Document:

<PAGE>

                                                                    Exhibit 10.7

                                 FIRST AMENDMENT

          FIRST AMENDMENT (the "Amendment"), dated as of January 6, 2003 to be
effective as of the First Amendment Effective Date (defined below) with respect
to that certain Third Amended and Restated Loan and Security Agreement, dated as
of December 31, 2002 (the "Credit Agreement"), among US LEC CORP., a Delaware
corporation ("Holdings"), as Guarantor and Borrower Representative, the entities
party to the Credit Agreement as Borrowers thereunder (each individually a
"Borrower" and collectively, the "Borrowers"), each financial institution or
entity listed on the signature pages thereof as a "Lender" and the other
financial institutions and other entities which become parties thereto as
successors or assigns (each a "Lender" and collectively, "Lenders") and General
Electric Capital Corporation, a Delaware corporation ("GECC"), as Administrative
Agent for Lenders (in such capacity, "Administrative Agent").

                              W I T N E S S E T H:

          WHEREAS, Borrowers, Holdings, Lenders and Administrative Agent are
parties to the Credit Agreement;

          WHEREAS, Borrowers have requested that Lenders agree to amend the
Credit Agreement to (i) permit the acquisition of certain assets from Eagle
Telco, Inc. and Eagle Communications, Inc. and (ii) amend certain other
provisions of the Credit Agreement; and

          WHEREAS, Lenders are willing to agree to the requested amendments on
the terms and conditions contained herein.

          NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree as follows:

          1. Definitions. Unless otherwise defined herein, terms defined in the
Credit Agreement shall have their defined meanings when used herein.

          2. Amendments to Credit Agreement.

          (a) Section 1.1 of the Credit Agreement shall be amended by adding
thereto the following new definitions in their proper alphabetical order:

               "'Eagle Acquisition': the purchase of the Eagle Assets from Eagle
     Telco, Inc., a Delaware corporation, by US LEC Acquisition Co., a North
     Carolina corporation (or another Borrower), upon the following terms and
     conditions: (a) total consideration shall not exceed $3,000,000 of which
     (i) $1,250,000 shall be paid in cash on the closing date and (ii)
     $1,750,000 shall be

<PAGE>

     paid by the issuance of a promissory note by Holdings to Eagle Telco, Inc.
     (the "Eagle Subordinate Note") and the issuance by Holdings of a warrant to
     purchase 921,053 shares of common stock, (b) the Eagle Subordinated Note
     shall (i) have a maturity date not earlier than December 31, 2007, (ii)
     bear interest at a rate not to exceed 11% per annum, (iii) have no
     principal amortization until the maturity date, (iv) be subordinated on
     terms not less favorable to Administrative Agent and Lenders than those set
     forth in the Subordinated Debt Investment Documents or in such other form
     as shall be acceptable to Administrative Agent and Requisite Lenders, and
     (v) be in form and substance acceptable to Administrative Agent, (c) the
     purchase shall be pursuant to documentation substantially in the form
     attached hereto as Exhibit A and such other documentation and with such
     changes thereto as shall be acceptable to the Administrative Agent, in each
     case with changes thereto that are not adverse to the interests of
     Administrative Agent and Lenders without the consent of Administrative
     Agent and Requisite Lenders, and (d) such other terms and conditions as
     shall be acceptable to Administrative Agent and its counsel."

               "'Eagle Assets': the following assets: (a) all of the contracts
     and agreements that are part of or which relate to the provision of
     telephony services, including primary rate ISDN services, dial up
     connectivity, private line and collocation services to Internet service
     providers solely as it relates to the states of North Carolina, Tennessee,
     Georgia, Florida and Virginia, (b) all notes, trade accounts receivable and
     rights to payment relating to the foregoing contracts (other than certain
     prepetition accounts receivable of StarNet Corporation), (c) certain
     deferred charges, advance payments, prepaid items, security and other
     deposits, claim for refunds, rights of offset, and credits of all kinds
     relating to the foregoing, and (d) all business records relating to the
     foregoing."

          (b) The definition of "Existing Loan" set forth in Section 1.1 of the
Credit Agreement shall be deleted in its entirety.

          (c) The definition of "Commitment Fees" set forth in Section 1.1 of
the Credit Agreement shall be amended by deleting the phrase "Section 2.20(a)"
in its entirety and substituting therefor the phrase "Section 2.20".

          (d) The definition of "Facility A Advance" set forth in Section 1.1 of
the Credit Agreement shall be amended by deleting the phrase "Section 2.1(a)" in
its entirety and substituting therefor the phrase "Section 2.1".

          (e) The definition of "LIBOR Period" set forth in Section 1.1 of the
Credit Agreement, Section 2.6(a) of the Credit Agreement and Section 2.11(g) of
the Credit Agreement shall be amended by deleting the phrase "Section 2.11(e)"
or the reference to clause "(e)" of Section 2.11 in their entirety and
substituting therefor "Section 2.11(f)" or clause "(f)", as the case may be.

                                       2

<PAGE>

          (f) The definition of "Maximum Lawful Rate" set forth in Section 1.1
of the Credit Agreement shall be amended by deleting the phrase "Section
2.11(f)" in its entirety and substituting therefor the phrase "Section 2.11(g)".

          (g) The definition of "Permitted Subordinated Debt" set forth in
Section 1.1 of the Credit Agreement shall be amended by deleting such definition
in its entirety and substituting therefor the following:

               "'Permitted Subordinated Debt': (a) the subordinated debt
     evidencing and giving rise to the Subordinated Debt Investment, (b) the
     Eagle Subordinated Note, and (c) Indebtedness in an amount not greater than
     $150,000,000 that (i) does not require any payment of principal until
     twelve (12) months after the later of the Facility A Commitment Termination
     Date and the Facility B Loan Maturity Date, (ii) is issued on market terms
     prevailing at the time and (iii) is subordinated on terms reasonably
     acceptable to Requisite Lenders to the Indebtedness created hereunder or
     pursuant to any other Loan Document."

          (h) The definitions of "Net Total Debt" and "Fixed Charges Coverage
Ratio" set forth in Section 1.1 of the Credit Agreement shall be amended by
deleting the phrase "the product of" in its entirety and substituting therefor
the phrase "the remainder of".

          (i) Section 9.4 shall be amended by deleting the provisos contained in
clause (a) and clause (f) thereof in their entirety and substituting therefor,
in each case, the following:

     "; provided, that (i) upon the repayment in full of the Deferred
     Amortization Holdings and its Subsidiaries may enter into Permitted
     Acquisitions and (ii) Holdings and its Subsidiaries may consummate the
     Eagle Acquisition."

          (j) Section 9.7 shall be amended by deleting the "and" immediately
preceding clause (f) and inserting the following:

     ", and (g) the Eagle Acquisition"

          (k) Schedule 5.6 attached to the Credit Agreement shall be deleted and
Schedule 5.6 attached hereto shall be substituted in lieu thereof.

          (l) Schedule 5.41 attached to the Credit Agreement shall be deleted
and Schedule 5.41 attached hereto shall be substituted in lieu thereof.

          3. Representations and Warranties. In order to induce Administrative
Agent and Lenders to enter into this Amendment, the Loan Parties hereby
represent and warrant to Administrative Agent and Lenders that the
representations and warranties of the Loan Parties contained in the Credit
Agreement and the other Loan Documents are

                                       3

<PAGE>

true and correct in all material respects on and as of the date hereof, except
where such representations and warranties expressly relate to an earlier date in
which case such representations and warranties were true and correct in all
material respects as of such earlier date.

          4. Conditions to Effectiveness.

          (a) The amendments set forth in Section 2(b), (c), (d), (e), (f), (h)
and (l) of this Amendment shall be effective on the date when all of the
following conditions shall have occurred (the "First Amendment Effective Date"):

               (i) Administrative Agent shall have executed this Amendment and
     shall have received counterparts hereof duly executed and delivered by
     Borrowers, Holdings and the Requisite Lenders; and

               (ii) Administrative Agent shall have received counterparts of the
     Acknowledgement and Consent attached as Exhibit B to this Amendment, duly
     executed and delivered by each Guarantor.

          (b) The amendments set forth in Section 2(a), (g), (i), (j) and (k) of
this Amendment shall be effective on the date (which shall occur prior to
January 31, 2003) of the consummation of the Eagle Acquisition.

          5. Reference to Credit Agreement. Upon the First Amendment Effective
Date, each reference in the Credit Agreement to "this Agreement," "hereunder,"
or words of like or similar import shall mean and be a reference to the Credit
Agreement, as modified and amended by this Amendment.

          6. Governing Law and Jurisdiction. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

          7. Expenses. Borrowers agree to pay and reimburse Administrative Agent
for all its reasonable costs and expenses incurred in connection with the
preparation and delivery of this Amendment, including, without limitation, the
reasonable fees and disbursements of counsel to Administrative Agent.

          8. Headings. Section headings in the Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.

          9. Counterparts. This Amendment may be executed by the parties hereto
in any number of separate counterparts (including by facsimile transmission) and
all of

                                       4

<PAGE>

such counterparts taken together shall be deemed to constitute one and the same
instrument.

          10. Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of Borrowers, Holdings and their respective successors and
assigns, and upon Administrative Agent and Lenders and their respective
successors and assigns.

          11. Continuing Effect. Except as expressly amended hereby, the Credit
Agreement, as amended by this Amendment, shall continue to be and shall remain
in full force and effect in accordance with its terms. This Amendment shall not
constitute an amendment or waiver of any provision of the Credit Agreement not
expressly referred to herein and shall not be construed as an amendment, waiver
or consent to any action on the part of Borrowers that would require an
amendment, waiver or consent of Administrative Agent or Lenders except as
expressly stated herein. Any reference to the "Agreement" in the Credit
Agreement or to the "Loan Agreement" in the other Loan Documents or any related
documents shall be deemed to be a reference to the Credit Agreement as amended
by this Amendment.

          12. NO ORAL AGREEMENTS. THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

          13. GENERAL WAIVER AND RELEASE. IN ADDITION, TO INDUCE ADMINISTRATIVE
AGENT AND LENDERS TO AGREE TO THE TERMS OF THIS AMENDMENT, LOAN PARTIES (BY
THEIR EXECUTION BELOW) REPRESENT AND WARRANT THAT AS OF THE DATE OF THEIR
EXECUTION OF THIS AMENDMENT THERE ARE NO CLAIMS OR OFFSETS AGAINST OR DEFENSES
OR COUNTERCLAIMS TO THEIR RESPECTIVE OBLIGATIONS UNDER THE EXISTING LOAN
AGREEMENT, THE CREDIT AGREEMENT OR THE OTHER LOAN DOCUMENTS. NOTWITHSTANDING THE
FOREGOING, IN THE EVENT THERE EXIST ANY SUCH CLAIMS OR OFFSETS AGAINST OR
DEFENSES OR COUNTERCLAIMS, LOAN PARTIES (BY THEIR EXECUTION BELOW) HEREBY:

     (a) FOREVER GENERALLY WAIVE ANY AND ALL CLAIMS, OFFSETS, DEFENSES AND/OR
COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING ON OR PRIOR TO THE DATE OF
THEIR EXECUTION OF THIS AMENDMENT; AND

     (b) FOREVER RELEASE, ACQUIT AND DISCHARGE ADMINISTRATIVE AGENT AND LENDERS,
AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, SHAREHOLDERS,

                                       5

<PAGE>

AFFILIATES AND ATTORNEYS (COLLECTIVELY THE "RELEASED PARTIES") FROM ANY AND ALL
OBLIGATIONS, INDEBTEDNESS, LIABILITIES, CLAIMS, RIGHTS, CAUSES OF ACTION OR
DEMANDS WHATSOEVER, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, IN LAW
OR EQUITY, WHICH ANY LOAN PARTY EVER HAD, NOW HAS, CLAIMS TO HAVE OR MAY HAVE
AGAINST ANY RELEASED PARTY ARISING ON OR PRIOR TO THE DATE HEREOF AND FROM OR IN
CONNECTION WITH THE EXISTING LOAN AGREEMENT, THE CREDIT AGREEMENT AND THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY AND HEREIN.

     The provisions of this Section 13, including without limitation the
representations and warranties contained herein, shall survive termination of
this Amendment indefinitely.

                                       6

<PAGE>

          IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
day and year first above written.

                                         Borrower Representative And Guarantor:

                                         US LEC CORP.

                                         By: /s/ Michael K. Robinson
                                             -----------------------------------
                                             Name: Michael K. Robinson
                                             Title: Executive Vice President and
                                                    Chief Financial Officer

                                         Borrowers:

                                         US LEC OF ALABAMA INC.
                                         US LEC COMMUNICATIONS INC.
                                         US LEC OF FLORIDA INC.
                                         US LEC OF GEORGIA INC.
                                         US LEC OF MARYLAND INC.
                                         US LEC OF NORTH CAROLINA INC.
                                         US LEC OF PENNSYLVANIA INC.
                                         US LEC OF SOUTH CAROLINA INC.
                                         US LEC OF TENNESSEE INC.
                                         US LEC OF VIRGINIA L.L.C.
                                         US LEC ACQUISITION CO.

                                         By: /s/ Michael K. Robinson
                                             -----------------------------------
                                             Name: Michael K. Robinson
                                             Title: Executive Vice President and
                                                    Chief Financial Officer

                                  Page 1 of 2

<PAGE>

                                         GENERAL ELECTRIC CAPITAL
                                         CORPORATION, AS Administrative Agent
                                         and Lender

                                         By: /s/ Angela M. LePore
                                             -----------------------------------
                                         Name: Angela M. LePore
                                         Title: SVP, Special Assets

                                  Page 2 of 2

<PAGE>

                                         WACHOVIA BANK, NATIONAL ASSOCIATION,
                                         as Lender

                                         By: /s/ Matthew Berk
                                             -----------------------------------
                                         Name: Matthew Berk
                                         Title: Authorized Officer

                                  Page 3 of 2

<PAGE>

                                         U.S. BANK NATIONAL ASSOCIATION,
                                         as a Lender

                                         By: /s/ Greg B. Wilson
                                             -----------------------------------
                                         Name: Greg B. Wilson
                                         Title: Vice President

                                  Page 4 of 2

<PAGE>

                                         PNC BANK, NATIONAL ASSOCIATION,
                                         as a Lender

                                         By: /s/ Steven J. McGehrin
                                             -----------------------------------
                                         Name: Steven J. McGehrin
                                         Title: Vice President

                                  Page 5 of 2

<PAGE>

                                         IBM CREDIT CORPORATION, as a Lender

                                         By: /s/ Steven A Flanagan
                                             -----------------------------------
                                         Name: Steven A. Flanagan
                                         Title: Manager of Global Special
                                                Handling

                                  Page 6 of 2

<PAGE>

                                         BANK AUSTRIA CREDITANSTALT
                                         CORPORATE FINANCE, INC., as a Lender

                                         By:
                                             -----------------------------------
                                         Name:
                                               ---------------------------------
                                         Title:
                                                --------------------------------

                                  Page 7 of 2<PAGE>
                                                                   Exhibit 10.32

                              DATED 21 OCTOBER 2002

                    (1) THOSE PERSONS SET OUT IN SCHEDULE ONE

                                      -AND-

                          (2) ARTHROCARE CAYMAN LIMITED

                                      -AND-

                           (3) ARTHROCARE CORPORATION

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

                            SHARE PURCHASE AGREEMENT

                                   relating to
                       the entire issued share capital of
                        Atlantech Medical Devices Limited
                                       and
                     Atlantech Medical Devices (UK) Limited

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

                           [LOGO OF LATHAM & WATKINS]

                                    London

                                 99 Bishopsgate
                                 London EC2M 3XF
                            (44) 020 7710 1000 (Tel)
                            (44) 020 7374 4460 (Fax)
                                   www.lw.com

Confidential treatment has been requested for portions of this exhibit. The copy
filed herewith omits the information subject to the confidentiality request.
Omissions are designated as * * *. A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.

<PAGE>

THIS AGREEMENT is made the      21st     day of  October 2002.

BETWEEN:

(1)       THOSE PERSONS SET OUT AT SCHEDULE ONE (the "Vendors");

(2)       ARTHROCARE CAYMAN LIMITED a company incorporated under the laws of the
          Cayman Islands with offices at c/o Chartered Trust Services, Ltd., One
          Capital Place, Shedden Road, P.O. Box 1034 GT, Grand Cayman, Cayman
          Islands (the "Purchaser"); and

(3)       ARTHROCARE CORPORATION a company incorporated under the laws of the
          State of California, USA with offices at 680 Vaqueros Avenue
          Sunnyvale, California 94085-3523. USA (the "Guarantor").

WHEREAS:

(A)       Atlantech Medical Devices Limited ("Atlantech"), a company registered
          in England with number 3071270, has at the date of this Agreement an
          authorised share capital of (pound)50,000 divided into 39,000 ordinary
          A shares of (pound)1 each and 11,000 ordinary B shares of (pound)1
          each of which 15,678 of the said ordinary A shares and 4,221 of the
          said ordinary B shares are issued and fully paid or credited as fully
          paid and are owned by the Vendors in the proportions set out in
          schedule 1.

(B)       Atlantech Medical Devices (UK) Limited ("Atlantech UK"), a company
          registered in England with number 3156447, has at the date of this
          Agreement an authorised share capital of (pound)200 divided into 200
          ordinary shares of (pound)1 each of which 160 of the said ordinary
          shares are issued and fully paid or credited as fully paid and are
          owned by the Vendors in the proportions set out in schedule 1 (each of
          those companies mentioned at Recitals (A) and (B) being a "Company"
          and together, the "Companies").

(C)       The Vendors have agreed to sell the Shares to the Purchaser (a wholly
          owned subsidiary of the Guarantor) and the Purchaser has agreed to
          purchase the Shares in reliance (inter alia) upon the warranties and
          undertakings in this Agreement, for the consideration and otherwise
          upon and subject to the terms and conditions of this Agreement.

WHEREBY IT IS AGREED as follows:

1.   DEFINITIONS AND INTERPRETATION

1.1       In this Agreement the following words and expressions have the
          meanings set opposite them:

          "Accounts"                    the audited balance sheet as at the
                                        Balance Sheet Date and the audited
                                        profit and loss account for the last
                                        accounting reference period ended on the
                                        Balance Sheet Date of each Company and
                                        the notes, reports, statements and other
                                        documents which are required by law to
                                        be annexed to the Accounts of the
                                        company concerned and to be sent or made
                                        available to members for such Financial
                                        Year, a copy of each of which is
                                        enclosed in the Disclosure Documents;

          "Accounting Standards"        statements of standard accounting
                                        practice (including financial reporting
                                        standards) issued pursuant to section
                                        256, CA 85 by the ASB;

                                        1

<PAGE>

          "Additional Consideration"    the consideration payable for the Shares
                                        as specified in clause 3.3;

          "Additional Revenue           consideration payable for the Shares as
          Related Consideration"        specified in clause 3.4;

          ***                           ***

          "ASB"                         Accounting Standards Board Limited (no.
                                        2526824) or such other body prescribed
                                        by the Secretary of State from time to
                                        time pursuant to section 256, CA 85;

          "Affiliate"                   in relation to any body corporate, any
                                        Holding Company or subsidiary
                                        undertaking of such body corporate or
                                        any subsidiary undertaking of a Holding
                                        Company of such body corporate;

          "Agreement"                   this Agreement including its recitals
                                        and the schedules but not the Tax Deed;

          "Associated                   a company in which a Company or
          Company"                      any Subsidiary holds shares conferring
                                        the right to exercise 20% or more of the
                                        votes which could be cast on a poll at a
                                        general meeting of such company and
                                        which is not a subsidiary of any of the
                                        companies in the Group and which is more
                                        particularly listed in schedule 2 under
                                        the heading "The Associated Companies";

          "Atlantech Products"          means those products: (a) available for
                                        purchase by third parties from either of
                                        the Companies immediately prior to the
                                        date of this Agreement; or (b) made
                                        available for purchase to third parties
                                        from either of the Companies on or
                                        following the date of this Agreement
                                        which have been developed or otherwise
                                        acquired by either of the Companies or
                                        any of the Warrantors in each case
                                        without material assistance from the
                                        Purchaser or any member of the
                                        Purchaser's Group PROVIDED THAT
                                        "Atlantech Products" shall not under any
                                        circumstances include any products
                                        manufactured or developed by the
                                        Purchaser or any Affiliate of the
                                        Purchaser (other than, following
                                        Completion, the Companies) or by either
                                        of the Companies or any of the
                                        Warrantors with material assistance from
                                        the Purchaser or the Purchaser's Group;

          "Balance Sheet Date"          in the case of (i) Atlantech Medical
                                        Devices Limited 31 December 2001 and
                                        (ii) Atlantech Medical Devices (UK)
                                        Limited 30 September 2001;
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                        2

<PAGE>

          "Business"                    collectively the business of the sale of
                                        medical devices carried on by the
                                        Companies and each of the Subsidiaries
                                        at the date hereof;

          "Business Day"                a day (other than a Saturday or Sunday)
                                        when banks are open for business in
                                        London;

          "CA 85"                       Companies Act 1985;

          "CAA"                         Capital Allowances Act 1990;

          "Change of Control"           shall be deemed to occur where any
                                        person acquires after Completion more
                                        than fifty (50) percent. of the issued
                                        share capital (or voting rights attached
                                        to such share capital) of the Purchaser,
                                        any Holding Company of the Purchaser,
                                        either Company or the Guarantor
                                        entitling the holder thereof to attend
                                        and vote on all matters in general
                                        meeting provided that a Change of
                                        Control shall not include an internal
                                        reorganisation of the Purchaser's Group,
                                        re-capitalisation or management buy-out
                                        of the Guarantor or any of its
                                        subsidiary companies provided that the
                                        management personnel to whom the
                                        Warrantors report remains the same
                                        immediately following such
                                        reorganisation, re-capitalisation or
                                        management buy-out as immediately prior
                                        thereto;

          "Claim"                       any claim by the Purchaser in connection
                                        with the Warranties;

          "Companies Acts"              as defined in section 744, CA 85
                                        together with the Companies Act 1989;

          "Competent Authority"         means any person or legal
                                        entity (including any government or
                                        government agency) having regulatory
                                        authority under Environmental Laws
                                        and/or any court of law or tribunal;

          "Completion"                  completion of the sale and purchase of
                                        the Shares pursuant to this Agreement;

          "Completion Accounts"         the accounts referred to in clause
                                        6.1.2, prepared in accordance with
                                        schedule 5;

          "Confidential Information"    all information received or
                                        obtained as a result of entering into or
                                        performing, or supplied by or on behalf
                                        of a party in the negotiations leading
                                        to, this Agreement and which relates to:

                                        (i)   either Company or any of the
                                              Subsidiaries and their respective
                                              Affiliates;

                                        (ii)  any aspect of the Business;

                                        (iii) the provisions of this Agreement;

                                        3

<PAGE>

                                        (iv)  the negotiations relating to this
                                              Agreement;

                                        (v)   the subject matter of this
                                              Agreement; or

                                        (vi)  the Purchaser;

          "Connected Person"            a person connected with the Vendors or
                                        the Directors (or any former director of
                                        either Company or any of the
                                        Subsidiaries) within the meaning of
                                        section 839, ICTA 1988;

