Asset Sale and Purchase Agreement

(1)

McMurdo Limited, a company incorporated in England (registered number 746603) whose registered office is at 1650 Parkway, Whiteley, Fareham, Hampshire PO15 7AH (the Seller ).

(2)

Signature Industries Limited, a company incorporated in England (registered number 02800561) whose registered office is at Tom Cribb Road, Thamesmead, London SE28 0BH (the  Buyer ).

(3)

Digital Angel Corporation, a company incorporated under the laws of the state of Delaware USA whose registered office is at 490 Villaume Avenue, South St. Paul, Minnesota 55075-2443, USA ( DA ).

(4)

Chemring Group Plc, a company incorporated in England (registered number 86662) whose registered office is 1650 Parkway, Whiteley, Fareham, Hampshire, PO15 7AH ( CG ).

1

Definitions and interpretation

1.1

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

Accounts

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

Actual Plant Value

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

Actual S&P Value

the aggregate of the Actual Plant Value and the Actual Stock Value;

Actual Stock Value

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

AIS Business

the business of the design, manufacture and sale of the AIS Products carried on by the Seller at the Transfer Date;

AIS Contracts

those contracts, engagements or orders entered into on or prior to the Transfer Date by or on behalf of the Seller with customers for the sale, loan or hire of goods or equipment or provision of services by the Seller in connection with the AIS Business;

AIS Products

MT-1 transponder, MT-1 VDU Display, MT-2 transponder and M-2 Minimum Keyboard Display;

Anniversary Adjustment

the Unused Stock Value less the Zero Valued Used Stock Value;

Anniversary Date

the first anniversary of the Completion Date;

Anniversary Statement

the anniversary statement prepared in accordance with clause 4.5 and Schedule 12;

Assets

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

Book Debts

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

Business

the business of the design, manufacture and sale of the Products carried on by the Seller at the Transfer Date;

Business Contracts

the Customer Contracts, Supplier Contracts, IP Licences and the Leasing/Hire Agreements;

Business Day

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

Business Information

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

(a)

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

(b)

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

(c)

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

(d)

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

(e)

the sale or marketing of any of the products manufactured and/or sold or services rendered by the Business including, without limitation, all customer and supplier names and lists, sales advertising and marketing information (including without limitation, targets, sales and market share statistics, market surveys and reports on research and terms and conditions of sale or supply), type approvals, licences and national or local authorisations in respect of the Products;

Business Intellectual Property

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

(a)

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

(b)

the Business Information; and

(c)

the Business Name

Business Name

‘McMurdo’ (subject always to the terms of the Connectors Licence), 'McMurdo Marine’ and ‘Nova Marine Systems’;

Buyer's Group

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

Buyer’s Solicitors

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

CAA

the Capital Allowances Act 2001;

Completion

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

Completion Date

(subject to clause 5.5) the date which is the earlier of:

(a)

5 Business Days after notice has been given in accordance with clause 5.2 by the relevant Party that the last unsatisfied Condition has been satisfied; and

(b)

5 Business Days after the Buyer has waived the last unsatisfied Condition or Conditions in accordance with clause 5.4

Completion Statement

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

Computer System

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

Conditions

the conditions precedent set out in clause 5.1;

Connectors Licence

the trade mark licence dated 18 June 1998 between the Seller (1) and ITW Limited (2), a copy of which is at Folder 2a Section 14a of the Disclosure Bundle;

Connectors Novation

the deed of novation in the agreed form to be entered into between the Seller (1), ITW Limited (2) and the Buyer (3);

Creditors

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

Customers

the persons, firms or companies who or which were either at the Transfer Date or during the period of 12 months prior to the Transfer Date a customer of the Business;

Customer Contracts

those contracts, engagements or orders entered into on or prior

Deferred Price

the further price, if any, payable by the Buyer for the Goodwill calculated in accordance with Schedule 5;

Deposit

has the meaning given in clause 3.2.1;

Disclosure Bundle

has the meaning given in the Disclosure Letter;

Disclosure Letter

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

Employees

the persons whose names are set out in Schedule 4;

Escrow Agents

the Buyer’s Solicitors and the Seller’s Solicitors;

Escrow Bank

National Westminster Bank plc, Milton Keynes;

Escrow Letter

the letter, in the agreed form, to be signed by the parties instructing and authorising the Escrow Agents to establish and operate the Retention Account;

