	21.12.4	 	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.

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

	 
	 	21.12.6	 	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.







	22	 	DC Guarantee







	 	22.1	 	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:







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





 


33









 





	 	22.1.2	 	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.

	 
	 	22.2	 	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.

	 
	 	22.3	 	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.

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







	 	22.4.1	 	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

	 
	 	22.4.2	 	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.







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







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

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

	 
	 	22.5.3	 	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;

	 
	 	22.5.4	 	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;

	 
	 	22.5.5	 	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;

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

	 
	 	22.5.7	 	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

	 
	 	22.5.8	 	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.







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





 


34









 











	 	22.7	 	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.

	 
	 	22.8	 	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:







	 	22.8.1	 	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;

	 
	 	22.8.2	 	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;

	 
	 	22.8.3	 	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

	 
	 	22.8.4	 	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.







	 	22.9	 	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.

	 
	 	22.10	 	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.

	 
	 	22.11	 	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.

	 
	 	22.12	 	DC warrants to the Buyer and/OROLIA as follows:







	 	22.12.1	 	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.

	 
	 	22.12.2	 	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.

	 
	 	22.12.3	 	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.

	 
	 	22.12.4	 	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.

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

	 
	 	22.12.6	 	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.







	 	22.13	 	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.





 


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	23	 	Announcements and publicity







	 	23.1	 	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.







	24	 	Notices







	 	24.1	 	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:







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

	 
	 	24.1.2	 	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

	 
	 	24.1.3	 	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

	 
	 	24.1.4	 	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.







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







	 	24.2.1	 	Name: Signature Industries Limited

	 
	 	 	 	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

	 
	 	24.2.2	 	Name: McMurdo Limited

	 
	 	 	 	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.

	 
	 	24.2.3	 	Name: Digital Angel Corporation

	 
	 	 	 	For the attention of: Patricia Petersen

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

	 
	 	 	 	Fax number: +00 (1) 561-431-8562





 


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	 	24.2.4	 	Name: OROLIA SA

	 
	 	 	 	For the attention of: Christophe François

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

	 
	 	 	 	Fax number: + 33 (0) 4 92 38 09 75







	 	24.3	 	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.







	25	 	Successors, assigns and third parties







	 	25.1	 	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.

	 
	 	25.2	 	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.







	26	 	Variation







	 	26.1	 	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.







	27	 	Waiver







	 	27.1	 	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.

	 
	 	27.2	 	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.

	 
	 	27.3	 	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.







	28	 	Costs







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







	29	 	Severance







	 	29.1	 	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.





 


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	30	 	Further assurance







	 	30.1	 	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.

	 
	 	30.2	 	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.







	31	 	Entire Agreement







	 	31.1	 	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:







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

	 
	 	31.1.2	 	(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.







	 	31.2	 	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.

	 
	 	31.3	 	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.







	32	 	Counterparts







	 	32.1	 	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.







	33	 	Miscellaneous







	 	33.1	 	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.





 


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	 	33.2	 	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.

	 
	 	33.3	 	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.







	34	 	Applicable law and jurisdiction and remedy and agents for services







	 	34.1	 	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.

	 
	 	34.2	 	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.

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

	 
	 	34.4	 	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.

	 
	 	34.5	 	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.







	35	 	Post-completion effect







	 	35.1	 	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.






In witness whereof this Agreement has been executed as a Deed on the date stated at the beginning
of this Agreement.




 


39











 




SCHEDULE 1




Apportionment of the Consideration





	1	 	The Price will be apportioned as follows:-






	 	 	 	 	 
	Item	 	US$	 
	Goodwill
	 	 	7,519,583	 
	Plant
	 	 	342,303	 
	Stock (Initial Stock Value — GBP1,300,000)
	 	 	2,138,110	 
	Business Contracts
	 	 	1	 
	Business Intellectual Property
	 	 	1	 
	Business Information
	 	 	1	 
	Rights against third parties referred to in clause 2.1.7
	 	 	1	 
	 
	 	 	 
	Total
	 	 	10,000,000	 
	 
	 	 	 





 


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SCHEDULE 2




Warranties





	1	 	Disclosure Bundle

	 
	1.1	 	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.

	 
	 	 	Capacity and Authority

	 
	1.2	 	The Seller:







	 	1.2.1	 	is a limited company duly incorporated under English law;

	 
	 	1.2.2	 	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;

	 
	 	1.2.3	 	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

	 
	 	1.2.4	 	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.







	1.3	 	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.

	 
	1.4	 	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

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

	 
	1.6	 	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.

	 
	1.7	 	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.

	 
	1.8	 	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.

	 
	 	 	Connected persons

	 
	1.9	 	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.

	 
	2	 	Records and Accounts

	 
	 	 	Records

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







	 	2.1.1	 	are in possession of the Seller; and





 


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	 	2.1.2	 	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.

	 
	 	2.1.3	 	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.







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

	 
	 	 	Accounts

	 
	2.3	 	The Accounts:







	 	2.3.1	 	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;

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

	 
	 	2.3.3	 	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;

	 
	 	2.3.4	 	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;

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

	 
	 	2.3.6	 	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

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







	2.4	 	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.

	 
	 	 	Management Accounts

	 
	2.5	 	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.

	 
	3	 	Trading

	 
	 	 	Change since the Accounting Date

	 
	3.1	 	Since the Accounting Date:







	 	3.1.1	 	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;





 


42









 





	 	3.1.2	 	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;

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

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

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

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

	 
	 	3.1.7	 	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);

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

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

	 
	 	3.1.10	 	[LEFT INTENTIONALLY BLANK]

	 
	 	3.1.11	 	the Business has not been adversely affected by:







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

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

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







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

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







	 	 	Agents

	 
	3.2	 	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.

	 
	3.3	 	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.

	 
	 	 	Terms of Trade

	 
	3.4	 	So far as it is aware the Seller has not:







	 	3.4.1	 	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;

	 
	 	3.4.2	 	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.





 


43









 











	4	 	The Assets

	 
	 	 	Title to the Assets

	 
	4.1	 	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.

	 
	4.2	 	The Assets:







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

	 
	 	4.2.2	 	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;







	4.3	 	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.

	 
	4.4	 	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.

	 
	4.5	 	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.

	 
	4.6	 	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.

	 
	 	 	Plant

	 
	4.7	 	So far as the Seller is aware the Plant:







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

	 
	 	4.7.2	 	has been properly maintained;

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

	 
	 	4.7.4	 	has been written down correctly;

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







	 	 	The Stock and Products

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

	 
	4.9	 	The Stock:







	 	4.9.1	 	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;

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

	 
	 	4.9.3	 	(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.





 


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	 	4.9.4	 	(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.

	 
	 	4.9.5	 	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.







	5	 	Contracts

	 
	 	 	Business Contracts

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

	 
	5.2	 	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.

	 
	5.3	 	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):







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

	 
	 	5.3.2	 	is not on an arm’s length basis.







	5.4	 	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.

	 
	 	 	Customer Contracts

	 
	5.5	 	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.

	 
	5.6	 	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.

	 
	 	 	Leasing/Hire Agreements

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

	 
	 	 	Supplier Contracts

	 
	5.8	 	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.

	 
	5.9	 	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.

	 
	 	 	Breach of Business Contracts and other arrangements

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

	 
	5.11	 	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.