          "Consideration"               the aggregate consideration for the
                                        Shares set out in clauses 3 and 6;

          "Contingent Claim Amount"     an amount in respect of a Claim or claim
                                        under or pursuant to the Tax Deed by the
                                        Purchaser against the Warrantors not
                                        being a liability of the Warrantors
                                        determined or quantified in accordance
                                        with the terms of sub-clause 7.5.2 and
                                        being a bona fide estimate of the
                                        quantum of such liability by the
                                        Purchaser;

          "Copyright"                   copyright, design rights, topography
                                        rights and database rights whether
                                        registered or unregistered (including
                                        any applications for registration of any
                                        such thing) and any similar or analogous
                                        rights to any of the foregoing whether
                                        arising or granted under the law of
                                        England or of any other jurisdiction;

          "Directors"                   the directors of each of the Companies
                                        named in schedule 2;

          "Disclosed"                   fairly disclosed by the Disclosure
                                        Documents or fairly disclosed by the
                                        disclosures contained in the Disclosure
                                        Letter and "Disclosure" shall be
                                        construed accordingly;

          "Disclosure Documents"        the Disclosure Letter and the two
                                        identical bundles of documents collated
                                        by or on behalf of the Warrantors, the
                                        outside covers of each of which have
                                        been signed for identification by or on
                                        behalf of the Warrantors and the
                                        Purchaser;

          "Disclosure Letter"           the letter described as such of even
                                        date herewith addressed by the
                                        Warrantors to the Purchaser;

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

          "Environment"                 any and all organisms (including man),
                                        ecosystems, property and the following
                                        media: air (including the air within
                                        buildings and the air within other
                                        natural

                                        4

<PAGE>

                                        or man-made structures whether above or
                                        below ground); water (including water
                                        under or within land or in drains or
                                        sewers and coastal and inland waters);
                                        and land (including land under water);

          "Environmental Laws"          any and all laws, whether civil,
                                        criminal or administrative, which have
                                        as a purpose or effect the protection of
                                        the Environment, and/or the mitigation,
                                        abatement, containment or prevention of
                                        Harm and/or the provision of remedies in
                                        respect of Harm; statutes and
                                        subordinate legislation; regulations,
                                        orders, ordinances; Permits, common law,
                                        local laws and bye-laws; judgments,
                                        notices, orders of any Competent
                                        Authority;

          "Environmental Liability"     liability (including liability in
                                        respect of Remedial Action) on the part
                                        of either Company and/or any
                                        of their directors or officers or
                                        shareholders under Environmental Laws;

          "ERA"                         Employment Rights Act 1996;

          "Event"                       any payment, transaction, act, omission
                                        or occurrence of whatever nature whether
                                        or not either Company or the Purchaser
                                        is a party thereto and including:

                                        the execution of this Agreement and
                                        completion of the sale of the Shares to
                                        the Purchaser; and

                                        the death of any person;

                                        and references to an Event occurring on
                                        or before Completion shall include an
                                        Event deemed, pursuant to any Taxation
                                        Statute, to occur or be treated or
                                        regarded as occurring on or before
                                        Completion;

          "FA"                          Finance Act;

          "FRSs"                        a financial reporting standard adopted
                                        or issued by the ASB;

          "Financial Year"              a financial year within the meaning
                                        ascribed to such expression by section
                                        223, CA 85;

          "Group"                       together the Companies and the
                                        Subsidiaries (but for these purposes not
                                        including Atlantech Italia Srl);

          "Hardware"                    any and all computer, telecommunications
                                        and network equipment;

          "Harm"                        harm or damage to or other interference
                                        with the Environment;

                                        5

<PAGE>

          "Hazardous Matter"            any and all matter (whether alone or in
                                        combination with other matter) including
                                        electricity, heat, vibration, noise or
                                        other radiation which may or is liable
                                        to cause Harm;

          "Holding Company"             a holding company within the meaning
                                        ascribed to such expression by sections
                                        736 and 736A, CA 85;

          "ICTA 1988"                   Income and Corporation Taxes Act 1988;

          "Indemnities"                 the indemnities given by the Vendors in
                                        clause 9;

          "Intellectual Property"       Patents, design rights, moral rights,
                                        registered designs, Know-How, Copyright
                                        (including rights in Software), Trade
                                        Marks and rights arising in domain
                                        names;

          "Intellectual Property        agreements or arrangements relating to
          Agreements"                   the Proprietary Intellectual Property or
                                        Third Party Intellectual Property;

          "Investments"                 the companies listed in schedule 2 under
                                        the heading "Investments";

          "IT Contracts"                any agreements or arrangements with
                                        third parties relating to IT Systems or
                                        IT Services, including all hire purchase
                                        contracts or leases of Hardware used by
                                        either Company or any of the
                                        Subsidiaries, licences of Software used
                                        by each Company or any of the
                                        Subsidiaries, and other IT procurement;

          "IP Materials"                all documents, records, tapes, discs,
                                        diskettes and any other
                                        materials whatsoever containing
                                        Copyright works, Know-How or Software;

          "IT Services"                 any services provided by a third party
                                        relating to the IT Systems or to any
                                        other aspect of either Company's or any
                                        of the Subsidiaries' data processing or
                                        data transfer requirements, including
                                        facilities management, bureau services,
                                        hardware maintenance, software
                                        development or support, consultancy,
                                        source code deposit, recovery and
                                        network services;

          "IT Systems"                  Hardware and/or Software owned or used
                                        by each Company;

          "ITA"                         Inheritance Tax Act 1984;

          "Know-How"                    trade secrets and confidential business
                                        information including confidential
                                        details of supply arrangements, customer
                                        lists and pricing policy; sales targets,
                                        sales statistics, market share
                                        statistics, marketing surveys and
                                        reports; marketing research; unpatented
                                        technical and other information
                                        including

                                        6

<PAGE>

                                        inventions, discoveries, processes and
                                        procedures, ideas, concepts, formulae,
                                        specifications, procedures for
                                        experiments and tests and results of
                                        experimentation and testing; information
                                        comprised in Software; together with all
                                        common law or statutory rights
                                        protecting the same including by any
                                        action for breach of confidence and any
                                        similar or analogous rights to any of
                                        the foregoing whether arising or granted
                                        under the law of England or any other
                                        jurisdiction;

          "Legal and Beneficial Title"  full and unrestricted title with the
                                        benefit of quiet possession and free
                                        from lawful interruption and
                                        disturbance;

          ***                           ***

          "Minority Vendors"            ***

          ***                           ***

          "Management Accounts"         means the management accounts of each of
                                        the Companies for the period from the
                                        relevant Balance Sheet Date to 31 August
                                        2002, copies of which are annexed to the
                                        Disclosure Letter;

          "Net Assets"                  in relation to each Company, its fixed
                                        assets plus its current assets less its
                                        liabilities as more fully described at
                                        Part I of schedule 5 as at Completion
                                        and as set out in the Audited Completion
                                        Accounts;

          "Patents"                     patents and applications for a patent in
                                        the UK or any other jurisdiction;

          "Permits"                     any and all licences, consents, permits,
                                        authorisations or the like, made or
                                        issued pursuant to or under, or required
                                        by, Environmental Laws in relation to
                                        the carrying on of the Business;

          "Proceedings"                 any proceeding, suit or action arising
                                        out of or in connection with this
                                        Agreement;

          "Properties"                  the properties of which short
                                        particulars are set out in Part 1 of
                                        schedule 4 and the expression "Property"
                                        shall mean, where the context so admits,
                                        any one or more of such properties and
                                        any part or parts thereof;

          "Proprietary Intellectual     Intellectual Property owned by the
          Property"                     Company;

          "Provisional Consideration"   the consideration payable for the Shares
                                        as specified in clause 3.1;

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                        7

<PAGE>

          "Purchaser's Accountants"     PricewaterhouseCoopers, LLP;

          "Purchaser's Group"           the Purchaser and its Affiliates;

          "Purchaser's Solicitors"      Latham & Watkins of 99 Bishopsgate,
                                        London EC2M 3XF;

          "Registered Proprietary       Proprietary Intellectual Property listed
          Intellectual Property"        in Part 1 of schedule 7;

          "Remedial Action"             (i)   preventing, limiting, removing,
                                        remedying, cleaning-up, abating or
                                        containing the presence or effect of any
                                        Hazardous Matter in the Environment
                                        (including the Environment at the
                                        Property); or (ii) carrying out
                                        investigative work and obtaining legal
                                        and other professional advice as is
                                        reasonably required in relation to (i);

          "RTPA"                        Restrictive Trade Practices Act 1976;

          "Service                      Agreements" the service agreements in
                                        the agreed terms between each of
                                        Nicholas Woods, Clive Reay-Young,
                                        Jennifer Garman and Simon Mifsud;

          "Shareholders' Agreements"     *** Clive Reay-Young, Nicholas Paul
                                        Woods, Jennifer Maureen Garman *** Simon
                                        Misfud *** Clive Reay-Young, Nicholas
                                        Paul Woods, Jennifer Maureen Garman,
                                        Simon David Misfud ***

          "Shares"                      all of the issued shares in the capital
                                        of Atlantech and all of the issued
                                        shares in the capital of Atlantech UK;

          "Software"                    any and all computer programs in both
                                        source and object code form, including
                                        all modules, routines and sub-routines
                                        thereof and all source and other
                                        preparatory materials relating thereto,
                                        including user requirements, functional
                                        specifications and programming
                                        specifications, ideas, principles,
                                        programming languages, algorithms, flow
                                        charts, logic, logic diagrams,
                                        orthographic representations, file
                                        structures, coding sheets, coding and
                                        including any manuals or other
                                        documentation relating thereto and
                                        computer generated works;

          "SSAP"                        a statement of standard accounting
                                        practice or financial reporting standard
                                        in force at the date hereof as issued by
                                        the Institute of Chartered Accountants
                                        in England and Wales and adopted by the
                                        ASB as an Accounting Standard;
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                        8

<PAGE>

          ***                           ***

          "subsidiary"                  a subsidiary within the meaning ascribed
                                        to such expression by sections 736 and
                                        736A, CA 85;

          "subsidiary undertaking"      a subsidiary undertaking within the
                                        meaning ascribed to such expression by
                                        section 258, CA 85;

          "Subsidiary"                  the subsidiary of Atlantech named in
                                        schedule 2 under the heading "The
                                        Subsidiary";

          "Taxation" or "Tax"           as defined in the Tax Deed;

          "Taxation Authority"          as defined in the Tax Deed;

          "Tax Deed"                    the deed in the agreed terms of even
                                        date herewith containing certain
                                        taxation covenants and indemnities
                                        between the Covenantors (as defined
                                        therein) and the Purchaser;

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

          "Tax Warranties"              the warranties set out in Part 2 of
                                        schedule 3;

          "TCGA"                        Taxation of Chargeable Gains Act 1992;

          "Third Party                  means all Intellectual Property licensed
          Intellectual Property"        to the Company by a third party;

          "TMA"                         Taxes Management Act 1970;

          "Trade Marks"                 trade or service mark applications or
                                        registered trade or service marks,
                                        registered protected designations of
                                        origin, registered protected geographic
                                        origins, refilings, renewals or reissues
                                        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 Union"                 as defined in section 1, TULRCA;

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                        9

<PAGE>

          "TULRCA"                      Trade Union and Labour Relations
                                        (Consolidation) Act 1992;

          "TUPE"                        Transfer of Undertakings (Protection of
                                        Employment) Regulations 1981 as amended;

          "UK GAAP"                     applicable accounting standards,
                                        principles and practices generally
                                        accepted in the United Kingdom;

          "Unregistered Proprietary     Proprietary Intellectual Property other
          Intellectual Property"        than Registered Proprietary Intellectual
                                        Property;

          "US GAAP"                     applicable accounting standards,
                                        principles and practices generally
                                        accepted in the United States of
                                        America;

          "US Property"                 the property, brief particulars of which
                                        are set out in part 2 of schedule 4;

          "VAT"                         value added tax;

          "VATA"                        Value Added Tax Act 1994;

          "Vendors' Accountants"        Brown Butler of Yorkshire Bank Chambers,
                                        Infirmary Street, Leeds, West Yorkshire,
                                        LS1 2JT;

          "Vendors' Solicitors"         DLA of Victoria Square House, Victoria
                                        Square, Birmingham B2 4DL;

          "Warranties"                  the warranties set out in clause 7 and
                                        schedule 3;

          "Warrantors"                  means each of Nicholas Woods, Clive
                                        Reay-Young, Mrs. Jennifer Garman and
                                        Simon Mifsud whose addresses are set out
                                        in schedule 1 provided that Simon Mifsud
                                        shall only give Warranties relating to
                                        Atlantech UK and shall only be a
                                        Warrantor for such purposes;

          "in the agreed terms"         in the form agreed between the Vendors
                                        and the Purchaser and signed for the
                                        purposes of identification by or on
                                        behalf of each party.

1.2       The table of contents and headings in this Agreement are inserted for
          convenience only and shall not affect its construction.

1.3       Unless the context otherwise requires words denoting the singular
          shall include the plural and vice versa, references to any gender
          shall include all other genders and references to persons shall
          include bodies corporate, unincorporated associations and
          partnerships, in each case whether or not having a separate legal
          personality. References to the word "include" or "including" are to be
          construed without limitation.

1.4       References to recitals, schedules and clauses are to recitals and
          schedules to and clauses of this Agreement unless otherwise specified
          and references within a schedule to paragraphs are to paragraphs of
          that schedule unless otherwise specified.

                                       10

<PAGE>

1.5       Save to the extent by which the liability of any party would thereby
          be extended or increased, references in this Agreement to any statute,
          statutory provision or EC Directive include a reference to that
          statute, statutory provision or EC Directive as amended, extended,
          consolidated or replaced from time to time (whether before or after
          the date of this Agreement) and include any order, regulation,
          instrument or other subordinate legislation made under the relevant
          statute, statutory provision or EC Directive.

1.6       Words and expressions defined in the Tax Deed shall to the extent not
          inconsistent bear the same meanings in this Agreement.

1.7       References to any English legal term for any action, remedy, method of
          judicial proceeding, legal document, legal status, court, official or
          any legal concept, state of affairs or thing shall in respect of any
          jurisdiction other than England be deemed to include that which most
          approximates in that jurisdiction to the English legal term.

1.8       Any reference to "writing" or "written" includes faxes and any
          non-transitory form of visible reproduction of words.

1.9       Any agreement, covenant, representation, warranty, undertaking or
          liability arising under this Agreement on the part of two or more
          persons shall be deemed to be made or given by such persons jointly
          and severally, unless otherwise expressly agreed.

1.10      In schedule 3, references to the Company shall be deemed to include a
          reference to each of Atlantech and Atlantech UK and each of them
          severally.

1.11      References to times of the day are to London time and references to a
          day are to a period of 24 hours running from midnight.

2.   SALE AND PURCHASE

2.1       Obligation to sell and purchase

          Subject to the terms of this Agreement, each of the Vendors severally
          shall sell, with full title guarantee, the number of Shares set
          opposite his name in column (B) and/or (C), as appropriate, of
          schedule 1 and the Purchaser shall purchase such interests in the same
          together with all rights attaching thereto at the date of this
          Agreement.

2.2       Dividends and distributions

          The Purchaser shall be entitled to receive all dividends and
          distributions declared, paid or made by the Company on or after the
          date of this Agreement.

2.3       Sale of all Shares

          The Purchaser shall not be obliged to complete the purchase of any of
          the Shares unless the purchase of all the Shares is completed
          simultaneously.

2.4       Declaration of Trust

          Each of the Vendors severally acknowledge and undertake that pending
          registration of the transfers of his shares (referred to in clause 2.1
          above), he holds such Shares on trust for the Purchaser.

2.5       Power of Attorney

                                       11

<PAGE>

          Each Vendor hereby severally and irrevocably appoints the Purchaser as
          his attorney for the purpose of exercising any rights, privileges or
          duties attaching to his shares (as referred to in clause 2.1 above)
          including receiving of notices of and attending and voting at all
          meetings of the members of the Company from Completion to the day on
          which the Purchaser or its nominee is entered in the register of
          members of the Company as the holder of such shares, in each case in
          such manner as the Purchaser shall in its discretion decide.

2.6       Specific Authorisation

          For the purpose of sub-clause 2.5, each Vendor severally authorises:

          2.6.1     the Company to send any notices in respect of his share
                    holdings (as referred to in clause 2.1 above) to the
                    Purchaser;

          2.6.2     the Purchaser to complete and return proxy cards, consents
                    to short notice and any other document required or permitted
                    to be signed by such Vendor as a member.

3.   CONSIDERATION

          The aggregate consideration payable by the Purchaser to the Vendors
          (or, in the case of the *** and Additional Revenue Related
          Consideration, to the Warrantors only) for the purchase of the Shares
          shall be:

3.1       Provisional Consideration

          The sum of *** which shall be apportioned between the Vendors in the
          amounts set out opposite their respective names in column (E) of
          schedule 1 (subject to adjustment as provided in clause 6.2).

3.2       ***

          ***

3.3       Additional Consideration

          ***

          (each such payment being an "Additional Consideration Payment" and
          each such date being a "Payment Date")

          in each case subject to the terms of clauses 7.5 and 9 and payable to
          each of the Vendors in cash on the relevant Payment Date in an amount
          equal to their pro rata entitlement as set out opposite their
          respective names in column (D) of schedule 1 ("Pro Rata Entitlement")
          to such Additional Consideration Payment PROVIDED THAT no Additional
          Consideration shall become payable to a Defaulting Vendor and the
          relevant Additional Consideration Payment shall be reduced by an
          amount equal to the aggregate of any Defaulting Vendors' Pro Rata
          Entitlement to the relevant Additional Consideration Payment and the
          balance of the Additional Consideration Payment shall be payable to
          the remaining Vendors.

          For the purpose of this clause 3.3 a Vendor shall be a "Defaulting
          Vendor" if:

          (a)  *** or

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       12

<PAGE>

          (b)  in the case of each of *** on or prior to the relevant Payment
               Date circumstances exist which ***;

          (c)  FURTHER PROVIDED THAT where at any time any of *** shall be
               subject to and calculated in accordance with the following
               calculation:

          (A + B + C) x  X = Y

          where:

          A = the relevant applicable reduction *** applicable in the event of
                the further proviso above being relevant to ***

          B = the *** applicable in the event of the further proviso above being
                relevant to ***

          C = the *** applicable in the event of the further proviso above being
                relevant to ***

          X = the applicable proposed Additional Consideration Payment

          Y = the amount of the total aggregate deduction to be deducted from
                the applicable Additional Consideration Payment

          and for the avoidance of doubt this calculation shall be made on each
          subsequent Payment Date taking into account each of A, B and C as
          appropriate. For example, where A is applicable to that Payment Date
          set out at sub-clause 3.2.1 it shall also be applied in relation to
          Payment Dates applicable to sub-clauses 3.2.2 and 3.2.3.

          The resulting Additional Consideration Payment (if any) on the
          relevant Payment Date shall be paid by the Purchaser by way of
          electronic transfer for same day value to the Vendors' Solicitors who
          are irrevocably authorised to receive the same and whose receipt shall
          be an effective discharge of the Purchaser's obligation to pay such
          sum and the Purchaser shall not be concerned to see to the application
          or be answerable for the loss or misapplication by the Vendors'
          Solicitors of such sum. The Vendors' Solicitors shall distribute any
          Additional Consideration Payment to the Vendors *** in amounts
          calculated by reference to their Pro Rata Entitlement recalculated to
          disregard the Pro Rata Entitlement of any Defaulting Vendor *** in the
          circumstances referred to;

3.4       Additional Revenue Related Consideration

          further additional payments on the following terms:

          3.4.1     in the event that *** to be apportioned among the Warrantors
                    in the *** set out opposite their respective names
                    in column (G) of schedule 1 ("***") PROVIDED THAT if the ***
                    then the aggregate amount payable to the Warrantors shall be
                    calculated as follows:

                    ***

                    ***For the avoidance of doubt where *** no additional
                    payment shall be payable to the Warrantors (or repayable by
                    the Warrantors) under this sub-clause 3.4.1; and

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       13

<PAGE>

          3.4.2     in the event that *** the Warrantors shall be entitled to
                    further consideration in the amount of *** to be apportioned
                    among the Warrantors in their Warrantor Percentages PROVIDED
                    THAT if the ***, provided that, in the event that this
                    results in a negative amount no additional payment shall be
                    made to (or be payable or repayable by) the Warrantors under
                    this sub-clause 3.4.2.

                    The parties agree and shall each use reasonable endeavours
                    to procure that at least *** constituting the *** PROVIDED
                    THAT where there shall be less than such percentage actually
                    achieved an amount equal to the *** shall be added to ***
                    for the purposes of calculation of further consideration
                    under this sub-clause 3.4.2.

          3.4.3     in the case of sub-clauses 3.4.1 and 3.4.2 calculations of
                    ***:

                    (a)  by the Chief Financial Officer of the Guarantor based
                         upon information prepared by the Company auditors such
                         officer to issue to the Purchaser and the Warrantors a
                         certificate evidencing the same as soon as practicable
                         following 31 December in each relevant year and in any
                         event not later than 28 February next following. The
                         Purchaser and the Warrantors shall have 30 days
                         following receipt of the certificate within which to
                         notify each other in writing of any disagreement or
                         difference of opinion relating to the auditor's
                         certificate (a "***") and the provisions of sub-clauses
                         6.1.4, 6.1.5, 6.1.6 and 6.1.7 shall apply mutatis
                         mutandis save that references to "***" shall be treated
                         as references to "***" and the reference in sub-clause
                         6.1.7 to "clause 6" shall be treated as a reference to
                         "clause 3.4". Failing such notice, the parties shall be
                         deemed to have accepted the auditor's certificate as
                         final and binding; and

                    (b)  in accordance with US GAAP;

          3.4.4     Payments (if any) to be made to the Warrantors under this
                    sub-clause 3.4 shall be made (subject always to the terms of
                    clause 7.5) on the earlier of *** as the case may be, or on
                    the next following Business Day should such date not fall on
                    a Business Day; and (ii) the date 10 Business Days following
                    acceptance, deemed acceptance or determination by the
                    Independent Accountant of the certificate of the Guarantor's
                    Chief Financial Officer in accordance with sub-clause
                    3.4.3(a) above. Any such payments shall be made by the
                    Purchaser by way of electronic transfer for same day value
                    to the Vendors' Solicitors who are irrevocably authorised to
                    receive the same and whose receipt shall be an effective
                    discharge of the Purchaser's obligation to pay such sum and
                    the Purchaser shall not be concerned to see to the
                    application or be answerable for the loss or misapplication
                    by the Vendors' Solicitors of such sum. Unless otherwise
                    paid by the Purchaser on or prior to 1 February in any
                    relevant year interest shall be calculated on the amount so
                    certified by the Chief Financial Officer as being *** (and
                    not more than such amount) from such date to the date of
                    payment at the rate of 1% above the base lending rate from
                    time to time of Barclays Bank plc.

