Current Report Filing (8-k)

2.    Mainframe (Z-series) processing power. (approx. 5% overall of 23MSU

Software charges).

3.    Hardware 24 hour processor maintenance support

4.    D-Series scheduling agent for cross platform event scheduling.

5.    File transfers (Etiliize) - Using FTP.

6.    Invoice Printing using PSF software. (20K per week x 52)

7.    Invoice stationery (20K per week x 52)

8.    24 and 48 hour label production daily

9.    Fortnightly period end processing - same day service.

10. 24 hour service monitoring via Xymon.

11.   DBA support for system related changes and database maintenance.

12.   Power / cooling Servers UPS in Server room

3.    Major modifications including

a.    Operating system version upgrades

b.    Application version upgrades either driven by the supplier or requested by Kleeneze

c.    Hardware upgrades associated with 1a & 1b

4.    Changes driven by UK Law or legislation

Ricoh Multi Function Device (print, scan, copy)

Ongoing supply, support and maintenance of all existing MFD’s used by Kleeneze at current levels

1.    Any additional devices

2.    Supply & Implementation of amended or enhanced features or functionality

3.    Any increases above 5% to existing print volumes brought about by Kleeneze business changes or clear misuse

4.    Major modifications including

a.    Operating system version upgrades & associated hardware upgrades

5.    Changes driven by UK Law or legislation

£381.6k

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

__________________________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): February 6, 2015

CVSL Inc.

(Exact name of registrant as specified in its charter)

Florida	Commission	98-0534701
(State or other jurisdiction	File No.: 00-52818	(IRS Employer
of incorporation or organization)		Identification No.)

2400 North Dallas Parkway, Suite 230, Plano, Texas 75093

(Address of principal executive offices and zip code)

(972) 398-7120

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01

Entry into a Material Definitive Agreement.

On February 6, 2015, Trillium Pond AG (“Trillium Pond”), a Swiss corporation wholly owned by CVSL AG, a Swiss corporation wholly owned by CVSL Inc., a Florida corporation (the “Company”) entered into a Share Purchase Agreement (the “SPA”) with Findel plc (“Findel”), a company incorporated in England whose registered office is at 2 Gregory Street, Hyde, Cheshire SK14 4TH to purchase from Findel all of the issued and outstanding share capital of Kleeneze Limited (“Kleeneze”), a company incorporated in England and Wales whose registered office is at 2 Gregory Street, Hyde, Cheshire SK14 4TH. Kleeneze has one wholly-owned subsidiary, Kleeneze (Ireland) Limited.

Kleeneze was founded in 1923 and sells a variety of household goods through a network of more than 7,000 independent sales representatives in the U.K. and Ireland.

Pursuant to the SPA, Trillium Pond has agreed to acquire all 2,500,001 shares of Kleeneze common stock issued and outstanding in exchange for payment to Findel of Three Million Six Hundred Eighteen Thousand Five Hundred Thirty-Four pounds sterling (£3,618,534) (the “Base Consideration”) subject to adjustment based on Kleeneze’s final last twelve months earnings before interest, taxes, depreciation and amortization (“LTM EBITDA”) calculated prior to the closing date. The closing date is expected to be within 45 days of the execution of the SPA. Of the Base Consideration, Five Hundred Thousand pounds sterling (£500,000) will be held in a Retention or Escrow Account pending the final determination of the LTM EBITDA, if necessary. The SPA contains customary conditions required to be fulfilled or waived prior to consummation of the acquisition. There can be no guarantee that the conditions to closing will be met.

Should the LTM EBITDA fall below a predetermined amount, a portion of the Base Consideration can be paid, at Trillium Pond’s option, in either cash or shares of CVSL Inc. Common Stock, par value $0.0001 (“CVSL Shares”). Should the LTM EBITDA exceed the benchmark amount, the consideration will be increased by five times the increase of LTM EBITDA over the predetermined amount, but in no instance will total consideration exceed Five Million pounds sterling (£5,000,000). Any consideration paid above the Base Consideration is to be paid in CVSL Shares.

The SPA provides that Kleeneze is to maintain approximately Five Million One Hundred Nineteen Thousand Nine Hundred Forty-Nine pounds sterling (£5,119,949) of total working capital at closing, of which Eight Hundred Sixty Six Thousand pounds sterling (£866,000) shall be cash held by Kleeneze at closing.

As part of the SPA, Findel agrees to indemnify Trillium Pond against certain losses relating to potential breaches of the SPA, certain fees and expenses, and certain post-closing liabilities of Kleeneze.

The closing of the SPA is conditioned upon the delivery and execution of a Service Level Agreement (the “SLA”) between Findel’s wholly-owned subsidiary, Express Gifts Limited (“EGL”), and Kleeneze to be entered into providing for (i) EGL to continue to providing warehousing, packaging and fulfillment services, as well as other services such as of office space and information technology support, to Kleeneze for a minimum of eighteen (18) months after the closing, and (ii) Kleeneze to pay a fee per shipped order, dependent on the warehouse location, as well as certain fees associated with the other services in the SLA.

In addition, the closing of the SPA is also conditioned upon the delivery and execution of a Transitional Services Agreement (the “TSA”) between Kleeneze and Findel providing for (i) Findel to continue to provide certain administrative functions to Kleeneze for a maximum of twelve months after the closing and (ii) Kleeneze paying Findel agreed upon fees for such administrative services during the term of the TSA. Such services will include finance support, human resources and other back office services to support Kleeneze’s ongoing operations.

The Company and Kleeneze anticipate entering into employment agreements with certain key Kleeneze personnel. The terms of such employment agreements are anticipated to be finalized prior to the closing of the transactions.

Should any CVSL Shares be issued by the Company to Findel as part of the consideration, such shares will be issued in a private placement transaction pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, and such issuance is subject to approval by the NYSE MKT.

The foregoing descriptions of the SPA, the SLA and the TSA do not purport to be complete and are qualified in their entirety by reference to the full text of such documents, copies of which are attached hereto as Exhibit 10.1, Exhibit 10.2, Exhibit 10.3, respectively.

The documents attached hereto are included with this Current Report on Form 8-K (this “Current Report”) only to provide investors with information regarding the terms and conditions of such documents, and not to provide investors with any other factual information regarding the Company, Kleeneze, or other parties, or their businesses or operations. Investors should not rely on any representations and warranties in any such documents or any descriptions thereof as characterizations of the actual state of facts or condition of the Company, Kleeneze, or other parties, as applicable. Information concerning the subject matter of any representations and warranties in such documents may change after the date of such documents, and such subsequent information may or may not fully be reflected in the Company’s public disclosures or periodic reports filed with the Securities and Exchange Commission (the “Commission”). The representations, warranties, and covenants contained in such documents were made only for purposes of the respective document and as of specific dates, are solely for the benefit of the parties to such documents, may be subject to limitations agreed upon by the parties, including with respect to the SPA being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to such agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the parties that differ from those applicable to investors. The attached documents should not be read alone, but should instead be read in connection with the other information regarding the Company, Kleeneze, and their businesses and operations, as applicable, that is or will be contained in, or incorporated by reference into, the Company’s Annual Reports on Forms 10-K, Quarterly Reports on Forms 10-Q, proxy or information statements, and other documents that the Company files with or furnishes to the Commission.

Item 8.01

Other Events.

The Company issued a press release on February 6, 2015, a copy of which is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01

Financial Statements and Exhibits.

(a)

Financial Statements of Business Acquired.

Financial statements required to be filed under Item 9.01(a) of Form 8-K, if any, will be filed by amendment to this Current Report no later than 71 calendar days after the date this Current Report was required to be filed.

(d)

Exhibits.

10.1

Share Purchase Agreement, dated February 6, 2015, between Trillium Pond AG and Findel plc.

10.2

Service Level Agreement to be executed at closing between Kleeneze and Express Gifts, Ltd.

10.3

Transition Services Agreement to be executed at closing between Kleeneze and Findel plc.

99.1

Press release of CVSL Inc. dated February 6, 2015.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CVSL Inc.


