-The DACH market -Business development: past and present -Opportunities -Future plans -DACH subsidiary -Location -Setup and Structure -Business Strategy -Funding Opportunities -Staffing and Area Management -Timeline -Cost and Development Projection Agenda

The DACH market CountryInhabitants (Million) Extension (sq km)GDP ( USD) Germany trillion Austria trillion Switzerland trillion United Kingdom trillion - Germany: 3 rd largest Microscopy Market estimated at million GBP - Home market of two major microscope manufacturers (Leica, Zeiss) - Large micro-technology sector employing over people in total - Strong manufacturing sector in the areas of other optical technologies - Micro-technology market as a whole shows strong growth

Prior in the DACH market

Opportunities Growing the business in the 3 rd largest market for microscopy Further Establishing Prior as market leader in microscope automation Product Development through new OEM contracts Increasing Profits by selling directly Setting up local support structure

Future DACH Subsidiary Advantages Local representation Better position against competition Local support and contact point Purpose Grow business and turnover Become important profit source for Prior Further establish Prior as market leader

Location - Central Location in Germany - Good infrastructure - Important centre for optical industries - Long history as centre for optical innovation - Well known University - Fraunhofer and Max-Planck Institutes - Business Centre for Micro-Technologies

Setup and Structure Independent business entity GmbH (Gesellschaft mit beschränkter Haftung) –good reputation –legal form of choice for many traditional, privately owned businesses. –limited liability of all partners –ability to conclude contracts –ability to regulate profits by adjusting transfer prices from the UK –ability to invoice management charges from the UK and to thereby decrease tax liability in Germany

Business Strategy OEM Accounts - Key Accounts - Product Development - Customer Focus End User Accounts - Product Range - Prior Brand Name - High Margin Distributors - Complete Solutions - Market Share - Marketing Regional Management - Regional Technical Sales Specialists - Key Account Management - Jena Office Technical Support - German Language, OEM capacity Marketing: German Language Literature, Website, Manuals Marketing Partner, Dedicated Campaigns

Funding Opportunities EU funding 50% of total payroll for 2 years Eligible if locating in Eastern Germany Availability of funding confirmed by consultancy before setup Local funding Up to 70% of rental cost for 3 years when setting up in Jena Technology Centre Access to workshop, meeting rooms and other facilities

Staffing and Area Management Jena Office: H. Ruchatz Technical Support Specialist Sales Administrator Field Based Sales Specialists: North/West: Dortmund South: Munich

Timeline Business Strategy Finalised Start legal process of setting up GmbH GmbH registered, start of EU funding application Office Opening Staff Recruitment EU funding strategy approved

Cost and Development DACH Turnover and Forecast GBP Turnover /52005/62006/72007/82008/92009/102010/ % growth

Quarterly Sales Forecast

Break Even Analysis Year 1

Break Even Analysis Year 1-4

DACH Profit Forecast GBP2007/82008/92009/102010/11 Q Q Q Q Total Turnover % of TO Transfer to Prior Ltd Subsidies

Summary Sales in DACH have risen by 70% last year Very good potential for growth in 3 rd largest microscopy market Local subsidiary based in Jena to open September 2007 New subsidiary will be profitable in 1 st year and subsequent years Early recruitment of sales and support staff possible through EU funding schemes