3.5       In the event of a Change of Control at any time prior to ***, the
          Vendors shall (subject always (i) in relation to payments of ***, to
          the provisos at clause 3.3 on the facts as at the date of the Change
          of Control, and (ii) to the terms of clauses 7.5 and 9) be ***.

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       14

<PAGE>

3.6       *** the Additional Revenue Related Consideration for the Shares
          pursuant to clause 3.4 is to be determined) the future conduct of the
          Business will have an effect on the *** for each of the calendar years
           *** (the "Consideration Years"). Accordingly, the Purchaser
          undertakes with each Warrantor that during the Consideration Years it
          will not *** Additional Revenue Related Consideration.

3.7       Each of the Vendors hereby: (i) confirms and acknowledges to each of
          the parties to this Agreement his agreement that the Consideration to
          be paid to him for the shares set opposite his name in column (B)
          and/or (C), as appropriate, of schedule 1 being sold pursuant to
          clause 2 above is, as between each of the Vendors, fair and
          reasonable; and (ii) irrevocably waives any and all claims which he
          may have against any party to this Agreement for a different
          allocation of the Consideration.

3.8       Where any reorganisation, amalgamation, reconstruction, merger or
          other transaction in relation to the business of either Company shall
          have (or is likely to have) the effect of making the ***, the
          Purchaser and the Warrantors agree to consult in good faith with a
          view to formulating (and shall use best endeavours to agree in good
          faith) such arrangements or treatment as shall be reasonably necessary
          to resolve such effect.

4.   WAIVERS OF PRE-EMPTION

4.1       Each of the Vendors hereby severally waives all rights of pre-emption
          or other rights over any of the Shares conferred on him either by the
          articles of association of the Company or under either Shareholders'
          Agreement or in any other way.

4.2       Each of the Vendors hereby severally agrees that as at and with effect
          from Completion each Shareholders' Agreement shall terminate without
          further liability of any party thereto without prejudice to any
          outstanding claims at Completion not being claims against either of
          the Companies. For the avoidance of doubt, each party releases each
          Company (as applicable) from all and any liability whatsoever under or
          pursuant to the Shareholders' Agreements with immediate effect from
          Completion.

5.   COMPLETION

5.1       Warrantors' obligations

          At Completion:

          5.1.1     the Warrantors shall deliver to the Purchaser each of the
                    documents listed in Part 1 of schedule 6; and

          5.1.2     the Warrantors shall procure that all necessary steps are
                    taken properly to effect the matters listed in Part 2 of
                    schedule 6 at board meetings of each Company and the
                    Subsidiary and shall deliver to the Purchaser duly signed
                    minutes of all such board meetings.

5.2       Purchaser's obligations

          Subject to the Warrantors complying with their obligations under
          sub-clause 5.1 above the Purchaser shall at Completion:

          5.2.1     pay the Provisional Consideration *** together with *** in
                    respect of its liability pursuant to clause 16.1.2 and ***
                    in respect of the repayment of loans to Atlantech

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       15

<PAGE>

                    from the directors by way of electronic transfer for same
                    day value to the Vendors' Solicitors who are irrevocably
                    authorised to receive the same and whose receipt shall be an
                    effective discharge of the Purchaser's obligation to pay
                    such sum and the Purchaser shall not be concerned to see to
                    the application or be answerable for the loss or
                    misapplication by the Vendors' Solicitors of such sum; and

          5.2.2     ***and

          5.2.3     deliver to the Warrantors a counterpart Tax Deed duly
                    executed by the Purchaser.

          Within 2 Business Days following Completion the Purchaser shall
          deliver to the Warrantors a copy of the minutes of a meeting of the
          directors of the Purchaser and Guarantor authorising the execution by
          the Purchaser and Guarantor of this Agreement, Tax Deed and any other
          documents in the agreed terms executed by the Purchaser and Guarantor
          (such copy minutes being certified as correct by the secretary of the
          Purchaser and Guarantor).

5.3       Company records

          Forthwith following Completion each Warrantor severally shall, and
          shall procure that any other Vendor shall, without delay send to the
          Purchaser at its registered office for the time being, all records,
          correspondence, documents, files, memoranda and other papers relating
          to the Companies and each of the Subsidiaries or the Business which
          are in their possession or control and not kept at any of the
          Properties, save for those required for the purpose of preparing the
          Completion Accounts which shall be sent to the Purchaser with the
          Completion Accounts in accordance with clause 6.1.1.

6.   COMPLETION ACCOUNTS

6.1       Preparation of Completion Accounts

          6.1.1     Prior to or on 30 November 2002, the Warrantors shall
                    procure that the Vendors' Accountants shall provide to the
                    Purchaser and the Purchasers' Accountants the Completion
                    Accounts together with all relevant schedules and relevant
                    information and working papers supporting the balances in
                    the individual Company accounts as set out in the Completion
                    Accounts. Prior to or on 1 February 2003, the Chief
                    Financial Officer of the Guarantor shall prepare and issue
                    to the Warrantors a certificate, evidencing and based upon
                    the review carried out by the Purchaser's Accountants,
                    setting out a closing balance sheet audit of the Completion
                    Accounts (the "Audited Completion Accounts"). The Warrantors
                    shall cooperate with and provide (or otherwise procure) all
                    information and documents reasonably requested by the said
                    officer and/or Purchaser's Accountants in connection with
                    the preparation of the Audited Completion Accounts. ***

          6.1.2     The Completion Accounts shall consist of a balance sheet for
                    each Company as at the close of business on the date of
                    Completion and shall be prepared in accordance with the form
                    and principles set out in schedule 5.

          6.1.3     The Warrantors shall have 30 Business Days after receipt of
                    the Audited Completion Accounts pursuant to sub-clause 6.1.1
                    within which to notify the Purchaser in writing of their
                    agreement or any disagreement or difference of opinion
                    relating to the Audited Completion Accounts. Failing any
                    such notice, the parties shall be deemed

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       16

<PAGE>

                    to have accepted such accounts as accurate and such accounts
                    shall be deemed final and binding.

          6.1.4     If within the period of 30 Business Days referred to in
                    sub-clause 6.1.3 above the Warrantors notify the Purchaser
                    of any disagreement or difference of opinion relating to the
                    Audited Completion Accounts ("Notice of Disagreement") and
                    if the parties are able to resolve such disagreement or
                    difference of opinion within 10 Business Days of the Notice
                    of Disagreement, the parties shall be deemed to have
                    accepted such accounts (as agreed) as accurate.

          6.1.5     If the Purchaser and Warrantors are unable to reach
                    agreement within 10 Business Days of the Notice of
                    Disagreement, the matter in dispute shall be referred to an
                    independent chartered accountant (the "Independent
                    Accountant") to be appointed (in default of nomination by
                    agreement between the Warrantors and the Purchaser within 15
                    Business Days of the date of the Notice of Disagreement) by
                    the President for the time being of the Institute of
                    Chartered Accountants in England and Wales.

          6.1.6     The Independent Accountant shall act as an expert and not as
                    an arbitrator, the Arbitration Act 1996 shall not apply and
                    his decision shall (in the absence of manifest error) be
                    final and binding on the Vendors and the Purchaser for all
                    the purposes of this Agreement. The costs of the Independent
                    Accountant shall be apportioned between the Vendors and the
                    Purchaser as the Independent Accountant shall decide but
                    each party shall be responsible for its own costs of
                    presenting its case to the Independent Accountant.

          6.1.7     Each of the Warrantors and the Purchaser shall, and shall
                    direct that their respective advisors shall, give all
                    assistance and access to all additional information to each
                    other that they may reasonably require to assist them to
                    make decisions and resolve any disputes under this clause 6
                    expeditiously.

6.2       Adjustment of Provisional Consideration

          The Provisional Consideration shall be adjusted after Completion in
          accordance with the following provisions of this sub-clause 6.2.

          6.2.1     ***

          6.2.2     Any amounts to be paid under sub-clause 6.2.1 shall:

                    (a)  be paid within 15 Business Days after the date on which
                         the Audited Completion Accounts have been agreed or
                         settled (whether under sub-clause 6.1.3 or 6.1.4 or by
                         virtue of a decision of the Independent Accountant or
                         otherwise) together with interest on the amount to be
                         paid calculated at the rate of *** from 1 February 2003
                         until the date of actual payment; and

                    (b)  be made to the Vendors' Solicitors or the Purchaser's
                         Solicitors (as the case may be) who are irrevocably
                         authorised to receive the same and whose receipt shall
                         be an effective discharge of the Vendor's or
                         Purchaser's obligation to pay such sum and the Vendors
                         or Purchaser (as the case may be) shall not be
                         concerned to see to the application or be answerable
                         for the loss or misapplication of such sums by the
                         Vendors' Solicitors or the Purchaser's Solicitors, as
                         the case may be.

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       17

<PAGE>

7.   WARRANTIES

7.1       Extent of Warranties

          In consideration of the Purchaser agreeing to purchase the Shares on
          the terms contained in this Agreement, each of the Warrantors hereby
          in relation to each of (a) the Companies and (b) the Subsidiary and
          Atlantech Italia Srl, jointly and severally warrants and undertakes to
          the Purchaser in the terms set out in Schedule 3 and Schedule 9
          respectively.

7.2       Obligation to make enquiries

          Where any of the Warranties is made or given "so far as the Warrantors
          are aware", such Warranty shall be deemed to be given to the best of
          the knowledge, information and belief of each of Nicholas Woods, Clive
          Reay-Young, Jennifer Garman and, in relation to Atlantech UK only,
          Simon Mifsud.

7.3       Information supplied by the Companies and Subsidiaries

          Any information supplied by or on behalf of any of the Companies or on
          behalf of any of the Subsidiaries (or by any officer, employee or
          agent of any of them) to the Warrantors or their advisers in
          connection with the Warranties, the Indemnities or the Tax Deed or the
          information Disclosed in the Disclosure Documents shall not constitute
          a warranty, representation or guarantee as to the accuracy of such
          information in favour of the Warrantors and each of the Warrantors
          hereby undertake to the Purchaser to waive irrevocably any and all
          claims which it might otherwise have against the Companies or any of
          the Subsidiaries or against any officer, employee or agent of any of
          them in respect of such claims other than in the case of fraud.

7.4       Separate and independent warranties

          Each of the Warranties set out in the separate paragraphs of schedule
          3 shall be separate and independent and save as expressly otherwise
          provided shall not be limited by reference to any other such Warranty
          or by anything in this Agreement, the Disclosure Documents or the Tax
          Deed.

7.5       Set-off by Purchaser

          7.5.1     The Purchaser shall (without prejudice to its other rights
                    hereunder) be entitled in its discretion to set off against
                    any amount otherwise due and payable to each Warrantor under
                    any of the provisions of clauses 3.3, 3.4 or 6.2 any amount
                    due by such Warrantor to the Purchaser (a) under clause 6.2
                    or clause 9 of this Agreement; (b) under the Tax Deed;
                    and/or (c) pursuant to a Claim in respect of (i) any
                    liability which has been finally determined in accordance
                    with sub-clause 7.5.2 below, and/or (ii) any applicable
                    Contingent Claim Amount provided that the Purchaser has
                    provided the Warrantor with an opinion of counsel of at
                    least 10 years' call that, were such Claim to be the subject
                    of judicial proceedings, the Purchaser would have a
                    reasonable prospect of success in respect thereof. The
                    Purchaser agrees that where it determines to exercise its
                    rights of set-off under this sub-clause 7.5 it shall (save
                    in respect of any sum due to the Purchaser under the Tax
                    Deed or clause 6.2 of this Agreement and without prejudice
                    to its right (as set out above) to set off against any
                    payment due to the Warrantor under sub-clause 6.2) first
                    apply such rights against payment of consideration otherwise
                    due to the Warrantor pursuant to sub-clauses 3.3.3, 3.3.2
                    and 3.3.1 respectively and in such order of priority.

                                       18

<PAGE>

          7.5.2     For the purposes of sub-clause 7.5.1 a liability of a
                    Warrantor shall be deemed to be finally determined when
                    either (i) judgement has been given by a court of competent
                    jurisdiction and the time limit for appeal has expired, or
                    (ii) final appellate judgement has been given with no
                    further right of appeal or (iii) the claim has been settled
                    by agreement in writing between the Purchaser and the
                    (including, in relation to any payment due by the Warrantor
                    to the Purchaser under sub-clause 6.2.1. as determined
                    pursuant to sub-clause 6.1.3, 6.1.4 or by virtue of a
                    decision of the Independent Accountant).

          7.5.3     If a claim in respect of which the Purchaser has set off a
                    Contingent Claim Amount is finally determined in accordance
                    with sub-clause 7.5.2 for a lesser amount than the
                    Contingent Claim Amount, the balance of the Contingent Claim
                    Amount in excess of the amount payable as finally determined
                    shall be paid within 5 Business Days to the relevant
                    Warrantor.

7.6       Reliance

          The Purchaser has entered into this Agreement upon the basis of and in
          reliance upon the Warranties and the Indemnities.

7.7       Payments by Warrantors

          Any payment made by the Warrantors in respect of a breach of any
          Warranties or payment made under the Indemnities or the Tax Deed, or
          any other payment made pursuant to this Agreement, shall be and shall
          be deemed to be pro tanto a reduction in the price paid for the Shares
          under this Agreement.

7.8       Minority Vendor Warranties

          7.8.1     Each of the Minority Vendors severally warrants and
                    undertakes to the Purchaser that:

                    (a)  he or she has full power to enter into and perform this
                         Agreement and this Agreement constitutes binding
                         obligations on him/her in accordance with its terms;

                    (b)  there is no Encumbrance or any form of agreement
                         (including conversion rights and rights of pre-emption)
                         on, over or affecting the Shares held by him/her and
                         there is no agreement or commitment to give or create
                         any of the foregoing. No claim has been made by any
                         person to be entitled to any of the foregoing; and

                    (c)  he/she is entitled to sell and transfer the Shares held
                         by him/her to the Purchaser with full title guarantee
                         and otherwise on the terms set out in this Agreement.

          7.8.2     ***

          7.8.3     ***

7.9       The only warranties (including the Warranties) given in relation to
          intellectual property, real property, information technology and
          telecommunications, and environmental matters are

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       19

<PAGE>

          those warranties contained in paragraphs 18, 8, 19 and 9 respectively
          of part 1 of schedule 3 and no other warranties (including the
          Warranties) shall be given in relation to the same.

7.10      Purchaser's and Guarantor's warranties

          The Purchaser and the Guarantor each severally warrant to each Vendor
          that it has full power and capacity to enter into and perform this
          Agreement, the Tax Deed and each of the documents in the agreed terms
          to which it is a party and this Agreement constitutes, and the Tax
          Deed and each other document in agreed terms to which it is a party
          when executed will constitute binding obligations on it in accordance
          with their terms.

8.   LIMITATION OF WARRANTORS' LIABILITY

8.1       Limitations on liability

          The liability of the Warrantors:

          8.1.1     in respect of any claim under the Warranties shall be
                    limited as provided in schedule 8

          but so that the limitations on the liability of the Warrantors under
          this sub-clause 8.1 and schedule 8 shall not apply in relation to the
          Warranties set out in paragraphs 1.2 and 2.4.1 of schedule 3.

8.2       Exclusions from clause 8

          Notwithstanding any other provision of this Agreement, the provisions
          of this clause 8 and schedule 8 shall not apply to any claim:

          8.2.1     made against the Warrantors in the case of any fraud,
                    dishonesty, wilful misstatement or wilful omission by or on
                    behalf of the Warrantors provided that the Warrantors shall
                    be solely responsible for their own fraudulent, dishonest
                    acts or omissions or wilful misstatements or omissions; or

          8.2.2     made under the Indemnities, other than paragraphs 6.3 and
                    6.5 of part 2 of schedule 8 which shall apply thereto.

8.3       The parties agree that rescission shall not be available as a remedy
          for any breach of this Agreement and agree not to claim this remedy.

9.   INDEMNITY

9.1       The Warrantors undertake to indemnify and keep the Purchaser
          indemnified (contracting for itself and as trustee for its officers,
          directors, agents and employees) from and against and in respect of
          *** which may be suffered or incurred by the Purchaser or the
          Companies PROVIDED THAT in the event that *** is less than *** add
          such amount to the Additional Consideration Payment due on such date.
          Without prejudice to the Warrantors' obligation under this indemnity,
          the Purchaser agrees that any amount due and payable hereunder from
          the Warrantors to the Purchaser shall first (to the full extent
          possible) be set off and deducted from any amount payable to the
          Warrantors under sub-clauses 3.3.3, 3.3.2 and 3.3.1 and in such order
          of priority.

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       20

<PAGE>

9.2       Any amount payable under the provisions of clause 9.1 shall be made to
          the Vendors' Solicitors or the Purchaser's Solicitors (as the case may
          be) who are irrevocably authorised to receive the same and whose
          receipt shall be an effective discharge of the Vendor's or Purchaser's
          obligation to pay such sum and the Vendors or Purchaser (as the case
          may be) shall not be concerned to see to the application or be
          answerable for the loss or misapplication of such sums.

9.3       For the purpose of clause 9.1 the ***.

9.4       For the avoidance of doubt, the provisions of clause 8 and schedule 8
          shall not apply to this clause 9, other than paragraphs 6.3 and 6.5 of
          part 2 of schedule 8, which shall apply.

9.5       The Purchaser agrees and undertakes to the Warrantors to *** and
          further agrees in good faith to ***.

10.  PROTECTION OF GOODWILL

10.1      Covenants

          As further consideration for the Purchaser agreeing to purchase the
          Shares on the terms contained in this Agreement and with the intent of
          assuring to the Purchaser the full benefit and value of the goodwill
          and connections of the Group and as a constituent part of the sale of
          the Shares, each of Nicholas Woods, Clive Reay-Young, Jennifer Garman
          and Simon Mifsud (the "Covenantors") hereby undertake to the Purchaser
          (contracting for itself and on behalf of each Company and of each of
          the Subsidiaries) that (except whilst an employee of the Group acting
          in that capacity or with the written consent of the Purchaser) they
          shall not whether on their own behalf or with or on behalf of any
          person and whether directly or indirectly by any person or business
          controlled by them or any Connected Person:

          10.1.1    in the period from Completion to the date falling three
                    years after Completion, carry on or be employed, engaged,
                    concerned, interested or in any way assist within the United
                    Kingdom in any business which may in any way be in
                    competition with all or part of the Business provided that
                    nothing in this sub-clause 10.1.1 shall prevent the
                    Covenantors from holding for investment purposes only any
                    units of an authorised unit trust and/or not more than five
                    (5) per cent. of any class of the issued share or loan
                    capital of any company quoted on a recognised investment
                    exchange (as defined in the Financial Services and Markets
                    Act 2000);

          10.1.2    in the period from Completion to the date falling three
                    years after Completion, canvass, solicit or approach or
                    cause to be canvassed, solicited or approached (in relation
                    to a business which may in any way compete with all or part
                    of the Business) the custom of any person who at any time
                    during the 12 months preceding Completion shall have been a
                    client or customer of the Company or of any of the
                    Subsidiaries;

          10.1.3    in the period from Completion to the date falling three
                    years after Completion, interfere or seek to interfere or
                    take such steps as may interfere with supplies to the
                    Company and/or any of the Subsidiaries from any suppliers
                    who shall have been supplying goods or services to the
                    Company or to any of the Subsidiaries for use in connection
                    with the Business at any time during the period of 12 months
                    prior to the date of Completion;

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       21

<PAGE>

          10.1.4    in the period from Completion to the date falling three
                    years after Completion, offer employment to or employ or
                    offer to conclude any contract of services with senior
                    employees of the Company or of any of the Subsidiaries
                    employed in the capacity of director or manager of any
                    technical, IT, financial, sales, marketing, business
                    development or other managerial role with a view to using
                    the knowledge or skills of such person in connection with
                    any business which is intended to be competitive with the
                    Business or procure or facilitate the making of such an
                    offer by any person, firm or company or entice or endeavour
                    to entice any such employees of the Company or of any of the
                    Subsidiaries to terminate their employment with the Company
                    or any of the Subsidiaries;

          10.1.5    at any time after Completion use as a trade or business name
                    or mark or carry on a business under a title containing the
                    word "Atlantech" or any other word(s) which is deliberately
                    calculated to resemble the same; or

          10.1.6    at any time after Completion disclose to any person
                    whatsoever or use to the detriment of the Company or any
                    Subsidiary or otherwise make use of, or through any failure
                    to exercise all due care and diligence cause any
                    unauthorised use of, any Confidential Information including
                    Know-How relating or belonging to the Company or to any of
                    the Subsidiaries or in respect of which the Company or any
                    of the Subsidiaries is bound by an obligation of confidence
                    to a third party save as required by law or by any court of
                    competent jurisdiction.

          Each undertaking contained in this sub-clause 10.1 shall be read and
          construed independently of the other undertakings herein as an
          entirely separate and severable undertaking.

10.2      Severability of covenants

          Whilst the undertakings in sub-clause 10.1 are considered by the
          parties to be reasonable in all the circumstances, if any one or more
          should for any reason be held to be invalid but would have been held
          to be valid if part of the wording thereof was deleted or the period
          thereof reduced or the range of activities or area covered thereby
          reduced in scope, the said undertakings shall apply with the minimum
          modifications necessary to make them valid and effective.

10.3      Information in the public domain

          The restriction contained in sub-clause 10.1.6 shall not extend to any
          confidential or secret information which may come into the public
          domain otherwise than through the default of the Warrantors.

11.  ANNOUNCEMENTS

11.1      Restrictions on announcements

          Each Vendor severally agrees that no press conference, announcement or
          other communication concerning Confidential Information or the
          transactions referred to in this Agreement, or in connection with the
          Group or otherwise relating to the financial condition or trading or
          financial prospects of the Group, shall be made or despatched by such
          Vendor or his agents, employees or advisers to any third party without
          the prior written consent of the Purchaser save as may be required by
          any:

          11.1.1    law; or

          11.1.2    existing contractual arrangements;

                                       22

<PAGE>

          provided such communication shall be made only after consultation with
          the Purchaser.

11.2      Time limit

          The restrictions contained in this clause 11 shall continue to apply
          after Completion without limit in time.

12.  FURTHER ASSURANCE

          The Warrantors shall, from time to time on being required to do so by
          the Purchaser, now or at any time in the future, do or procure the
          doing of all such acts and/or execute or procure the execution of all
          such documents in a form satisfactory to the Purchaser as the
          Purchaser may reasonably consider necessary for giving full effect to
          this Agreement and securing to the Purchaser the full benefit of the
          rights, powers and remedies conferred upon the Purchaser in this
          Agreement.

13.  ASSIGNMENT

13.1      Limited assignment

          No party may assign the benefit of this Agreement whether absolutely
          or by way of security except (in the case of the Purchaser only) by
          way of an absolute assignment to an Affiliate, provided always that
          (a) such assignee executes a deed of adherence to this Agreement in a
          form reasonably satisfactory to the Warrantors, (b) if such assignee
          ceases to be an Affiliate of the Purchaser it shall forthwith execute
          an assignment to an Affiliate of the Purchaser and (c) the Vendors'
          liabilities under this Agreement are not thereby increased; save that
          a party may assign such benefit absolutely or by way of security to a
          person (other than to an Affiliate of the Purchaser as aforesaid) with
          the prior consent in writing of the other parties, such consent not to
          be unreasonably withheld or delayed and any purported assignment in
          contravention of this clause shall be ineffective.