Excluded Assets

the following assets which are excluded from the sale to the Buyer under this Agreement: (i) the Retained Business; (ii) the Book Debts; (iii) the statutory books of the Seller; (iv) cash in hand or at the bank and all cheques and other securities representing the same; (v) any right to use or continue to use after Completion any trade or service name or mark of the Seller or any member of the Seller’s Group other than the Business Names; (vi) the Property; (vii) the Computer System; (viii) items of plant and equipment used by the Seller in both the Business and the AIS Business; and (ix) all assets, property rights and other interests of the Seller other than the Assets;

Expert

has the meaning given in clause 11.4;

Goodwill

the goodwill custom and connection of the Seller exclusively in relation to the Business together with the exclusive right for the Buyer and its successors and assigns to carry on the Business and use the Business Names respectively to represent themselves as carrying on the Business in succession to the Seller;

Guaranteed Agreements

has the meaning given in clause 21.1

HBoS Release

the release from HBoS in the agreed form;

Initial Price

the sum of £3,117,020;

Initial Plant Value

the amount specified in Schedule 1 as being that part of the Initial Price apportioned to the Plant;

Initial S&P Value

the aggregate of the Initial Plant Value and the Initial Stock

Initial Stock Value

the amount specified in Schedule 1 as being that part of the Initial Price apportioned to the Stock;

Intellectual Property

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

Interest Rate

means 2% above the base rate of the Bank of England from time to time;

IP Licences

means, save for any which are incorporated into Customer Contracts or Supplier Contracts, any licences, authorisations and permissions in any form whatsoever whether express or implied, written or unwritten (a) pertaining to the use, enjoyment and exploitation by the Seller of any Business Intellectual Property in connection with the Business as carried on at the Transfer Date, or (b) granted by the Seller to any third party including a member of the Seller's Group in the course of the Business pertaining to the use, enjoyment and exploitation by such third party of any Business Intellectual Property together with any other such licences entered into on or after today's date;

Leasing/Hire Agreements

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

Legal Opinion

the legal opinion in agreed form given in relation to DA entering into this Agreement;

Licence

has the meaning given in clause 12.1;

Management Accounts  

the accounts comprising a balance sheet as at 24 November 2006 and a profit and loss account for the period which commenced on 1 August 2006 and ended on 24 November 2006, a copy of which is annexed to the Disclosure Letter;

Mandate Letters

letters from the Buyer's Solicitors and the Seller's Solicitors to the Escrow Bank in the agreed form;

NAV 7 Licence

the ip licence relating to the NAV7 casings and related tooling to be entered into between the Seller (1) and the Buyer (2) in the agreed form;

Novation Agreement

the novation agreement to be entered into by the Parties in the

Parties

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

Patent Assignment

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

Plant

the plant, equipment (including items of office equipment used by Employees on a day to day basis other than any such items which relate to the Computer System) and machinery wherever situate, including tools and jigs in the possession of suppliers, belonging to the Seller and used exclusively in connection with the Business being those items listed in Schedule 10 together with any other such items acquired by the Seller after today’s date but before Completion and less any items on such list which are disposed of by the Seller after today’s date but before Completion;

Post Exchange Breach

has the meaning given in clause 10.6;

Price

the total purchase price payable by the Buyer to the Seller as referred to in clause 3.1;

Products

the products listed at Schedule 7;

Property

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

Retained Business

any businesses (other than the Business) carried on or previously carried on by the Seller (including the AIS Business and the carrying out of its obligations pursuant to the RNLI Contract);

Retention

has the meaning given in clause 3.2.3;

Retention Account

the joint interest bearing account to be established in accordance with the Escrow Letter;

Retention Account Opening Form

the form opening the Retention Account in the agreed form;

RNLI Contract

the development and licensing agreement dated 19 September 2005 between the Seller (1) and RNLI (2), a copy of which is at Folder 2a, Section 8 of the Disclosure Bundle;

Seller’s Solicitors Account

the Seller’s Solicitors client account held at Lloyds TSB Bank plc, sort code 30-96-68, account number 01364135 (or such other account as the Seller may notify the Buyer in writing);

Security Interest

any encumbrance, mortgage, charge, assignment for the purpose of security, pledge, lien, right of set-off, retention of title or hypothecation for the purpose, or which has the effect, of granting security interest of any kind whatsoever and any agreement, whether conditional or otherwise, to create any of the foregoing;

Seller’s Group

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

Seller’s Scheme

the pension scheme known as the Chemring Group Staff Pension Scheme;