Date: February 6, 2015	By:	/s/ John P. Rochon
		John P. Rochon
		Chief Executive Officer and President

EXHIBIT INDEX

Exhibit Number*		Description

10.1		Share Purchase Agreement, dated February 6, 2015, between Trillium Pond AG and Findel plc.

10.2		Service Level Agreement to be executed at closing between Kleeneze and Express Gifts, Ltd.

10.3		Transition Services Agreement to be execute at closing between Kleeneze and Findel plc.

99.1		Press release of CVSL Inc. dated February 6, 2015.

______________________________

* Financial statements required to be filed under Item 9.01(a) of Form 8-K, if any, will be filed by amendment to this Current Report no later than 71 calendar days after the date this Current Report was required to be filed.

Exhibit 10.1

DATED 2015

	FINDEL PLC	(1)
	TRILLIUM POND AG	(2)
	and
	CVSL INC	(3)

SHARE PURCHASE AGREEMENT

relating to the sale and purchase of the whole of the issued share capital of Kleeneze Limited

CONTENTS

1	DEFINITIONS AND INTERPRETATION	1

2	SALE AND PURCHASE	8

3	CONSIDERATION	8

4	Signing and Pre-Completion period	9

5	Termination	10

6	COMPLETION	11

7	POST-COMPLETION OBLIGATIONS	13

8	WARRANTIES	14

9	Indemnity	15

10	RESTRICTIVE COVENANTS	16

11	Retention	17

12	guarantee	18

13	CONFIDENTIALITY AND USE OF NAMES	19

14	TAX	19

15	ANNOUNCEMENTS	19

16	GENERAL	20

17	ASSIGNMENT	21

18	ENTIRE AGREEMENT	21

19	NOTICES	21

20	Process agent	22

21	COUNTERPARTS	22

22	GOVERNING LAW AND JURISDICTION	22

Schedule 1 Target		24

Schedule 2 Warranties		26

Schedule 3 Warranty Limitations		43

Schedule 4 TAX		47

Schedule 5 Pre-Completion Undertakings		70

Schedule 6 Adjustments to the Consideration		73

Schedule 7 Working Capital		80

DATE OF AGREEMENT	2015

PARTIES

(1)	FINDEL PLC, a company incorporated in England (Company Number 00549034) whose registered office is at 2 Gregory Street, Hyde, Cheshire SK14 4TH (the "Seller")

(2)	TRILLIUM POND AG a company incorporated in Switzerland whose address is at c/o CVSL AG, Hertensteinstrasse 51 6004, Luzern (the "Buyer")

(3)	CVSL Inc, a company incorporated in the U.S.A (Key ID 103392095) whose office is at 2400 Dallas Patrkway Suite 230 Plano, TX 75093-4371 United States (the "Guarantor")

INTRODUCTION

The Seller is the legal and beneficial owner of the whole of the issued share capital of the Target.

The Seller has agreed to sell the whole of the issued share capital of the Target to the Buyer on the terms of this agreement.

The Guarantor has agreed to guarantee the funding of the Consideration by the Buyer under this agreement.

IT IS AGREED THAT:

DEFINITIONS AND INTERPRETATION

1.1

In this agreement the following words and expressions shall have the following meanings.

Actual LTM EBITDA" means the amount, as determined or agreed as contemplated by this agreement, of EBITDA of the Target Group for the year ending on 20 February 2015 calculated consistently with the illustration in paragraph 4 of Schedule 6.

"ASB" means the Accounting Standards Board Limited, a company registered in England and Wales (registered number 2526824), or such other body prescribed by the Secretary of State from time to time pursuant to the Companies Acts.

"Associate" means any person, firm or company which is a connected person (as defined in section 1122 of CTA 2010) of the Seller, or which is an associated company of the Seller within the meaning of section 449 of CTA 2010 (but as if in section 450 CTA 2010 there was substituted for the words "the greater part" wherever they appear the words "20% or more") but excluding the Target Group.

"Benchmark LTM EBITDA" means the amount of £525,000 being the EBITDA of the Target Group for the year ended 26 December 2014 calculated as illustrated in paragraph 4 of Schedule 6.

"Business Day" means any day (other than a Saturday, Sunday or a bank or public holiday in London or New York City, USA).

"Buyer's Group" means the Buyer, any subsidiary of the Buyer, any holding company of the Buyer and any subsidiary of any holding company of the Buyer, from time to time.

"Buyer's Solicitors" means Addleshaw Goddard LLP of 100 Barbirolli Square, Manchester, M2 3AB

"Companies Acts" has the meaning set out in section 2 of the Companies Act 2006 and includes any enactment passed after the Companies Act 2006 which may, by reason of that or any other enactment, be cited together with the Companies Act 2006 as "the Companies Acts".

"Completion" means completion of the sale and purchase of the Shares in accordance with clause 6.

"Completion Date" means 46 days from the date of this agreement (or the next Business Day thereafter) or such earlier date as the parties may agree

"Completion Statement" means a document containing a statement of the Actual LTM EBITDA to be prepared and agreed or determined pursuant to, and in accordance with, paragraphs 2 and 3 of Schedule 6.

"Condition" means the approval of the terms of this agreement by the relevant approval body of the New York Stock Exchange in accordance with requirements applicable to the Buyer.

"Confidential Business Information" means all or any information of a secret or proprietary or confidential nature (however stored) and not publicly known which is owned by the Target Group or which is used in or otherwise relates to the business, Customers or financial or other affairs of the Target Group, including, without limitation, information relating to:

(a)

the business methods, technical processes, corporate plans, management systems, finances, new business opportunities or development projects of the Target Group; or

(b)

the marketing or sales of any past or present or future products, goods or services of the Target Group including, without limitation, Customer names and lists and other details of Customers, sales targets, sales statistics, market share statistics, prices, market research reports and surveys and advertising and other promotional materials; or

(c)

future projects, business development or planning, commercial relationships and negotiations; or

(d)

any trade secrets or other information relating to the provision of any product or service of the Target Group.

"Consideration" means the amount set out in clause 3.

"CTA 2010" means the Corporation Tax Act 2010.

"Customer" means each of the multi-level direct marketing distributors of the Target Group.

"CVSL Inc." means a company incorporated in the U.S.A (Key ID 103392095) whose office is at 2400 Dallas Parkway, Suite 230, Plano, Texas, 75093

"CVSL Shares" means shares of common stock in CVSL Inc.

"CVSL Share Excess Amount" shall have the meaning set out in paragraph 1.3(a) of Schedule 6.

"CVSL Share Shortfall Amount" shall have the meaning set out in clause 11.6(a).

"Debt Waiver" means the deed of release in the agreed form from the Target to the Buyer releasing the Seller from liability to pay the Intra-group Non-trading Balances.

"Deed of Release of Intra Group Indebtedness" means the deed of release in the agreed form releasing all Intra Group Indebtedness.

"Disclosure Letter" means the letter in the agreed form dated the same date as this agreement from the Seller to the Buyer relating to the Warranties and the Tax Warranties and providing details of other matters specifically referred to in this agreement.

"Domain Names" means the domain names listed in the Disclosure Letter.

"EC Treaty" means the Treaty of Rome 1957 as amended.

"Environment" means the natural and man-made environment including:

(a)

land, including without limitation, surface land, sub-surface strata, sea bed and river bed under water (as defined in paragraph (b)) and natural and man-made structures;

(b)

water, including, without limitation, coastal and inland waters, surface waters, aquatic sediment, ground waters, and water in drains and sewers;

(c)

air, including, without limitation, air inside buildings and other natural and man-made structures above or below ground; and

(d)

any living systems or organisms supported by the media set out in (a), (b) or (c) above.

"Escrow Agent" means the Seller's Solicitors.

"Escrow Agreement" means the agreement in the agreed form to be entered into on Completion between the Seller, the Buyer and the Escrow Agent setting out terms relating to the operation of the Retention Account and the holding and distribution of the Retention Sum.

"ESH Law" means all international, EU, national, state, federal, regional or local laws, common law, statutes, ordinances, directives, regulations, decisions, notices, directions, standards, codes of practice, judgments, decrees or orders, the requirements and conditions of all ESH Permits, agreements, circulars, guidance notes (statutory or otherwise), and judicial and administrative interpretations of each of the foregoing concerning (without limitation) the protection of or harm to human health or the Environment or the conditions of the work place and worker and process safety, or the generation, transportation, storage, treatment or disposal of any Hazardous Substance, in each case as enacted, amended, replaced or supplemented from time to time.