	 
	5.12	 	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.





 


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	5.13	 	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.

	 
	6	 	Compliance

	 
	 	 	General

	 
	6.1	 	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.

	 
	6.2	 	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.

	 
	6.3	 	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:







	 	6.3.1	 	have been obtained;

	 
	 	6.3.2	 	are valid and subsisting; and

	 
	 	6.3.3	 	are detailed in the Disclosure Letter;







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

	 
	6.4	 	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.

	 
	 	 	Data Protection

	 
	6.5	 	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).

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







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

	 
	 	6.6.2	 	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.







	6.7	 	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:







	 	6.7.1	 	any complaint from any data subject;

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

	 
	 	6.7.3	 	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.





 


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	 	 	Competition and Trade Regulation







	 	6.7.4	 	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:

	 
	 	6.7.5	 	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,

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

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

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

	 
	 	6.7.9	 	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;

	 
	 	6.7.10	 	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;

	 
	 	6.7.11	 	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;

	 
	 	6.7.12	 	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

	 
	 	6.7.13	 	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.







	6.8	 	The Seller, in relation to the Business:







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

	 
	 	6.8.2	 	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.







	6.9	 	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:







	 	6.9.1	 	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

	 
	 	6.9.2	 	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.







	6.10	 	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:







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





 


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	 	6.10.2	 	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.







	6.11	 	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.

	 
	 	 	Restrictions on Business

	 
	6.12	 	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:







	 	6.12.1	 	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

	 
	 	6.12.2	 	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.







	7	 	Litigation and Insolvency

	 
	 	 	Defective Products and Services

	 
	7.1	 	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.

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







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







	 	7.2.2	 	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.







	7.3	 	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.

	 
	 	 	Litigation

	 
	7.4	 	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.

	 
	7.5	 	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:







	 	7.5.1	 	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;

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





 


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

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







	 	 	Insolvency

	 
	7.6	 	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.

	 
	7.7	 	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.

	 
	7.8	 	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.

	 
	7.9	 	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.

	 
	7.10	 	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.

	 
	7.11	 	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.

	 
	7.12	 	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.

	 
	7.13	 	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.

	 
	7.14	 	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.

	 
	7.15	 	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.

	 
	8	 	Employees

	 
	8.1	 	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.

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

	 
	8.3	 	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.





 


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	8.4	 	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.

	 
	8.5	 	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.

	 
	8.6	 	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.

	 
	8.7	 	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.

	 
	8.8	 	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.

	 
	8.9	 	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.

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

	 
	8.11	 	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.

	 
	8.12	 	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.

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







	 	8.13.1	 	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

	 
	 	8.13.2	 	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.







	9	 	Pensions

	 
	9.1	 	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.





 


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	9.2	 	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.

	 
	9.3	 	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.

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

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

	 
	9.6	 	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.

	 
	9.7	 	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.

	 
	10	 	Intellectual Property

	 
	10.1	 	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.

	 
	10.2	 	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.

	 
	10.3	 	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.

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

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

	 
	10.6	 	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:







	 	10.6.1	 	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

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

	 
	 	10.6.3	 	being claimed or opposed by any other person.







	10.7	 	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.

	 
	10.8	 	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.





 


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	10.9	 	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.

	 
	10.10	 	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.

	 
	10.11	 	The Seller is not, and has not within the year preceding the date of this Agreement, been
party to or threatened with any legal proceedings relating to any Intellectual Property and
the Seller is not aware of (and has not acquiesced in) any infringement of the Business
Intellectual Property or any breach of confidence, passing off or actionable unfair
competition in any jurisdiction in relation to the Business, (save in relation to the Excluded
Assets).

	 
	10.12	 	The Seller has in its possession or control all Business Information (to the extent the same
is confidential) used, enjoyed or exploited in the Business (or held with a view to such use,
enjoyment or exploitation). Except insofar as it is in the public domain through no fault of
the Seller or any member of the Seller’s Group, none of the same is known or accessible to any
person except the Seller, or members of the Seller’s Group, the Seller’s employees and
advisers, other than persons who have given the Seller confidentiality undertakings in respect
thereof details of which are set out in the Disclosure Letter. The Seller is not aware without
making any specific enquiries of any breach of such confidentiality obligations by any third
party.

	 
	10.13	 	Save in the ordinary course of business or with its employees, the Seller has not entered
into any confidentiality or other agreement, nor is subject to any duty, which restricts the
free use or disclosure of such information as is referred to in paragraph 10.12 above.

	 
	10.14	 	There are no outstanding written claims against the Seller under any contract or under
section 40, Patents Act 1977 for employee compensation in respect of any Business Intellectual
Property owner by the Seller.

	 
	10.15	 	The Seller has not in the year prior to today’s date carried on the Business under any name
other than its corporate name or Business Name.

	 
	11	 	Tax

	 
	11.1	 	The Seller has complied in all material respects with all statutory provisions, rules,
regulations, orders and directions in relation to the Business concerning VAT, PAYE and
National Insurance contributions including the making on time of accurate returns and payments
and the proper maintenance and preservation of records, and the Seller has not been given any
penalty, notice or warning regarding the same.

	 
	11.2	 	The Seller is not involved in any dispute with HM Revenue and Customs, the [Contributions
Agency] or other appropriate fiscal authority whether in the United Kingdom or elsewhere
concerning any matter affecting or likely to affect either the Business or any of the Assets
to be transferred under this Agreement.

	 
	11.3	 	No circumstances exist whereby any power within section 212, Inheritance Tax Act 1984 could
be exercised in relation to any of the Assets.

	 
	11.4	 	There is no HM Revenue & Customs charge over any of the Assets outstanding for unpaid
inheritance tax as provided by sections 237 and 238, Inheritance Tax Act 1984.

	 
	11.5	 	In respect of the Business all returns and payments for the purposes of VAT referable to
supplies made have been made.

	 
	11.6	 	None of the Assets is subject to the Value Added Tax Capital Goods Scheme provided for in
Part XV of the Value Added Tax Regulations 1995 (SI 1995/2518).

	 
	11.7	 	All VAT payable on the importation of goods, and all excise duties payable to HM Revenue &
Customs payable in respect of the Business Assets including the Stock, have been paid in
full, and none of the Business Assets is liable to confiscation, forfeiture or distress.





 


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	11.8	 	None of the Assets is chargeable assets of a business which, if transferred to a body
corporate treated as a member of a group under section 43, VATA as a going concern, would give
rise to a liability on that body corporate or the representative member of the group of which
that body corporate is a member under section 44, VATA.

	 
	11.9	 	In respect of any Assets which are plant and machinery for the purposes of Part II of the CAA
and which are fixtures (as defined in section 173(1), CAA) at today’s date either:







	 	11.9.1	 	no person has been or will have become entitled to allowances in respect of any
expenditure incurred on the provision of the fixture or,

	 
	 	11.9.2	 	if any person has become so entitled that person has been, is or will be required to
bring the disposal receipts in respect of the fixture into account under section 55,
CAA; or

	 
	 	11.9.3	 	the Consideration will be apportioned for the purposes of CAA so as to attribute a
sum equal to the Seller’s ‘notional written down value’ as described in section 197(2)
CAA to the fixtures.







