ASSET PURCHASE AGREEMENT

Exhibit 2

ASSET PURCHASE AGREEMENT

providing for the purchase of certain assets of

BAYER DIAGNOSTICS MANUFACTURING LIMITED

(Seller)

by

KIMBALL ELECTRONICS (WALES) LIMITED

(Buyer)

CONTENTS

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ASSET PURCHASE AGREEMENT

1.    GENERAL AND LEGAL EFFECT

This Asset Purchase Agreement ( Agreement ), dated as of the 3rd day of April, 2006, sets forth the terms and conditions on which (i) Bayer HealthCare LLC ( BHC ), a Delaware limited liability company, a member of the worldwide group of companies headed by Bayer AG ( Bayer Group ), desires to cause its wholly-owned subsidiary Bayer Diagnostics Manufacturing Limited, a company incorporated in England and Wales with number 403450, ( BDML ) to sell to Kimball Electronics (Wales) Limited, a company incorporated in England and Wales with number 5675516 ( Kimball Wales ), a wholly owned United Kingdom subsidiary of Kimball Electronics Manufacturing, Inc., a company incorporated in the State of Indiana in the United States ( Kimball ), the manufacturing operation owned and operated by BDML at Bridgend, Wales, United Kingdom (the Operation ) and accompanying assets and assign to Kimball Wales certain contracts as more fully described below, and Kimball desires to cause Kimball Wales to purchase the Operation and accept such assignment; and (ii) BHC and Kimball are willing, subject to the completion of the purchase and sale of the Operation, to enter into a contract manufacturing agreement, between BHC and Kimball Wales ( Contract Manufacturing Agreement ) and, in the case of Kimball to cause Kimball Wales to enter into such Contract Manufacturing Agreement, under which BHC will contract with Kimball and Kimball Wales for manufacture and/or packaging of the products currently manufactured and/or packaged at the Land and Buildings (the Products ) for distribution by the Diagnostics Division and Diabetes Care Division of BHC or other companies in the Bayer Group (the Transaction ).

All of the representations, warranties, undertakings and obligations of BDML and BHC contained in this Agreement are joint and several. All of the representations, warranties, undertakings and obligations of Kimball Wales and Kimball contained in this Agreement are joint and several.

2.    SALE AND PURCHASE

BDML shall or shall procure to sell, assign, transfer, and deliver to Kimball Wales the following assets used in the Operation as of the Completion Date (defined below) (the Transferring Assets ):

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(a)     all plant, machinery and equipment, including spare parts, owned by BDML at Completion (as defined below) and situated either at the Land and Buildings or at the locations specified in the Disclosure Schedule (excluding all fixtures and equipment that are transferred pursuant to the Transfer) (the Transferring Equipment);

(b)     all good and usable inventory and stocks of raw materials, work-in-progress, finished goods, and consumables owned by BDML and held at the Land and Buildings or locations specified in the Disclosure Schedule or in transit to BDML from suppliers at the Completion Date and that are commensurate with needs for forecasted Product volumes for the purposes of manufacturing and/or packaging the Products (the Stock );

(c)     all of BDML's right, title, interest and benefit subject to the burden of contracts of BDML relating to the conduct of the Operation and production of the Products, including all operating and finance leases and all agreements for purchase by BDML of services and supplies for the Operation (including, without limitation, any security or similar deposits relating to such contracts but excluding any contracts of employment or insurance except the Bayer UK Group Long Term Disability Policy (number G10246) which Assicurazioni Generali S.p.A in relation to two Employees and the Group Income Continuance Plan (number 702886) with Friends Provident in relation to two Employees (collectively, the Transferring Contracts , of which the Material Transferring Contracts are listed in the attached Schedule 5;

(d)     to the extent permitted by their terms or applicable law, all licenses, permits, authorizations and registrations which are vested in BDML necessary to conduct the Operation (excluding any licenses, permits, authorizations and registrations relating to the marketing of the Products) as listed in Schedule 6 (the Licences );

(e)     all records (excluding, unless otherwise provided for in this Agreement, any tax records), manuals, maintenance procedures, equipment lists, reports, data, correspondence, equipment literature, files, and other documents relating solely to the Transferring Assets and the Employees;

(f)     to the extent BDML is able to assign the benefit of the same, and subject to the burden, all product and service warranties of manufacturers (other than BDML or BHC) relating to the Transferring Assets or to the Products manufactured at the Land and Buildings on or after the Completion Date (the Manufacturer Warranties ); and

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(g)     subject to clause 2(f), all claims, causes, or rights of action under the Manufacturer Warranties, except to the extent relating to items incorporated in Products sold by BDML prior to the Completion Date.