"ESH Permits" means any permits, consents, licences, certificates, notices, filings, lodgements, agreements, directions, declarations, registrations, notifications, exemptions, variations, renewals, permissions and amendments and other authorisations and approvals including any conditions thereof required or provided under ESH Law for the operation of the Target's business or its occupation or use of the Property.

"EU" means the European Union.

"Final Determination Date" means the date on which the Completion Statement is agreed or determined in accordance with paragraph 2 of Schedule 6.

"GAAP" means generally accepted accounting practices, principles and standards in compliance with all applicable laws in the United Kingdom including without limitation the legal principles set out in the Companies Acts, rulings and abstracts of the ASB and guidelines, conventions, rules and procedures of accounting practice in the United Kingdom which are regarded as permissible by the ASB.

"Hazardous Substance" means any natural or artificial substance (whether in solid or liquid form or in the form of a gas or vapour) or organism (including genetically modified organisms) whether alone or in combination with any other substance capable of causing harm or damage to the Environment or human health or welfare or which restricts or makes more costly the use, development, ownership or occupation of any property including but not limited to asbestos or any controlled, hazardous, toxic or dangerous chemical, substance or waste.

"Independent Legal Expert" means an independent Counsel for at least 10 years' call with commercial expertise nominated jointly by the Buyer and the Seller or, failing such nomination within 3 Business Days after a request by either the Buyer or the Seller, such expert shall be nominated at the request of either the Buyer or the Seller by the Chairman for the time being of the Bar Council of England and Wales.

"Intellectual Property" means any patents, trade marks, service marks, registered designs, utility models, design rights, copyright (including copyright in computer software), database rights, semi-conductor topography rights, inventions, trade secrets and other confidential information, know-how, business or trade names (including internet domain names and e-mail address names) and all other intellectual and industrial property and rights of a similar or corresponding nature in any part of the world, whether registered or not or capable of registration or not and including the right to apply for and all applications for any of the foregoing rights and the right to sue for infringements of any of the foregoing rights.

"Intra Group Guarantees" means all securities, guarantees, indemnities, counter-indemnities, sureties and letters of comfort of any nature whatsoever given by or binding upon the Target Group in respect of a debt, liability or obligation of the Seller and/or any of its Associates.

"Intra Group Indebtedness" means all debts, liabilities (whether actual, contingent or prospective) or obligations subsisting or outstanding as at Completion owed by the Target Group on the one hand to the Seller or to any of its Associates on the other hand but excluding normal trade indebtedness arising in the ordinary course of business.

"Intra-group Non-trading Balances" means the intra-group non-trading balances of:

(a)

in the region of £15,000,000; and

(b)

£6,000,000;

owed by the Seller to the Target.

"IP Licences" means any licences, sub-licences, agreements, authorisations and permissions whether express or implied, relating to the use, enjoyment and/or exploitation by:

(a)

the Target Group of any Third Party Intellectual Property Rights; and

(b)

any third party of any Target Intellectual Property Rights.

"Last Accounts" means the audited balance sheet of each member of the Target Group as at the Last Accounts Date and the audited profit and loss account of each member of the Target Group made up to the Last Accounts Date and (in each case) the auditor's and the directors' reports and notes thereon.

"Last Accounts Date" means 28 March 2014.

"London Stock Exchange" means London Stock Exchange plc.

"Management Accounts" means the unaudited balance sheet and profit and loss account of the Target Group for the 12 month period ended on the Management Accounts Date attached to the Disclosure Letter.

"Management Accounts Date" means 26 December 2014.

"Material Contract" means any contract, arrangement or obligation to which the Target Group is a party and which has a monetary value of £10,000.00or more.

"Pension Scheme" means the Findel Group Personal Pension Scheme.

"Post Termination Provisions" means clauses 15, 16, 17, 18, 19, 20, 21 and 22.

"Pre-completion Confirmation" means an unqualified written confirmation from the Seller as at Completion that, to the best of the knowledge, information and belief of the Seller, having made reasonable enquiries of Lisa Burke, Andrew Morgan, Michael Khatkar and Angela Hill there has been no breach of the provisions of Schedule 6 (Pre-Completion Undertakings)

"Property" means that part of the leasehold property known as Express House, Clayton Business Park, Clayton Le Moors, Accrington, Lancashire, BB5 5JY, which is occupied by the Target, brief details of which are set out in the Property Licence.

"Property Licence" means the property licence in the agreed form to be entered into between (1) the Seller and (2) the Target immediately after Completion.

"Registered Intellectual Property Rights" means the registered Intellectual Property listed in the Disclosure Letter.

"Relevant CVSL Share Price" means the average of the closing prices for CVSL Shares for each of the 10 trading days ending with the trading day 2 Business Days preceding the date of issue of the relevant CVSL Shares pursuant to this agreement.

"Retention Account" means the interest bearing deposit account to be opened prior to Completion in the name of the Escrow Agent for the purposes of holding the Retention Sum on deposit in accordance with clause 11.

"Retention Sum" means the sum of £500,000 to be paid by the Buyer into the Retention Account on Completion in accordance with clause 3

"Security Interest" means any mortgage, charge, assignment or assignation by way of security, guarantee, indemnity, debenture, hypothecation, pledge, declaration of trust, lien, right of set off or combination of accounts or any encumbrance or security interest whatsoever, howsoever created or arising and whether monetary or not.

"Seller's Group" means the Seller, any subsidiary of the Seller, and any associated undertaking of any such person, from time to time, but excluding the Target Group.

"Seller’s Solicitors" means Squire Patton Boggs (UK) LLP of Trinity Court, 16 John Dalton Street, Manchester M60 8HS.

"Service Level Agreement" means the service level agreement in the agreed form to be entered into with effect from Completion between (1) Express Gifts Limited (company number 00718151) and (2) the Target.

"Shares" means the 2,500,001 ordinary shares of £1 each in the capital of the Target.

"Systems" means the computer, telecommunications and networking hardware and software and other information technology owned or used by the Target Group.

"Subsidiary" means Kleeneze (Ireland) Limited, brief details of which are set out in Part 2 of Schedule 1.

"Target" means Kleeneze Limited, brief details of which are set out in Part 1 of Schedule 1.

"Target Group" means the Target and the Subsidiary, and references to the Target Group refer to all or to any member of the Target Group.

"Target Intellectual Property Rights" means all the Intellectual Property owned by the Target Group including, without limitation, the Intellectual Property set out in the Disclosure Letter.

"Tax Covenant" has the meaning given to it in Schedule 4.

"Tax Warranties" has the meaning given to it in Schedule 4.

"Third Party Intellectual Property Rights" means all Intellectual Property used or exploited exclusively in or in connection with the Target Group but not owned by the Target Group including, without limitation, all of the Intellectual Property listed in the Disclosure Letter.

"TSA" means a transitional services agreement in the agreed form to be entered into between (1) the Seller and (2) the Target with effect from Completion.

"UKLA" means the Financial Services Authority acting in its capacity as the UK Listing Authority.

"Warranties" means the warranties set out in Schedule 2.

"Working Capital" means the Target’s current assets (excluding cash) minus the Target’s current liabilities and otherwise in accordance with the agreed computations set out in Schedule 7.

1.2

Unless the context otherwise requires, all words and expressions which are defined in the Companies Acts shall have the same meanings in this agreement.

1.3

Unless the context otherwise requires:

(a)

words denoting the singular include the plural and vice versa;

(b)

words denoting any gender include all other genders;

(c)

any reference to "persons" includes individuals, bodies corporate, companies, partnerships, unincorporated associations, firms, trusts and all other legal entities;

(d)

all references to time are to London time;

(e)

any reference to a party is to a party to this agreement.

1.4

Clause headings are for convenience only and shall not affect the interpretation of this agreement. Any reference to a clause, sub-clause, paragraph or schedule is to the relevant clause, sub-clause, paragraph or schedule of this agreement.

1.5

The schedules to this agreement shall for all purposes form part of this agreement.

1.6

Any reference to a document being in the "agreed form" means a document in a form agreed by the parties and initialled by, or on behalf of, each of them for the purposes of identification.

1.7

Any phrase introduced by the terms "including", "include", "in particular" or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms.