13.2      Successors in title

          Subject to sub-clause 13.1, this Agreement shall be binding upon and
          enure for the benefit of the personal representatives and assigns and
          successors in title of each of the parties and references to the
          parties shall be construed accordingly.

14.  ENTIRE AGREEMENT: REMEDIES

14.1      Entire agreement

          This Agreement and the documents referred to herein as being in the
          agreed terms constitutes the whole and only agreement between the
          parties relating to the subject matter hereof and supersedes and
          extinguishes any prior drafts, previous agreements, undertakings,
          representations, warranties and arrangements of any nature whatsoever,
          whether or not in writing between the parties, in connection with the
          subject matter hereof.

14.2      Remedies

          The rights of any party under this Agreement are, except where
          otherwise stated, independent, cumulative and without prejudice to all
          other rights available to it whether as a matter of common law,
          statute, custom or otherwise.

                                       23

<PAGE>

14.3      Non-exclusion of fraud

          Nothing in this Agreement, the Tax Deed or in any other document
          referred to herein shall be read or construed as excluding any
          liability or remedy as a result of fraud.

15.  WAIVER, VARIATION AND RELEASE

15.1      No waiver by omission, delay or partial exercise

          No omission to exercise or delay in exercising on the part of any
          party to this Agreement any right, power or remedy provided by law or
          under this Agreement shall constitute a waiver of such right, power or
          remedy or any other right, power or remedy or impair such right, power
          or remedy. No single or partial exercise of any such right, power or
          remedy shall preclude or impair any other or further exercise thereof
          or the exercise of any other right, power or remedy provided by law or
          under this Agreement.

15.2      Specific waivers to be in writing

          Any waiver of any right, power or remedy under this Agreement must be
          in writing and may be given subject to any conditions thought fit by
          the grantor. Unless otherwise expressly stated, any waiver shall be
          effective only in the instance and only for the purpose for which it
          is given.

15.3      Variations to be in writing

          No variation to this Agreement shall be of any effect unless it is
          agreed in writing and signed by or on behalf of each party.

16.  COSTS AND EXPENSES

16.1      Payment of costs

          16.1.1    Subject to clause 16.1.2 and save as otherwise stated in
                    this Agreement, each party shall pay its own costs and
                    expenses in relation to the negotiation, preparation,
                    execution and carrying into effect of this Agreement and
                    other agreements forming part of the transaction.

          16.1.2    The Purchaser shall, upon delivery of copy invoices to
                    demonstrate the amount of fees incurred by the Warrantors in
                    connection with the transaction contemplated by this
                    Agreement,***.

16.2      Company and Subsidiaries to pay no costs

          For the avoidance of doubt, neither the Company nor any of the
          Subsidiaries shall pay any legal or other professional charges and
          expenses in connection with any investigation of the affairs of the
          Group or the negotiation, preparation, execution and carrying into
          effect of this Agreement.

17.  PAYMENTS

          Save as envisaged in clause 7.5, all payments to be made under this
          Agreement shall be made in full without any set-off or counterclaim
          and free from any deduction or withholding save as

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       24

<PAGE>

          may be required by law in which event such deduction or withholding
          shall not exceed the minimum amount which it is required by law to
          deduct or withhold and the payer will simultaneously pay to the payee
          such additional amounts as will result in the receipt by the payee of
          a net amount equal to the full amount which would otherwise have been
          receivable had no such deduction or withholding been required save
          that in the case of a payment by a Warrantor or Vendor in respect of a
          Claim any such deduction or withholding shall be treated as having
          already been taken into account in the quantification of damages
          pursuant to such Claim and provided always that in any event each
          Warrantor's and each Vendor's liability in respect of this clause,
          when aggregated with all other payments made by that Warrantor or
          Vendor under this Agreement and the Tax Deed, will not exceed the
          amount of Provisional Consideration received by him/her as set out
          opposite his/her name in column (E) of schedule 1.

18.  NOTICES

18.1      Form of notices

          Any communication to be given in connection with the matters
          contemplated by this Agreement shall except where expressly provided
          otherwise be in writing and shall either be delivered by courier post
          or facsimile transmission.

18.2      Address and facsimile

          Such communication shall be sent to the address of the relevant party
          referred to in this Agreement or the facsimile number set out below or
          to such other address or facsimile number as may previously have been
          communicated to the other party in accordance with this clause. Each
          communication shall be marked for the attention of the relevant
          person.

          (a)  Vendors /Warrantors- facsimile number ***. For the attention of
               Nicholas Woods (copied to DLA on facsimile number *** for the
               attention of David Glover).

          (b)  Purchaser - facsimile number 001 408 530 9143. For the attention
               of the General Counsel.

          (c)  Guarantor - facsimile number 001 408 530 9143. For the attention
               of the General Counsel.

          And in the case of each of (b) and (c) above, copies to Latham &
          Watkins, attention Mike Hall of facsimile number 001 650 463 2600.

18.3      Deemed time of service

          A communication shall be deemed to have been served:

          18.3.1    if delivered by courier at the address referred to in
                    sub-clause 18.2, at the time of delivery; and

          18.3.2    if sent by facsimile to the number referred to in sub-clause
                    18.2, at the time of completion of transmission by the
                    sender.

          If a communication would otherwise be deemed to have been delivered
          outside normal business hours (being 9:30 a.m. to 5:30 p.m. on a
          Business Day) in the time zone of the
___________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       25

<PAGE>

          territory of the recipient under the preceding provisions of this
          clause, it shall be deemed to have been delivered at the next opening
          of such business hours in the territory of the recipient.

18.4      Proof of service

          In proving service of the communication, it shall be sufficient to
          show that delivery by courier was made or that the facsimile was
          despatched and a confirmatory transmission report received.

18.5      Change of details

          A party may notify the other parties to this Agreement of a change to
          its name, relevant person, address or facsimile number for the
          purposes of sub-clause 18.1 provided that such notification shall only
          be effective on:

          18.5.1    the date specified in the notification as the date on which
                    the change is to take place; or

          18.5.2    if no date is specified or the date specified is less than
                    five clear Business Days after the date on which notice is
                    deemed to have been served, the date falling five clear
                    Business Days after notice of any such change is deemed to
                    have been given.

18.6      Non-applicability to Proceedings

          For the avoidance of doubt, the parties agree that the provisions of
          this clause 18 shall not apply in relation to the service of any writ,
          summons, order, judgment or other document relating to or in
          connection with any Proceedings.

19.  COUNTERPARTS

19.1      Execution in counterparts

          This Agreement may be executed in any number of counterparts and by
          the parties on different counterparts, but shall not be effective
          until each party has executed at least one counterpart.

19.2      One agreement

          Each counterpart shall constitute an original of this Agreement but
          all the counterparts shall together constitute one and the same
          agreement.

20.  INVALIDITY

          Each of the provisions of this Agreement is severable. If any such
          provision is or becomes illegal, invalid or unenforceable in any
          respect under the law of any jurisdiction, the legality, validity or
          enforceability in that jurisdiction of the remaining provisions of
          this Agreement shall not in any way be affected or impaired thereby.

21.  AGREEMENT TO CONTINUE IN FULL FORCE AND EFFECT

          This Agreement together with the Tax Deed shall, to the extent that it
          remains to be performed, continue in full force and effect
          notwithstanding Completion.

22.  CONFIDENTIALITY

22.1      Prohibition on disclosure

                                       26

<PAGE>

          The Warrantors each hereby undertake with the Purchaser that they
          shall both during and after the term of this Agreement preserve the
          confidentiality of, and not directly or indirectly reveal, report,
          publish, disclose or transfer or use for their own or any other
          purposes Confidential Information except:

          22.1.1    in the circumstances set out in sub-clause 22.2 below;

          22.1.2    to the extent otherwise expressly permitted by this
                    Agreement; or

          22.1.3    with the prior consent in writing of the party to whose
                    affairs such Confidential Information relates.

22.2      Permitted disclosures

          The circumstances referred to in sub-clause 22.1.1 above are:

          22.2.1    where the Confidential Information, before it is furnished
                    to the Warrantors, is in the public domain;

          22.2.2    where the Confidential Information, after it is furnished to
                    the Warrantors, enters the public domain otherwise than as a
                    result of (i) a breach by the Warrantors of their
                    obligations in this clause 22 or (ii) a breach by the person
                    who disclosed that Confidential Information of a
                    confidentiality obligation and the Warrantors are aware of
                    such breach;

          22.2.3    if and to the extent the Warrantors makes disclosure of the
                    Confidential Information to any person in compliance with
                    any requirement of law provided that any such information
                    disclosable shall be disclosed only to the extent required
                    by law and only after consultation with the Purchaser.

22.3      No time limit

          The restrictions contained in this clause shall continue to apply
          after Completion without limit in time.

22.4      The Purchaser agrees and undertakes that, in so far as it is able
          under law, it shall, in circumstances where public disclosure of this
          Agreement is required under regulation, endeavour to limit any
          disclosure of and keep confidential provisions of this Agreement
          relating to ***.

23.  GUARANTEE

23.1      In consideration of the Vendors' obligations under this Agreement, the
          Guarantor unconditionally and irrevocably guarantees to the Vendors
          the due and punctual performance by the Purchaser of the Purchaser's
          obligations under or pursuant to this agreement and the Tax Deed
          ("Guaranteed Obligations") and agrees to indemnify the Vendors against
          all losses, damages, costs and expenses (including reasonable legal
          costs and expenses) which the Vendors may suffer or incur arising
          directly from any breach by the Purchaser of the Guaranteed
          Obligations.

23.2      The Guarantor shall not in any way or to any extent be released from
          its obligations under this agreement by reason of any time or other
          indulgence, waiver, release or discharge granted by

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       27

<PAGE>

          the Vendors to the Purchaser or to any third party or by the
          acceptance of any composition from or the making of any arrangement
          with the Purchaser or any third party or any circumstances or any
          provision or rule of law, whether statutory or otherwise, affecting or
          preventing recovery from the Purchaser of any sum due or rendering any
          debt, obligation or liability of the Purchaser void or unenforceable
          and which but for this provision might operate to exonerate or
          discharge the Guarantor from its obligations to the Vendors under this
          agreement and/or the Tax Deed, and this guarantee shall continue in
          force until the Purchaser or the Guarantor on its behalf shall have
          fully performed and discharged all the Guaranteed Obligations. Any
          settlement or discharge between the Vendors and the Purchaser shall be
          subject to the condition that no security or payment to the Vendors by
          the Purchaser or any third party shall be avoided or reduced by virtue
          of any provision or enactment relating to bankruptcy, insolvency or
          liquidation for the time being and from time to time in force.

23.3      Without prejudice to the rights of the Vendors against the Purchaser
          as principal debtor, the Guarantor shall as between the Vendors and
          the Guarantor be deemed principal debtor in respect of the Guaranteed
          Obligations and not merely a surety and accordingly it shall not be
          necessary for the Vendors before seeking to enforce this guarantee to
          seek to enforce any security or lien they may hold from the Purchaser
          or any third party or otherwise to take any steps or proceedings
          against the Purchaser.

24.  GOVERNING LAW AND JURISDICTION

24.1      English law

          This Agreement shall be governed by and construed in accordance with
          English law.

24.2      Courts of England and Wales

          24.2.1    The parties to this Agreement irrevocably agree that the
                    courts of England shall have non-exclusive jurisdiction to
                    settle any dispute which may arise out of or in connection
                    with this Agreement and that accordingly any Proceedings may
                    be brought in such courts.

          24.2.2    The submission to the jurisdiction of the English courts
                    referred to in clause 24.2.1 above shall not (and shall not
                    be construed so as to) limit the right of any party to take
                    any action or proceedings which may arise out of or in
                    connection with this Agreement in any other court of
                    competent jurisdiction (including without limitation in the
                    United Sates of America) nor shall the taking of proceedings
                    in the English courts preclude the taking of any such action
                    or proceedings in any other court of competent jurisdiction
                    (whether concurrently or not) if and to the extent permitted
                    by applicable law.

24.3      The Purchaser and the Guarantor hereby appoint Latham & Watkins (Attn:
          Michael Bond) of 99 Bishopsgate, London EC2M 3XF to accept service on
          their behalf of any proceedings which may be commenced pursuant to
          this clause in the courts of England.

24.4      Each of the parties hereby irrevocably waives any objection which they
          might now or hereafter have to the courts referred to in this clause
          24 being nominated as the forum to hear and determine any proceedings
          and to settle any disputes and agree not to claim that any such court
          is not a convenient or appropriate forum.

24.5      A person who is not a party to this Agreement shall have no right
          under the Contracts (Right of Third Parties) Act 1999 to enforce any
          of its terms.

                                       28

<PAGE>

          EXECUTED AS A DEED by the hands of the parties or their duly
          authorised representatives on the date first appearing at the head of
          this Agreement.

                                       29

<PAGE>

                                   SCHEDULE 1

                                   THE VENDORS
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
            (A)                     (B)              (C)            (D)              (E)             (F)             (G)

           VENDOR                   ***              ***            ***           Provisional        ***             ***
                                                                                 Consideration
                                                                                    [Pound]
-----------------------------------------------------------------------------------------------------------------------------
<S>                           <C>              <C>              <C>           <C>                 <C>           <C>
***                           ***              ***              ***           ***                 ***           ***
-----------------------------------------------------------------------------------------------------------------------------
***                           ***              ***              ***           ***                 ***           ***
-----------------------------------------------------------------------------------------------------------------------------
***                           ***              ***              ***           ***                 ***           ***
-----------------------------------------------------------------------------------------------------------------------------
Mrs. J. Garman                ***              ***              ***           ***                 ***           ***
***
-----------------------------------------------------------------------------------------------------------------------------
***                           ***              ***              ***           ***                 ***           ***
-----------------------------------------------------------------------------------------------------------------------------
***                           ***              ***              ***           ***                 ***           ***
-----------------------------------------------------------------------------------------------------------------------------
Mr. CB Reay-Young             ***              ***              ***           ***                 ***           ***
***
-----------------------------------------------------------------------------------------------------------------------------
Nicholas Woods                ***              ***              ***           ***                 ***           ***
***
-----------------------------------------------------------------------------------------------------------------------------
Simon Mifsud                  ***              ***              ***           ***                 ***           ***
***
-----------------------------------------------------------------------------------------------------------------------------
***                           ***              ***              ***           ***                 ***           ***
-----------------------------------------------------------------------------------------------------------------------------
                              ***              ***              ***           ***
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       30

<PAGE>

                                   SCHEDULE 2

                                  THE COMPANIES

A.  ATLANTECH MEDICAL DEVICES LIMITED

Registered Number:                        3071270

Registered Office:                        Atlantech House, Freemans Way,
                                          Harrogate Business Park, Harrogate,
                                          North Yorkshire HG3 1DH

Date and place of incorporation:          22 June 1995, UK

Secretary:                                Jennifer Maureen Garman

VAT Number:                               664743216

Tax District and Reference Number:        318/A624 Harrogate

Accounting Reference Date:                31 December

Auditors:                                 Brown Butler, Yorkshire Bank Chambers,
                                          Infirmary Street, Leeds LS1 2JT

Solicitors:                               DLA,   Victoria   Square   House,
                                          Victoria Square,
                                          Birmingham B2 4DL

Authorised Share Capital:                 (pound)50,000

Issued and fully paid-up Share Capital:   (pound)19,899 consisting of 15,678
                                          ordinary "A" shares of (pound)1 each
                                          and 4,221 ordinary "B" shares of
                                          (pound)1 each

Loan Capital:                             None

Directors:                                Jennifer Garman
                                          ***

                                          Clive Reay-Young
                                          ***

                                          Nicholas Woods
                                          ***

*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       31

<PAGE>

B.  ATLANTECH MEDICAL DEVICES (UK) LIMITED

Registered Number:                        3156447

Registered Office:                        Atlantech House, Freemans Way,
                                          Harrogate Business Park, Harrogate,
                                          North Yorkshire HG3 1DH
Date and place of incorporation:          1 February 1996, UK

Secretary:                                Jennifer Maureen Garman

VAT Number:                               664813713

Tax District and Reference Number:        318/A648 Harrogate

Accounting Reference Date:                30 September

Auditors:                                 Brown Butler, Yorkshire Bank Chambers,
                                          Infirmary Street, Leeds LS1 2JT

Solicitors:                               DLA, Victoria Square House, Victoria
                                          Square,Birmingham B2 4DL

Authorised Share Capital:                 (pound)200

Issued and fully paid-up Share Capital:   (pound)160 consisting of 160 ordinary
                                          shares of (pound)1 each

Loan Capital:                             None

Directors:                                Jennifer Garman
                                          ***

                                          Simon Mifsud
                                          ***

                                          Clive Reay-Young
                                          ***

                                          Nicholas Woods
                                          ***

                                 THE SUBSIDIARY

A.  Atlantech Medical Devices, (USA) Inc.

    Registered Number: P01000052983 Registered office: c/o James Schneider,
    Atlas Pearlman, P.A., 350 East Las Olas Boulevard, Suite 1700, Fort
    Lauderdale, Florida 33301

    Date and place of incorporation: Florida, 29 May 2001

    Authorised share capital: $100 (divided into 100,000 shares of $0.001 each).

    Issued and fully paid-up share capital: $100

    Directors: Nicholas Woods, Jennifer Garman and Clive Reay-Young

***Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       32

<PAGE>

                            THE ASSOCIATED COMPANIES

A.  Atlantech Italia Srl

    Registered number: 03207310966

    Registered office: Via L. Manara, 4, 20059 Vimercate (MI), Italy

    Date and place of incorporation: Monza, Milan on 26 July 2002

    ***

    ***

    Directors: Dr Pier Alfeo Zanotti Cavazzoni (sole director)

B.  Atlantech Medizinsche Produckte GmbH

    Registered number: FN 182571

    Registered office: Kaufmannstrasse 16, 6020 Innsbruck

    Date and place of incorporation: Innsbruck, 3 May 1999

    ***

    Directors:  Gunter Ruhr, Clive Reay-Young

                                   INVESTMENTS

A.  ***

B.  ***

__________
***Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       33

<PAGE>

                                   SCHEDULE 3

                                 THE WARRANTIES

          Note that under clause 1.10 references in this schedule 3 to the
          Company shall be deemed to apply to each of the Companies and each of
          them severally.

                                     PART 1

                               GENERAL WARRANTIES

1.        Preliminary

1.1       Information

          The facts set out in the recitals and schedules 1, 2 and 4 and all
          information contained in the Disclosure Documents are true and
          accurate and not misleading. There is no fact or matter which has not
          been disclosed which renders any such information untrue, inaccurate
          or misleading in any material respect.

1.2       Power to contract

          Each Warrantor has full power to enter into and perform this Agreement
          and the Tax Deed respectively and this Agreement constitutes, and the
          Tax Deed when executed will constitute, binding obligations on each
          Warrantor in accordance with their terms.

2.        The Company

2.1       Memorandum and articles of association

          The copy of the memorandum and articles of association of the Company
          which is comprised in the Disclosure Documents is true and complete in
          all respects and has embodied in it or annexed to it a copy of every
          such resolution and agreement as is referred to in section 380(4), CA
          85 and the Company has at all times carried on its business and
          affairs in all material respects in accordance with its memorandum and
          articles of association and all such resolutions and agreements.

2.2       Statutory returns

          The Company has complied in all material respects with the provisions
          of the Companies Acts and all returns, particulars, resolutions and
          other documents required to be filed with or delivered to the
          Registrar of Companies or to any other applicable regulatory or
          governmental authority by the Company have been correctly and properly
          prepared in all material respects and so filed or delivered.

2.3       Share capital

          2.3.1     The Shares constitute the whole of the issued share capital
                    of the Company. There is no Encumbrance or any form of
                    agreement (including conversion rights and rights of
                    pre-emption) on, over or affecting the Shares or any
                    unissued shares, debentures or other securities of the
                    Company and there is no agreement or commitment to give or
                    create any of the foregoing. No claim has been made by any
                    person to be entitled to any of the foregoing and no person
                    has the right (exercisable now or in the future and whether
                    contingent or not) to call for the issue of any share or
                    loan capital of the Company under any of the foregoing. The
                    Warrantors are entitled to sell and

                                       34

<PAGE>

                    transfer  the Shares to the Purchaser with full title
                    guarantee and otherwise on the terms set out in this
                    Agreement.

          2.3.2     The Company has not at any time:

                    (a)  repaid, redeemed or purchased (or agreed to repay,
                         redeem or purchase) any of its own shares, or otherwise
                         reduced (or agreed to reduce) its issued share capital
                         or any class of it or capitalised (or agreed to
                         capitalise) in the form of shares, debentures or other
                         securities or in paying up any amounts unpaid on any
                         shares, debentures or other securities, any profits or
                         reserves of any class or description or passed (or
                         agreed to pass) any resolution to do so; or

                    (b)  directly or indirectly provided any financial
                         assistance for the purpose of the acquisition of shares
                         in the Company or any holding company of the Company or
                         for the purpose of reducing or discharging any
                         liability incurred in such an acquisition whether
                         pursuant to sections 155 and 156, CA 85 or otherwise.

2.4       Solvency

          The Company has not stopped payment and is not insolvent nor unable to
          pay its debts according to section 123, Insolvency Act 1986. No order
          has ever been made or petition presented or resolution passed for the
          winding up of the Company and no distress, execution or other process
          has ever been levied on any of its assets. No administrative or other
          receiver has been appointed by any person over the business or assets
          of the Company or any part thereof, nor has any order been made or
          petition presented for the appointment of an administrator in respect
          of the Company.

3.        Connected business

3.1       Subsidiaries, Associated Companies and Investments

          3.1.1     The shares in the Subsidiaries, the Associated Companies and
                    Investments are held by Atlantech (or, in the case of
                    Biocomposites, by Grindco 268 Limited) free from all
                    Encumbrances and with all rights now or hereafter attaching
                    thereto.

          3.1.2     No Group company is under any obligation of any kind to
                    further acquire or subscribe shares or securities in any
                    company or other entity or make any funding or financial
                    contribution to any company or other entity nor is it party
                    to any agreement or arrangement (written or oral) in
                    relation to any other Group company, other than in the
                    ordinary course of business.

3.2       Connected transactions

          The Company:

          3.2.1     is not and has not agreed to become the holder or other
                    owner of any class of any shares, debentures or other
                    securities of any other body corporate (whether incorporated
                    in the United Kingdom or elsewhere) other than the
                    Subsidiaries and the Associated Companies or Investments;

          3.2.2     has not agreed to become a subsidiary of any other body
                    corporate or under the control of any group of bodies
                    corporate or consortium;

                                       35

<PAGE>

          3.2.3     is not and has not agreed to become a member of any
                    partnership, joint venture, consortium or other
                    unincorporated association other than a recognised trade
                    association or agreement or arrangement for sharing
                    commissions or other income;

          3.2.4     has no branch, place of business or substantial assets
                    outside England and Wales or any permanent establishment (as
                    that expression is defined in any relevant Order in Council
                    made pursuant to section 788, ICTA 1988) in any country
                    outside the United Kingdom; and

          3.2.5     save as otherwise disclosed pursuant to paragraphs 3.2.1 to
                    3.2.4, does not have any interest, legal or beneficial, in
                    any shares or other capital or securities or otherwise
                    howsoever in any other firm, company, association, venture
                    or legal person or entity.