	11.10	 	HM Revenue and Customs has not agreed to operate any special arrangement (being an
arrangement which is not based on a strict application of the relevant legislation) in
relation to the Business whether in respect of benefits provided to its officers or employees,
the valuation of its stock, the depreciation of its assets or any administrative or other
matter whatsoever.

	 
	11.11	 	All documents in the possession or under the control of the Seller which establish or are
necessary to establish the title of the Seller to the Assets that need a stamp duty have been
duly stamped and any applicable stamp duties or charges in respect of such documents have been
duly accounted for and paid, and no such documents which are outside the United Kingdom would
attract stamp duty if they were brought in to the United Kingdom.

	 
	12	 	Health and Safety

	 
	 	 	Interpretation

	 
	12.1	 	In this paragraph 12:







			
	Health and Safety Laws	 	all applicable primary and subordinate Legislation,
Directives, Approved Codes of Practices including
but without limitation the Fire Precautions Act
1971, The Health and Safety at Work etc Act 1974
and Regulations made pursuant to section 15 of the
Health and Safety at Work Etc Act 1974 concerning
the health and safety of those who work for the
Business, whether as employees or otherwise, visit
the Property or are in anyway affected by the
activities of the Business or by persons working
for the Business.







	12.2	 	So far as the Seller is aware the Business complies with all material conditions,
limitations, obligations, prohibitions and requirements contained in any Health and Safety
Laws and so far as the Seller is aware there are no facts or circumstances which may lead to
any breach of any Health and Safety Laws.

	 
	12.3	 	The Seller has not received any written prohibition or improvement notices from any
enforcement body, including but without limitation the Health and Safety Executive and the
relevant local authority, with regard to breaches of Health and Safety Laws or otherwise in
respect of the Business.

	 
	12.4	 	In the last 12 months there have been no written claims (which remain outstanding),
investigations, proceedings against or threatened against the Seller or any of its directors,
officers or employees in respect of accidents, injuries, illness, disease or any other harm to
the health and safety of employees, contractors or any other persons caused by breaches of
Health and Safety Laws by the Seller in carrying on the Business and so far as the Seller is
aware there are no facts or circumstances which may lead to any such claims, investigations or
proceedings.





 


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	13	 	Property

	 
	13.1	 	In relation to the Property, the rents have been paid and in all material respects all
covenants, restrictions, stipulations, obligations and undertakings have been performed and
the last demand (or receipt for rent if issued) were unqualified and the Lease is valid and in
full force and no notice of any breach has been received by either the Seller.

	 
	13.2	 	The Property is free from:







	 	13.2.1	 	any mortgage, debenture, charge (whether legal or equitable and whether fixed or
floating), rent, charge, lien or other right in the nature of security; and

	 
	 	13.2.2	 	any agreement for sale, estate contract, option, right of pre-emption or right of
first refusal,







	 	 	and there is no agreement or commitment to give or create any of them.

	 
	13.3	 	The Property is not subject to the payment of any outgoings other than non-domestic local
business rates and water and sewerage charges, and all outgoings have been paid when due and
none are disputed.

	 
	13.4	 	The Seller has complied with all applicable statutory and bye-law requirements, and all
regulations, rules and delegated legislation, relating to the Property and its current use,
including without limitation all requirements under the Public Health Acts, the Occupiers
Liability Act 1957, the Offices, Shops and Railway Premises Act 1963, the Occupiers Liability
Act 1984, the Construction (Design and Management) Regulations 1994, the Disability
Discrimination Act 1995, the Construction (Design and Management) Regulations 2007, and all
regulations, rules and delegated legislation and the Vendor has maintained all necessary fire
certificates and certificates in relation to electricity and gas.

	 
	14	 	The Property is in a condition that is fit for its current use.

	 
	15	 	There are no development works, redevelopment works or fitting-out works outstanding in
respect of the Property.

	 
	16	 	The Property has not suffered from any:







	 	16.1.1	 	flooding; or

	 
	 	16.1.2	 	subsidence; or

	 
	 	16.1.3	 	heave; or

	 
	 	16.1.4	 	landslip; or

	 
	 	16.1.5	 	mining activities; or

	 
	 	16.1.6	 	structural defects; or

	 
	 	16.1.7	 	defects in the drains and services from time to time serving the Property; or

	 
	 	16.1.8	 	dry rot, wet rot, rising damp or any infestation.







	17	 	The Seller has not received any adverse report from any engineer, surveyor or other
professional relating to the Property and is not aware of any predecessor in title having done
so.

	 
	18	 	No notices, complaints or requirements have been issued or made (whether formally or
informally) by any competent authority or undertaking exercising statutory or delegated powers
in relation to the Property, the current use of the Property or any machinery, plant or
equipment in it, and the Seller is not aware of any matter which could lead to any such
notice, complaint or requirement being issued or made.

	 
	19	 	There exists no dispute between the Seller and the owner or occupier of any other premises
adjacent to or neighbouring the Property and the Seller does not expect, and is not aware of
any circumstances that may give rise to, any such dispute after the date of this Agreement.





 


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	20	 	McMurdo Limited

	 
	20.1	 	The warranties set out in the McMurdo Ltd Sale and Purchase Agreement are hereby repeated.

	 
	21	 	Legal Opinion

	 
	21.1	 	The Legal Opinion of DC is true and accurate.





 


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SCHEDULE 3




Seller Protection Provisions





	1	 	Definitions

	 
	1.1	 	In this Schedule:






	 	 	 
	Claim

	 	means any claim for breach of any of the Warranties;
	 
	 	 
	Event

	 	means any event, act, transaction, arrangement, default or
omission including, without limitation, the receipt or
accrual of any income or gains or of any distribution,
failure to distribute, acquisition, disposal, transfer,
payment, loan or advance including, without prejudice to the
generality of the foregoing, the sale and purchase of the
Business and the Assets pursuant to this Agreement;
	 
	 	 
	Taxation Warranties

	 	means the warranties contained in paragraph 11 of Schedule 2.







	2	 	Remedies

	 
	2.1	 	Subject to clause 11.1.2 of this Agreement a breach of any of the Warranties will give rise
only to an action by the Buyer for damages and will not entitle the Buyer to terminate,
rescind or repudiate this Agreement.

	 
	2.2	 	Where the matter or default giving rise to a Claim is capable of remedy, that Claim will only
entitle the Buyer to damages or other compensation to the extent that the relevant matter or
default is not remedied to the reasonable satisfaction of the Buyer within 30 days after the
date on which notice is served pursuant to paragraph 3 below.

	 
	3	 	Time

	 
	3.1	 	The Seller will have no liability for any Claim unless notice in writing of the Claim (giving
reasonable particulars of the nature of the Claim and amount claimed together with an estimate
of the liability) has been given to the Seller:







	 	3.1.1	 	on or before the expiry of the seventh anniversary of Completion Date in
respect of any Claim under the Taxation Warranties; or

	 
	 	3.1.2	 	on or before the expiry of the period of 18 months from the Completion Date
in respect of any other Claim.







	3.2	 	The Seller or the Buyer or OROLIA (if applicable) will have no liability for any indemnity
claim pursuant to this Agreement or any of the Transaction Documents unless notice in writing
of the indemnity claim (giving reasonable particulars of the nature of the indemnity claim and
the amount claimed together with an estimate of the liability) has been given to the Seller
(in respect of a claim by the Buyer or OROLIA) or the Buyer (in respect of a claim by the
Seller):







	 	3.2.1	 	on or before the expiry of the seventh anniversary of Completion in respect
Date of any indemnity claim relating to Tax; or

	 
	 	3.2.2	 	on or before the expiry of third anniversary of Completion Date in respect
of any other indemnity claim.