1.8

References to any English statutory provision or English legal term for any action, remedy, method of judicial proceeding, document, legal status, court, official or any other legal concept or thing shall, in respect of any body corporate incorporated in any jurisdiction other than England, be deemed to refer to and include any equivalent or analogous action, remedy, method of judicial proceeding, document, legal status, court, official or other legal concept or thing or what most nearly approximates in that jurisdiction to the English statutory provision or English legal term.

1.9 For the purposes of this agreement, where any amount is required to be converted from one currency to another for the purposes of calculating the number of CVSL Shares to be issued, the relevant exchange rate shall be daily spot rate for the Business Day prior to the date of issue, as set out at www.bankofengland.co.uk.

SALE AND PURCHASE

2.1

Subject to the terms and conditions of this agreement, the Seller shall sell with full title guarantee and the Buyer shall purchase the Shares with effect from Completion.

2.2

The Seller covenants with the Buyer that:

(a)

the Shares are fully paid (or credited as fully paid) and constitute the whole of the allotted and issued share capital of the Target;

(b)

the Seller is entitled to sell and transfer the full legal and beneficial ownership of the Shares to the Buyer on the terms set out in this agreement without the consent of any third party; and

(c)

the Shares will be sold and transferred to the Buyer free from all Security Interests and together with all accrued benefits and rights attaching or accruing to the Shares, including all dividends declared on or after the Completion Date

2.3

On signing of this agreement:

(a)

the Seller will provide to the Buyer as evidence of the authority of each person entering into this agreement or any document to be entered into in connection with this agreement on behalf of the Seller, a certified copy of a resolution of the board of directors (or a duly authorised committee) of the Seller and/or a power of authority conferring such authority;

(b)

the Buyer will provide to the Seller:

(i)

as evidence of the authority of each person entering into this agreement or any document to be entered into in connection with this agreement on behalf of the Buyer, a certified copy of a resolution of the board of directors (or a duly authorised committee) of the Buyer and/or a power of authority conferring such authority;

(ii)

a legal opinion in the agreed form from BDO AG.

CONSIDERATION

3.1

Subject always to clauses 3.2 and 3.3, the Consideration for the purchase of the Shares shall be £3,618,534, subject to adjustment as set out in Schedule 6 of which:

(a)

£3,118,534 shall be paid to the Seller by the Buyer in cash on Completion ("Completion Purchase Price"); and

(b)

the Retention Sum shall be paid into the Retention Account by the Buyer on Completion whereupon the provisions of clause 11 shall apply to such sum and such account;

save that in no event shall the Consideration exceed £5,000,000.

3.2

The parties agree to use reasonable endeavours to agree the Actual LTM EBITDA in accordance, mutatis mutandis, with paragraphs 2,3 and 4 of Schedule 6, prior to the Completion Date and also what, if any, adjustments there should be to the Consideration.

3.3

If the parties agree the Actual LTM EBITDA and also what, if any, adjustments there should be to the Consideration, in writing prior to Completion, at Completion the Buyer:

(a)

in its sole discretion may elect to satisfy the Consideration by:

(i)

issuing to the Seller, in lieu of cash, such number of CVSL Shares as is equal to the CVSL Share Shortfall Amount (if applicable) divided by the Relevant CVSL Share Price; or

(ii)

issuing to the Seller, in lieu of cash, such number of CVSL Shares as is equal to the CVSL Share Excess Amount (if applicable) divided by the Relevant CVSL Share Price; and

(b)

will pay the balance of the Consideration in cash;

and for the avoidance of doubt no amount shall be paid into the Escrow Account, there shall be no Retention and the provisions of clause 11 and Schedule 6 shall not apply. If the parties do not agree the Actual LTM EBITDA by the Completion Date the parties will proceed to Completion and clause 3.1 shall apply.

Signing and Pre-Completion period

4.1

Between the date of this agreement and Completion, the Seller will comply with the undertakings in paragraphs 1 and 2 of schedule 6.

4.2

Between the date of this agreement and Completion, the Buyer will use its best endeavours to ensure that:

(a)

the Condition is satisfied; and

(b)

on the Completion Date it will be able to comply with its obligations under clause 6.8 including (without limitation) having the financial means to pay the Consideration at Completion;

and will notify the Seller as soon as reasonable practicable upon satisfaction.

Termination

5.1

If the Buyer becomes aware that the Seller has materially breached any provision of Schedule 5 (Pre-Completion Undertakings) the Buyer may terminate this agreement before Completion by written notice to the Seller and clause 5.2 will apply. For the purposes of this clause 5.1 a material breach is one that would entitle the Buyer if it were to complete the sale and purchase of the Target on the terms of this agreement, to bring a claim against the Seller pursuant to clause 4.1, for breach of the undertakings contained in Schedule 6, and which, subject to clause 5.2, in the Buyer's reasonable opinion would have a cumulative value of £361,853 (the "Termination Threshold" or more.

5.2

If the Buyer serves a written notice under clause 5.1 to terminate this agreement, the Seller may request that the Buyer obtain an opinion (the "Legal Opinion") from an Independent Legal Expert stating whether the claim(s) alleged to give rise to the right to terminate is/are more likely to be successful than not successful and whether the amount claimed by the Buyer is a reasonable estimate of the amount payable in respect of such claim/claims. Upon such opinion being obtained by the Buyer (a copy of which shall as soon as reasonably practicable be provided to the Seller):

(a)

if the Legal Opinion confirms that the claim(s) is/are more likely to be successful than not; and

(i)

that the amount claimed by the Buyer is a reasonable estimate of the amount payable in respect of such claim/claims; or

(ii)

the amount claimed by the Buyer is not a reasonable estimate of the amount payable in respect of such claim(s) but that a reasonable estimate would exceed the Termination Threshold

the Buyer may terminate this agreement under clause 5.1 and the Seller will pay the costs of the Independent Legal Expert; or

(b) if the Legal Opinion confirms that the claim(s) is/are more likely to be unsuccessful than successful and/or that the amount claimed by the Buyer is not a reasonable estimate of the amount payable in respect of such claim(s) and that a reasonable estimate would not reach the Termination Threshold, the Buyer may not terminate this agreement under clause 5.1 and the Buyer will pay the costs of the Independent Legal Expert.

The Independent Legal Expert will be asked to provide the Legal Opinion as soon as reasonably practicable and both parties will provide all information requested by the Independent Legal Expert as soon as reasonably practicable.

If the provisions of this clause 5.2 are evoked, the Completion Date will be deemed to be deferred until 2 Business Days after delivery to the Seller of the Legal Opinion.

5.3

If:

(a)

the Buyer terminates this agreement under clause 5.1;

(b)

the Buyer or the Seller terminates this agreement under any other provision of this agreement giving the Buyer or the Seller (as the case may be) the right to terminate; or

(c)

this agreement is terminated under clause 6.2

notwithstanding any other provision of this agreement each party's rights and obligations under this agreement (including any rights and liabilities of the parties which have arisen before termination) will cease immediately except that the Post-Termination Provisions will continue in force.

COMPLETION

6.1

Subject to satisfaction of the Condition, Completion shall take place at the offices of the Seller's Solicitors on the Completion Date when each of the events set out in clauses 6.3 to 6.6 shall occur.

6.2

If the Condition is not satisfied on or before the Completion Date, this agreement shall terminate and the provisions of clause 5.2 shall apply.

6.3

At Completion, the Seller shall deliver to the Buyer:

(a)

a duly completed and executed transfer of the Shares in favour of the Buyer or as it directs;

(b)

the certificates for the Shares;

(c)

duly completed and executed Service Level Agreement;

(d)

duly completed and executed TSA;

(e)

the duly executed Escrow Agreement;

(f)

the Pre-Completion Confirmation duly executed by the Seller

(g)

the resignations of Roger Siddle, Philip Maudsley and Timothy Kowalski as directors of the Target Group and Mark Ashcroft as the secretary of the Target Group in the agreed form;

(h)

evidence satisfactory to the Buyer that all charges, debentures and other Security Interests affecting the Target Group (including without limitation all such Security Interests held by Barclays Bank plc) have been released and discharged in full; and

(i)

the Deed of Release of Intra Group Indebtedness duly executed by the Seller.