4.        Accounts

4.1       General

          The Accounts:

          4.1.1     were prepared in accordance with the requirements of all
                    relevant statutes, with good accounting principles and
                    practices generally accepted at the date hereof in the
                    United Kingdom (including the Accounting Standards) on a
                    basis consistent with the two preceding accounting periods
                    of the Company;

          4.1.2     disclose a true and fair view of the assets, liabilities and
                    state of affairs of the Company as at the relevant Balance
                    Sheet Date and of its profits for the financial year ended
                    on such date;

          4.1.3     to the extent required by the CA 85 and the relevant FRSs,
                    contain provision or reserve for bad and doubtful debts,
                    obsolescent or slow-moving stocks and for depreciation on
                    fixed assets, which provision or reserve was when made
                    adequate;

          4.1.4     to the extent required by CA 85 and the relevant FRSs,
                    contain a note of all capital commitments of the Company at
                    the Balance Sheet Date, which note was when made adequate,
                    fair and not misleading;

          4.1.5     to the extent required by CA 85 and the relevant FRSs,
                    disclose, note or provide for all material liabilities of
                    the Company which were known, actual or contingent
                    (including material contingent liabilities to customers and
                    contingent liabilities for Taxation);

          4.1.6     the amount included in the Accounts in respect of
                    work-in-progress and stock-in trade is reasonable and has
                    been determined in accordance with SSAP 9; and

          4.1.7     to the extent required by CA 85 and all relevant FRSs,
                    reflect all the fixed and loose plant and machinery,
                    equipment, furniture, fittings and vehicles used by the
                    Company at the Balance Sheet Date and none has been acquired
                    for any consideration in excess of its net realisable value
                    at the date of such acquisition or otherwise than by way of
                    a bargain at arm's length.

4.2       Stock-in-trade and work-in-progress

          The basis of valuation for stock-in-trade and work-in-progress has
          remained in all material respects consistent with that adopted for the
          purpose of the Company's audited accounts in

                                       36

<PAGE>

          respect of the beginning and end of each of the accounting periods of
          the Company for the previous two financial years.

4.3       Profits

          The profits of the Company for the three years ended on the Balance
          Sheet Date as shown by the Accounts and by the audited accounts of the
          Company for the previous two years delivered to the Purchaser and the
          trend of profits shown by them have not (except as disclosed in them)
          been affected to a material extent by inconsistencies of accounting
          practices, by the inclusion of non-recurring items of income or
          expenditure, by transactions entered into otherwise than on normal
          commercial terms or by any other factors rendering such profits for
          all or any of such periods exceptionally high or low.

4.4       Books of account

          All accounts, books, ledgers, financial and other necessary records of
          whatsoever kind of the Company (including all invoices and other
          records required for VAT purposes):

          4.4.1     have been properly maintained in accordance with applicable
                    law;

          4.4.2     do not as far as the Warrantors are aware contain or reflect
                    any material inaccuracies or discrepancies.

4.5       Management Accounts of the Companies

          The Management Accounts have been prepared in accordance with
          accounting policies consistent with those used in preparation of the
          Accounts with all due care and on a basis consistent with the
          management accounts of the relevant Company prepared in the preceding
          year. The cumulative profits, assets and liabilities of the relevant
          Company stated in the Management accounts have not been knowingly or
          wilfully misstated.

5.        Post-Balance Sheet Date events

5.1       Since the Balance Sheet Date, the Company:

          5.1.1     has carried on its business in the ordinary and usual course
                    and without entering into any transaction, assuming any
                    liability or making any payment not provided for in the
                    Accounts which is not in the ordinary course of business and
                    without any interruption or material alteration in the
                    nature, scope or manner of its business;

          5.1.2     has not experienced any material deterioration in its
                    financial position or turnover or suffered any diminution of
                    its assets by the wrongful act of any person and the Company
                    has not had its business or profitability materially and
                    adversely affected by the loss of any important customer or
                    source of supply;

          5.1.3     has not acquired or disposed of or agreed to acquire or
                    dispose of any material assets or assumed or incurred or
                    agreed to assume or incur any material liabilities (actual
                    or contingent) otherwise than in the ordinary course of
                    business;

          5.1.4     has not declared, made or paid any dividend, bonus or other
                    distribution of capital or income (whether a qualifying
                    distribution or otherwise) and (excluding fluctuations in
                    overdrawn current accounts with bankers) no loan or loan
                    capital of the Company has been repaid in whole or in part
                    or has become due or is liable to be declared due by reason
                    of either service of a notice or lapse of time or otherwise
                    howsoever;

                                       37

<PAGE>

          5.1.5     has not made any change to the remuneration, terms of
                    employment, emoluments or pension benefits of any present or
                    former director, officer or employee of the Company who on
                    the Balance Sheet Date was entitled to remuneration in
                    excess of (pound)15,000 per annum and has not appointed or
                    employed any additional director, officer or employee
                    entitled as aforesaid;

          5.1.6     has received payment in full of all debts owing to the
                    Company shown in the Accounts (subject to any provision for
                    bad and doubtful debts made in the Accounts), has not
                    released any debts in whole or in part and has not written
                    off debts in an amount exceeding (pound)15,000 in the
                    aggregate;

          5.1.7     has not entered into contracts involving capital expenditure
                    in an amount exceeding(pound)20,000 in the aggregate;

          5.1.8     has not become aware that any event has occurred which would
                    entitle any third party to terminate any contract or any
                    benefit enjoyed by it or call in any money before the normal
                    due date therefor;

          5.1.9     has paid its creditors in accordance with the normal
                    practice of the Company and no claims have been made or are
                    pending under the Late Payment of Commercial Debts
                    (Interest) Act 1998 and does not have any debts outstanding
                    which are overdue for payment by more than eight weeks;

          5.1.10    has not borrowed or raised any money or taken any financial
                    facility (except such short term borrowings from bankers as
                    are within the amount of any overdraft facility which was
                    available to the Company at the Balance Sheet Date) or since
                    the Balance Sheet Date renegotiated or received any notice
                    from any banker that such banker wishes to renegotiate any
                    overdraft facility available to the Company at the Balance
                    Sheet Date;

          5.1.11    has not made any change to its accounting reference date and
                    no accounting period of the Company has ended since the
                    Balance Sheet Date;

          5.1.12    (including any class of its members) has not passed any
                    shareholders' resolution whether in general meeting or
                    otherwise.

6.        Transactions with the Vendors, Directors and Connected Persons

6.1       Loans and debts

          There is not outstanding:

          6.1.1     any indebtedness or other liability (actual or contingent)
                    owing by the Company to any Vendors or Director or any
                    Connected Person or owing to the Company by any Vendors or
                    Director or any Connected Person; or

          6.1.2     any guarantee or security for any such indebtedness or
                    liability as aforesaid.

6.2       Arrangements with Connected Persons

          6.2.1     There is not outstanding, and there has not at any time
                    during the last six years been outstanding, any agreement,
                    arrangement or understanding (whether legally enforceable or
                    not) to which the Company is a party and in which any
                    Vendors, Affiliate of any Vendors, Director or former
                    director of the Company or any Connected Person is or has
                    been interested whether directly or indirectly.

                                       38

<PAGE>

          6.2.2     The Company is not a party to nor has its profits or
                    financial position during the last six years been affected
                    by any agreement or arrangement which is not entirely of an
                    arm's length nature.

6.3       Competitive interests

          6.3.1     No Warrantors, Affiliate of any Warrantors, Director, former
                    director of the Company nor any Connected Person, either
                    individually, collectively or with any other person or
                    persons, has any estate, right or interest, directly or
                    indirectly, in any business other than that now carried on
                    by the Company which is or is likely to be or become
                    competitive with any aspect of the Business of the Company
                    save as registered holder or other owner of any class of
                    securities of any company if such class of securities is
                    listed on any recognised investment exchange (as defined in
                    the Financial Services and Markets Act 2000) and if such
                    person (together with Connected Persons and Affiliates)
                    holds or is otherwise interested in less than five % of such
                    class of securities.

          6.3.2     None of the Warrantors either individually, collectively or
                    with any other person or persons is interested in any way
                    whatsoever in any Intellectual Property used and not wholly
                    owned by the Company.

6.4       Benefits

          No Connected Person of any Vendors, Director or former director of the
          Company is entitled to or has claimed entitlement to any remuneration,
          compensation or other benefit from the Company.

7.        Finance

7.1       Borrowings

          Particulars of all money currently borrowed by the Company have been
          Disclosed. The total amount borrowed by the Company from any source
          does not exceed any limitation on its borrowing contained in the
          articles of association of the Company or in any debenture or loan
          stock trust deed or instrument or any other document executed by the
          Company and the amount borrowed by the Company from each of its
          bankers does not exceed the overdraft facility agreed with such
          banker. The Company has no outstanding loan capital.

7.2       Debts owed to the Company

          None of the Company nor the Warrantors considers any of the debts
          owing to the Company (but which are not yet due) to be irrecoverable
          in whole or in part. The Company does not own the benefit of any debt
          (whether present or future) other than debts which have accrued to it
          in the ordinary course of business.

7.3       Bank accounts

          7.3.1     Particulars of the balances on all the Company's bank
                    accounts as at a date not more than three days before the
                    date of this Agreement have been Disclosed and the Company
                    has no other bank accounts. Since the date of such
                    particulars there have been no payments out of any such bank
                    accounts except for routine payments which have been
                    Disclosed.

                                       39

<PAGE>

          7.3.2     All unpresented cheques drawn by the Company have been
                    Disclosed and there are no such unpresented cheques drawn
                    otherwise than in the normal course of business.

7.4       Financial facilities

          The Warrantors have Disclosed full details and true and correct copies
          of all documents relating to all debentures, acceptance lines,
          overdrafts, loans or other financial facilities outstanding or
          available to the Company and any Encumbrances provided for by such
          documents. As far as the Warrantors are aware, neither the Warrantors
          nor the Company have done anything whereby the continuance of any such
          facility or Encumbrance in full force and effect might be affected or
          prejudiced.

7.5       Grants

          Full details of all grants made to the Company in the last six years
          have been Disclosed. No act or transaction has been effected in
          consequence whereof the Company is or so far as the Warrantors are
          aware may be held liable to refund in whole or in part any investment
          grant, building grant or other such grant or loan received by virtue
          of any statute or in consequence whereof any such grant or loan for
          which application has been made by it will not or may not be paid or
          will or may be reduced.

7.6       Options and guarantees

          7.6.1     The Company is not responsible for the indebtedness of any
                    other person nor party to any option or pre-emption right or
                    any guarantee, suretyship or any other obligation (whatever
                    called) to pay, purchase or provide funds (whether by the
                    advance of money, the purchase of or subscription for shares
                    or other securities or the purchase of assets or services or
                    otherwise) for the payment of, or as an indemnity against
                    the consequence of default in the payment of, any
                    indebtedness of any other person.

          7.6.2     No person other than the Company or a Subsidiary has given
                    any guarantee of or security for any overdraft, loan or loan
                    facility granted to the Company or any Subsidiary.

8.        The Properties

8.1       General

          8.1.1     The Properties comprise all the land and premises owned,
                    controlled, used or occupied by the Company and all the
                    rights or interests vested in the Company relating to any
                    land and premises at the date hereof and the particulars set
                    out in schedule 4 are true and accurate in all material
                    respects and not misleading.

          8.1.2     The Company is not the original lessee of any land or
                    premises other than the Properties and has not given a
                    guarantee or entered into any direct covenant with a
                    landlord or assignor of any land or premises other than the
                    Properties.

          8.1.3     The Company has legal and beneficial title to each of the
                    Properties.

          8.1.4     The Company has in its possession or unconditionally held to
                    its order all the documents of title and other documents and
                    papers relating to each of the Properties.

                                       40

<PAGE>

          8.1.5     The Properties, title deeds and documentation relating
                    thereto, and all tenant's fixtures and fittings and plant,
                    equipment and other chattels on the Properties, are not
                    subject to any Encumbrance nor, so far as the Warrantors are
                    aware, any overriding interest (as defined in section 70,
                    Land Registration Act 1925) nor is there any person in
                    possession or occupation of or who has or claims any right
                    of any kind in respect of any of the Properties adversely to
                    the estate, interest, right or title therein of the Company;

          8.1.6     So far as the Warrantors are aware, there are no rights,
                    interests, covenants, restrictions, reservations, licences
                    or easements or any disputes or outstanding notices (whether
                    given by a landlord, a local authority or any other person)
                    which adversely affect the Properties or the proper use and
                    enjoyment of any of the Properties for the purpose of the
                    business now being carried on at the Properties by the
                    Company.

          8.1.7     There has been no dealing with any of the Properties
                    otherwise than at arm's length and in particular no dealing
                    at an undervalue which may give rise to a claim for improper
                    stamping or setting aside.

          8.1.8     None of the Properties is subject to the payment of any
                    outgoings other than the usual rates and taxes and the
                    payments referred to in the lease or licence under which the
                    Properties are held and all sums due to date in respect
                    thereof have been paid.

          8.1.9     Each of the Properties:

                    (c)  enjoys access and egress over roads and footpaths
                         which, so far as the Warrantors are aware, have been
                         adopted by the appropriate highway authority and are
                         maintainable at the public expense;

                    (d)  drains foul sewage and surface water to public sewers,
                         is served by water, electricity, gas and telephone
                         utilities and either the pipes, sewers, wires, cables,
                         conduits and other conducting media serving the
                         Properties connect directly to the mains without
                         passing through land in the occupation or ownership of
                         any third party or, if they do not, so far as the
                         Warrantors are aware, each of the Properties has the
                         benefit of all necessary easements and rights for the
                         maintenance and use thereof and such rights are held on
                         terms which do not entitle any person to terminate or
                         curtail the same; and

                    (e)  so far as the Warrantors are aware, has the benefit of
                         all other easements and rights necessary for its proper
                         use and enjoyment for the purposes of the business now
                         being carried on at the Properties by the Company and
                         such easements and rights are held on terms which do
                         not entitle any person to terminate or curtail the
                         same.

          8.1.10    The Company has not entered into any commitment (whether
                    legally binding or not) and the Company is not party to any
                    subsisting agreement with any person or company whereby a
                    fee (including but not limited to an abort fee) will be paid
                    to such person or company in respect of the management, use,
                    development, letting or sale of any of the Properties.

          8.1.11    So far as the Warrantors are aware, there are no unpaid
                    charges for the construction or adoption of any road or
                    sewer or other service serving the Property.

8.2       Planning

                                       41

<PAGE>

          8.2.1     In relation to each of the Properties, its existing use is
                    set out in Part 1 of schedule 4 ("Existing Use").

          8.2.2     So far as the Warrantors are aware, there are no lawfully
                    enforceable restrictions or prohibitions contained in any
                    planning permission for the Existing Use which restrict or
                    prohibit the Existing Use of any of the Properties.

          8.2.3     So far as the Warrantors are aware, the Existing Use of each
                    of the Properties is the permitted use under the Town and
                    Country Planning legislation (which term includes the Town &
                    Country Planning Act 1990, the Planning (Listed Buildings
                    and Conservation Areas) Act 1990, the Planning (Hazardous
                    Substances) Act 1990 and the Planning (Consequential
                    Provisions) Act 1990) and is not a temporary or personal
                    use.

          8.2.4     So far as the Warrantors are aware, all development carried
                    out in relation to each of the Properties has been lawful
                    and all necessary consents and permissions have been
                    obtained for such development.

          8.2.5     So far as the Warrantors are aware, the consents and
                    permissions referred to in paragraph 8.2.4 are valid,
                    subsisting and unimpeachable and are also either
                    unconditional or subject only to conditions which have been
                    satisfied so that nothing further remains to be done
                    thereunder.

          8.2.6     The Company has not received notice of any resolution,
                    proposal or order made or contemplated for the compulsory
                    acquisition of any of the Properties by the local or any
                    other authority nor any outstanding order, notice or other
                    requirement of any such authority that affects the Existing
                    Use of any of the Properties or involves expenditure in
                    compliance with it.

          8.2.7     No compensation has been received consequent upon a refusal
                    of any planning permission affecting any of the Properties
                    or the imposition of any restrictions in any such planning
                    permission and no such planning permission is suspended.

8.3       Leasehold Properties

          8.3.1     Where any of the Properties is leasehold, particulars of
                    each lease vested in the Company are set out in Part 3 of
                    schedule 4 and in relation to each such lease:

                    (a)  any consent necessary for the grant of the lease has
                         been obtained and a copy of the consent is with the
                         title deeds to the Property to which the lease relates;

                    (b)  no rent reviews are or should be currently under
                         negotiation or the subject of a reference to an expert
                         or arbitrator or the courts;

                    (c)  the receipt for the payment of rent which fell due
                         immediately prior to the date hereof is unqualified;

                    (d)  no notices of breaches of any covenants or conditions
                         contained in the lease have been given or received on
                         the part of either the landlord or the Company and the
                         landlord has not refused to accept rent or made any
                         complaint of breach of covenant;

                    (e)  no alterations, improvements or additions have been
                         made to the Property to which the lease relates since
                         the grant of the lease or in respect of all such

                                       42

<PAGE>

                         alterations, improvements or additions made all
                         necessary consents and approvals have first been
                         obtained; and

                    (f)  VAT is not chargeable on the rent or any other payment
                         to be made under the lease and no election has been
                         made by the landlord to waive exemption from VAT in
                         respect of the lease.

8.4       Inferior leases

          The Company is in actual occupation of each of the Properties and no
          other person is or will be entitled to occupy or use any part or any
          of the Property.

8.5       Statutory compliance/environmental issues

          The Company has not received notice of any breach or allegation of any
          breach of the requirements of:

                    the Shops Act 1950 and 1965
                    the Clean Air Act 1993
                    the Construction (Design and Management) Regulations 1995
                    the Factories Act 1961
                    the Offices, Shops and Railway Premises Act 1963
                    the Fire Precautions Act 1971
                    the Health and Safety at Work etc. Act 1974
                    the Control of Pollution Act 1974
                    the Food and Environmental Protection Act 1985
                    the Planning (Hazardous Substances) Act 1990
                    the Environmental Protection Act 1990
                    the Water Resources Act 1991 the Water Industry Act 1991
                    the Radioactive Substances Act 1993
                    or the Public Health Acts or other legislation concerning
                    health, safety or environmental matters or any regulations,
                    orders, notices or directions made under any of such
                    legislation which in any such case affect any of the
                    Properties.

          8.5.1     Where required, a fire certificate has been issued in
                    respect of each of the Properties and so far as the
                    Warrantors are aware, each of the Properties complies in all
                    respects with current fire regulations.

9.        Environmental

9.1       Compliance with Environmental Law

          So far as the Warrantors are aware, at all times during the period of
          occupation by the Company the Property (other than the premises at 19
          Greenfield Avenue, Stourbridge) has been used, and at all times the
          Business has been conducted thereon, in all material respects in
          compliance with Environmental Law.

9.2       Environmental Liability

          There are no events, states of affairs, conditions, circumstances,
          activities, practices, incidents, or actions (including the
          generation, use, treatment, storage, transport, deposit, disposal,
          discharge or management of Hazardous Matter) which, so far as the
          Warrantors are aware, have occurred or are occurring or have been or
          are in existence at, in, under or about the Property (other than the
          premises at 19 Greenfield Avenue, Stourbridge) at all times

                                       43

<PAGE>

          during the period of occupation of the Property by the Company or in
          or about the conduct of the Business by the Company which will give
          rise to Environmental Liability.

9.3       Notice of claims

          At no time has the Company received any notice, claim or other
          communication alleging any actual or potential Environmental
          Liability.

10.       Other assets

10.1      Title

          10.1.1    The Company has Legal and Beneficial Title to all assets of
                    the Company which are included in the Accounts or have
                    otherwise been represented as being the property of the
                    Company or which were at the Balance Sheet Date used or held
                    for the purposes of its business and (except for assets
                    disposed of or realised by the Company in the ordinary
                    course of business) the Company retains such title to all
                    such assets free from any Encumbrance, hire or hire purchase
                    agreement or leasing agreement or agreement for payment on
                    deferred terms and all such assets are in the possession and
                    control of the Company and are sited within the United
                    Kingdom.

          10.1.2    The Company has not acquired or agreed to acquire any
                    material asset on terms that title to such asset does not
                    pass to the Company until full payment is made.

10.2      Encumbrances

          The Company has Legal and Beneficial Title to all assets which have
          been acquired by the Company since the Balance Sheet Date and (except
          for assets disposed of or realised by the Company in the ordinary
          course of business) the same are in the possession and control of the
          Company and none is the subject of any Encumbrance nor has the Company
          created or agreed to create any Encumbrance or entered into any
          factoring arrangement, hire-purchase, conditional sale or credit sale
          agreement which has not been Disclosed and in respect of any such
          Encumbrance, arrangement or agreement so Disclosed there has been no
          default by the Company in the performance or observance of any of the
          provisions thereof.

10.3      Condition of assets

          The plant and machinery (including fixed plant and machinery) and all
          vehicles and office and other equipment shown in the Accounts or
          acquired since the Balance Sheet Date or otherwise used in connection
          with the Business which have not been disposed of in the ordinary
          course of business:

          10.3.1    are in reasonable repair and condition having regard to
                    their age (and subject to fair wear and tear) and are
                    regularly maintained and in satisfactory working order;

          10.3.2    are each capable of doing the work for which they were
                    designed and/or purchased and so far as the Warrantors are
                    aware will each be so capable (subject to fair wear and
                    tear) during the period of time over which the value of such
                    assets will be written down to nil in the accounts of the
                    Company;

          and the vehicles owned by the Company are roadworthy and duly licensed
          for the purposes for which they are used.

10.4      Condition of stock

                                       44

<PAGE>

          The Company's stock-in-trade is in good condition and is capable of
          being sold by the Company in the ordinary course of business in
          accordance with its current price list without rebate or allowance to
          a purchaser.

10.5      Rental payments

          Rentals payable by the Company under any leasing, hire-purchase or
          other similar agreement to which it is a party are set out in the
          Disclosure Documents and have not been and as far as the Warrantors
          are aware are not likely to be increased.

11.       Insurance

11.1      Extent of insurance

          The Company is and has at all material times been, in the reasonable
          opinion of the Warrantors, adequately covered against all legal
          liability and risks normally insured against by such companies
          (including liability to employees or third parties for personal injury
          or loss or damage to property, product liability and loss of profit).

11.2      Premiums and claims

          Particulars of all policies of insurance of the Company now in force
          have been Disclosed and such particulars are true and correct and all
          premiums due on such policies have been duly paid and all such
          policies are valid and in force. So far as the Warrantors are aware
          there are no circumstances which might lead to any liability under
          such insurance being avoided by the insurers or the premiums being
          increased. There is no claim outstanding under any such policies and
          so far as the Warrantors are aware there are no circumstances likely
          to give rise to a claim.