	3.3	 	Any Claim of which notice has been given in accordance with paragraph 3.1 of this Schedule is
deemed to have been withdrawn and fully barred and unenforceable on the expiry of six months
commencing on the date on which the relevant notice of the Claim was given to the Seller,
unless proceedings in respect of the Claim have already been issued and served on the Seller.

	 
	4	 	Amount

	 
	4.1	 	The Seller will have no liability whatsoever in respect of any individual Claim unless the
amount that would otherwise be recoverable from the Seller in respect of that
Claim (or series of Claims arising from the same fact, matter or circumstances) exceeds
US$15,000 (excluding costs and interest).





 


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	4.2	 	The Seller will have no liability in respect of any individual Claim unless and until the
amount that would otherwise be recoverable from the Seller in respect of that Claim, when
aggregated with any other amounts so recoverable in respect of other Claims (excluding any
amounts in respect of a Claim for which the Seller has no liability by virtue of paragraph
4.1) exceeds US$ 250,000 and in the event that the aggregate amount exceeds US$ 250,000 the
Seller will be liable for the entire amount not only the excess over US$ 250,000.







	4.3	 	The aggregate liability of the Seller for Claims and indemnity claims made against the Seller
pursuant to this Agreement or any of the Transaction Documents shall under no circumstances
exceed an amount equal to the Initial Consideration.

	 
	5	 	Reduction of Consideration

	 
	5.1	 	Any payment made by the Seller in respect of any Claim will be deemed to be a reduction in
the Consideration.

	 
	6	 	Disclosure

	 
	6.1	 	The Seller will have no liability in respect of any Claim to the extent that the Event, fact
or circumstance which might result in a Claim or a possible Claim is disclosed fairly and
accurately in the Disclosure Letter or in this Agreement or in any agreement or arrangement
otherwise entered into between the Seller and the Buyer.

	 
	7	 	Changes in the law

	 
	7.1	 	The Seller will have no liability whatsoever in respect of any Claim to the extent that the
Claim would not have arisen but for the passing of or any change in after the date of this
Agreement, any law, rule, regulation, interpretation of the law or administrative practice of
any government, governmental department, agency or regulatory body or any increase in the
rates of Taxation or any imposition of new Taxation in any such case not in force at the
Completion Date.

	 
	8	 	Exclusion of certain Claims

	 
	8.1	 	The Buyer may not make any Claim against the Seller and the Seller will have no liability to
the Buyer under this Agreement:







	 	8.1.1	 	to the extent that the Claim arises or is increased out of:







	 	(a)	 	any changes in accounting policy or practice of the Buyer
introduced or having effect after Completion; or

	 
	 	(b)	 	any voluntary act or omission of the Buyer after Completion
done or suffered outside the ordinary course of business and other than
pursuant to a legally binding obligation entered into by the Seller before
Completion or in order to comply with any legal requirement binding on the
Buyer; or

	 
	 	(c)	 	any act, omission or transaction done, made or carried out
by or on behalf of the Seller at the request; or







	 	8.1.2	 	to the extent that the Claim arises because of:







	 	(a)	 	any legislation not in force at today’s date or any change
of law, judgment delivered or administrative practice having retrospective
effect that comes into force after today’s date; or

	 
	 	(b)	 	that Claim relates to any liability which is contingent
only until it becomes an actual liability, but this paragraph 8.1.2 will not
operate to avoid a Claim made in respect of a contingent liability in
accordance with paragraph 3 above.







	9	 	Satisfaction by other persons/means

	 
	9.1	 	The Seller will have no liability for any Claim to the extent that any loss occasioned to the
Buyer or to the Business is covered by a right to make recovery or claim
indemnity or by a policy of insurance in force and payment is made under such indemnity or
policy.





 


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	9.2	 	If at any time the Buyer becomes entitled to recover from some other person any sum in
respect of any Claim then the Buyer will subject to a full indemnity from the Seller:-







	 	9.2.1	 	undertake all reasonable steps necessary to enforce such recovery; and

	 
	 	9.2.2	 	promptly supply all information which relates to such recovery to the Seller
including details of any steps taken to enforce such recovery and copies of all
correspondence and documents relating to the same.







	9.3	 	If the Buyer recovers from a third party an amount which is referable to an Event giving rise
to the Claim then:







	 	9.3.1	 	the sum recovered will be set-off against the Seller’s liability for that
Claim

	 
	 	9.3.2	 	if amounts previously paid by the Seller in respect of the Claim is more
than the sum recovered, the Buyer will immediately pay the Seller the sum recovered;
and

	 
	 	9.3.3	 	if amounts previously paid by the Seller in respect of the Claim is less
than or equal to the sum recovered the Buyer will immediately pay the Seller an amount
equal to the amount paid by the Seller.







	 	 	For the purposes of this paragraph 9.3 the “sum recovered” means an amount equal to the
amount recovered from the third party plus any repayment supplement in respect of the
amount recovered from the third party under section 825 ICTA plus any interest in respect
of the amount recovered from the third party less all reasonable costs and expenses
incurred by the Buyer in recovering the amount from the third party and any tax payable by
the Buyer on any sum so recovered.

	 
	10	 	Procedure for claims

	 
	10.1	 	If the Buyer becomes aware of any matter which might give rise to a Claim, the following
provisions will apply:-







	 	10.1.1	 	the Buyer will as soon as reasonably practical give notice to the Seller of the
Event and will consult with the Seller in respect of the Event;

	 
	 	10.1.2	 	the Buyer will provide to the Seller and to the Seller’s professional advisers
reasonable access to premises and personnel and to any relevant assets, documents and
records within their power, possession or control for the purpose of investigating the
event and enabling the Seller to take such action as is referred to in paragraph
10.1.4;

	 
	 	10.1.3	 	the Seller (at its own expense) will be entitled to take copies of any documents or
records and photograph any premises or assets as referred to in paragraph 10.1.2;

	 
	 	10.1.4	 	the Buyer will:-







	 	(a)	 	take such action and institute such proceedings and give
such information and assistance as the Seller may request to dispute, resist,
appeal, compromise, defend, remedy or mitigate the Event or enforce against
any person any rights of the Buyer in relation to the matter; and

	 
	 	(b)	 	in connection with any proceedings related to the Event use
professional advisers nominated by the Seller and, if the Seller so requests,
allow the Seller the exclusive conduct of the proceedings provided that such
action will not in the Buyer’s reasonable opinion, be detrimental to the
Business or its reputation







	 	 	 	and in each case on the basis that the Seller will indemnify the Buyer for all
reasonable costs and expenses incurred as a result of any request or nomination
by the Seller.






 


58









 







	 	10.1.5	 	If the Seller and the Buyer agree on the amount to be paid in respect of the Claim,
they will jointly instruct the Escrow Agent to pay to the Buyer the agreed amount.







	 	10.1.6	 	If the Seller and the Buyer disagree on the amount to be paid in respect of the
Claim, the matter will be settled according to clause 34 of this Agreement. The
decision of the Court will be forwarded by either the Seller or the Buyer to the
Escrow Agent and the Escrow Agent will take the appropriate measures.