In addition, BDML will provide Kimball Wales with copies of all records relating to Product manufacturing, quality warranty and US Food and Drug Administration ( FDA ) matters (but specifically excluding any Product design and marketing documentation) and the right to use the same in connection with the Contract Manufacturing Agreement.

3.     EXCLUDED ASSETS, EXCLUDED LIABILITIES AND ASSUMED LIABILITIES

3.1     Excluded Assets . Subject to the Transferring Assets described in clause 2 hereof, the following assets shall be excluded from the sale that is the subject matter of this Agreement:

(a)     the Land and Buildings which shall be transferred pursuant to the Transfer to Robert Hitchins Limited (the Developer );

(b)     all intellectual property rights, including those relating to the Products and the processes for production thereof, which, together with any improvements thereto, are and shall remain the sole property of BDML or BHC (as appropriate) and the parties acknowledge and agree that all matters concerning intellectual property are addressed exclusively in the Contract Manufacturing Agreement except that certain licences to intellectual property rights granted by third parties pursuant to the Material Transferring Contracts listed in the attached Schedule 5 shall be included in the Transferring Assets and except that BHC and BDML give the warranty set forth in clause 8.20 hereof;

(c)     all contractual arrangements (which for the avoidance of doubt shall include all contractual arrangements for the sale or distribution of Products) other than the Transferring Contracts;

(d)     all accounts receivable owing to BDML, whether due or existing before, at or after the Completion Date;

(e)     all cash in hand and at bank at the Completion Date; and

(f)     all other assets not specifically included in clause 2 above.

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3.2     Excluded Liabilities . Except for the Assumed Liabilities, Kimball Wales shall not assume or be obligated to pay, perform, or discharge any liability, obligation, debt, charge, or expense of BHC or BDML of any kind, description, or character, whether accrued, absolute, contingent, or otherwise, or whether or not disclosed to Kimball and/or Kimball Wales in this Agreement, the Disclosure Schedule (defined below) or otherwise, which is outstanding on, accrued or referable to the period up to the Completion Date in relation to the Operation, (collectively, the " Excluded Liabilities "). Without limiting the generality of the foregoing, and subject to anything to the contrary contained in this Agreement, and the Assumed Liabilities, Kimball Wales shall not assume or be obligated to pay, perform, or discharge any liability, obligation, debt, charge, or expense of BDML or BHC, and BDML or BHC, as applicable, shall remain unconditionally liable for, the following:

(a)     any liability related to income, payroll, withholding, sales or any other tax related to the Transferring Assets or the conduct of the Operation relating to the period up to the Completion Date, including, but not limited to, any interest or penalties related thereto (other than bonus payments payable to the Employees for the period 01 January 2006 to 31 December 2006);

(b)     any liability relating to indebtedness of BDML or the Operation or to the Employees (who by way of example and without limitation, may manufacture, service, market, sell, handle, ship, clean, maintain, administer, manage or otherwise perform activities relating to the Transferring Assets) relating to the period up to the Completion Date (other than bonus payments payable to the Employees for the period 01 January 2006 to 31 December 2006);

(c)     any liability relating to any disease, illness, or injury (whether occurring before or after the Completion Date) that arises out of or results from any act, omission or occurrence related to the conduct of the Operation prior to the Completion Date, including any liability for products liability claims (whether arising before or after the Completion Date) for goods or services sold and/or delivered before the Completion Date, except to the extent that such liability arises out of, or results from, or is increased by any act or omission of Kimball and/or Kimball Wales after the Completion Date;

(d)     any liability (including, but not limited to, any liability arising from any implied warranty or breach thereof) caused by BDML and relating to the Transferring Assets or the conduct of the Operation arising prior to the Completion Date, including,

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without limitation, for services performed or, goods manufactured directly or indirectly, sold, or distributed by the BDML prior to the Completion Date; and