12.       Litigation

12.1      Litigation and arbitration proceedings

          12.1.1    Save as plaintiff in the collection of debts (not exceeding
                    (pound)5,000 in the aggregate) arising in the ordinary
                    course of business, the Company is not now engaged in any
                    litigation, arbitration or criminal proceedings and, so far
                    as the Warrantors are aware, there are no lawsuits or
                    arbitration proceedings pending or threatened by or against
                    the Company or any person for whose acts or defaults the
                    Company may be vicariously liable.

          12.1.2    The Company has not, in the last three years preceding the
                    date of this Agreement, been involved in any litigation,
                    arbitration, criminal proceedings or material dispute with
                    any person who is or was a supplier or customer of
                    importance to the Company or the Business, or where such
                    litigation, arbitration, proceedings or dispute resulted in
                    adverse publicity or loss of goodwill.

          12.1.3    So far as the Warrantors are aware, there is no matter or
                    fact in existence which might give rise to any legal
                    proceedings or arbitration involving the Company including
                    any which might form the basis of any criminal prosecution
                    against the Company.

12.2      Injunctions, etc.

          No injunction or order for specific performance has been granted
          against the Company.

                                       45

<PAGE>

12.3      Orders and judgments

          The Company is not subject to any order or judgment given by any court
          or governmental agency which is still in force and has not given any
          undertaking to any court or to any third party arising out of any
          legal proceedings.

13.       Licences

13.1      General

          The Company has all necessary licences (including statutory licences),
          permits, consents and authorities (public and private) for the proper
          and effective carrying on of the Business and in the manner in which
          the Business is now carried on and all such licences, permits,
          consents and authorities are valid and subsisting and the Warrantors
          know of no reason why any of them should be suspended, cancelled or
          revoked whether in connection with the sale to the Purchaser or
          otherwise and, so far as the Warrantors aware, there are no factors
          that might in any way prejudice the continuance or renewal of any of
          those licences, permits, consents or authorities and the Company is
          not restricted by contract from carrying on any activity in any part
          of the world.

13.2      Data Protection Act 1998

          13.2.1    Those members of the Group which are required to register
                    under the Data Protection Act 1998 have registered or
                    applied to register themselves under the Data Protection Act
                    1998 in respect of all registrable personal data held by
                    them, and all due and requisite fees in respect of such
                    registrations have been paid.

          13.2.2    The details contained in such registrations or applications
                    are correct, proper and suitable for the purpose(s) for
                    which the Company holds or uses the personal data which are
                    the subject of them.

          13.2.3    So far as the Warrantors are aware, all personal data held
                    by each member of the Group has been held in accordance with
                    the data protection principles and there has been no
                    unauthorised disclosure of such personal data.

14.       Trading

14.1      Tenders, etc.

          No offer, tender or the like is outstanding (the value of which to the
          Company could exceed (pound)50,000 in any year) which is capable of
          being converted into an obligation of the Company by an acceptance or
          other act of some other person.

14.2      Delegation of powers

          There are in force no powers of attorney given by the Company other
          than to the holder of an encumbrance solely to facilitate its
          enforcement nor any other authority (express, implied or ostensible)
          given by the Company to any person to enter into any contract or
          commitment or do anything on its behalf other than any authority of
          employees to enter into routine trading contracts in the normal course
          of their duties.

14.3      Consequence of acquisition of Shares by Purchaser

          The acquisition of the Shares by the Purchaser or compliance with the
          terms of this Agreement will not:

                                       46

<PAGE>

          14.3.1    so far as the Warrantors are aware, cause the Company to
                    lose the benefit of any right or privilege it presently
                    enjoys or cause any person who normally does business with
                    the Company not to continue to do so on the same basis as
                    previously;

          14.3.2    relieve any person of any obligation to the Company (whether
                    contractual or otherwise) or legally entitle any person to
                    determine any such obligation or any right or benefit
                    enjoyed by the Company or to exercise any right whether
                    under an agreement with or otherwise in respect of the
                    Company;

          14.3.3    conflict with or result in the breach of or constitute a
                    default under any of the terms, conditions or provisions of
                    any agreement or instrument to which the Company is now a
                    party or any loan to or mortgage created by the Company or
                    of its memorandum or articles of association;

          14.3.4    result in any present or future indebtedness of the Company
                    becoming due and payable or capable of being declared due
                    and payable prior to its stated maturity; or

          14.3.5    entitle any person to receive from the Company any finder's
                    fee, brokerage or other commission.

14.4      Guarantees and warranties

          The Company has not given any guarantee or warranty or made any
          representation in respect of articles or trading stock, sold or
          contracted to be sold by it, save for any warranty or guarantee
          implied by law and (save as aforesaid) has not accepted any liability
          or obligation to service, maintain, repair, take back or otherwise do
          or not do anything in respect of any articles or stock that would
          apply after any such article or stock has been delivered by it.

14.5      Fair trading, etc.

          So far as the Warrantors are aware, the Company is not and has not
          been party to or directly or indirectly concerned in any agreement,
          arrangement, understanding or practice (whether or not legally
          binding) or in the pursuit of any course of conduct which is:

          14.5.1    registrable under the RTPA or notifiable under the
                    Competition Act 1998 or capable of giving rise to an
                    investigation by the Director General of Fair Trading or a
                    reference to the Monopolies and Mergers Commission;

          14.5.2    in contravention or breach of the EC Treaty, the Fair
                    Trading Act 1973, the Consumer Credit Act 1974, the Resale
                    Prices Act 1976, the Trade Descriptions Act 1968, the RTPA,
                    the Competition Act 1980, the Consumer Protection Act 1987,
                    the Competition Act 1998 or any regulations, orders, notices
                    or directions made thereunder; or

          14.5.3    is otherwise registrable, unenforceable or void or renders
                    the Company or any of its officers liable to administrative,
                    civil or criminal proceedings under any anti-trust, trade
                    regulation or similar legislation in any jurisdiction where
                    the Company carries on business.

14.6      Restrictions on trading

          The Company is not and has not been a party to any agreement,
          arrangement, understanding or practice restricting the freedom of the
          Company to provide and take goods and services by such means and from
          and to such persons and into or from such place as it may from time to
          time think fit.

                                       47

<PAGE>

14.7      Possession of records

          14.7.1    The Company does not have any of its records, systems,
                    controls, data or information recorded, stored, maintained,
                    operated or otherwise wholly or partly dependent on or held
                    by any means (including any electronic, mechanical or
                    photographic process whether computerised or not) which
                    (including all means of access thereto and therefrom) are
                    not under the exclusive ownership and direct control of the
                    Company.

14.8      Business names

          The Company does not use on its letterhead, books or vehicles or
          otherwise carry on the Business under any name other than its
          corporate name.

15.       Contracts

15.1      Onerous contracts

          There are no long term contracts (that is, contracts not terminable by
          the Company without penalty on six months' notice or less) or onerous
          or unusual or abnormal contracts (that is, contracts for material
          capital commitments or contracts differing from those in the ordinary
          course of business) binding upon the Company and no expenses or
          liabilities of a material amount have been incurred before the date of
          this Agreement by the Company otherwise than for the purpose of the
          Company's business.

15.2      Material contracts

          All contracts to which the Company is a party as are material have
          been Disclosed and the Company is not a party to or subject to any
          agreement, transaction, obligation, commitment, understanding,
          arrangement or liability which:

          15.2.1    other than in the case of ongoing sales and/or distribution
                    agreements, is incapable of complete performance in
                    accordance with its terms within six months after the date
                    on which it was entered into or undertaken;

          15.2.2    was, at the time of entering into, known by the Warrantors
                    or by the Company to be likely to result in a loss to the
                    Company on completion of performance;

          15.2.3    cannot readily be fulfilled or performed by the Company on
                    time and without undue or unusual expenditure of money and
                    effort;

          15.2.4    involves obligations, restrictions, expenditure or receipts
                    of an unusual, onerous or exceptional nature and not in the
                    ordinary course of business;

          15.2.5    involves or is likely to involve the supply of goods by or
                    to the Company (other than supplies from Atlantech to
                    Atlantech UK) the aggregate sales value of which will
                    represent in excess of five % of the turnover of the Company
                    for the year ended on the Balance Sheet Date;

          15.2.6    requires the Company to pay any commission, finder's fee,
                    royalty or the like; or

          15.2.7    is in any way otherwise than in the ordinary course of the
                    Company's business.

15.3      Performance of contracts

                                       48

<PAGE>

          15.3.1    The terms of all contracts of the Company have been complied
                    with by the Company in all material respects and, so far as
                    the Warrantors are aware, by the other parties to the
                    contracts in all material respects and there are no
                    circumstances likely to give rise to a default by the
                    Company or, so far as the Warrantors are aware, by the other
                    parties under any such contract.

          15.3.2    There are no outstanding claims, separately or in the
                    aggregate, of material amounts, against the Company on the
                    part of customers or other parties in respect of defects in
                    quality or delays in delivery or completion of contracts or
                    deficiencies of design or performance or otherwise relating
                    to liability for goods or services sold or supplied by the
                    Company and no such claims are threatened or anticipated
                    and, as far as the Warrantors are aware, there is no matter
                    or fact in existence in relation to goods or services
                    currently sold or supplied by the Company which might give
                    rise to the same.

          15.3.3    The Company has no knowledge of the invalidity of or grounds
                    for rescission, avoidance or repudiation of any agreement or
                    other transaction to which the Company is a party and has
                    received no notice of any intention to terminate, repudiate
                    or disclaim any such agreement or other transaction.

16.       Employees

16.1      Particulars of employees

          The particulars shown in the schedule of employees comprised in the
          Disclosure Documents are true and complete in all material respects
          and show in respect of each Director, officer and employee of the
          Company his date of birth, the date on which he commenced continuous
          employment with the Company for the purposes of ERA and all
          remuneration payable and other benefits provided or which the Company
          is bound to provide (whether now or in the future) to each such person
          and include full particulars of all remuneration arrangements
          (particularly profit sharing, incentive and bonus arrangements to
          which the Company is a party whether binding or not) and each
          Director, officer and employee of the Company is listed therein.

16.2      Service contracts

          There is no contract of service in force between the Company and any
          of its Directors, officers or employees which is not terminable by the
          Company without compensation (other than any compensation payable
          under Parts X and XI, ERA) on 12 weeks' notice given at any time or
          otherwise in accordance with section 86, ERA other than as Disclosed.
          There are no consultancy or management services agreements in
          existence between the Company and any other person, firm or company,
          and there are no agreements or other arrangements (binding or
          otherwise) between the Company or any employers' or trade association
          of which the Company is a member and any Trade Union. There are no
          outstanding pay negotiations with any employees or Trade Unions.

16.3      Benefits

          There are no amounts owing to present or former directors, officers or
          employees of the Company other than not more than one month's arrears
          of remuneration accrued or due or for reimbursement of business
          expenses incurred within a period of three months preceding the date
          of this Agreement and no moneys or benefits other than in respect of
          remuneration or emoluments of employment are payable to or for the
          benefit of any present or former director, officer or employee of the
          Company, nor any dependant of any present or former director, officer
          or employee of the Company.

                                       49

<PAGE>

16.4      Liabilities and payments

          Save to the extent (if any) to which provision or allowance has been
          made in the Accounts:

          16.4.1    no liability is currently outstanding or, so far as the
                    Warrantors are aware is anticipated, by the Company for
                    breach of any contract of employment or for services or for
                    severance payments or for redundancy payments or protective
                    awards or for compensation for unfair dismissal or for
                    failure to comply with any order for the reinstatement or
                    re-engagement of any employee or for sex or race
                    discrimination or for any other liability accruing from the
                    termination or variation of any contract of employment or
                    for services;

          16.4.2    no gratuitous payment is currently outstanding from the
                    Company in connection with the actual or proposed
                    termination, suspension or variation of any contract of
                    employment or for services of any present or former
                    director, officer or any dependant of any present or former
                    director, officer or employee of the Company; and

          16.4.3    the Company has not agreed to make any payment to or
                    provided or agreed to provide any benefit for any present or
                    former director, officer or employee of the Company, which
                    is currently outstanding.

16.5      Relevant legislation

          16.5.1    The Company has in relation to each of its employees (and so
                    far as relevant to each of its former employees) complied
                    with:

                    (g)  all obligations imposed on it by all relevant statutes,
                         regulations and codes of conduct and practice
                         (including, without limitation, Health and Safety at
                         Work etc. Act 1974 and the Working Time Regulations
                         1998) affecting its employment of any persons and all
                         relevant orders and awards made thereunder and has
                         maintained all necessary records regarding the service,
                         terms and conditions of employment of each of its
                         employees; and

                    (h)  all collective agreements, recognition agreements and
                         customs and practices for the time being affecting its
                         employees or their conditions of service.

          16.5.2    There is no liability or claim against the Company
                    outstanding or anticipated under the Equal Pay Act 1970, the
                    Sex Discrimination Acts 1975 and 1986, the Race Relations
                    Act 1976, the ERA, TUPE, TULRCA or the Trade Union Reform
                    and Employment Rights Act 1993.

16.6      Termination of employment

          No present director, officer or employee of the Company has given or
          received notice terminating his employment and Completion of this
          Agreement will not entitle any employee to terminate his employment or
          trigger any entitlement to a severance payment or liquidated damages.

16.7      Share and other schemes

          The Company does not have in existence nor is it proposing to
          introduce, and none of its directors, officers or employees
          participate in (whether or not established by the Company) any
          employee share trust, share incentive scheme, share option scheme or
          profit sharing scheme for the benefit of all or any of its present or
          former directors, officers or employees or

                                       50

<PAGE>

          the dependants of any of such persons or any scheme whereunder any
          present or former director, officer or employee of the Company is
          entitled to a commission or remuneration of any other sort calculated
          by reference to the whole or part of the turnover, profits or sales of
          the Company or any other person, firm or company including any
          profit-related pay scheme established under Chapter III, Part V, ICTA
          1988.

16.8      Disputes and claims

          16.8.1    No dispute exists (nor are the Warrantors aware of any
                    circumstances which may lead to any dispute) between the
                    Company and a material number or category of its employees
                    or any Trade Union(s) or Works Council and so far as the
                    Warrantors are aware there are no wage or other claims
                    outstanding against the Company by any person who is now or
                    has been a director, officer or employee of the Company.

          16.8.2    The Company has not had during the last three years any
                    strike, work stoppages, slowdown or work-to-rule by its
                    employees or lock-out, nor, so far as the Warrantors are
                    aware, is any anticipated, which has caused, or is likely to
                    cause, the Company to be materially incapable of carrying on
                    its business in the normal and ordinary course.

16.9      Transfer of undertakings

          The Company has not been a party to any relevant transfer as defined
          in TUPE nor has the Company failed to comply with any duty to inform
          and consult any Trade Union under the said regulations within the
          period of one year preceding the date of this Agreement.

16.10     Agreements with Trade Unions

          The Company is not a party to any agreement or arrangement with or
          commitment to any trade unions or staff association nor are any of its
          employees members of any trades union or staff association.

17.       Pension Schemes

17.1      Save for the Atlantech Medical Devices Limited Retirement Benefits
          Scheme ("the SSAS") and the Clerical Medical Group Stakeholder Pension
          Plan ("the Stakeholder"), there is not in operation any arrangement
          for the provision of, and the Companies are not paying or contributing
          towards, nor are they under any moral or legal liability or contingent
          liability to pay or secure, any pension or other benefit on
          retirement, resignation, dismissal, death, sickness or disability or
          on the attainment of a specified age or the completion of a specified
          number of years of service for the benefit of any of the Employees or
          any dependant of an Employee; and the Companies have not undertaken to
          make any ex gratia payment to or in respect of any of the Employees.

17.2      As regards the SSAS:

          17.2.1    complete and accurate details of the SSAS (including all
                    documentation, benefit structures, augmentations and funding
                    details) have been Disclosed;

          17.2.2    all benefits under the SSAS (other than those which are
                    fully insured) are provided on a money purchase basis and
                    there is no obligation (other than in the case of those
                    benefits which are fully insured) to provide any specified
                    level of benefits;

                                       51

<PAGE>

          17.2.3    the identities of those of the Employees who are members of
                    the SSAS or of persons who have any rights under the SSAS in
                    respect of any of the Employees have been Disclosed;

          17.2.4    as at Completion, all contributions due to be paid in
                    respect of the SSAS by the Companies have been duly paid;

          17.2.5    all premiums by way of insurance which are payable in
                    respect of the SSAS by the Companies or by the trustees or
                    other administrators of the SSAS have been duly paid and
                    full details of the insurance policies or contracts
                    concerned have been Disclosed;

          17.2.6    all benefits (other than refunds of contributions) payable
                    under the SSAS on the death of any person or during periods
                    of sickness or disability are as at Completion fully insured
                    under a policy effected with an insurance company of good
                    repute and there is no reason why the relevant policies
                    cannot be continued on the same terms following Completion;

          17.2.7    all consultancy, legal and other fees, charges or expenses
                    in relation to the SSAS have been paid and no services have
                    been rendered in respect of which an account or other
                    invoice has not been rendered;

          17.2.8    no legal proceedings in connection with the SSAS are
                    pending, threatened or expected (including any complaint to
                    the Pensions Ombudsman) and there is no fact or circumstance
                    likely to give rise to any such proceedings;

          17.2.9    the SSAS has been administered in accordance with the
                    provisions of the SSAS and has been administered in
                    accordance with and comply with all applicable legislation,
                    regulatory requirements and the general requirements of
                    trust law, and (without limitation to the foregoing) -

                    (a)  the SSAS does not and has not directly or indirectly
                         discriminated between male and female employees as
                         regards eligibility, the rate of contributions or the
                         benefits to be provided in any way which is contrary to
                         Article 141 of the Treaty of Rome or any UK Statute;
                         and

                    (b)  neither the trustees of the SSAS nor the Companies have
                         engaged or currently engage in any activity in relation
                         to the SSAS which would require any of them to be
                         authorised for the purposes of the Financial Services
                         and Markets Act 2000;

          17.2.10   the SSAS is an exempt approved scheme within the meaning of
                    Chapter IV Part I of the Income and Corporation Taxes Act
                    1988 and there is no reason why such approval may be
                    withdrawn; and

          17.2.11   a contracting out certificate under the Pension Schemes Act
                    1993 is in force covering the employments of all Employees
                    who are members of the SSAS and there is no reason why such
                    a certificate may be cancelled.

17.3      As regards the Stakeholder:

          17.3.1    all benefits under the Stakeholder (other than those which
                    are fully insured) are provided on a money purchase basis
                    and there is no obligation (other than in the case of those
                    benefits which are fully insured) to provide any specified
                    level of benefits. Contributions made by the Companies in
                    respect of the Stakeholder do not

                                       52

<PAGE>

                    exceed the permitted maximum as defined in section 638 of
                    the Income and Corporation Taxes Act;

          17.3.2    the Companies have at all times complied with all the
                    provisions of the Stakeholder which apply to it and section
                    3 of the Welfare Reform and Pensions Act 1999 (the "1999
                    Act"). The Stakeholder complies with the 1999 Act, the
                    Stakeholder Pension Schemes Regulations 2000 and any other
                    applicable legislation and regulations;

          17.3.3    the identities of those of the Employees who are members of
                    the Stakeholder have been Disclosed and the level of both
                    employee and employer contributions payable in respect of
                    each member has been Disclosed and the Companies shall not
                    before Completion take any steps affecting the level of
                    employer contributions;

          17.3.4    as at Completion, all contributions, premiums and expenses
                    due to be paid in respect of the Stakeholder by the
                    Companies have been duly paid;

          17.3.5    no legal proceedings in connection with the Stakeholder are
                    pending, threatened or expected (including any complaint to
                    the Pensions Ombudsman) and there is no fact or circumstance
                    likely to give rise to any such proceedings;

          17.3.6    the Stakeholder does not and has not directly or indirectly
                    discriminated between male and female employees as regards
                    eligibility, the rate of contributions or the benefits to be
                    provided in any way which is contrary to Article 141 of the
                    Treaty of Rome or any UK Statute;

          17.3.7    the Companies have not engaged and do not currently engage
                    in any activity in relation to the Stakeholder which would
                    require them to be authorised for the purposes of the
                    Financial Services and Markets Act 2000; and

          17.3.8    the Stakeholder is an exempt approved scheme within the
                    meaning of Chapter IV Part XIV of the Income and Corporation
                    Taxes Act 1988 and there is no reason why such approval may
                    be withdrawn.

18.       Intellectual Property

18.1      Ownership and rights

          18.1.1    Parts 1 and 2 of schedule 7 respectively contain particulars
                    of all Registered Proprietary Intellectual Property and
                    material Unregistered Proprietary Intellectual Property.

          18.1.2    The Company is either the sole beneficial owner of or is
                    licensed to use all Intellectual Property required for the
                    Company to carry on its business as of the date of
                    Completion.

18.2      Enforcement

          18.2.1    So far as the Warrantors are aware, the Proprietary
                    Intellectual Property is valid and subsisting and none of
                    the Proprietary Intellectual Property is the subject of
                    outstanding or threatened disputes, claims or proceedings
                    for cancellation, revocation, opposition, interference,
                    rectification or contested ownership.

          18.2.2    Details of Patents owned by the Company are set out in
                    schedule 7.

                                       53

<PAGE>

          18.2.3    All Registered Proprietary Intellectual Property has been
                    maintained and all renewal fees have been paid on time.

          18.2.4    All Know-How owned, used or exploited by the Company has
                    been kept secret and confidential and has, as far as the
                    Warrantors are aware, not been disclosed to third parties
                    other than as required in the normal course of business
                    subject to confidentiality undertakings being obtained by
                    the Company.

          18.2.5    Nothing has been done to diminish or otherwise affect the
                    reputation of unregistered Trade Marks, owned, used or
                    otherwise exploited by the Company.

18.3      Intellectual Property Agreements

          18.3.1    Parts 3 and 4 of schedule 7 respectively contain particulars
                    of all Intellectual Property Agreements whereby:

                    (a)  the Company uses or exploits any Third Party
                         Intellectual Property ("Licences-In"); or

                    (b)  the Company has authorised or otherwise permitted,
                         expressly or by implication, any use whatsoever of any
                         Proprietary Intellectual Property, or granted to any
                         third party any right or interest in respect of any
                         Proprietary Intellectual Property ("Licences-Out").

          18.3.2    Save as set out in schedule 7, none of the Proprietary
                    Intellectual Property has been charged, mortgaged, licensed
                    or otherwise encumbered.

          18.3.3    So far as the Warrantors are aware, all Intellectual
                    Property Agreements are valid and binding and none has been
                    the subject of any breach or default by any party or of any
                    event which with notice or lapse of time or both would
                    constitute a default.

          18.3.4    No member of the Group has received notice of any dispute,
                    claim or proceeding arising out of or relating to the
                    Intellectual Property Agreements and the Warrantors are not
                    aware of any circumstances which are reasonably likely to
                    lead to any such dispute, claim or proceeding arising.

          18.3.5    No Intellectual Property Agreement will terminate or become
                    capable of termination or otherwise be adversely affected by
                    the execution and completion of this Agreement.