	11	 	Fraud, etc

	 
	11.1	 	The provisions of this Schedule 3 will not apply in the case of any fraud, wilful
non-disclosure or misconduct by or on behalf of the Seller.

	 
	12	 	Mitigation

	 
	12.1	 	Nothing in this Agreement affects the duty at law of the Buyer to mitigate its loss.





 


59









 






SCHEDULE 4




The Employees





Attached




 


60









 





SCHEDULE 5




The Customer Contracts




Attached



 


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SCHEDULE 6




The Supplier Contracts




Attached



 


64









 





SCHEDULE 7




Products





	1	 	C1 SVDR Capsule

	 
	2	 	Smartfind E5 EPIRB Auto

	 
	3	 	Smartfind E5 EPIRB Manual

	 
	4	 	Smartfind G5 EPIRB Auto

	 
	5	 	Smartfind G5 EPIRB Manual

	 
	6	 	FastFind

	 
	7	 	FastFind Plus

	 
	8	 	FastFind Max

	 
	9	 	FastFind Max G

	 
	10	 	FastFind 200/201

	 
	11	 	FastFind 210/211

	 
	12	 	S4 SART

	 
	13	 	Programming pen

	 
	14	 	MOB Guardian (excluding IP associated with the RNLI Contract)

	 
	15	 	G4 EPIRB GPS Auto

	 
	16	 	G4 EPIRB GPS Manual

	 
	17	 	Precision EPIRB GPS Auto

	 
	18	 	Precision EPIRB GPS Manual

	 
	19	 	E3 EPIRB Auto

	 
	20	 	E3 EPIRB Manual

	 
	21	 	SOS EPIRB Auto

	 
	22	 	SOS EPIRB Manual

	 
	23	 	HRU Kit

	 
	24	 	A5 SmartFind EPIRB Manual

	 
	25	 	Smartfind S5AIS SART

	 
	26	 	R1

	 
	27	 	R2

	 
	28	 	SART Batteries

	 
	29	 	EPIRB Batteries

	 
	30	 	NAV 7

	 
	31	 	NAV Accessories

	 
	32	 	Davis

	 
	33	 	SEPIRB

	 
	34	 	PLB Batteries

	 
	35	 	AMS 639 Buoy







 


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SCHEDULE 8




Registered Intellectual Property




Registered trade marks




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Application /	 	 	 	 
	 	 	 	 	 	 	Registration	 	 	 	 
	Trade Mark	 	Jurisdiction	 	Number	 	 	Classes	 
	FASTFIND
	 	US	 	2934775	 	 	Class 9
	SMARTFIND
	 	US	 	3345623	 	 	Class 9
	SMARTFIND
	 	European Community	 	E4739256	 	 	Classes 9 & 41
	McMURDO
	 	European Community	 	E3250347	 	 	Classes 9, 13 & 41






Registered Patent




Patent number GB2334486

Full title: Release unit

Proprietor: Signature Industries Limited




Registered Domain Names




406mhz.co.uk

davisweather.co.uk

fastfindpersonallocatorbeacon.com

fastfindplb.com

mcmurdo.biz

mcmurdo.co.uk

mcmurdomarine.com



 


66









 





SCHEDULE 9




Part 1




Escrow Agreement




This Agreement is dated 2009



Parties





	(2)	 	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”);







	(3)	 	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”);







	(4)	 	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”); and







	(5)	 	OROLIA SA, a company incorporated under the laws of France, whose registered office is at 3
Avenue Du Canada, 91974 Les Ulis cedex, France (“OROLIA”).






Whereas





	(A)	 	This agreement is supplemental to an Agreement dated 2 November 2009 made between the Seller,
McMurdo Limited, OROLIA SA and Digital Angel Corporation (the Business Sale Agreement) whereby
the Buyer agreed to purchase certain of the assets of the Seller.







	(B)	 	Clause 3.2.2 and clause 8.1.5(i) of the Business Sale Agreement provides that on Completion
the Seller and the Buyer shall establish an Escrow Agreement in respect of the Retention.







	(C)	 	The Parties hereto wish to set out the terms and conditions of the establishment, maintenance
and operation of the Escrow Agreement.






It is agreed as follows





	1.	 	In this Agreement, save as otherwise defined or as the context may require, words and
expressions in the Business Sale Agreement shall have the same meaning in this Agreement.






1 Retention Account





	1.1	 	On Completion:







	 	(a)	 	OROLIA shall transfer the Retention into the Escrow Account pursuant to
clause 8.1. 5(i) of the Business Sale Agreement by electronic means;

	 
	 	(b)	 	the Seller and the Buyer shall jointly sign and deliver the Instruction
Letter to the Solicitors.







	1.2	 	Each of the Buyer and the Seller undertake to each other to hold the Retention on trust for
each other in accordance with the terms of this Schedule 9.






1.3 The following provisions shall apply in respect of the Escrow Account:




	 	(a)	 	all interest earned in respect of the Retention shall be credited to the
Escrow Account;





 


67









 











	 	(b)	 	no other credit shall be made to the Escrow Account without the written
consent of the Solicitors;

	 
	 	(c)	 	no withdrawal shall be made from the Escrow Account except in accordance with
the Instruction Letter or as may otherwise be ordered by a court of competent
jurisdiction;

	 
	 	(d)	 	neither the Buyer nor the Seller shall have any entitlement to interest until
payment of the principal to which it relates.






2 Relevant Claims





	2.1	 	After the Transfer Date, the Buyer shall notify the Seller monthly in writing all the
Relevant Claims having arisen during the prior month. If there is a Due Amount in respect of a
Relevant Claim, the Seller and the Buyer shall, unless such Due Amount in respect of a
Relevant Claim has been paid to the Buyer for the Relevant Claim(s) in full, instruct the
Escrow Agents to pay the Buyer the Due Amount in respect of the Relevant Claim(s) out of the
Escrow Account together with interest (less tax if deduction of tax is required) earned on
that sum in the Escrow Account from the Transfer Date to the date of actual payment in
accordance with this clause and for the avoidance of doubt and without prejudice to clause 2.5
the Due Amount in respect of the Relevant Claim(s) to be paid out of the Escrow Account shall
not in any circumstance exceed the General Retention.







	2.2	 	If any Relevant Claim has been notified in writing by the Buyer to the Seller on or before
the Anniversary Date but is not settled as defined at clause 2.6 (“Settled”) on or prior to
the Anniversary Date, the Buyer shall be entitled to retain from the Retention such amount as
is equal to the amount of the estimated liability of the Relevant Claim(s) (as determined by
the Buyer acting in good faith).







	2.3	 	In the event of a dispute as to the amount of the estimated liability of the Relevant
Claim(s) under clause 2.2, the Seller shall notify the Buyer in writing of such dispute
(giving reasonable particulars and supporting evidence of its valuation) and the Buyer and the
Seller shall acting reasonably attempt to resolve their dispute within 10 Business Days of the
receipt of such notice. If the dispute cannot be resolved amicably through ordinary
negotiations by appropriate representatives of the Seller and the Buyer, the matter will be
referred in writing by either the Seller or the Buyer to the Chief Executive Officers (or
their equivalent) of OROLIA and DC. The Chief Executive Officers will meet in order to
attempt to resolve the matter by negotiation, within 10 Business Days of them being notified
in writing. The Chief Executive Officers will notify in writing both the Buyer and the Seller
of the result of their negotiations (Chief Officers’ Notice).