Seller’s Solicitors

Bond Pearce LLP of Oceana House, 39-49 Commercial Road, Southampton SO15 1GA;

Special Provisions Order

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

Stock

the stock-in-trade exclusively relating to the Business at the Transfer Date including (without limitation) raw materials, goods and other assets purchased for resale, stores, component parts, work in progress, together with finished products all exclusively relating to the Business, including those items listed in Schedule 14 (to the extent they have not been used or otherwise disposed of by the Buyer after today’s date);

Supplier Contracts

those contracts, engagements or orders entered into on or prior to the Transfer Date by or on behalf of the Seller for the supply or sale of goods or services to the Seller exclusively in connection with and in the ordinary course of the Business which at the Transfer Date remain to be performed in whole or in part including those contracts listed in Schedule 6. For the avoidance of doubt this excludes any contracts between the Seller and a third party supplier which relate to services provided by the Seller to the Buyer under the Transitional Services Agreement;

Tax or Taxation

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

Trade Mark Assignment

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

Transfer Date

the close of business on the Completion Date;

Transitional Services Agreement

an agreement in respect of certain transitional services between the Seller and the Buyer in the agreed form;

TULRA

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

TUPE

the Transfer of Undertakings (Protection of Employment) Regulations 2006 (as amended);

Unused Stock

items of Stock which have not been used or otherwise disposed of by the Buyer by the Anniversary Date;

Unused Stock Value

the aggregate value of the Unused Stock as shown in the Anniversary Statement as agreed or determined in accordance with Schedule 12 and clause 4.10;

US Coastguard Contract

US Coast Guard contract ref HSCG 23-06-R-DNQ159 dated 27 September 2006 between United States Coast Guard (1) and the Seller (2) a copy of which is at Folder 2a, Section 6 of the Disclosure Bundle;

VAT

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

VATA

Valued Added Tax Act 1994;

Warranties

the warranties set out in clause 10 and Schedule 2.

Zero Valued Used Stock

items of Stock which were given a value of zero when calculating the Actual Stock Value and which have been used by the Buyer after Completion;

Zero Valued Used Stock Value

the aggregate value of the Zero Valued Used Stock as shown in the Anniversary Statement as agreed or determined in accordance with Schedule 12 and clause 4.10;

1.2

In this Agreement, unless the context requires otherwise:

1.2.1

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

1.2.2

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

1.2.3

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

1.2.4

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

1.2.5

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

1.2.6

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

1.2.7

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

1.2.8

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

1.2.9

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

1.2.10

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

1.2.11

a reference to any enactment includes a reference to:

(a)

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

(b)

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

1.2.12

subsidiary and holding company have the meanings given to them by section 736 Companies Act 1985 and subsidiary undertaking and parent undertaking will have the meanings given to them by section 258 Companies Act 1985; and

1.2.13

associate has the meaning given to it by section 435 Insolvency Act 1986 and a person is regarded as associated with any person which is an associate of his and with any company of which any director is an associate of his.

2

Agreement to Sell and Purchase

2.1

With effect from the Transfer Date the Seller will sell and the Buyer (relying on the Warranties) will purchase the Business as a going concern together with the following assets:

2.1.1

the Goodwill;

2.1.2

the Plant;

2.1.3

the Stock;

2.1.4

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

2.1.5

the Business Intellectual Property;

2.1.6

the Business Information; and

2.1.7

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

2.2

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

2.3

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

2.4

For the avoidance of doubt this Agreement shall not operate to assign to the Buyer any liabilities or obligations except as specifically stated in this Agreement or any documents which are in the agreed form.

3

Price

3.1

The price is the total of the Initial Price (as adjusted in accordance with clause 4 and Schedule 12) and the Deferred Price.

3.2

The Initial Price will be paid as follows:

3.2.1

£250,000 of the Initial Price ( Deposit ) will be paid on the date of this Agreement in accordance with clause 6.1;

3.2.2

£2,792,020 of the Initial Price will be paid on Completion in accordance with clause 8.1.2(b); and

3.2.3

£75,000 of the Initial Price ( Retention ) will be paid on Completion into the Retention Account in accordance with clause 8.1.2(c).

3.3

The provisions of Schedule 13 apply to the Retention once it has been deposited in the Retention Account. The Buyer and the Seller shall instruct their respective solicitors to open the Retention Account using the Retention Account Opening Form and Mandate Letters.

3.4

The provisions of Schedule 9 apply to the calculation and payment of the Deferred Price.