(e)     any liability related to any violation of any law, statute, rule or regulation that arises out of or results from any act, omission or occurrence related to any part of the conduct of the Operation and/or the Transferring Assets prior to the Completion Date, including, but not limited to, any claims arising from or in connection with any employment relationship, such as claims for wrongful dismissal, breach of employment contracts, sexual harassment or racial or gender discrimination, defamation or libel, personal injury claims, and any claims arising under any governing law or regulation relevant to the employment relationship, except any such liability that arises out of, or results from, or is increased by any act or omission of Kimball and/or Kimball Wales after the Completion Date or with respect to which Kimball Wales is obliged to indemnify BDML pursuant to clause 15.2.2 of this Agreement; and

3.3     Assumed Liabilities . At the Completion, Kimball Wales shall assume and agree to pay, perform, and discharge, when due, the liabilities and obligations of BDML arising on or after the Completion Date under the Transferring Contractsand, for the avoidance of doubt, all liabilities and obligations arising out of carrying on the Operation and/or the Transferring Assets on or after the Completion Date and all taxes and national insurance contributions and all other liabilities and obligations due to and in respect of the Employees on account of their employment by Kimball Wales on or after the Completion Date (collectively, the " Assumed Liabilities ").

3.4     Nothing in this Agreement shall grant to Kimball and/or Kimball Wales any right, title or interest in the Land and Buildings (which is to be transferred to a third party on the date of this Agreement under the terms of the Transfer). For the avoidance of doubt, none of the representations, warranties (apart from warranty 8.21) or indemnities given by BDML and/or BHC under this Agreement are given, made or apply to the Land and Buildings or to BDML's and/or BHC's ownership, use or occupation of the Land and Buildings whether in respect of matters relating to the environment or otherwise.

4.       PRICE

4.1     The price for the Transferring Assets and BDML's and BHC's other covenants in this Agreement, subject to adjustment as described in paragraph 5 below, will be GBP 14.4

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million (the Price ) which shall be apportioned as set out in Schedule 1 and will be payable as follows: GBP 11.4 million (the "Completion Amount").in cash on Completion and GBP 3.0 million in respect of the Japanese Stock (the "Japanese Amount") in accordance with clause 4.2.

The Price is exclusive of value added tax if any is chargeable. In the event value added tax on any of the Transferring Assets is chargeable, Kimball and/or Kimball Wales shall, pursuant to clause 14, pay such tax.

4.2     The Japanese Amount will be payable by Kimball Wales to BDML in cash on a shipment by shipment basis within one hundred five (105) days of shipment in the case of ocean shipments or within seventy-five (75) days of shipment in the case of air shipments.

4.3     In the event that there is any adjustment to the Price under clause 5 of this Agreement, the apportionment for the Transferring Equipment and for the Stock shall instead equal their respective values on the Completion Statement or the Final Completion Statement (if applicable).

4.4     Any payment made by BDML in respect of a breach of any of the Warranties or any other payment made by BDML pursuant to this Agreement shall (and shall be deemed to) reduce the Price paid for the Transferring Assets under this Agreement by the same amount. The reduction will be allocated as nearly as possible to the Transferring Assets to which such breach or payment related or (if that is not possible) as BDML shall decide.

5.       NET BOOK VALUE ADJUSTMENTS AND APPORTIONMENTS

5.1     The Price shall be adjusted within a reasonable period (not to exceed 120 days) following Completion as follows:

(a) if the aggregate net book value of the Land and Buildings, Transferring Equipment and Stock exceeds GBP 19.7 million, by adding the excess;

(b) if the aggregate net book value of the Land and Buildings, Transferring Equipment and Stock is less than GBP 19.7 million, by deducting the shortfall;

as shown in a completion statement as at 31 March 2006 (the Completion Statement ) to be prepared by BDML (using the same accounting policies as those employed in BDML's latest audited accounts, and following a stock-take carried out in accordance with the provisions of Schedule 2 by BDML) and which Completion Statement is to be delivered by BDML to

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Kimball Wales within 60 days of the Completion Date. Kimball Wales shall review such Completion Statement within 30 days of receipt by Kimball Wales of such Completion Statement.