	2.4	 	If the Chief Officers’ Notice sets out that the meeting referred to in clause 2.3 failed to
resolve the issue, either the Seller or the Buyer, on giving written notice to the other, may
declare that they are in dispute in which case the provisions of clause 2.6 will apply. If the
Chief Officers’ Notice set outs that the meeting successfully resolved the issue, then the
Seller or the Buyer shall comply with the terms of the arrangements set out in the Chief
Officers’ Notice and proceed to clause 2.5.






2.5 Without prejudice to clause 2.8, and subject to as otherwise provided by this clause 2.5:




	 	(a)	 	if no Relevant Claim has been notified in writing by the Buyer to the Seller
under this Agreement by the Anniversary Date; or

	 
	 	(b)	 	a settlement of all outstanding Relevant Claims notified in accordance with
clauses 2.1 to 2.4 has been made; or

	 
	 	(c)	 	a retention in respect of any outstanding Relevant Claim in accordance with
clause 2.2 above has been made;







the Seller and the Buyer shall, promptly (but in any event by no later than 5 Business
Days following the Anniversary Date, the resolution of the dispute pursuant to clauses 2.3
and 2.4 or settlement of all outstanding Relevant Claims pursuant to clause 2.6 (as
appropriate)) instruct the Escrow Agents to pay the balance standing to the credit of
the Escrow Account (together with any interest which has accrued on the amount so paid less
any applicable bank charges) to the Seller.


 


68









 









	2.6	 	For the purposes of this clause 2 a Relevant Claim shall be deemed Settled if:-







	 	(a)	 	the Seller and the Buyer so agree in writing having followed if required the
procedure set out in clauses 2.3 and 2.4 ; or

	 
	 	(b)	 	failing such resolution of their dispute pursuant to clauses 2.3 and 2.4, the
Relevant Claim has been determined by a court or tribunal of competent jurisdiction
from which there is no right of appeal or from whose judgment the Buyer or the Seller
(as the case may be) is debarred by passage of time or otherwise from making an
appeal.







	2.7	 	The General Retention shall not be regarded as imposing any limit on the amount of any
Relevant Claims under this Agreement or under any other Transaction Documents. If any part of
the Relevant Claim is not satisfied in full out of the Retention, the balance shall remain
fully enforceable against the Seller.







	2.8	 	The General Retention shall not be released at the Anniversary Date if there are still any
unpaid but due sums for services rendered by the Buyer or OROLIA SA under the Business Sale
Agreement or the Transitional Services Agreement or if pursuant to clause 16.5 of the Business
Sale Agreement, the Due Creditors remain unpaid. In such circumstances and without prejudice
to the Buyer’s rights and remedies under the Business Sale Agreement or at law, the Buyer
shall on notice to the Escrow Agents be entitled to set off such unpaid sums against the
General Retention.






3 Insolvency





	3.1	 	On the occurrence of an Insolvency Event in respect of either the Buyer or the Seller the
Buyer or the Seller (as the case may be) shall be deemed to have assigned all of its rights
under this Schedule 9 to OROLIA or DC (as appropriate) and (as appropriate)







	 	3.1.1	 	DC shall perform and discharge all obligations of the Seller in the manner
prescribed in this Agreement and the Business Sale Agreement;

	 
	 	3.1.2	 	OROLIA shall perform and discharge all obligations of the Buyer in the
manner prescribed in this Agreement and the Business Sale Agreement.







	3.2	 	On the occurrence of an Insolvency Event in respect of either the Buyer or the Seller, the
Buyer or the Seller shall notify all the parties to this Agreement and the Escrow Agents.







	3.3	 	Nothing in this Agreement shall prejudice the Buyer’s remedies under this Agreement, the
Business Sale Agreement or any Transaction Document or at law. If any part of the Relevant
Claim (subject always to clause 3.8) is not satisfied in full out of the Retention, the
balance shall remain fully enforceable against the Seller; and nothing in this Escrow
Agreement shall prejudice, limit or otherwise affect any right, including the right to make
any claim, or remedy which the Buyer may have from time to time against the Seller or DC
either under this Agreement or under any other Transaction Document.





 


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In witness whereof this Agreement has been executed as a Deed on the date stated at the
beginning of this Agreement.



	 	 	 	 	 
	Executed by as a Deed by

Signature Industries Limited acting by or if by one

	 	/s/ Parke Hess
 

Director
	 	 
	director in the presence of:
	 	 	 	 
	Witness

	 	Director/Secretary	 	 
	Name — Geraldine Fabre
	 	 	 	 
	Address — 14 New Street, London
	 	 	 	 
	EC2M 4HE
	 	 	 	 
	 
	 	 	 	 
	Executed by as a Deed by

McMurdo Limited acting by or if by one director

	 	/s/ Jean Yves Courtois
 

Director
	 	 
	in the presence of: 

Witness

	 	/s/ Christophe Francois
 

Deputy CEO
	 	 
	Name
	 	 	 	 
	Address
	 	 	 	 
	 
	 	 	 	 
	Executed by as a Deed by

Digital Angel Corporation acting by or if by one

	 	/s/ Parke Hess
 

Authorised Signatory
	 	 
	director in the presence of:
	 	 	 	 
	Witness

	 	Authorised Signatory	 	 
	Name — Geraldine Fabre
	 	 	 	 
	Address — 14 New Street, London
	 	 	 	 
	EC2M 4HE
	 	 	 	 
	 
	 	 	 	 
	Executed by as a Deed by

OROLIA SA acting by

	 	/s/ Jean Yves Courtois
 

Director
	 	 
	 
	 	 	 	 
	 

	 	/s/ Christophe Francois
 

Deputy CEO
	 	 






 


70









 





Part 2




Instruction Letter




Pritchard Englefield Solicitors

New Street

London

EC2M 4EH




Kimbells LLP

Power House

Harrison Close

Milton Keynes

MK5 8PA




2009



Dear Sirs




	1	 	Purpose









This is the Escrow Letter referred to in the Escrow Agreement and sets out the terms on
which you have agreed to act as our Escrow Agents in relation to the Escrow Account.




	2	 	Interpretation

	 
	 	 	The terms defined in the Escrow Agreement shall have the same meaning when used in this letter.







	3	 	Deposit

	 
	 	 	We jointly and irrevocably instruct you to:







	 	3.1.1	 	open immediately a separately designated interest-bearing instant access
deposit account with the Escrow Bank in your joint names on the terms and conditions
of the Bank’s Mandate Letters or using the Request Letter attached to this letter; and

	 
	 	3.1.2	 	subject to receipt by the Escrow Bank from the Buyer of the Retention in
accordance with the Business Sale Agreement, to invest the Retention in the Escrow
Account unless we jointly instruct you otherwise in writing

	 
	 	3.1.3	 	hold the Retention to the credit of the Escrow Account to our joint order
(less any amount debited by the Escrow Bank in respect of its fees and charges).







	4	 	Interest

	 
	 	 	All interest that accrues from time to time in respect of the Retention shall be added to
the Retention and shall be deemed to form part of it for the purposes of this letter.