3.5

Subject to adjustment in accordance with clause 4, the Initial Price will be apportioned as set out in Schedule 1.

4

Completion Statement, Anniversary Statement and Adjustment to the Initial Price

4.1

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

4.2

If the Actual S&P Value:

4.2.1

is equal to the Initial S&P Value there shall be no adjustment of the Initial Price;

4.2.2

is less than the Initial S&P Value the Seller will repay to the Buyer so much of the Initial Price as is equal to the deficiency, provided always that the Seller shall not be required pursuant to this clause to repay an amount which is more than Initial S&P Value; or

4.2.3

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

4.3

Any payment required to be made under clause 4.2.2 or 4.2.3 will be made in cleared funds by electronic funds transfer within five Business Days of the Completion Statement being agreed, deemed agreed or determined by the Independent Accountants in accordance with Schedule 12 and will be paid, in the case of clause 4.2.2, to the Buyer’s Solicitors and in the case of clause 4.2.3, to the Seller’s Solicitors. The relevant Solicitors are hereby authorised to receive the same and their receipt will be an absolute discharge of the Seller or the Buyer (as the case may be). 

4.4

If any Party fails to make full payment under clause 4.2, the outstanding balance of that payment from time to time will bear interest (as well after as before judgment) from the due date for payment in accordance with clause 4.3 to the actual date of payment (both dates inclusive) at the rate of 4 % per annum above the base rate of National Westminster Bank plc from time to time.

4.5

The Buyer and the Seller will ensure that the Anniversary Statement is prepared in accordance with Schedule 12 and clause 4.10.

4.6

If the Anniversary Adjustment:

4.6.1

is zero there shall be no further adjustment of the Initial Price;

4.6.2

is more than zero the Seller will repay to the Buyer so much of the Initial Price as is equal to the excess, provided always that the Seller shall not be required pursuant to this clause to repay an amount which is more than Actual Stock Value; or

4.6.3

is less than zero the Buyer will pay to the Seller an additional amount of consideration, such amount being equal to the excess.

4.7

Subject to clause 4.8, any payment required to be made under clause 4.6.2 or 4.6.3 will be made in cleared funds by electronic funds transfer within five Business Days of the Completion Statement being agreed, deemed agreed or determined by the Independent Accountants in accordance with Schedule 12 and will be paid, in the case of clause 4.6.2, to the Buyer’s Solicitors and in the case of clause 4.6.3, to the Seller’s Solicitors. The relevant Solicitors are hereby authorised to receive the same and their receipt will be an absolute discharge of the Seller or the Buyer (as the case may be).

4.8

Payment obligations under clause 4.6 will first be satisfied from the Retention Account in accordance with Schedule 13.

4.9

If any Party fails to make full payment under clause 4.6, the outstanding balance of that payment from time to time will bear interest (as well after as before judgment) from the due date for payment in accordance with clause 4.7 to the actual date of payment (both

4.10

In the period between Completion and the Anniversary Date the Buyer shall always use the items of Stock before using similar items acquired by it after Completion. For the purpose of the Anniversary Statement if the Buyer has failed to comply with its obligation under this clause the Unused Stock, the Zero Valued Used Stock, the Unused Stock Value, Zero Valued Used Stock and the Anniversary Adjustment shall be calculated on the basis that they are what they would have been had the Buyer complied with its obligation under this clause.

4.11

The Buyer and the Seller agree that when it is agreed they will both initial the list of Stock prepared for the purpose of the Completion Statement. A copy of such Stock list will be kept by both of them so that it is available for the purpose of the Anniversary Statement. The Buyer and the Seller acknowledge that, subject only to paragraph 6.2 of part 3 of Schedule 12, for the purposes of the Anniversary Statement such Stock list will be conclusive evidence of the Stock.

5

Conditions Precedent

5.1

Completion of this Agreement is conditional upon the Buyer or Seller :

5.1.1

receiving the consent of Davis Instruments Corp to the assignment (conditional on Completion taking place) of the agreement dated 1 December 2002 between the Seller (1) and Davis Instruments Corp (2) (a copy of which is at Folder 2c, Section D.1 of the Disclosure Bundle) from the Seller to the Buyer in accordance with the terms of such agreement or in such other manner or form as the Seller and Buyer may agree;

5.1.2

receiving the consent of Simrad Limited to the assignment (conditional on Completion taking place) of the agreement dated 7 February 2003 between the Seller (1) and Simrad Limited (2) (a copy of which is at Folder 2a, Section 7 of the Disclosure Bundle) from the Seller to the Buyer in accordance with the terms of such agreement or in such other manner or form as the Seller and Buyer may agree;