If Kimball Wales notifies BDML in writing pursuant to clause 16.4 of its objections to the Completion Statement proposed by BDML within 30 days of receipt by Kimball Wales of the Completion Statement and the parties have not reached agreement within fifteen (15) days after BDML's receipt of that notice from Kimball Wales, a further Completion Statement will be prepared by an internationally recognized accounting firm selected by Kimball Wales and satisfactory to BDML (acting reasonably) (the " Final Completion Statement "). Such accounting firm shall be independent of both Kimball Wales and BDML. The determination by the Final Completion Statement independent accounting firm shall (save in the case of manifest error) be final and binding on the parties. The independent accounting firm will determine which party will bear the fees and expenses incurred in preparing the Final Completion Statement, including whether such fees and expenses are to be shared by the parties and, if so, in what proportions.

5.2     Within fifteen (15) Business Days of the Completion Statement being agreed or finally determined in accordance with clause 5.1:

(a)     if there is an excess Kimball Wales shall pay the amount of such excess to such bank account as BDML shall notify Kimball Wales; and

(b)     if there is a shortfall BDML shall pay the amount of such shortfall to such bank account as Kimball Wales shall notify BDML.

5.3     Notwithstanding the provisions of clauses 3 or 15, all items of receipt and expenditure, prepayments and accruals, periodical charges and outgoings will be apportioned based on the financial statements of BDML as at 31 March 2006 (except those relating to Excluded Liabilities incurred after 31 March 2006 but prior to Completion that are unusual or unanticipated by Kimball Wales or relating to Excluded Assets) and will be paid to or by BDML or BHC as appropriate within 90 days of Completion. Expected expenses to be so apportioned include, but are not limited to, depreciation, payroll and benefits, utilities and service contracts.

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6.       MERGER CONTROL FILINGS

6.1     Notwithstanding any other provisions of this Agreement the parties acknowledge and agree that no representations and/or Warranties are given in relation to Merger Control Filings.

7.       COMPLETION; DELIVERIES AT COMPLETION

7.1     Place and Date of Completion. The completion of the purchase and sale contemplated by this Agreement (the Completion ) shall take place immediately following execution of this Agreement at the Land and Buildings on or before 3 April, 2006, or at such other place or date as the parties may mutually agree (the Completion Date ) provided that all the obligations of the parties set out in this clause 7 have been discharged.

7.2     Deliveries at Completion.

7.2.1     Kimball Wales's Deliveries . At the Completion, Kimball Wales shall sign and/or deliver, or cause to be signed and/or delivered: (a) the Completion Amount; (b) written instruments or agreements, reasonably acceptable to BDML, that provide for Kimball Wales's assumption of the Assumed Liabilities; (c) this Agreement and the Transaction Agreements duly executed by Kimball Wales and Kimball (as appropriate); (d) a copy of the Licence relating to the Land and Buildings duly executed by Kimball Wales and the Developer; (e) a copy of the Transfer duly executed by the Developer, (f) the purchase price payable to BDML under the Transfer; (g) any and all other agreements, certificates, instruments, and other documents required of Kimball Wales and Kimball under this Agreement (duly executed by Kimball Wales and Kimball (as appropriate); (h) evidence of the approval of the Transaction, entry into this Agreement and entry into the Transaction Agreements by the boards of Kimball and Kimball Wales.

7.2.2     BDML's Deliveries . At the Completion, BDML shall sign and/or deliver, or cause to be signed and/or delivered: (a) assignments, and other instruments of conveyance that shall be sufficient to transfer title to the Transferring Assets to Kimball Wales free and clear of all Security Interests (defined in clause 8.7 hereof); (b) a copy of the Transfer duly executed by BDML; (c) all such third party consents as identified in section 8.4 of the Disclosure Schedule hereto as being obtained prior to Completion; (d) duly executed agreements in the agreed form for the assignment or novation of Transferring Contracts; (e) this Agreement and the Transaction Agreements duly

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executed by BDML ,BHC, Bayer Plc and Bayer Diagnostics Europe Limited as appropriate; (f) certified copies of resolutions of BDML's and BHC's directors, authorizing the consummation of the transactions contemplated by this Agreement; (g) all records and other documents included in the Transferring Assets; (h) copies of all records relating to Product manufacturing, quality warranty and FDA matters (but specifically excluding any Product design and marketing documentation); (i) evidence that each Security Interest (if any) encumbering any of the Assets has been released and terminated; and (j) any and all other agreements, certificates, instruments, and other documents required of BDML and BHC under this Agreement.