	5	 	Operation Of The Escrow Account

	 
	5.1	 	You agree to hold the Retention as escrow agents on our behalf and to accept payments in,
make payments from, and otherwise operate the Escrow Account in accordance with our joint
written instructions given in accordance with this letter
until the Anniversary Date or until settlement of all Relevant Claims in accordance with
Schedule 9 (as the case may be).





 


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	5.2	 	The Retention (or any amount left of the Retention following a Relevant Claim) shall be
retained by you in the Escrow Account until you receive instructions given by us pursuant to
this letter, whether for the purpose of making payments from the Escrow Account or otherwise,
shall be given jointly by us to both of you in writing and signed by us, or on our behalf, by
the signatories whose names and specimen signatures are set out in the Schedule.







	5.3	 	In making any payment out of the Escrow Account, you may withhold or deduct any sum which you
are obliged by law to so withhold or deduct (whether in respect of liability to taxation or
otherwise). We hereby authorise you to pay all bank charges, taxation and other liabilities
referable to the operation of the Escrow Account. We undertake to indemnify each of you, and
to keep you fully and effectively indemnified against all such charges, taxation and
liabilities referable to the operation of the Escrow Account.







	5.4	 	Any payment from the Escrow Account shall be made by you as soon as is reasonably
practicable, and in any event no later than 10 Business Days, after receiving the relevant
instructions.







	5.5	 	You may (without checking the authority of such signatory) rely on and shall be protected in
acting or refraining from acting in accordance with any written notice, instruction or request
furnished to by the Buyer and the Seller.







	5.6	 	Any instructions from us may consist of separate documents in the same form, each signed by
or on behalf of the Seller and the Purchaser or following any assignment as envisaged by
clause 4 of the Escrow Agreement their Guarantors where appropriate.







	6	 	Liability Of The Escrow Agents







	6.1	 	Each of you undertakes to perform only such duties as are specifically set out in this
letter. In connection with such duties, neither of you shall be liable for any loss, damages,
charge, costs or expenses occurring as a result of any mistake of fact, error of judgment or
act, mistake or omission by you of any kind in connection with the operation or failure or
delay in the operation of the Escrow Agreement unless caused by wilful misconduct or gross
negligence, and you shall both be entitled to rely on any written notice, instrument or
signature believed by you to be genuine and believed to have been signed or presented by the
proper party or parties duly authorised to do so.







	6.2	 	Your obligations and duties as joint holders of the Escrow Account are several and will be
fully discharged by giving the Escrow Bank instructions in accordance with this letter.







	6.3	 	We jointly and severally agree to indemnify each of you and hold you both harmless against
any and all actions, proceedings, claims, demands liabilities (including, without limitation,
the Escrow Bank’s charges incurred in operating the Escrow Account), costs and expenses which
either of you may suffer or incur in connection with the performance of your obligations under
this letter, except for liabilities incurred by either of you resulting from your wilful
misconduct or gross negligence.





 


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	7	 	Miscellaneous







	7.1	 	This letter is binding on, shall continue for the benefit of and be enforceable by, your and
our respective successors and assigns. The provisions of this letter shall apply
to and ensure for the benefit of the partners for the time being of each of the firms
respectively to whom it is addressed and to the partners of any firm resulting from any
reconstitution of either firm and reference to “partners” or “firms” shall include
reference to such partners or firms.







	7.2	 	No amendment to this letter shall be effective unless made in writing and signed by, or on
behalf of, you and us (or the relevant Guarantor of either the Seller or the Buyer).







	7.3	 	This letter may be executed in several counterparts, each of which when executed shall be
deemed an original but all of which together shall constitute one and the same instrument.






7.4 We declare that the instructions given in this letter are irrevocable.




	7.5	 	This letter and any disputes or claims arising out of or in connection with its subject
matter or formation (including non-contractual disputes and claims) are governed by and
construed in accordance with the law of England.







	7.6	 	The courts of England have exclusive jurisdiction to settle any dispute or claim that arises
out of or in connection with this Agreement or its subject matter or formation (including
non-contractual disputes or claims).







Please confirm that you agree to accept our instructions and to act as our escrow agents on
the terms set out in this letter by signing and returning the duplicate copies of this
letter enclosed.



Yours faithfully




	 	 
	On behalf of the Buyer	 






Yours faithfully




	 	 
	On behalf of the Seller	 





 


73









 





REQUEST LETTER




To: [ESCROW BANK]




Date




We, the undersigned, have this day request you to open a separately designated interest-bearing
instant access deposit account such account to be designated [     ] subject to the
following conditions:-




	1.	 	Interest is to be credited to the account gross.









	2.	 	Withdrawals at any time or times from that deposit account are to be made in accordance with
written instructions addressed to you, provided that they are signed on behalf of each of us
by one of the authorized signatories listed below.







	3.	 	You are entitled to deduct your reasonable and proper charges from the amount for the time
being standing to the credit of the deposit account.







	4.	 	This authority shall remain in force until revoked notwithstanding any change in the
constitution or name of the Firms and shall apply notwithstanding any change in the membership
of the Firms by death, bankruptcy, retirement or otherwise, or the admission of new partner or
partners.







	5.	 	Statement shall be supplied monthly to each of Pritchard Englefield Solicitors and Kimbells
LLP (for the attention of Geraldine Fabre and Anthony Harris at Pritchard Englefield
Solicitors and Jonathan Hambleton at Kimbells LLP.






List of Authorised Signatories




	 	 	 	 	 
	NAME	 	OFFICE HELD	 	SIGNATURE
	Anthony Harris

	 	Partner	 	 
	David Glass

	 	Partner	 	 
	Bryan Bletso

	 	Partner	 	 
	Geraldine Fabre

	 	Partner	 	 
	For Pritchard Englefield Solicitors
	 
	 	 	 	 
	Jonathan Hambleton

	 	Partner	 	 
	 
	 	 	 	 
	For Kimbells LLP
	 	 	 	 






 


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SCHEDULE 10




The Plant



 


75









 





SCHEDULE 11




Leasing/Hire Agreements




Part 1: Vehicle Leases





	1	 	 Automotive Leasing Agreements








	 	(a)	 	Automotive Leasing — Car Registration AP06 PZL dated 1 August 2006

	 
	 	(b)	 	Fleethire Contract — Car Registration MT57 CMU dated 8 January 2008

	 
	 	(c)	 	Honda Finance — Car Registration EX57 VCP confirmation dated 3 August 2007

	 
	 	(d)	 	Arval Contract — Car Registration FY57 GVX dated 12 August 2007

	 
	 	(e)	 	Audi Finance — Car Registration GK08 UNE undated

	 
	 	(f)	 	Godfrey Davis Contract — Car Registration SL08 ENP undated

	 
	 	(g)	 	RCI Finance — Car Registration YE58 JCZ dated 4 December 2008

	 
	 	(h)	 	Fleethire Contract — Car Registration BN08 JYT start date 12 March 2008






Part 2: Other Leases





	2	 	Hire Agreement between Canotec Ltd and McMurdo Ltd regarding Canon copiers dated 9 November
2004







	3	 	Hire Agreement for franking machine between Vendor and Pitney Bowes dated 26 December 2007





 


76









 










SCHEDULE 12




Part (1)




Completion Statement





	 	 	Instructions

	 
	1	 	Immediately prior to (and in any event 7 days before Completion) the Seller will prepare the
Completion Statement.







	 	 	Content

	 
	2	 	Paragraphs 3 to 7 of this Part of this Schedule apply to the content of the Completion Statement.







	3	 	The Completion Statement will consist of the statement of the Initial Stock Value and the
Actual Stock Value.







	4	 	Subject to paragraph 5 of Part 1 of this Schedule which will take priority over the general
requirements of this paragraph 4 the Buyer will prepare the Completion Statement on the
following basis:







	 	4.1	 	so far as relevant in ascertaining the matters which are to be stated in it,
under the historical cost convention, in accordance with accounting principles and
practices generally accepted in the UK in accordance with Companies Act 2006 as it
applies to statutory accounts and all applicable statements of standard accounting
practices;

	 
	 	4.2	 	in accordance with the accounting policies and practices used in the
preparation of the Accounts.