5.1.3

receiving the consent of Furuno Electric Co. Limited to the assignment (conditional on Completion taking place) of the agreement dated 30 June 2005 between the Seller (1) and Furuno Electric Co. Limited (2) (a copy of which is at Folder 2a, Section 5 of the Disclosure Bundle) from the Seller to the Buyer in accordance with the terms of such agreement or in such other manner or form as the Seller and Buyer may agree;

5.1.4

receiving confirmation from Kelvin Hughes Limited that other than as a result of matters which only become apparent after Completion the identity of the Buyer will not lead it to exercise its rights (under the second paragraph of clause 11.1.3 of such agreement) to terminate the agreement dated 30 June 2005 between the Seller (1) and Kelvin Hughes Limited (2) (a copy of which is at Folder 2a, Section 4 of the Disclosure Bundle);

5.1.5

receiving confirmation from Mitsubishi (or its relevant group company or agent) that: (i) the patent licence (a copy of which is at Folder 2b, Section 6 of the Disclosure Bundle) has been assigned or will be assigned to the Buyer subject only to the Buyer or Seller confirming that the Business and Assets have transferred to the Buyer; or (ii) a replacement of such patent licence has been granted to or will be granted to the Buyer subject only to the Buyer or Seller confirming that the Business and Assets have transferred to the Buyer;

5.1.6

receiving confirmation from the Seller that the two software bugs referred to at Disclosure 41 of the Disclosure Bundle have been resolved and that the testing carried out by the Seller to check that they have been resolved the Seller has carried out following the appropriate testing procedures included in the Seller’s quality approved system;

5.1.7

receiving confirmation from the relevant authority or authorities that the UK product approvals which the Seller has in place at today’s date in relation to each of the Products (such approvals being listed in the document at Folder 2a, Section 13c of the Disclosure Bundle) ( UK Approvals ) either have been issued or will be issued to the Buyer subject only to the relevant authority or authorities receiving confirmation that the Business and Assets have transferred to the Buyer;

5.1.8

receiving confirmation from the relevant authority or authorities that the Danish product approvals which the Seller has in place at today’s date in relation to each of the Products (such approvals being listed in the document at Folder 2a, Section 13c of the Disclosure Bundle) either have been issued or will be issued to the Buyer subject only to the relevant authority receiving confirmation that the Business and Assets have transferred to the Buyer and/or confirmation that any of the UK Approvals specified by such authority or authorities have been issued;

5.1.9

receiving confirmation from the relevant authority or authorities that the French product approvals which the Seller has in place at today’s date in relation to each of the Products (such approvals being listed in the document at Folder 2a, Section 13c of the Disclosure Bundle) either have been issued or will be issued to the Buyer subject only to the relevant authority receiving confirmation that the Business and Assets have transferred to the Buyer and/or confirmation that any of the UK Approvals specified by such authority or authorities have been issued;

5.1.10

receiving confirmation from the relevant authority or authorities that the German product approvals which the Seller has in place at today’s date in relation to each of the Products (such approvals being listed in the document at Folder 2a, Section 13c of the Disclosure Bundle) either have been issued or will be issued to the Buyer subject only to the relevant authority receiving confirmation that the Business and Assets have transferred to the Buyer and/or confirmation that any of the UK Approvals specified by such authority or authorities have been issued;

5.1.11

receiving confirmation from the relevant authority or authorities that the Greek product approvals which the Seller has in place at today’s date in relation to each of the Products (such approvals being listed in the document at Folder 2a, Section 13c of the Disclosure Bundle) either have been issued or will be issued to the Buyer subject only to the relevant authority receiving confirmation that the Business and Assets have transferred to the Buyer and/or confirmation that any of the UK Approvals specified by such authority or authorities have been issued;

5.1.12

receiving confirmation from the relevant authority or authorities that the Italian product approvals which the Seller has in place at today’s date in relation to each of the Products (such approvals being listed in the document at Folder 2a, Section 13c of the Disclosure Bundle) either have been issued or will be issued to the Buyer subject only to the relevant authority receiving confirmation that the Business and Assets have transferred to the Buyer and/or confirmation that any of the UK Approvals specified by such authority or authorities have been issued;