8.       REPRESENTATIONS AND WARRANTIES OF BHC AND BDML

8.1     BHC and BDML represent and warrant to Kimball Wales that each warranty set out in clauses 8.3 to 8.21 inclusive (each a Warranty and together the Warranties ) is true and accurate in all material respects at the date of this Agreement. In this Agreement any references to the knowledge or awareness of BDML is deemed to include the actual knowledge only of the individuals specified in Schedule 3having made all reasonable enquiries.

8.2     Disclosure Schedule . BDML shall deliver to Kimball Wales, on the date of this Agreement, individually numbered schedules (collectively, the "Disclosure Schedule") corresponding to the sections and subsections of this clause. The Disclosure Schedule shall contain exceptions to the specifically identified section and subsection contained in this clause, which shall modify such section or subsection, and shall set forth each exception in reasonable detail, with attached documentation as necessary to reasonably explain the exception. BDML shall provide Kimball Wales, on or before the Agreement Date, with copies of all documents attached to, or referred to in, the Disclosure Schedule. The Warranties are qualified by the facts and circumstances fairly disclosed in the Disclosure Schedule. All of the disclosures set out in the Disclosure Schedule shall have effect in relation to each of the Warranties and Kimball Wales shall not be able to claim that any fact or matter has not been disclosed to it by reason of the relevant disclosure not being related to any one or more of the Warranties provided such disclosures fairly and reasonably describe such fact or matter.

8.3     BDML's Organization and Good Standing . BDML is a limited company duly organized and validly existing under the laws of the jurisdiction of BDML's formation. BDML has all requisite corporate power and authority to own the Transferring Assets and to carry on the Operation as conducted at the date of this Agreement. So far as BDML is aware, no action is

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being taken by the Registrar of Companies in England and Wales to strike BDML off the register of companies maintained by the Registrar of Companies in England and Wales. No receiver, administrative receiver, judicially appointed manager or administrator has been appointed, nor any notice given, petition presented or order made for the appointment of any such person, over the whole or any part of the assets or undertaking of BDML. No petition has been presented, no order has been made and no resolution has been passed for the winding up of BDML or for the appointment of a liquidator or provisional liquidator of BDML. No voluntary arrangement has been proposed or is in force under Section 1 of the Insolvency Act 1986 in respect of BDML. No unsatisfied judgment is outstanding against BDML and no demand has been served on BDML under Section 123(1)(a) of the Insolvency Act 1986. BDML conducts the operation in offices or places of business, and the Transferring Assets are located, only at the locations listed in the Disclosure Schedule, except in the case of Stock in transit to BDML from the suppliers thereof.

8.4     Enforceability . Each of BDML and BHC has full corporate power and authority to execute and deliver this Agreement and the Transaction Agreements, and to perform its respective obligations hereunder and thereunder, and each of such agreements constitutes the legally enforceable obligation of BDML and/or BHC, as the case may be. As far as BDML is aware, neither BDML nor BHC is required to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency or third party in order for the transactions contemplated by this Agreement or the other Transaction Agreements to be consummated except as disclosed at section 8.4 of the Disclosure Schedule, and, except as so disclosed, all such notices, filings, authorizations, consents and approvals have been given, made or obtained, as applicable, before the Completion Date.

8.5     No Conflict with Other Instruments or Proceedings . The signing and delivery of this Agreement and the Transaction Agreements and the consummation of the transactions contemplated hereby and thereby will not (a) result in the breach of any of the terms or conditions of, or constitute a default under, BDML's memorandum and articles of association or BHC's corporate charter or bylaws or any contract, agreement, lease, commitment, indenture, mortgage, pledge, note, bond, license, or other instrument or obligation to which BDML or BHC is a party or by which BDML or BHC may be bound or any of the Transferring Assets may be materially and adversely affected; (b) as far as BDML is aware (following all reasonable inquiries), violate any law, rule, or regulation of any administrative agency or governmental body in England and Wales or the European Union or, as far as BDML is aware, violate any order, writ, injunction, or decree of any court, administrative

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agency, or governmental body in England and Wales or the European Union; (c) result in the imposition of any lien or encumbrance on any of the Transferring Assets; or (d) give rise to any right of first refusal or similar right to any third party with respect to any interest in any of the Transferring Assets.