6.4

At Completion, there shall be delivered or made available to and be placed in the possession of the Buyer:

(a)

the certificate of incorporation (and, where relevant, any certificate of incorporation on change of name) of the Target Group;

(b)

all minute books of the Target Group duly made up to Completion;

(c)

the register of members and other statutory registers of the Target Group duly made up to Completion;

(d)

all books of accounts and documents of record and all other documents in the possession, custody or control of the Seller in connection with the Target Group all complete and up to date;

(e)

bank statements of all bank accounts of the Target Group as at a date not more than 1 Business Day prior to Completion together with bank reconciliation statements in respect of each such account made up to Completion.

6.5

At Completion, the Seller shall procure and demonstrate to the Buyer’s reasonable satisfaction that all Intra Group Guarantees (if any) are cancelled with effect from Completion without liability on the part of the Target Group.

6.6

At Completion, a board meeting of the Target (and where necessary the Subsidiary) shall be duly convened and held at which, with effect from Completion:

(a)

the transfer referred to in clause 6.3(a) shall (subject to stamping) be approved and registered;

(b)

such persons as the Buyer may nominate shall be appointed as directors and as the secretary of the Target Group and the resignations referred to in clause 6.3(e) shall be submitted and accepted;

(c)

all authorities to the bankers of the Target Group relating to bank accounts shall be revoked and new authorities to such persons as the Buyer may nominate shall be given to operate the same;

(d)

the Service Level Agreement shall be approved and entered into;

(e)

the TSA shall be approved and entered into;

(f)

the Intra-Group Non-Trading Balances shall be, to the extent not already, fully provided for as an irrecoverable debt in the accounts of the Target;

(g)

the registered office of the Target Group shall be changed to such address as the Buyer shall specify; and

(h)

the accounting reference date of the Target Group shall be changed to such date as the Buyer shall specify.

6.7

If the purchase of all the Shares cannot be completed simultaneously, or the Seller does not comply with any of its obligations under clauses 6.3 to 6.6, the Buyer may by notice to the Seller:

(a)

set a new date for Completion not more than 10 Business Days after the Completion Date (in which case this clause 6 will apply to the deferred Completion);

(b)

proceed to Completion so far as is practicable (without affecting the Buyer's rights in respect of such non-compliance) and set a later date on which the Seller will comply with its respective outstanding obligations; or

(c)

terminate this agreement immediately, in which case clause will apply.

6.8

Upon completion of all of the matters specified in clauses 6.3 to 6.6:

(a)

the Buyer shall pay the Completion Purchase Price to Seller’s Solicitors in the manner agreed upon by the parties;

(b)

pay the Retention Sum into the Retention Account; and

(c)

deliver to the Seller the duly executed Escrow Agreement.

6.9

If following completion of all of the matters specified in clauses 6.2 to 6.5 the Buyer does not comply with any of its obligations at Completion under clause 6.8, the Seller may by notice to the Buyer:

(a)

set a new date for Completion not more than 10 Business Days after the Completion Date (in which case this clause 6.9 will apply to the deferred Completion);

(b)

proceed to Completion so far as is practicable (without affecting the Seller's rights in respect of such non-compliance) and agree to a later date on which the Buyer will comply with its respective outstanding obligations; or

(c)

terminate this agreement immediately, in which case clause 5.3 will apply.

POST-COMPLETION OBLIGATIONS

7.1

Immediately following Completion:

(a)

the Buyer undertakes to procure that the Target (or a person duly authorised by the Target:

(i)

executes and delivers to the Seller the Debt Waiver;

(ii)

makes a statutory declaration as required under provision 17 of the Licence to Occupy in a form complying with the requirements of Schedule 2 to the Regulatory Reform (Business Tenancies) (England and Wales) Order 2003 (the "Statutory Declaration") and provides a copy of the sworn Statutory Declaration to the Seller and the Seller’s Solicitors and shall send the original to the Seller’s Solicitors by secure post within 3 days of the date thereof;

(iii)

executes and delivers to the Seller a copy of the Property Licence;

(b)

following receipt of the Statutory Declaration, the Seller shall execute and deliver a copy of the Property Licence.

7.2

The Seller undertakes that, immediately following Completion until such time as the transfer of the Shares has been registered in the register of members of the Target, the Seller will hold those Shares registered in his name on trust for and as nominee for the Buyer or its nominees and undertakes to hold all dividends and distributions and exercise all voting rights available in respect of the Shares in accordance with the directions of the Buyer or its nominees and if the Seller is in breach of the undertakings contained in this clause the Seller irrevocably authorises the Buyer to appoint some person or persons to execute all instruments or proxies (including consents to short notice) or other documents which the Buyer or its nominees may reasonably require and which may be necessary to enable the Buyer or its nominees to attend and vote at general meetings of the Target and to do any thing or things necessary to give effect to the rights contained in this clause 7.2.

7.3

Following Completion, the Buyer undertakes to the Seller to procure the release of the Seller and each member of the Seller's Group from all securities, guarantees, indemnities, counter-indemnities, sureties and letters of comfort of any nature whatsoever given by or binding upon the Seller or any member of the Seller's Group in respect of any debt, liability or obligation of the Target Group and, pending such release, the Buyer shall indemnify and keep indemnified the Seller (for itself and as trustee for each member of the Seller's Group) from and against all amounts paid by it to any third party pursuant to any such securities, guarantees, indemnities, counter-indemnities, sureties or letters of comfort.

7.4

The Seller agrees that all agency agreements (details of which are set out in the Disclosure Letter) between the Target Group on the one hand and any member of the Seller's Group on the other hand shall be terminated (unless the parties agree otherwise) with effect from Completion but without prejudice to the rights and liabilities of the parties to any such agreement accruing or incurred prior to Completion.

7.5

At any time after Completion, the Seller shall (and shall use its reasonable endeavours to procure that any necessary third party shall) sign and execute all such documents and do all such acts and things (other than the payment of stamp duty) as the Buyer may reasonably require for effectively vesting the Shares in the Buyer.

7.6

The Seller shall for a period of 6 months following Completion provide all such information relating to the Target Group, its business and affairs within its custody, possession or control as the Buyer shall reasonably request.

7.7

The Buyer shall for a period of 6 months following Completion provide all such information relating to the Target Group, its business and affairs within its custody, possession or control as the Seller shall reasonably request for the purposes of preparing its audited accounts and fulfilling other legal or regulatory requirements.

WARRANTIES

8.1

The Seller warrants to the Buyer on the terms of the Warranties, subject only to:

(a)

any matter fairly disclosed in the Disclosure Letter;

(b)

the limitations and qualifications set out in this clause 8 and Schedule 3; and

(c)

in relation to the Tax Warranties only, the limitations and qualifications set out in Part 4 of Schedule 4.

8.2

Each Warranty and Tax Warranty shall be construed as a separate and independent warranty and, except where expressly stated, shall not be limited or restricted by reference to or inference from the terms of any other warranty or any other provision of this agreement.

8.3

The rights and remedies of the Buyer in respect of any breach of the Warranties or the Tax Warranties shall not be affected by completion of the purchase of the Shares, by any investigation made by or on behalf of the Buyer into the affairs of the Target Group, by its rescinding or failure to rescind this agreement, by any failure to exercise or delay in exercising any right or remedy or by any other event or matter whatsoever, except a specific and duly authorised written waiver or release expressly referring to such breach.

8.4

The Seller agrees to waive any claim or remedy or right which it may have in respect of any misrepresentation, inaccuracy or omission in or from any information or advice supplied or given by the Target Group or a director, officer or employee of the Target Group for the purpose of assisting the Seller in giving any warranty, representation, undertaking or covenant, in preparing the Disclosure Letter and in entering into this agreement or any agreement or document entered into pursuant to this agreement.

8.5

If any Warranty or Tax Warranty is qualified by the expression "so far as the Seller is aware" or "to the best of the knowledge, information and belief of the Seller" or words to such effect, such expression shall mean that the actual knowledge of the board of directors of the Seller, having made reasonable enquiries into the subject matter of that Warranty or Tax Warranty of Lisa Burke, Andrew Morgan, Michael Khatkar, and Angela Hill.