5.1.13

receiving confirmation from the relevant authority or authorities that the Singaporean product approvals which the Seller has in place at today’s date in relation to each of the Products (such approvals being listed in the document at Folder 2a, Section 13c of the Disclosure Bundle) either have been issued or will be issued to the Buyer subject only to the relevant authority receiving confirmation that the Business and Assets have transferred to the Buyer and/or confirmation that any of the UK Approvals specified by such authority or authorities have been issued;

5.1.14

receiving confirmation from the relevant authority or authorities that the United States (FFC) product approvals which the Seller has in place at today’s date in relation to each of the Products (such approvals being listed in the document at Folder 2a, Section 13c of the Disclosure Bundle) either have been issued or will be issued to the Buyer subject only to the relevant authority receiving confirmation that the Business and Assets have transferred to the Buyer and/or confirmation

5.1.15

receiving confirmation from the relevant authority or authorities that the Spanish product approvals which the Seller has in place at today’s date in relation to each of the Products (such approvals being listed in the document at Folder 2a, Section 13c of the Disclosure Bundle) either have been issued or will be issued to the Buyer subject only to the relevant authority receiving confirmation that the Business and Assets have transferred to the Buyer and/or confirmation that any of the UK Approvals specified by such authority or authorities have been issued; and

5.1.16

receiving confirmation from the relevant authority or authorities that the Netherlands product approvals which the Seller has in place at today’s date in relation to each of the Products (such approvals being listed in the document at Folder 2a, Section 13c of the Disclosure Bundle) will be issued to the Buyer subject only to the relevant authority receiving confirmation that the Business and Assets have transferred to the Buyer and/or confirmation that any of the UK Approvals specified by such authority or authorities have been issued.

5.2

The Seller and Buyer shall respectively use all reasonable endeavours to ensure the satisfaction of all the Conditions as soon as possible so far as lies within their respective power so to do. As soon as a Condition is satisfied the Party who received notice from the relevant third party that it has been will promptly give written notice of this fact to the Buyer or Seller (as the case may be).

5.3

All costs and expenses relating to obtaining the consents or approvals or other matters referred to in clauses 5.1.1 to 5.1.16 will be borne by the Seller and the Seller shall indemnify the Buyer and keep it indemnified against any such costs and expenses provided always that the obligations of the Seller under this clause 5.3 shall immediately cease in relation to any consent or approval or other matter if the Buyer waives the Condition relating to such consent or approval or other matter.

5.4

The Buyer may waive in writing all or any of the Conditions. 

5.5

If all the Conditions are not satisfied or waived in accordance with clause 5.4 on or before 16 April 2007 (or such other date as the Seller and the Buyer in their absolute discretion may agree in writing) this Agreement (save for clauses 5.6, 6 (in relation to to whom the Deposit belongs)and 23 which shall remain in force) shall become null and void and no party shall be entitled to make a claim against any other party in connection with this Agreement save for any claim which arises in respect of clauses 5.6, 6 (in relation to to whom the Deposit belongs) and 23.

5.6

If any of the approvals referred to in this clause 5 are granted to the Buyer and for whatever reason Completion does not take place, the Buyer will (at the Buyer's expense) do, execute and perform and will procure to be done, executed and performed all such acts, deeds, documents and things as the Seller may require to ensure that any such approvals are reissued in the name of the Seller (or in such name as it may direct) and that they cease to be issued in the name of the Buyer. As security for the performance of its obligations under this clause 5.6, the Buyer hereby irrevocably and unconditionally appoints any director (for the time being) of the Seller severally as its attorney with full power and authority in the Buyer’s name and on its behalf to do, sign and execute all acts, documents or deeds that the attorney, in its absolute discretion, considers necessary or desirable for the performance of these obligations.

6

Deposit

6.1

Upon signing this Agreement the Buyer will pay the Deposit by electronic transfer to the Seller’s Solicitors Account and the Seller’s Solicitors are hereby authorised to receive the same and whose receipt will be an absolute discharge of the Buyer.

6.2

If all the Conditions are satisfied and the Buyer fails to complete the purchase of the Business and the Assets under clause 8 on the Completion Date (other than where it properly rescinds this Agreement pursuant to clause 8.5 or it properly terminates this

6.3

If:

6.3.1

all the Conditions are not satisfied or waived in accordance with clause 5.4 on or before 16 April 2007 (or such other date as the Seller and the Buyer in their absolute discretion may agree in writing); or

6.3.2

the Buyer rescinds the Agreement pursuant to clause 8.5; or

6.3.3

the Buyer terminates the Agreement