8.6     Compliance with Laws and Other Regulations .

(i)     For the three (3) years prior to the date of this Agreement as far as BDML is aware with respect to the Operation, the Employees, and the Transferring Assets BDML has, in all material respects, complied with all requirements of local law, rule and regulation (including those relating to taxes) and all requirements of any governmental body or agency of England and Wales with respect to the conduct of the Operation, or the Employees, or the Transferring Assets; and

(ii)     there is no actual and, as far as BDML is aware, no written pending or written threatened action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand against BDML or any of the Transferring Assets or relating to the Operation alleging any failure to so comply.

8.7     Title; Encumbrances . The Transferring Assets are free and clear of all claims, liens, mortgages, security interests, pledges, encumbrances, charges, obligations, and other restrictions, except for restrictions solely arising from and relating to the Assumed Liabilities (collectively, the Security Interests ). BDML has good and marketable title to all of the Transferring Assets. There is no actual nor, so far as BDML is aware, any pending or threatened dispute or claim made by any other person or entity concerning any such title to or ownership of any of the Transferring Assets or, except as disclosed in section 8.7 of the Disclosure Schedule, any Security Interest in any of the Transferring Assets. Except as disclosed in Section 8.7 of the Disclosure Schedule, the Transferring Assets together with the fixtures deemed to be part of the Land and Buildings that are transferred pursuant to the Transfer, equipment owned by Bayer PLC to be used by Bayer PLC to provide services under the Transitional Services Agreement or to be made available to Kimball Wales under the Parts Distribution Agreement include all the machinery and tooling necessary for the conduct of the Operation in all material respects in the same manner as the Operation is being conducted as at Completion.

8.8     Absence of Certain Changes or Events . Since the Last Accounting Date, as defined in clause 16.14 hereof, there has been no material adverse change in the condition of the Transferring

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Assets, the Operation or the conduct of the Operation as of the Completion Date, financial or otherwise, except as set forth in section 8.8 of the Disclosure Schedule. So far as BDML is aware, since the last forecast (attached hereto as Schedule 10) for purchase of Products, no event has taken place that BDML reasonably expects will cause the forecast to change in any material respect.

8.9     Suppliers . Since the Last Accounting Date, and except as set forth in section 8.9 of the Disclosure Schedule, there has not been any adverse change in the terms on which BDML contracts with BDML's 20 largest suppliers and BDML's 10 largest service providers (in terms of BDML's annual spend in connection with the Operation), whose names are listed in section 8.9 of the Disclosure Schedule. None of the suppliers or service providers listed in section 8.9 of the Disclosure Schedule has indicated to BDML that it wishes to make a material adverse change to the terms on which it contracts with BDML or, as far as BDML is aware, no such supplier or service provider has filed or intends to pursue a claim in excess of GBP 10,000 for nonpayment or nonperformance by BDML.

8.10     Stock . All Stock is of a good and merchantable quality, or is suitable and usable for the manufacture of Products. None of the Stock is obsolete or in excess of the necessary requirements of the conduct of the Operation commensurate with needs for BDML's forecasted Product volumes. None of the Stock related to urine strip Products shall decay or degrade or become less merchantable, by virtue of normal and customary storage as is currently in place at the Operation prior to such time as such materials could reasonably be expected to be used in accordance with BDML's forecasted Product volumes.

8.11     Location and Condition of Machinery and Equipment . Except as set forth in the Disclosure Schedule all plant, machinery and equipment (including spare parts) comprised in the Transferring Assets will be located at the Land and Buildings on the Completion Date. The plant, machinery and equipment comprised in the Transferring Assets are in good operating condition and good maintenance and repair (ordinary wear and tear excepted and consistent with their age), for the purposes for which they are presently being used.