	 	 	Accounting policies

	 
	5	 	In preparing the Completion Statement:







	 	5.1	 	Stock will be determined in accordance with paragraph 6 of this Part of this Schedule.







	 	 	Stock valuation

	 
	6	 	For the purposes of the preparation of the Completion Statement, the value of Stock will be
ascertained as follows:







	 	6.1	 	the Seller, OROLIA and the Buyer will cause a stocktaking of all the Stock to
be made seven days before the Completion Date;

	 
	 	6.2	 	unless otherwise agreed by the Seller and the Buyer, this stocktaking will
consist of a reconciliation of the relevant books and records (including stock
adjustments for obsolete and quarantine, reworked and to be reworked, stock, stock
provisions, and any other adjustments and/or provisions) with a physical check of the
amount, quality and condition of all Stock situated at the Property at the Completion
Date and an inspection of the relevant books and records and contractual documentation
of the Business for all Stock not so situated;

	 
	 	6.3	 	the stocktaking will also consist of a verification of the values attributed
to the top 50 items of Stock by value included in relevant books and records
(including stock adjustments for obsolete and quarantine, reworked and to be reworked
stock, stock provisions, and any other adjustments and/or provisions);

	 
	 	6.4	 	any items of damaged, obsolete, slow moving, unsaleable, unusable, reworked,
to be reworked, in quarantine or unmarketable Stock or work in progress shall have no
value and Stock more than 12 months old shall be regarded as obsolete and have no
value;

	 
	 	6.5	 	for the avoidance of doubt Chemring Stock shall be disregarded as shall any
Stock or work in progress relating to the MOB Guardian contract;





 


77









 





	 	6.6	 	any Stock which comprises of finished products or parts in relation to the
support of obsolete products previously supplied to any customer shall be disregarded;

	 
	 	6.7	 	when this stocktaking has been completed and valued in accordance with
paragraph 6 of this Schedule and such value shall be included in the Completion
Statement provided always that if the verification referred to in paragraph 6.3 above
reveals factual errors, such errors shall be corrected in the valuation of Stock for
the purposes of the Actual Stock Value;

	 
	 	6.8	 	the value of the Stock shall be determined in pounds sterling (£) and then
converted into US Dollars (US$) and the amount shall be paid in US dollars (US$).







	 	 	Format

	 
	7	 	The Completion Statement and shall be set out in the form of the pro forma Completion
Statement which is at Part 2 of this Schedule.

	 
	 	 	Preparation







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







	9	 	In order to enable OROLIA and the Seller to review the Completion Statement, the Buyer and
the Seller will keep up to date and make available to the other, its books and records
relating to the Business and the stock take during normal office hours and co-operate with
them with regard to the preparation and review of the Completion Statement.







	10	 	If OROLIA does not within 5 Business days of receiving the Completion Statement give written
notice to the Seller that it disagrees with the Completion Statement or any item in them, this
notice stating the reasons for the disagreement in reasonable detail, (Objection Notice), the
Completion Statement will be final and binding on the Parties. If OROLIA gives a valid
Objection Notice within the 5 Business Day period, OROLIA and the Seller will attempt in good
faith to reach agreement in respect of it and, if they are unable to do so before the Long
Stop Date the parties shall proceed to Completion and an adjustment of the Purchase Price
shall only made when the Completion Statement is agreed or determined in accordance with the
provisions below.







	11	 	In the event OROLIA and the Seller are unable to agree the Completion Statement, 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 him.







	12	 	The Independent Accountants will act as experts and not as an arbitrators and will determine
which, if any, adjustments proposed in the Objection Notice (or what lesser adjustments in
respect of the matter giving rise to the adjustments proposed in the Objection Notice) should
be made to the Completion Statement so that they comply with this Schedule. Any determination
made by the Independent Accountants will be final and binding on the Parties (in the absence
of manifest error).







	13	 	The costs of the Independent Accountants will be borne as the Independent Accountants
determine and if the Independent Accountants do not make a determination, then equally.







	14	 	The adjustments agreed by OROLIA and Seller or determined by the Independent Accountants (as
appropriate) will be deemed to form part of the Completion Statement.







	15	 	OROLIA and Seller will co-operate with the Independent Accountants and comply with their
reasonable requests made in connection with the carrying out of their duties under this
Agreement.





 


78









 











	16	 	Nothing in paragraph 17 will entitle OROLIA or the Seller or the Independent Accountants
access to any information or a document which is protected by legal professional privilege, or
which has been prepared by the other Party or its accountants and other professional advisers
with a view to assessing the merits of any claim or argument.







	17	 	Subject to paragraph 16, the Parties are not entitled to refuse to supply that part or parts
of any document which contain only the facts on which the relevant claim or argument is based.







	18	 	Each Party and the Independent Accountants will, and will ensure that its Accountants and
other advisers will, keep all information and documents provided to them under paragraphs 8 to
17 confidential and will not use the same for any purpose, except for disclosure or use in
connection with the preparation of the Completion Statement.





 


79









 







Part (2)




Pro Forma Completion Statement




	 	 	 	 	 
	Initial Stock Value
	 	£	1,300,000	 
	 
	 	 	 	 
	Actual Stock Value
	 	£	 	 
	 
	 	 	 	 
	Difference between the Initial Stock Value and the Actual Stock
Value due to the Seller or OROLIA (as the case may be)
	 	£	 	 






 


80









 





SCHEDULE 13




Licence to Occupy



 


81









 





SCHEDULE 14




McMurdo Ltd Sale and Purchase Agreement



 


82









 





	 	 	 
	Executed by as a Deed by
	 	 
	Signature Industries Limited acting by or if by one

	 	Director
	director in the presence of:
	 	 
	Witness

	 	Director/Secretary
	Name
	 	 
	Address
	 	 
	 
	 	 
	Executed by as a Deed by
	 	 
	McMurdo Limited acting by or if by one director in the

	 	Director
	presence of:
	 	 
	Witness

	 	Director/Secretary
	Name
	 	 
	Address
	 	 
	 
	 	 
	Executed by as a Deed by
	 	 
	Digital Angel Corporation acting by

	 	Authorised Signatory
	 
	 	 
	 

	 	Authorised Signatory
	 
	 	 
	Executed by as a Deed by
	 	 
	OROLIA SA acting by

	 	Jean-Yves COURTOIS, Chairman and CEO
	 

	 	Authorised Signatory
	 
	 	 
	 

	 	Christophe Francois, Deputy CEO







 


83