8.6

Notwithstanding any other provisions of this agreement or any other agreement or document entered into pursuant to this agreement, none of the limitations contained in this clause 8 and the Disclosure Letter nor any statutory limitation shall apply to:

(a)

any claim relating to title to the Shares or capacity to enter into this agreement; or

(b)

any claim for breach of the Warranties or the Tax Warranties or under the Tax Covenant where the fact, matter or circumstance giving rise to the claim arises as a result of fraud, wilful concealment or deliberate non-disclosure on the part of the Seller, the Target Group or any of their respective officers, employees or advisers.

8.7

If any amount is paid by the Seller in respect of a breach of any Warranty or Tax Warranty or otherwise pursuant to this clause 8, in addition to Buyer’s remedies available at law or in equity, the amount of such payment shall be deemed to constitute a reduction in the consideration payable under this agreement.

8.8

In Schedule 2 any reference to the Target shall also be deemed to be a reference to the Subsidiary and the Warranties shall apply accordingly.

8.9

The Buyer confirms to the Seller that as at the date of this agreement it has no actual knowledge of any fact which it is actually aware would entitle it immediately after Completion bring a claim against the Seller for breach of the Warranties.

Indemnity

9.1

Subject to clause 9.2, the Seller covenants to pay to the Buyer an amount equal (on an indemnity basis) to all liabilities, costs, expenses, damages and losses (including but not limited to any interest, penalties reasonable professional costs and expenses) suffered, incurred or paid by the Buyer, the Target or the Subsidiary or any member of the Buyer's Group or any of their respective officers or employees arising out of or in connection with any third party claim or any legal or regulatory action or investigation brought by any competent authority connected to, the release of the Seller by the Target of the Intra-group Non-trading Balances.

9.2

For the avoidance of doubt, the waiver of the Intra-group Non-trading Balances pursuant to the Debt Waiver shall not, in itself, be deemed to be a loss suffered by the Target for the purposes of clause 9.1.

9.3

If any claim is made against the Buyer or any member of the Buyer's Group by any third party which is likely to give rise to a claim by the Buyer against the Seller under clause 5.1 then the Buyer shall (at the Seller's cost);

(a)

give notice of such claim to the Seller as soon as reasonably practicable after the Buyer becomes aware of it;

(b)

keep the Seller informed as to the progress of any such claim and shall procure that the Seller is promptly sent copies of all relevant communications and other documents (written or otherwise) transmitted to any other party to any proceedings or their agents or professional advisers (including, without limitation, pleadings and any opinion of Counsel relating to any proceedings against any third parties);

(c)

take, and shall procure that each member of the Buyer’s Group shall take, all reasonable steps so as to recover or minimise or resolve such liability or dispute and; and

(d)

upon request, comply with the reasonable requests of the Seller in relation to such claim

provided that taking any such action would not in the Buyer's reasonable opinion be detrimental to the ongoing business of the Target or the Subsidiary or any member of the Buyer's Group, or the reputation of Target, the Subsidiary or any member of the Buyer's Group and/or any of their respective directors or officers.

RESTRICTIVE COVENANTS

10.1

The Seller covenants with the Buyer (for itself and as trustee for each member of the Buyer's Group) that without the prior written consent of the Buyer, neither the Seller nor any of its Associates will either as principal or partner, alone or jointly with, through or as manager, adviser, consultant or agent for any person or in any other capacity whatsoever:

(a)

for a period of 2 years after the date of Completion directly or indirectly, carry on or be engaged, concerned or interested in the business or industries of selling household, health and beauty products through a multi-level or direct selling network of distributors in the United Kingdom and the Republic of Ireland in competition with the business of the Target Group as carried on at Completion PROVIDED THAT nothing contained in this clause 10.1(a) shall preclude the Seller or any member of the Seller's Group from:

(i)

engaging or being interested in any business which is carried on by the Seller's Group (other than the Target Group) at Completion;

(ii)

acquiring a business, an immaterial proportion of which carries on a business in competition with the business of the Target Group;

(iii)

being the registered holder or beneficial owner for investment purposes only of not more than 3% of the equity share capital of any company listed on the Official List of the UKLA or the AIM market of the London Stock Exchange, NYSE, NYSE MKT, NASDAQ; or

(b)

for a period of 1 year after the date of Completion enter into any employment or business arrangement, including consulting, distributing, or similar arrangements with any person who is, and was at or within 6 months from the date of Completion, employed by, a consultant to or an independent contractor of the Target Group without the prior written consent of the Buyer; or

(c)

for a period of 2 years after the date of Completion, solicit or endeavour to solicit in competition with the business of the Target (as carried on at the date of Completion) the custom of, or orders from, any person, firm or company who has been a direct Customer of the Target at any time during the period of 12 months immediately preceding the date of Completion save that nothing in this clause shall prevent the marketing of products to the general public or their own or commercially available mailing lists.

10.2

The restrictions contained in this clause 10 are considered to be reasonable by the Seller in all respects but if any of those restrictions shall be held to be void in the circumstances where it would be valid if some part were deleted, the parties agree that such restrictions shall apply with such deletion as may be necessary to make it valid and effective.

10.3

The Seller shall procure that each member of the Seller's Group and each of their respective Associates shall comply with the provisions of this clause as if each such person were a party covenanting with the Buyer.

10.4

The Seller acknowledges that the Buyer is accepting the benefit of the covenants contained in this clause 10 both on its own behalf and on behalf of each member of the Buyer's Group and the Target Group with the intention that the Buyer may claim against the Seller on behalf of any such person for loss sustained by that person as a result of any breach of any of the covenants contained in this clause.

10.5

The provisions of clauses 10.1(a) to 10.1(c) are separate and severable and shall be enforceable accordingly.

Retention

11.1

The monies standing to the credit of the Retention Account (including, without limitation, any accrued interest) shall be dealt with only in accordance with the provision of this agreement and the Escrow Agreement.

11.2

If there is any conflict between the provisions of this agreement and the provisions of the Escrow Agreement the parties agree that as between themselves the provisions of this agreement shall prevail.

11.3

The Buyer and the Seller shall ensure that all rights to the Retention Account remain free from any Security Interest except as set out in this clause 11.

11.4

The Buyer and the Seller shall promptly give all necessary instructions and notifications to the Escrow Agent and do all acts and things reasonably required to ensure that the Retention Account and the principal monies and interest standing to its credit are administered in accordance with the provisions of this agreement and the Escrow Agreement and shall procure that the Escrow Agent is not required to and does not take any action with respect to the Retention Account except on the joint written instructions of the Buyer and the Seller.

11.5

The interest accrued on the Retention Sum (or any part of it) whilst in the Retention Account shall be credited to the Retention Account and, in relation to any payment made from the Retention Account pursuant to this agreement, accrued interest shall follow the principal monies and shall be paid to the Seller or the Buyer (as the case may be) at the same time as payment of the corresponding principal.

11.6

On finalisation of the Completion Statement in accordance with Schedule 6, the Retention Sum shall be paid out of the Retention Account to the Seller unless Actual LTM EBITDA is less than Benchmark LTM EBITDA (the difference being the "EBITDA Shortfall") in which case the Buyer, in its sole discretion, may:

(a)

elect to have paid to it from the Retention Account an amount equal to some or all (as the Buyer shall determine) of the amount of the EBITDA Shortfall, multiplied by 5 ("CVSL Share Shortfall Amount"): and

(b)

issue to the Seller such number of CVSL Shares as is equal to the CVSL Share Shortfall Amount divided by the Relevant CVSL Share Price on or before the fifth Business Day after the Final Determination Date.

11.7

The Seller and the Buyer shall within 5 Business Days commencing on the Final Determination Date jointly instruct the Escrow Agent to release the monies standing to the credit of the Retention to the Seller and/or the Buyer (as the case may be) in accordance with the provisions of clause 11.6. Any payment made shall be made by electronic funds transfer in favour of the Buyer (in the case of a payment to the Buyer) or the Seller's Solicitors (in the case of a payment to the Seller) whose receipt shall be a complete discharge of the obligation to pay the amount so paid.

guarantee

12.1

In consideration of the Seller entering into this agreement, the Guarantor (as primary obligor and not merely as a surety) unconditionally and irrevocably guarantees as a continuing obligation the proper and punctual performance of the Buyer of its obligation to pay the Consideration.