18.4      Infringement

          18.4.1    The Company has not infringed and, as far as the Warrantors
                    are aware, does not infringe any Intellectual Property of a
                    third party as a result of the Company's use or exploitation
                    of the Intellectual Property in the conduct of the Business
                    involving the use and exploitation of the Proprietary
                    Intellectual Property or the Third Party Intellectual
                    Property, nor, as far as the Warrantors are aware, will such
                    use or exploitation give rise to any infringement dispute,
                    claims or proceedings against the Company.

          18.4.2    So far as the Warrantors are aware, there are not and have
                    not been any disputes, claims or proceedings threatened or
                    in existence in any court or tribunal in respect of any
                    Intellectual Property used or exploited by the Company in
                    the conduct of the Business.

                                       54

<PAGE>

          18.4.3    So far as the Warrantors are aware, there has been and is no
                    current or anticipated infringement by any third party of
                    any Proprietary Intellectual Property or Third Party
                    Intellectual Property.

19.       Information technology and telecommunications

19.1      Ownership

          19.1.1    All IT Systems are owned by the Company or leased under
                    written lease agreements, and are not wholly or partly
                    dependent on any facilities or services not under the
                    exclusive ownership and/or control of the Company.

          19.1.2    So far as the Warrantors are aware, all the IT Contracts are
                    valid and binding and none of the IT Contracts has been the
                    subject of any breach or default, or of any event which
                    (with notice or lapse of time or both) would constitute a
                    default, or is liable to be terminated or otherwise
                    adversely affected by the transaction contemplated by this
                    Agreement.

19.2      Computer operation and maintenance

          19.2.1    All IT Systems are in satisfactory working order and have
                    been and are being properly and regularly maintained and
                    replaced. No part of the IT Systems has materially failed to
                    function at any time during the twelve months prior to the
                    date hereof.

          19.2.2    All IT Services are being and have been provided materially
                    in accordance with the relevant IT Contract.

          19.2.3    The Company has full and unrestricted access to and use of
                    the IT Systems, and no third party agreements or consents
                    are required to enable the Company to continue such access
                    and use following completion of the transaction contemplated
                    by this Agreement.

          19.2.4    So far as the Warrantors are aware it is not necessary for
                    the Company to incur as at the date of Completion any
                    further material expenditure on the modification,
                    development, expansion or (save in the normal course of
                    business) replacement of the IT Systems in order to carry on
                    its Business as at the date of Completion; and

          19.2.5    The Company has not suffered material loss as a result of
                    any virus or other extraneously-induced malfunction, and so
                    far as the Warrantors are aware, no person has had
                    unauthorised access to the IT Systems or any data stored
                    thereon. The Company operates a documented procedure to
                    minimise the risk of such infections and unauthorised
                    access.

          19.2.6    All data processed using the IT Systems and/or the IT
                    Services has been regularly archived in hard copy form. Such
                    hard copies have been properly stored and catalogued.

          19.2.7    The Company has taken all steps reasonably necessary to
                    ensure that its business can continue in the event of a
                    failure of the IT Systems (whether due to natural disaster,
                    power failure or otherwise).

19.3      Euro compliance

          The IT Systems accept payment, process payments and produce invoices
          in Euros.

                                       55

<PAGE>

20.       Legislation

          The Company has not received notice of and is not aware of any
          allegation of breach of the requirements of any legislation which is
          applicable to it.

                                       56

<PAGE>

                                     PART 2

                               TAXATION WARRANTIES

21.       Taxation

21.1      General

          21.1.1    Notices and returns

                    All notices, returns, computations and registrations of the
                    Company for the purposes of Taxation have been made
                    punctually on a proper basis and are correct and none of
                    them is, or so far as the Warrantors are aware is likely to
                    be, the subject of any dispute with any Taxation Authority.

          21.1.2    All information supplied by the Company to a Tax Authority
                    for the purposes of Taxation was when supplied and remains
                    complete and accurate in all material respects.

          21.1.3    Payment of Tax due

                    All Taxation which the Company is liable to pay prior to
                    Completion has been or will be so paid prior to Completion.

          21.1.4    Penalties or interest on Tax

                    The Company is not liable to pay any penalty, fine,
                    surcharge or interest charged by virtue of the provisions of
                    the TMA or any other Taxation Statute.

          21.1.5    Compliance with PAYE, national insurance contribution and
                    Tax collection obligations

                    (c)  All income tax deductible and payable under the PAYE
                         system has, so far as is required to be deducted, been
                         deducted from all payments made or treated as made by
                         the Company and all amounts due to be paid to the
                         Inland Revenue prior to the date of this Agreement have
                         been so paid, including all Tax chargeable on benefits
                         provided for directors, employees or former employees
                         of the Company or any persons required to be treated as
                         such.

                    (d)  All deductions and payments required to be made under
                         any Taxation Statute in respect of national insurance
                         and social security contributions (including employer's
                         contributions) have been so made.

                    (e)  All payments by the Company to any person which ought
                         to have been made under deduction of Tax have been so
                         made and the Company (if required by law to do so) has
                         accounted to the Inland Revenue for the Tax so
                         deducted.

                    (f)  Proper records have been maintained in respect of all
                         such deductions and payments and all applicable
                         regulations have been complied with.

                    (g)  The Disclosure Documents contain details so far as they
                         affect the Company of all current dispensations agreed
                         with the Inland Revenue in relation to PAYE and all
                         notifications given by the Inland Revenue under section
                         166, ICTA 1988.

                                       57

<PAGE>

          21.1.6    Investigations

                    The Company has not been subject to any visit, audit,
                    investigation, discovery or access order by any Taxation
                    Authority (other than those that are routinely carried out
                    by a Taxation Authority) and so far as the Warrantors are
                    aware there are no circumstances existing which make it
                    likely that a visit, audit, investigation, discovery or
                    access order will be made.

          21.1.7    Residence

                    The Company is and always has been resident for Taxation
                    purposes only in the jurisdiction in which it is
                    incorporated and does not and has not undertaken any
                    business or owned any assets in any other jurisdiction.

          21.1.8    Tax provision

                    Full provision or reserve has been made in the Accounts
                    prepared in accordance with the standard accounting practice
                    applicable to the Company for all Taxation assessed or
                    liable to be assessed on the Company or for which it is
                    accountable in respect of income, profits or gains earned,
                    accrued or received or deemed to be earned, accrued or
                    received on or before the Balance Sheet Date, including
                    distributions made down to such date or provided for in the
                    Accounts and proper provision has been made in the Accounts
                    for deferred Taxation in accordance with generally accepted
                    accounting principles.

          21.1.9    Concessions and arrangements

                    The amount of Taxation chargeable on the Company during any
                    accounting period ending on or within the six years before
                    the Balance Sheet Date has not depended on any concessions,
                    agreements or other formal or informal arrangements with any
                    Taxation Authority.

          21.1.10   Section 765, ICTA 1988

                    The Company has not without the prior consent of the
                    Treasury carried out or agreed to carry out any transaction
                    under section 765, ICTA 1988 which would be unlawful in the
                    absence of such consent and has, where relevant, complied
                    with the requirements of section 765A(2), ICTA 1988 (supply
                    of information on movement of capital within the EU) and any
                    regulations made or notice given thereunder.

          21.1.11   Transactions requiring clearance or consent

                    All particulars furnished to any Taxation Authority in
                    connection with an application for clearance or consent by
                    the Company or on its behalf or affecting the Company has
                    been made and obtained on the basis of full and accurate
                    disclosure to the relevant Taxation Authority of all
                    relevant material facts and considerations; and any
                    transaction for which clearance or consent was obtained has
                    been carried into effect only in accordance with the terms
                    of the relevant clearance or consent.

          21.1.12   Calculation of Taxation liability

                    The Company has sufficient records relating to past events
                    to permit accurate calculation of the Taxation liability or
                    relief which would arise upon a disposal or realisation or
                    supply on completion of each asset owned by the Company at
                    the

                                       58

<PAGE>

                    Balance Sheet Date or acquired by the Company since that
                    date but before Completion.

          21.1.13   Claims and disclaimers

                    The Company has duly submitted all claims and disclaimers
                    the making of which has been assumed for the purposes of the
                    Accounts.

21.2      Corporation tax, including corporation tax on chargeable gains

          21.2.1    Base values and acquisition costs

                    If each of the capital assets of the Company were disposed
                    of on the date hereof for a consideration equal to the book
                    value of that asset in, or adopted for the purposes of, the
                    Accounts or, in the case of assets acquired since the
                    Balance Sheet Date, equal to the consideration given upon
                    its acquisition, no liability to corporation tax on
                    chargeable gains or balancing charges under the CAA would
                    arise and for the purpose of determining the liability to
                    corporation tax on chargeable gains there shall be
                    disregarded any relief and allowances available to the
                    Company other than amounts falling to be deducted under
                    section 38, TCGA.

          21.2.2    Short life assets

                    The Company has not made any election under section 37, CAA
                    nor is it taken to have made such an election under section
                    37(8)(c), CAA.

          21.2.3    Long life assets

                    The Company does not own and has not owned a long life asset
                    (within the meaning of section 38A, CAA) in respect of which
                    any claim for capital allowances would be subject to the
                    provisions of section 38E-38G, CAA.

          21.2.4    Industrial buildings

                    None of the assets of the Company expenditure on which has
                    qualified for a capital allowance under Part I, CAA has at
                    any time been used otherwise than as an industrial building
                    or structure.

          21.2.5    Distributions

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

          21.2.6    Demergers

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

          21.2.7    Issues of securities

                    No securities (within the meaning of section 254(1), ICTA
                    1988) issued by the Company and remaining in issue at the
                    date of this Agreement were issued in such circumstances
                    that the interest payable thereon falls to be treated as a
                    distribution

                                       59

<PAGE>

                    under either sections 209(2)(d), 209(2)(da) or 209(2)(e),
                    ICTA 1988, nor has the Company agreed to issue such
                    securities in such circumstances.

          21.2.8    Capital distributions

                    The Company has not received any capital distribution to
                    which the provisions of section 189, TCGA could apply.

          21.2.9    Land sold and leased back

                    The Company has not entered into any transaction to which
                    the provisions of section 779 or 780, ICTA 1988 have been or
                    could be applied.

          21.2.10   Non-deductible payments

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

          21.2.11   No unremittable income or gains

                    No claim has been made by the Company under sections 584,
                    585 or 723 ICTA 1988 or under section 279, TCGA.

          21.2.12   Payments to directors, officers or employees

                    The Company has not agreed to make any payment to or agreed
                    to provide any benefit for any Director or former director,
                    officer or employee of the Company, whether as compensation
                    for loss of office, termination of employment or otherwise,
                    which is not allowable as a deduction in calculating the
                    profits of the Company for Taxation purposes whether up to
                    or after the Balance Sheet Date.

          21.2.13   Transfer pricing

                    The Company is not a party to any transaction or arrangement
                    under which it will be required to pay for any asset or any
                    services or facilities of any kind an amount which is in
                    excess of the market value of that asset or those services
                    or facilities, neither is or was the Company a party to any
                    transaction or arrangements to which the provisions of
                    section 770A and schedule 28 AA, ICTA 1988 will apply and
                    nor will the Company receive any payment for an asset or any
                    services or facilities of any kind that it has supplied or
                    provided or is liable to supply or provide which is less
                    than the market value of that asset or those services or
                    facilities.

          21.2.14   Transactions not at arm's length

                    The Company has not disposed of or acquired any asset in
                    circumstances falling within section 17 or 19, TCGA nor
                    given or agreed to give any consideration to which section
                    128(1)(2), TCGA will apply.

          21.2.15   Transactions between connected persons

                    No allowable loss has accrued to the Company to which
                    section 18(3), TCGA will apply.

                                       60

<PAGE>

          21.2.16   Depreciatory transactions

                    (h)  No allowable loss which might accrue on the disposal by
                         the Company of any share in or security of any company
                         is so far as the Warrantors are aware likely to be
                         reduced by virtue of the provisions of sections 176 and
                         177, TCGA.

                    (i)  The Company has not been a party to any scheme or
                         arrangement whereby the value of an asset has been
                         materially reduced as set out in sections 30-34, TCGA.

          21.2.17   Other claims made by the Company

                    The Company has made no claim under section 280, TCGA (tax
                    on chargeable gains payable by instalments).

          21.2.18   Gifts

                    The Company has not received any assets by way of gift as
                    mentioned in section 282, TCGA and the Company has not held,
                    and does not hold, shares in a company to which section 125,
                    TCGA could apply.

          21.2.19   Non-resident companies

                    (j)  There has not accrued or arisen any income, profit or
                         gain in respect of which the Company may be liable to
                         corporation tax by virtue of the provisions of section
                         13, TCGA or Chapter IV of Part XVII, ICTA 1988.

                    (k)  The Company has not been served with a notice in
                         respect of the unpaid corporation tax liability of any
                         company pursuant to section 191, TCGA.

          21.2.20   Controlled foreign companies

                    No notice of the making of a direction under section 747,
                    ICTA 1988 has been received by the Company and so far as the
                    Warrantors are aware no circumstances exist which would
                    entitle the Inland Revenue to make such a direction or to
                    apportion any profits of a controlled foreign company to the
                    Company pursuant to section 752, ICTA 1988.

          21.2.21   Agent for non-residents

                    The Company has not been a party to any transaction or
                    arrangement whereby it is or may hereafter become liable for
                    Taxation under or by virtue of section 42A, ICTA 1988 or
                    regulations made thereunder or section 126, FA 1995.

          21.2.22   Loan relationships

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

                    (m)  The Disclosure Documents contain full particulars of
                         any debtor relationship (within the meaning of section
                         103, FA 1996) of the Company which relates to a
                         relevant discounted security (within the meaning of
                         paragraph 3 of

                                       61

<PAGE>

                         schedule 13, FA 1996) to which paragraph 17 or 18 of
                         schedule 9, FA 1996 applies.

                    (n)  The Company has not been a party to a loan relationship
                         which had an unallowable purpose (within the meaning of
                         paragraph 13 of schedule 9, FA 1996).

                    (o)  The Disclosure Documents contain full particulars of:

                         (i)     any loan relationships to which the Company is
                                 a party to which paragraph 8 of schedule 15, FA
                                 1996 has applied or will apply on the
                                 occurrence of a relevant event (within the
                                 meaning of paragraph 8(2) of schedule 15, FA
                                 1996);

                         (ii)    2the amount of any deemed chargeable gain or
                                 deemed allowable loss that has arisen or will
                                 arise on the occurrence of such relevant event;
                                 and

                         (iii)   any election made pursuant to paragraph 9 of
                                 schedule 15, FA 1996.

                    (p)  The Company has not entered into any transaction to
                         which paragraph 11 of schedule 9, FA 1996 applies.

21.3      Close companies

          21.3.1    Close company status

                    The Company has at all times been a close company within the
                    meaning of sections 414 and 415, ICTA 1988.

          21.3.2    Close investment-holding company status

                    The Company has not in any accounting period beginning after
                    31st March, 1989 been a close investment-holding company as
                    defined in section 13A, ICTA 1988.

          21.3.3    Distributions

                    No distribution within section 418, ICTA 1988 has ever been
                    made by the Company.

          21.3.4    Loans to participators

                    Any loans or advances made or agreed to be made by the
                    Company within sections 419 and 420 or 422, ICTA 1988 have
                    not been released or written off or agreed to release or
                    write off the whole or any part of any such loans or
                    advances.

21.4      Inheritance tax

          21.4.1    No transfers of value and associated operations

                    The Company has made no transfers of value within sections
                    94 and 202, ITA nor has the Company received a transfer of
                    value such that liability might arise under section 199, ITA
                    nor has the Company been party to associated operations in
                    relation to a transfer of value as defined by section 268,
                    ITA.

          21.4.2    Inland Revenue charge

                                       62

<PAGE>

                    There is no unsatisfied liability to inheritance tax
                    attached to or attributable to the Shares or any asset of
                    the Company and none of them are subject to an Inland
                    Revenue charge as mentioned in section 237 and 238, ITA.

          21.4.3    Power of sale, mortgage or charge

                    No asset owned by the Company nor the Shares are liable to
                    be subject to any sale, mortgage or charge by virtue of
                    section 212, ITA.

21.5      VAT

          21.5.1    Returns and payments

                    The Company is a taxable person duly registered for the
                    purposes of VAT.

          21.5.2    VAT groups

                    The Company is not and has not been a member of a group for
                    VAT purposes.

          21.5.3    Transactions between connected persons

                    The Company has not been or agreed to be party to any
                    transaction or arrangement in relation to which a direction
                    has been or could be made under paragraph 1 of schedule 6,
                    VATA or to which paragraph 2(3A) of schedule 10, VATA
                    applied.

          21.5.4    Charge to VAT as agent or representative

                    The Company is not and has not agreed to become liable for
                    VAT by virtue of sections 47 and 48, VATA.

          21.5.5    VAT and Properties

                    The Company or its relevant associate for the purposes of
                    paragraph 3(7) of schedule 10, VATA has exercised the
                    election to waive exemption from VAT (pursuant to paragraph
                    2 of schedule 10, VATA) only in respect of those Properties
                    listed (as having been the subject of such an election) in
                    the Disclosure Documents and:

                    (q)  neither the Company nor its relevant associate has any
                         obligation to exercise such an election in respect of
                         any other of the Properties;

                    (r)  any notification of the election and information
                         required by paragraph 3(6) of schedule 10, VATA has
                         been given and any permission required by paragraph
                         3(9) of schedule 10, VATA has been properly obtained;

                    (s)  so far as the Warrantors are aware no election has or
                         will be disapplied or rendered ineffective by virtue of
                         the application of the provisions of paragraph 2 (3AA)
                         of schedule 10, VATA;

                    (t)  the Company has not agreed to refrain from making an
                         election in relation to any of the Properties.

          21.5.6    Capital goods scheme

                                       63

<PAGE>

                    The Company does not own and has not at any time within the
                    period of ten years preceding the date hereof owned any
                    assets which are capital items subject to the Capital Goods
                    Scheme under Part XV of the VAT Regulations 1995.

21.6      Stamp duty

          21.6.1    Stamp duty

                    All stampable documents wheresoever executed (other than
                    those which have ceased to have any legal effect) to which
                    the Company is a party as a purchaser, transferee, assignee,
                    lessee or mortgagee and which are required to prove the
                    Company's right, title or interest in an asset beneficially
                    owned by the Company on Completion have been duly stamped or
                    stamped with a particular stamp denoting that no stamp duty
                    is chargeable.

                                       64

<PAGE>

                                   SCHEDULE 4

                                     PART 1

                                  UK PROPERTIES

<TABLE>
<CAPTION>
          (1)                 (2)                   (3)                (4)                   (5)
    DESCRIPTION OF          TENURE             REGISTERED OR     TITLE NUMBER AND         EXISTING USE
       PROPERTY                                UNREGISTERED     GRADE OF TITLE (IF
                                                                    REGISTERED)
<S>                      <C>                   <C>              <C>                    <C>
Unit 38 Harrogate        Leasehold             Unregistered     N/A                    Offices and storage
Business Park,
Wetherby Road,
Harrogate

Unit 2 Back Gladstone    Licence               Unregistered     N/A                    Storage
Street,
Harrogate

Premises at 19           Verbal agreement      Unregistered     N/A                    Offices and storage
Greenfield Avenue,
Stourbridge
</TABLE>

                                     PART 2

                                  US PROPERTIES

<TABLE>
<CAPTION>
          (1)                 (2)                   (3)                (4)                   (5)
    DESCRIPTION OF          TENURE             REGISTERED OR     TITLE NUMBER AND         EXISTING USE
       PROPERTY                                UNREGISTERED     GRADE OF TITLE (IF
                                                                    REGISTERED)
<S>                      <C>                   <C>              <C>                    <C>
Premises at              Leasehold              N/A              N/A                   Offices and storage
Lakeview Office
Park, South
Semoran
Boulevard, Winter
Park, Florida
</TABLE>

                                       65

<PAGE>

                                     PART 3

                                 LEASES/LICENCES

<TABLE>
<CAPTION>
         (1)                  (2)                    (3)                    (4)                    (5)
    DESCRIPTION OF            DATE                   TERM                 PARTIES          CURRENT YEARLY RENT
       PROPERTY
<S>                      <C>                    <C>                   <C>                      <C>
Unit 38 Harrogate        14/07/2000             5 year from and       D S Estates Limited      ***
Business Park,                                  including 03/04/2000  (1)
Wetherby Road,
Harrogate
                                                                      Atlantech Medical
                                                                      Devices Limited (2)

Unit 2 Back              05/06/2001             Until determined by   Pelican Marketing        ***
Gladstone Street,                               one month's written   Limited (1)
Harrogate                                       notice

                                                                      Atlantech Medical
                                                                      Devices Limited (2)

19 Greenfield            May 2000               Until determined by   Ronald Mifsud (1)        ***
Avenue                                          reasonable notice
Stourbridge                                                           Atlantech UK (2)
</TABLE>

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       66

<PAGE>

                                   SCHEDULE 5

                                     PART I

                BASIS FOR PREPARATION OF THE COMPLETION ACCOUNTS

The Completion Accounts shall consist of the following as at the close of
business on the date of Completion:

(i)       ***

(ii)      ***

The Completion Accounts shall be prepared in accordance with the accounting
policies and principles adopted by each Company to the extent consistent with US
GAAP and otherwise accordance with the applicable standards under US GAAP.

***

(i)       ***

(ii)      ***

For the avoidance of doubt, at Completion Atlantech will repay outstanding loans
from directors, which in aggregate total ***. A corresponding equivalent amount
will appear in the Completion Accounts as an inter-company loan from the
Purchaser.

The Completion Accounts shall include a schedule listing the full and accurate
details of all claims, elections, surrenders, disclaimers, notices or consents,
the adjustment to or revision of making, giving or doing of which in each case
was taken into account in computing the provision or reserve for Tax in the
Completion Accounts.