8.12     Transferring Contracts . The Material Transferring Contracts are listed in Schedule 5. BDML has provided Kimball Wales with a copy of each Material Transferring Contract. Except for rights to use of the assets to be transferred to the Developer pursuant to the Transfer, the Transitional Services Agreement, the Contract Manufacturing Agreement and the Parts Distribution Agreement, the Transferring Contracts are all the contracts, arrangements, and agreements, of whatsoever nature, necessary to enable Kimball Wales to

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conduct the Operation in all material respects in the same manner as the Operation is being conducted as at Completion. The Transferring Contracts are valid and enforceable in accordance with their terms, and, BDML and, so far as BDML is aware, all other parties to each of those Transferring Contracts have performed all obligations required to be performed in connection with these Transferring Contracts to date. Neither BDML nor, so far as BDML is aware, any other party is in default or in arrears under the terms of these Transferring Contracts, and no condition exists or event has occurred which, with the giving of notice or the lapse of time or both, would constitute a default under any of them. No Material Transferring Contract is out of the ordinary and usual course of business. BDML has not given any power of attorney to any person, firm, or corporation for any purpose whatsoever relating to the Transferring Assets.

8.13     Litigation . There is no actual and, as far as BDML is aware, no threatened or pending suit, action, proceeding (legal, administrative, or otherwise), claim, investigation, or inquiry (by an administrative agency - including the FDA, governmental body, or otherwise) by, against, or otherwise affecting BDML with respect to the conduct of the Operation or any of the Transferring Assets. There is no outstanding judgment, order, writ, injunction, or decree of any court, administrative agency, governmental body, or arbitration tribunal against or affecting BDML in relation to the conduct of the Operation or any of the Transferring Assets.

8.14     Product Liabilities . Within the last 5 years, BDML's costs with respect to product liability or warranty claims associated with the conduct of the Operation have not exceeded, on a per annum basis, GBP 20,000 during such period.

8.15     Permits and Licenses . Save for any licence, permit or authorization held by or vested in a contractor who provides services to BDML in connection with the operation of the Transferring Assets or the conduct of the Operation, all permits, licenses, orders, and approvals necessary to own or operate the Transferring Assets in connection with the conduct of the Operation are identified in Section 8.15 of the Disclosure Schedule, are assignable to Kimball Wales and are in full force and effect. The Licences have been complied with by BDML in all material respects. All fees and charges incident to the Licences have been fully paid and are current, and, so far as BDML is aware, no suspension has been threatened or could reasonably be expected to result by reason of the transactions contemplated by this Agreement.

8.16     Brokers . BDML has not retained or employed, and is not and will not be liable to pay, any broker, finder, investment banker, or other person, or taken any action, or entered into any

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agreement or understanding that would give any broker, finder, investment banker, or other person any valid claim against Kimball Wales or BDML for a commission, brokerage fee, or other compensation.

8.17     Intercompany Arrangements . BDML has not entered into any material contracts, agreements, or commitments with any of BDML's Affiliates with respect to the Transferring Assets or the BDML's operations being carried on at the Operation, except as listed on section 8.17 of the Disclosure Schedule.

8.18     Accuracy of Statements . BDML's financial statements dated as of 31 August 2005 and 31 December 2005 (such financial statements being attached to section 8.18 of the Disclosure Schedule) have been prepared from the books and records of BDML and fairly present the financial position of BDML as of their respective dates and its results of operations for the periods ended on such dates. The financial statements of 31 December are prepared in accordance with generally accepted accounting principles in the United Kingdom. The financial statements of 31 August are prepared in accordance with IAS, the only departure from generally accepted accounting principles of the United Kingdom being the Pension Provision and related Deferred Tax impact.

8.19     Employment . The only representations and Warranties given in respect of matters relating to Employees are in clause 8.6 and this clause 8.19. Except as otherwise disclosed in the Disclosure Schedule:

(i)     [ Note: Intentionally left blank ];

(ii)     since September 19, 2005, no changes have been made to the terms of employment, benefits or conditions of service of any Employee or to the terms of any agreement or arrangement with any trade union, employee representative or body of employees or their representatives which may affect the Employees;

(iii)     BHC and/or BDML have disclosed in writing to Kimball and/or Kimball Wales the following, all of which are true, accurate and complete in all material respects as of the Completion Date:

(a)     copies of all service contracts and contracts for services, handbooks, policies and other relevant documents which apply to the Employees;

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(b)     full particulars of the current terms of employment or engagement and benefits of all Employees including, without