12.2

The Guarantor’s liability under this guarantee shall not be affected, discharged, modified or impaired by:

(a)

any amendment to or variation of this agreement or any agreement or document entered into pursuant to this agreement;

(b)

any release, waiver or time or other indulgence granted to the Buyer or any third party;

(c)

any insolvency, liquidation, administration, receivership or winding-up or dissolution of the Buyer;

(d)

any act, omission, event or circumstance which causes any of the obligations of the Buyer to be or become void, voidable, invalid or unenforceable for any reason;

(e)

any change of control or sale of the Buyer; or

(f)

any other act or omission or any other event or circumstance (whether or not known to the Seller) which would or might (but for this clause 12) operate to impair or discharge the Guarantor’s liability under this guarantee.

12.3

The Guarantor shall make any payments due from it under this guarantee in full, without any deduction or withholding in respect of any claim (whether by way of set-off, counterclaim or otherwise) asserted from time to time by the Buyer against the Seller under or pursuant to clause 3 and Schedule 6 of this agreement, except as required by law.

12.4

The Seller may claim under this guarantee without making any claim or taking any proceedings against the Buyer or taking any action to claim under or enforce any other right or security or other guarantee which it may hold from time to time in respect of the obligations of the Buyer under clause 3 and Schedule 6 of this agreement.

12.5

This guarantee shall remain in force and effect until the Buyer has performed, observed and discharged all of its obligations under or pursuant to clause 3 and Schedule 6 of this agreement.

CONFIDENTIALITY AND USE OF NAMES

The Seller shall not at any time after the date of Completion use or disclose or permit there to be disclosed any Confidential Business Information which it has or acquires PROVIDED THAT this clause shall not apply if and to the extent that:

(a)

such Confidential Business Information has come into the public domain (other than as a result of breach of any obligation of confidence by the Seller or any of its Associates); or

(b)

any disclosure of such Confidential Business Information that is authorised in writing by the Buyer; or

(c)

disclosure of the Confidential Business Information concerned is required by law or by any regulatory body or the London Stock Exchange.

TAX

The parties agree that the provisions of Schedule 4 shall have effect.

ANNOUNCEMENTS

15.1

A party may make or authorise an announcement if:

(a)

the announcement is required by law or the UKLA or the London Stock Exchange or the New York Stock Exchange or any securities exchange or court process or regulatory or governmental body (whether or not such requirement has the force of law);

(b)

that party has consulted with and taken into account the reasonable requirements of the other party; and

(c)

that party has used reasonable endeavours to obtain confidentiality undertakings from any relevant securities exchange or regulatory or governmental body.

15.2

The parties authorise the release of the press announcement in the agreed form at start of business of the day after Completion to the London Stock Exchange, the UKLA, the New York Stock Exchange and to such other persons as the parties may agree.

15.3

Unless required by law and subject to clause 15.2, for a period of 1 month after the date of Completion the parties shall not make or authorise any public announcement concerning the terms of or any matters contemplated by or ancillary to this agreement without the prior written consent of the other party. Such consent, shall not be unreasonably withheld or delayed.

GENERAL

16.1

Except where this agreement provides otherwise, each party shall pay its own costs relating to or in connection with the negotiation, preparation, execution and performance by it of this agreement and of each agreement or document entered into pursuant to this agreement and the transactions contemplated by this agreement (including the due diligence exercise conducted prior to Completion). No such costs incurred by or on behalf of the Seller shall be charged to the Target Group.

16.2

No variation of this agreement or any agreement or document entered into pursuant to this agreement shall be valid unless it is in writing and signed by or on behalf of each of the parties.

16.3

No delay, indulgence or omission in exercising any right, power or remedy provided by this agreement or by law shall operate to impair or be construed as a waiver of such right, power or remedy or of any other right, power or remedy.

16.4

No single or partial exercise or non-exercise of any right, power or remedy provided by this agreement or by law shall preclude any other or further exercise of such right, power or remedy or of any other right, power or remedy.

16.5

The provisions of this agreement insofar as they have not been performed at Completion shall remain in full force and effect notwithstanding Completion.

16.6

This agreement and each of the agreements and documents executed pursuant to this agreement shall be binding upon and enure for the benefit of the successors in title of the parties.

16.7

If any provision of this agreement is or becomes illegal, invalid or unenforceable under the law of any jurisdiction, that shall not affect or impair:

(a)

the legality, validity or enforceability in that jurisdiction of any other provision of this agreement; or

(b)

the legality, validity or enforceability under the law of any other jurisdiction of that or any other provision of this agreement.

16.8

No person who is not a party to this agreement shall have any right to enforce this agreement or any agreement or document entered into pursuant to this agreement pursuant to the Contracts (Rights of Third Parties) Act 1999.

ASSIGNMENT

No party may assign, transfer, charge, make the subject of a trust or deal in any other manner with any of its rights under it or purport to do any of the same nor sub-contract any or all of its obligations under this agreement without the prior written consent of the other party. Such consent shall not to be unreasonably withheld or delayed.

ENTIRE AGREEMENT

18.1

This agreement (including the transaction documents and the exhibits, schedules and annexes hereto and thereto) constitute the entire agreement between the parties and supersedes any previous agreement or arrangement between the parties relating to the acquisition of the Shares.

18.2

Each of the Parties agrees that it has not entered into this agreement or any agreement or document entered into pursuant to this agreement in reliance upon any representation, statement, covenant, warranty, agreement or undertaking of any nature whatsoever made or given by or on behalf of the other Party except as expressly set out in this agreement or any agreement or document entered into pursuant to this agreement. The Parties waive any claim or remedy or right in respect of any representation, statement, covenant, warranty, agreement or undertaking of any nature whatsoever that they may have against each other unless and to the extent that a claim lies for damages for breach of this agreement or any agreement or document entered into pursuant to this agreement. Nothing in this clause shall exclude any liability on the part of the Parties for fraud or fraudulent misrepresentation.

NOTICES

19.1

Any notice or other communication given under this agreement shall be in writing and signed by or on behalf of the party giving it and shall be served by delivering it by hand or sending it by pre-paid recorded delivery or registered post (or registered airmail in the case of an address for service outside the United Kingdom) or by fax to the party due to receive it, at its address or fax number set out in this agreement or to such other address or fax number as are last notified in writing to the party.

19.2

Subject to clause 19.3, in the absence of evidence of earlier receipt, any notice or other communication given pursuant to this clause shall be deemed to have been received:

(a)

if delivered by hand, at the time of actual delivery to the address referred to in clause 19.1;

(b)

in the case of pre-paid recorded delivery or registered post, two Business Days after the date of posting;

(c)

in the case of registered airmail, five Business Days after the date of posting; and

(d)

if sent by fax, at the time of completion of transmission.

19.3

If deemed receipt under clause 19.2 occurs before 9.00 am on a Business Day, the notice shall be deemed to have been received at 9.00 am on that day. If deemed receipt occurs on any day which is not a Business Day or after 5.00 pm on a Business Day the notice shall be deemed to have been received at 9.00 am on the next Business Day.

19.4

Any notice sent to the Buyer shall be copied to the Guarantor ( ).

19.5

For the avoidance of doubt, notice given under this agreement shall not be validly served if sent by e-mail.

Process agent

20.1

The Buyer and the Guarantor each:

(a)

irrevocably appoint , and any successor in business, of East Orchard Building, Eastcourt Farm, Malmesbury, Wilstshire, SN16 9RZT ("Process Agent") as its agent to accept service of process in the United Kingdom in relation to any document initiating or otherwise connected with any court proceedings arising out of or in connection with this agreement;

(b)

agrees to notify the Seller in writing of any change of address of such Process Agent within 10 Business Days of the change of address; and

(c)

if such Process Agent ceases to be able to act under this clause 17 or ceases to have an address in England and Wales, irrevocably agrees to appoint a replacement process agent ("New Process Agent") reasonably acceptable to the Seller and after such appointment reference to the Process Agent in this clause will be read as reference to the New Process Agent and to give to the Buyer notice of such appointment within 10 Business Days.

20.2

Without affecting the effectiveness of service under any other method set out in clause 19 service of such process upon the Process Agent (with a copy sent to the Buyer and the Guarantor) at its address given in clause this clause 19 or elsewhere within the jurisdiction of the courts of England and Wales for the time being in force will constitute good service on the Buyer and/or the Guarantor (as applicable).