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       67

<PAGE>

                                   SCHEDULE 6

                                   COMPLETION

                                     PART 1

1.        Warrantors' obligations

          On Completion, the Warrantors shall deliver to the Purchaser:

1.1       statements from each of the banks at which each Company and each of
          the Subsidiaries maintains an account of the amount standing to the
          credit or debit of all such bank accounts as at the close of business
          no earlier than three Business Days prior to Completion;

1.2       the cash book balances of the Company and each of the Subsidiaries as
          at Completion with statements reconciling such cash book balances and
          the relevant cheque books with the balances on the bank accounts of
          the Company and each of the Subsidiaries as shown by the statements
          referred to in paragraph 1.1;

1.3       the cheque books relating to all the bank accounts of the Company and
          each of the Subsidiaries together with confirmation that no cheques
          have been written by the Company or any of the Subsidiaries since
          preparation of the statements referred to in paragraph 1.2;

1.4       the (i) Tax Deed duly executed by each of the Warrantors, and (ii)
          Service Agreements in the agreed terms duly executed by each of
          Nicholas Woods, Clive Reay-Young, Jennifer Garman and Simon Mifsud;

1.5       transfers of the Shares duly executed by the registered holders
          thereof in favour of the Purchaser or its nominee(s) together with the
          relevant original share certificates in the names of such registered
          holders or appropriate deeds of indemnity;

1.6       such waivers, consents or other documents (including any power of
          attorney under which any document required to be delivered under Part
          1 of this schedule has been executed) in the agreed terms to enable
          the Purchaser and its nominee(s) to be registered as the holders of
          the Shares;

1.7       original certificates in respect of all issued shares in the capital
          of each of the Subsidiaries;

1.8       the statutory registers and minute books (properly written up to the
          time immediately prior to Completion), the common seal (if any), the
          certificate of incorporation and (if applicable) any certificate of
          incorporation on change of name of the Company and each of the
          Subsidiaries;

1.9       the documents of title to the Properties;

1.10      the written resignations in the agreed terms of all the Directors
          (except Nick Woods and Clive Reay-Young) from their respective
          offices, such resignations to take effect from Completion;

1.11      the written resignation of the auditors of the Company and of each of
          the Subsidiaries in the agreed terms to take effect from Completion
          containing the statements referred to in section 394(1), CA 85 that
          they consider there are no such circumstances as are mentioned in that
          section and confirming that they have deposited or shall deposit that
          statement in accordance with section 394(2), CA 85 at the respective
          registered offices of the Company and each of the Subsidiaries; and

                                       68

<PAGE>

2.        Purchaser's obligations

          On completion, the Purchaser shall deliver to each Warrantor:

2.1       a counterpart of the Tax Deed duly executed by the Purchaser;

2.2       a counterpart of each Service Agreement duly executed by the relevant
          Company; and

2.3       a counterpart of a *** agreement for each Warrantor in the agreed
          terms duly executed by the Guarantor.

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       69

<PAGE>

                                     PART 2

          On Completion, the Warrantors shall cause a board meeting of the
          Company and of each of the Subsidiaries to be held at which:

1.        in the case of each Company only, the said transfers of the Shares
          shall be passed for registration and registered (subject to the same
          being duly stamped, which shall be at the cost of the Purchaser);

2.        the resignations referred to in paragraphs 1.10 and 1.11 of Part 1
          shall be tendered and accepted so as to take effect at the close of
          the meeting;

3.        persons nominated by the Purchaser (in the case of directors subject
          to any maximum number imposed by the relevant articles of association)
          shall be appointed additional directors;

4.        Messrs. PricewaterhouseCoopers LLP shall be appointed auditors.

                                       70

<PAGE>

                                   SCHEDULE 7

                              INTELLECTUAL PROPERTY

A    -    PART 1 REGISTERED PROPRIETARY INTELLECTUAL PROPERTY

***

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the portions.

                                       71

<PAGE>

B    -    TRADE MARK PORTFOLIO

<TABLE>
<CAPTION>
                         COUNTRY OF
NAME OF TRADE MARK       REGISTRATION        CLASSES REGISTERED     TRADE MARK NUMBER
-------------------------------------------------------------------------------------
<S>                      <C>                <C>                     <C>
***                      ***                ***                     ***
-------------------------------------------------------------------------------------
***                      ***                                        ***
-------------------------------------------------------------------------------------
***                      ***
-------------------------------------------------------------------------------------
***                      ***
-------------------------------------------------------------------------------------
</TABLE>

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       72

<PAGE>

PART 2    UNREGISTERED PROPRIETARY INTELLECTUAL PROPERTY

UNREGISTERED RIGHT                               DETAILS
--------------------------------------------------------------------
***                                              ***
--------------------------------------------------------------------
***                                              ***
--------------------------------------------------------------------
Unregistered trade names                         PED

                                                 Endoflip

                                                 Cobra

                                                 Revolution

                                                 Arthroclear

                                                 Pathfinder

                                                 Barracuda

                                                 Marlin

                                                 Manta 1

                                                 Swordfish

                                                 Beluga

                                                 Piranha

                                                 Jaws

                                                 Tiger Shark

                                                 Hammerhead
--------------------------------------------------------------------

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       73

<PAGE>

PART 3    LICENCES IN

***

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       74

<PAGE>

PART 4    LICENCES OUT

***

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       75

<PAGE>

                                   SCHEDULE 8

                       LIMITATION OF WARRANTORS' LIABILITY

                                     PART 1

                               GENERAL LIMITATIONS

1.        Notwithstanding the provisions of Clause 6, the Vendors shall not be
          liable in respect of a breach of any of the Warranties if and to the
          extent that the loss occasioned thereby has been recovered under the
          Indemnities or the Tax Deed.

2.        The Warrantors shall not be liable under the Warranties:

2.1       to the extent that the facts which might result in a Claim or possible
          Claim were Disclosed;

2.2       to the extent that the subject of the Claim is allowed or provided for
          or reserved in the Accounts, the Management Accounts or the Completion
          Accounts or was specifically referred to in the notes to any such
          accounts in respect thereof; or

2.3       to the extent that a Claim arises or is increased:

          2.3.1     wholly or partly from an act or omission compelled by law;

          2.3.2     as a result of any increase in rates of Taxation since the
                    date of this Agreement; or

          2.3.3     wholly or partly as a result of the passing or coming into
                    force of or any change in any enactment, law, regulation,
                    directive, requirement or any practice of any government,
                    government department or agency or regulatory body
                    (including but not limited to extra-statutory concessions of
                    the Inland Revenue) after the date of this Agreement whether
                    or not having retrospective effect; or

2.4       if and to the extent that a Claim is increased due to the Purchaser or
          the Guarantor failing to act in all material respects in accordance
          with the provisions of paragraph 5 of this schedule; or

2.5       to the extent that such liability occurs or arises as a result of or
          is otherwise attributable to any voluntary act, transaction or
          omission of either Company or the Subsidiary or the Purchaser or the
          Guarantor or any member of the Purchaser's Group on or after
          Completion; or

2.6       to the extent that such liability occurs or arises wholly as a result
          of any act or omission carried out by the Warrantors at the specific
          request of the Purchaser or the Guarantor after Completion; or

2.7       to the extent that the income, profits or gains in respect of which
          the liability arises were actually earned, accrued or received by
          either Company or the Subsidiary but were not reflected in the
          Accounts or the Management Accounts or Completion Accounts; or

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

2.9       to the extent that the matter to which it relates

                                       76

<PAGE>

          2.9.1     is or, but for this Agreement, is recoverable by either
                    Company or the Subsidiaries from insurers and the amount is
                    so recovered; or

          2.9.2     is in respect of lost goodwill or possible business
                    following Completion where such loss is unrelated to a
                    Claim.

3.        The Purchaser agrees for itself and on behalf of every member of the
          Purchaser's Group with the Warrantors that in respect of any matter
          which may give rise to a Claim which relates to both Companies:

3.1       no loss, damage, cost, expense or other liability shall be met more
          than once;

3.2       such Claim shall for the purposes of paragraph 6 of this schedule
          shall be separate identifiable and quantifiable in respect of each
          Company.

4.

4.1       Where the Purchaser and/or either Company and/or the Subsidiary is/are
          at any time entitled to recover from some other person (including any
          Tax Authority) any sum in respect of any matter giving rise to a Claim
          the Purchaser shall and shall procure that the relevant Company or the
          Subsidiary shall take all reasonable steps to enforce such recovery
          prior to issuing proceedings against the Warrantors (but, for the
          avoidance of doubt, without prejudice to its right to take action
          against the Warrantors including the right to serve a notice of claim
          on the Warrantors in accordance with paragraph 6.6 of Part 2 and/or
          Part 3 of this Schedule), and in the event that the Purchaser or the
          Company or the Subsidiary shall recover any amount from such other
          person the amount of the Claim against the Warrantors shall be reduced
          by the amount recovered less all costs, charges and expenses
          reasonably incurred by the Purchaser or the Company or the Subsidiary
          in recovering that sum from such other person.

4.2       If the Warrantors pay at any time to the Purchaser or to either
          Company or to a Subsidiary an amount pursuant to a Claim and the
          Purchaser or the Company or a Subsidiary subsequently becomes entitled
          to recover from some other person any sum in respect of any matter
          giving rise to such Claims the Purchaser shall and shall procure that
          the relevant Company or the Subsidiary shall take all reasonable steps
          to enforce such recovery and shall, if successful in such recovery,
          forthwith repay to the Warrantors so much of the amount paid by them
          to the Purchaser or the relevant Company or the Subsidiary as does not
          exceed the sum recovered from such other person less all costs,
          charges and expenses reasonably incurred by the Purchaser or the
          relevant Company or the Subsidiary in recovering that sum from such
          other person.

4.3       If any amount is repaid to the Warrantors by the Purchaser or either
          Company or the Subsidiary pursuant to paragraph 4.2 above an amount
          equal to the amount so repaid shall be deemed never to have been paid
          by the Warrantors for the purposes of Part 2 of this schedule and
          accordingly shall not be treated as an amount in respect of which any
          liability has been incurred.

5.

5.1       If the Purchaser or either Company or a Subsidiary become aware of a
          matter which is reasonably likely to give rise to a Claim:

          5.1.1     the Purchaser shall (or shall procure that the relevant
                    Company or the Subsidiary concerned shall) as soon as
                    reasonably practicable give written notice to each Warrantor
                    of the matter and shall consult with each Warrantor with
                    respect to such

                                       77

<PAGE>

                    matter but such notice shall not be a condition precedent to
                    the liability of the Warrantors;

          5.1.2     the Purchaser shall (and shall procure that the Company or
                    Subsidiary concerned shall) provide to each Warrantor and
                    his advisers reasonable access to premises and personnel and
                    to relevant assets, documents and records within the
                    Purchaser's Group for the purposes of investigating the
                    matter and enabling the Warrantors to take the action
                    referred to in paragraph 5.1.4;

          5.1.3     each Warrantor (at his cost) may take copies of the
                    documents or records, and photograph the premises or assets,
                    referred to in paragraph 5.1.2;

          5.1.4     subject to paragraph 5.1.5 below and the Warrantors
                    accepting unconditionally in writing to the Purchaser
                    liability for a relevant Claim the Purchaser shall (i) (and
                    shall procure that the Company or Subsidiary concerned
                    shall) take such action as the Warrantors may reasonably
                    request in writing to negotiate, avoid, dispute, resist,
                    mitigate, compromise, defend or appeal against any such
                    Claim and any adjudication with respect thereto which shall
                    include (without limitation) the Company or Subsidiary
                    applying to postpone (so far as legally possible) the
                    payment of any taxation and (ii) shall not, and shall ensure
                    that no member of the Purchaser's Group will admit liability
                    in respect of, or compromise, or settle, the matter without
                    the prior written consent of the Warrantors (such consent
                    not to be unreasonably withheld or delayed);

          5.1.5     the Warrantors shall indemnify and secure the Purchaser and
                    the relevant Company and Subsidiary to their reasonable
                    satisfaction against all losses, damages and expenses
                    including interest on overdue tax and reimburse to the
                    Purchaser and the relevant Company and Subsidiary all
                    out-of-pocket expenses reasonably incurred by them in
                    complying with their obligations under this paragraph 5;

                                     PART 2

                    LIMITATIONS UNDER THE WARRANTIES/TAX DEED

6.        The liability of the Warrantors in respect of any claim under the
          Warranties or claim under the Tax Deed (and any claim pursuant to
          clause 9 of this Agreement with respect to paragraphs 6.3 and 6.5
          below):

6.1       shall not arise unless and until the amount of such claim when
          aggregated with other claims based on essentially the same or similar
          facts exceeds *** in respect of any single item;

6.2       shall not arise unless and until the amount of such claim when
          aggregated with the amount of any other such claim made against the
          Warrantors under this Agreement or the Tax Deed or which would have
          been made but for the operation of this paragraph 6.2 exceeds *** in
          which event all of such claim or claims shall be recoverable hereunder
          (and not just the excess);

6.3       in respect of such claims in connection with Atlantech shall not (when
          aggregated with the amount of all other such claims together with any
          claim pursuant to clause 9 of this Agreement) exceed *** and

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       78

<PAGE>

6.4       in respect of such claims in connection with Atlantech UK shall not
          (when aggregated with the amount of all other such claims) exceed ***
          and

6.5       shall not (when aggregated with the amount of all other such claims
          together with any claim pursuant to clause 9 of this Agreement) exceed
          *** and

6.6       shall cease on the date falling eighteen (18) months after the date of
          this Agreement with respect to claims under the Warranties (other than
          Tax Warranties), except in respect of matters which have been the
          subject of a bona fide written claim which is made before the relevant
          date by or on behalf of the Purchaser to the Vendors giving reasonable
          details of all material aspects of the Claim including the Purchaser's
          bona fide estimate of the amount thereof. Any such claim shall (if it
          has not previously been satisfied, settled or withdrawn) be deemed to
          have been withdrawn unless legal proceedings in respect of it have
          been commenced by both being issued and served within six months of
          such notification to the Warrantors,

provided always that in the case of each Warrantor his /her liability in
aggregate shall never exceed an amount equal to the amount of Provisional
Consideration received by him at Completion as set out opposite his name in
Column (E) of Schedule 1 (or, in the case of Simon Mifsud ***.

                                     PART 3

           TIME LIMITATIONS UNDER THE TAX WARRANTIES AND THE TAX DEED

          The liability of the Warrantors in respect of any Claim or any claim
          under the Tax Deed shall cease on the date falling seven (7) years
          after the date of this Agreement except in respect of matters which
          have been the subject of a bona fide written claim which is made
          before the relevant date by or on behalf of the Purchaser to the
          Warrantors giving reasonable details of all material aspects of the
          claim including the Purchaser's bona fide estimate of the amount
          thereof. Any such claim shall (if it has not previously been
          satisfied, settled or withdrawn) be deemed to have been withdrawn
          unless legal proceedings in respect of it have been commenced by both
          being issued and served within six months of such notification to the
          Warrantors.

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       79

<PAGE>

                                   SCHEDULE 9

                              SUBSIDIARY WARRANTIES

                                     PART A

                      ATLANTECH MEDICAL DEVICES (USA) INC.

          In this Part A the following words shall have the following meanings:

          "Accounts" means the unaudited monthly management accounts of the
          Subsidiary for the sixteen month period ended on the Accounts Date
          comprising the unaudited balance sheet and profit and loss account as
          at and for the period ended on the Accounts Date;

          "Accounts Date" means 31 August 2002.

1.        The facts set out under the heading "The Subsidiary" in Schedule 2 are
          accurate in all material respects and not misleading.

2.        Atlantech is the legal and beneficial owner of the shares in the
          Subsidiary set out under the heading "The Subsidiary" opposite
          Atlantech's name in Schedule 2. Such shares constitute the whole of
          the allotted and issued share capital of the Subsidiary, have been
          properly allotted and issued and there is no agreement, arrangement or
          obligation requiring the creation, allotment, issue, transfer,
          redemption or repayment of, or the grant to any person of the right
          (whether conditional or not) to require the allotment, issue,
          transfer, redemption or repayment of, any shares in the capital of the
          Subsidiary (including, without limitation, an option or right or
          pre-emption or conversion).

3.        There is no litigation, arbitration, prosecution, administrative or
          other legal proceedings or dispute in existence or threatened against
          Atlantech Medical Devices Limited in respect of the shares in the
          Subsidiary and there are no facts known to the Warrantors or any of
          them which might give rise to any such proceedings or any such
          dispute.

4.        There is no encumbrance on, over or affecting any of the issued or
          unissued shares in the capital of the Subsidiary and there is no
          agreement or commitment to give or create any encumbrance or
          negotiations which may lead to such an agreement or commitment and no
          claim has been made by any person to be entitled to an encumbrance in
          relation thereto.

5.

5.1       The Accounts disclose all the material assets and liabilities of the
          Subsidiary as at the Accounts Date.

5.2       The Accounts have been prepared in accordance with accounting policies
          consistent with US GAAP with all due care. The cumulative profits,
          assets and liabilities of Atlantech Medical Devices (USA) Inc stated
          in the US Accounts have not been knowingly or wilfully misstated.

6.        Since the Accounts Date the Subsidiary has not (other than as
          disclosed in the Accounts):

6.1       acquired any material assets (namely, any asset of a value in excess
          (in aggregate) of US$10,000);

6.2       incurred any material liability (namely, any liability of a value in
          excess (in aggregate) of US$10,000); or

                                       80

<PAGE>

6.3       entered into any material contract (written or otherwise) outside the
          ordinary course of business.

7.        All the property and assets which are described and included in the
          Accounts or which are used in connection with the business of the
          Subsidiary are:

7.1       legally and beneficially owned by the Subsidiary or used by the
          Subsidiary with the consent of the legal and beneficial owner;

7.2       in the possession or under the control of the Subsidiary;

7.3       free from all encumbrances and there is not any agreement or
          commitment to give or create, and no claim has been made by any person
          entitled to; any encumbrance; and

7.4       are situated in the United States of America.

8.        So far as the Warrantors are aware, at all times during the period of
          occupation by the Company the U.S. Property has been used, and at all
          times the Business has been conducted thereon, in all material
          respects in compliance with Environmental Law.

9.        Details of all insurance policies effected by the Subsidiary or by any
          other person in relation to any of the Subsidiary's assets are annexed
          to the Disclosure Letter and all such details are accurate in all
          material respects and all such insurance policies are currently in
          force.

10.       All the accounts, books, registers, ledgers and financial and other
          material records of whatsoever kind of the Subsidiary (including all
          invoices and other records required for customs and excise purposes)
          are materially up to date, in its possession or under its control and
          have been properly and accurately kept and compiled in all material
          respects.

11.       The Subsidiary does not own any material Intellectual Property and so
          far as the Warrantors are aware has not disclosed any Confidential
          Information to any third party (other than the Companies).

12.       Copies of the employment agreements for all employees of the
          Subsidiary are annexed to the Disclosure Letter and these contain all
          material terms of employment with respect to such individuals.

13.       There is not outstanding any claim against, nor are there (or have
          there been) any litigation, arbitration or administrative proceedings
          involving, the Subsidiary and no dispute exists between the Subsidiary
          and any customer or supplier thereof nor are there any circumstances
          of which the Warrantors are aware and which are believed by the
          Warrantors to be likely to give rise to any such dispute or claim.

14.       Save as disclosed in the Accounts, the Subsidiary does not have
          outstanding any borrowing nor any encumbrance or any obligation to
          create an encumbrance.

15.       So far as the Warrantors are aware, neither the Subsidiary nor any of
          its officers (during the course of their duties in relation to the
          business of the Subsidiary) has committed or omitted to do any act or
          thing the commission or omission of which is in contravention of any
          statutory obligation or any other federal law of the United States of
          America or law of the state of Florida.

16.       The Subsidiary has not since its incorporation had any subsidiary or
          subsidiary undertaking.

                                       81

<PAGE>

17.       The copy of the articles of incorporation of the Subsidiary annexed to
          the Disclosure Letter is accurate and complete.

18.       The lease with respect to the premises at South Semoran Boulevard,
          Winter Park, Florida annexed to the Disclosure Letter is accurate in
          all material respects and the Subsidiary does not own or have any
          other interest in any real estate.

19.       The Subsidiary does not operate any pension scheme for its employees
          nor is liable or under any obligation to contribute to any pension
          scheme.

                                     PART B

                              ATLANTECH ITALIA SRL

1.        Atlantech is the legal and beneficial owner of 80% shares in Atlantech
          Italia Srl. So far as the Warrantors are aware, such shares constitute
          80% of the allotted and issued share capital of Atlantech Italia Srl,
          have been properly allotted and issued and there is no agreement,
          arrangement or obligation requiring the creation, allotment, issue,
          transfer, redemption or repayment of, or the grant to any person of
          the right (whether conditional or not) to require the allotment,
          issue, transfer, redemption or repayment of, any shares in the capital
          of Atlantech Italia Srl (including, without limitation, an option or
          right or pre-emption or conversion).

2.        There is no litigation, arbitration, prosecution, administrative or
          other legal proceedings or dispute in existence or threatened against
          Atlantech Medical Devices Limited in respect of the shares in
          Atlantech Italia Srl and there are no facts known to the Warrantors or
          any of them which might give rise to any such proceedings or any such
          dispute.

3.        So far as the Warrantors are aware, there is not outstanding any claim
          against, nor are there (or have there been) any litigation,
          arbitration or administrative proceedings involving, Atlantech Italia
          Srl *** and no dispute exists between Atlantech Italia Srl and any
          customer or supplier thereof nor are there any circumstances of which
          the Warrantors are aware and which are believed by the Warrantors to
          be likely to give rise to any such dispute or claim.

*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       82

<PAGE>

         SIGNED AS A DEED by                      )      _______________________
                                                                 Director

         for and on behalf of                     )

         ARTHROCARE CORPORATION                   )      _______________________
                                                         Director/Secretary

         SIGNED AS A DEED by                      )      _______________________
                                                                 Director

         for and on behalf of                     )

         ARTHROCARE CAYMAN LIMITED                )      _______________________
                                                         Director/Secretary

         SIGNED AS A DEED by JENNIFER GARMAN
         acting as Attorney for
         NICHOLAS WOODS

         in the presence of:

         ________________________________
         Name
         ________________________________
         Address
         ________________________________

         ________________________________

         ________________________________
         Occupation

         SIGNED AS A DEED by JENNIFER GARMAN
         acting as Attorney for
         CLIVE REAY-YOUNG

         in the presence of:

         ________________________________
         Name
         ________________________________
         Address
         ________________________________

         ________________________________

         ________________________________
         Occupation

                                       83

<PAGE>

         SIGNED AS A DEED by
         JENNIFER GARMAN

         in the presence of:

         ________________________________
         Name
         ________________________________
         Address
         ________________________________

         ________________________________

         ________________________________
         Occupation

         SIGNED AS A DEED by JENNIFER GARMAN
         acting as Attorney for
         ***

         in the presence of:

         ________________________________
         Name
         ________________________________
         Address
         ________________________________

         ________________________________

         ________________________________
         Occupation

         SIGNED AS A DEED by JENNIFER GARMAN
         acting as Attorney for
         ***

         in the presence of:

         ________________________________
         Name
         ________________________________
         Address
         ________________________________

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       84

<PAGE>

         ________________________________

         ________________________________
         Occupation

         SIGNED AS A DEED by JENNIFER GARMAN
         acting as Attorney for
         ***

         in the presence of:

         ________________________________
         Name
         ________________________________
         Address
         ________________________________

         ________________________________

         ________________________________
         Occupation

         SIGNED AS A DEED by JENNIFER GARMAN
         acting as Attorney for
         ***

         in the presence of:

         ________________________________
         Name
         ________________________________
         Address
         ________________________________

         ________________________________

         ________________________________
         Occupation

         SIGNED AS A DEED by JENNIFER GARMAN
         acting as Attorney for
         ***

         in the presence of:
__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       85

<PAGE>

         ________________________________
         Name
         ________________________________
         Address
         ________________________________

         ________________________________

         ________________________________
         Occupation

         SIGNED AS A DEED by JENNIFER GARMAN
         acting as Attorney for***

         in the presence of:

         ________________________________
         Name
         ________________________________
         Address
         ________________________________

         ________________________________

         ________________________________
         Occupation

         SIGNED AS A DEED by JENNIFER GARMAN
         acting as Attorney for
         ***

         in the presence of:

__________
*** Certain information on this page has been omitted and filed separately with
the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                       86

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00050-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00050-of-00352.parquet"}]]