COUNTERPARTS

This agreement may be executed in any number of counterparts and by the different parties on separate counterparts (which may be facsimile copies), but shall not take effect until each party has executed at least one counterpart. Each counterpart shall constitute an original but all the counterparts together shall constitute a single agreement.

GOVERNING LAW AND JURISDICTION

22.1

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

22.2

Each party irrevocably agrees to submit to the exclusive jurisdiction of the courts of England in relation to any claim or matter arising under or in connection with this agreement (or any agreement or document entered into pursuant to this agreement).

IN WITNESS of which this document has been executed by the parties as a deed on the date set out above.

Schedule 1

Target

Part 1 – Details of the Target

Registered Number:	05801085

Type of Company:	Private company limited by shares

Date of incorporation:	29/04/2006

Country of incorporation:	England and Wales

Authorised Share Capital:	£2,500,001 divided into 2,500,001 Ordinary Shares of £1 each

Issued Share Capital:	2,500,001 Ordinary Shares of £1 each

Registered Office:	2 Gregory Street, Hyde, Cheshire SK14 4TH

Directors:	Roger William John Siddle Philip Binns Maudsley Timothy John Kowalski

Secretary:	Mark Ashcroft

Accounting Reference Date:	31/03

Auditors:	KPMG LLP

Charges:	An English law debenture dated 24 July 2009 between, amongst others, Target, Subsidiary and Barclays Bank Plc and the confirmatory security agreement dated 21 January 2015 between the same. An Irish law debenture dated 24 July 2009 between, amongst others, Target, Subsidiary and Barclays Bank Plc. An Irish share charge dated 24 July 2009 between Target and Barclays Bank in relation the shares in Subsidiary.

Part 2 – Details of the Subsidiary

Registered Number:	215390

Type of Company:	Private company limited by shares

Date of incorporation:	30/03/1994

Country of incorporation:	Ireland

Authorised Share Capital:	€125,000 divided into 100,000 Ordinary Shares of €1.25 each

Issued Share Capital:	2 Ordinary Shares of €1.25 each

Registered Office:	c/o KPMG, Dockgate, Dock Road, Galway

Directors:	Roger William John Siddle Philip Binns Maudsley Timothy John Kowalski

Secretary:	Mark Ashcroft

Accounting Reference Date:	31/03

Auditors:	KPMG LLP

Charges:	A Charge of Shares dated 24/07/2009 granted by the Target in favour of Barclays Bank Plc acting in its capacity as security trustees for the secured creditors. A Debenture dated 24/07/2009 granted by the Target in favour of Barclays Bank Plc as agent and security trustee for the secured creditors. A Security Agreement dated 24/07/2009 granted by the Target in favour of Barclays Bank Plc acting as agent and security trustee for the secured creditors.

Schedule 2
Warranties

Corporate matters

1.1

Authority and Capacity

(a)

The Seller has full power and authority to enter into and perform this agreement and any agreement or document to be entered into by the Seller pursuant to this agreement which constitute, or when executed will constitute, valid and binding obligations on the Seller which are enforceable in accordance with their respective terms.

(b)

The Seller has taken all corporate and other action necessary to enable it to enter into and perform this agreement and any agreement or document to be entered into pursuant to this agreement and has obtained all approvals and consents (including any governmental, third-party or other consents) required by it for the performance by it of the transactions contemplated by this agreement and any agreement or document to be entered into pursuant to this agreement.

(c)

The execution and delivery of, and the performance by the Seller of its obligations under, this agreement and any agreement or document entered into pursuant to this agreement will not:

(i)

result in a breach of any provision of the Memorandum or Articles of Association of such Seller; or

(ii)

result in a breach of any order, judgment or decree of any court or governmental agency or Security Interest to which the Seller is a party or by which the Seller or any of its assets is bound.

1.2

Title to the Shares

(a)

The Seller is the only legal and beneficial owners of the Shares.

(b)

The Shares have been validly allotted and issued, are fully paid or are properly credited as fully paid.

(c)

There is no Security Interest on, over or affecting any of the Shares and there is no agreement or arrangement to give or create any such Security Interest. No claim has been or will be made by any person to be entitled to any such Security Interest.

(d)

The Target has not created or granted or agreed to create or grant any Security Interest in respect of any of its uncalled share capital.

(e)

Except as required by this agreement, there are no agreements or arrangements in force which provide for the present or future allotment, issue, transfer, redemption or repayment of, or grant to any person of the right (whether conditional or otherwise) to require the allotment, issue, transfer, redemption or repayment of, any share or loan capital of the Target (including any option or right of pre-emption or conversion).

1.3

Changes in share capital

Since the Management Accounts Date:

(a)

no share or loan capital has been issued or allotted, or agreed to be issued or allotted, by the Target; and

(b)

the Target has not redeemed or purchased or agreed to redeem or purchase any of its share capital.

1.4

Subsidiaries and other interests

The Target does not own or have any interest of any nature whatsoever in any shares, debentures or other securities of any body corporate, whether incorporated in any part of the United Kingdom or elsewhere.

1.5

Directors

(a)

The only directors of the Target are the persons whose names are so listed in relation to the Target in Schedule 1.

(b)

No person is a shadow director of the Target within the meaning of the section 251 of the Companies Act 2006.

(c)

No director is now or has at any time within the last 6 years been subject to any disqualification order under the Companies Acts, the Insolvency Act 1986 or the Company Directors Disqualification Act 1986.

1.6

Corporate compliance

(a)

The Target has at all times carried on business and conducted its affairs in all material respects in accordance with its Memorandum and Articles of Association for the time being in force and any other documents to which it is or has been a party.

(b)

The Target is empowered and duly qualified to carry on business in all jurisdictions in which it now carries on business.

(c)

Due compliance has been made with all the provisions of the Companies Acts and other legal requirements in connection with the formation of the Target, the allotment or issue of any of its shares, debentures and other securities and the payment of dividends.

1.7

Documents filed

(a)

All returns, particulars, resolutions and documents required by the Companies Acts or any other legislation to be filed with the Registrar of Companies in England and Wales, or any other authority, in respect of the Target have been duly filed and were true, accurate and correct.

(b)

All mortgages and charges in favour of the Target have (where necessary in order to secure their enforceability) been duly registered in accordance with the Companies Acts.

1.8

Accuracy of Information

The information contained in Schedule 1 is true, accurate and complete.

1.9

Commissions

No one is entitled to receive from the Target any finder's fee, brokerage or other commission in connection with the sale and purchase of the Shares under this agreement.

ACCOUNTS

2.1

The Last Accounts

(a)

The Last Accounts were prepared in accordance with the historical cost convention. The bases and policies of accounting adopted for the purposes of preparing the Last Accounts are the same as those adopted in preparing the audited accounts of the Target in respect of the last 3 preceding accounting periods.

(b)

The Last Accounts:

(i)

give a true and fair view of the assets and liabilities and state of affairs of the Target, as the case may be, as at the Last Accounts Date and of its profits or losses for the financial period ended on that date;

(ii)

comply with all applicable requirements of the Companies Acts and other relevant statutes and regulations; and

(iii)

have been prepared in accordance with GAAP as applicable to a United Kingdom company as at the Last Accounts Date.

2.2

Valuation of stock

In the Last Accounts:

(a)

all stock was valued in the same way as in the audited accounts of the Target for the 2 preceding financial years and on the basis of the lower of cost or net realisable value;

(b)

all redundant and obsolete stock has been fully provided for or written off and all slow-moving and damaged stock has been adequately provided for.

2.3

Depreciation of fixed assets

The rates of depreciation and amortisation shown in the audited accounts of the Target for the 3 financial years ended on the Last Accounts Date were sufficient to ensure that each fixed asset of the Target will be written down to nil by the end of its useful life.

2.4

Management Accounts

(a)

The Management Accounts have been prepared in accordance with accounting policies consistent with those used in preparing the Last Accounts.

(b)

Having regard to the purpose for which the Management Accounts were prepared, the Management Accounts are not misleading in any material respect and neither materially overstate the value of the assets nor materially understate the liabilities of the Target as at the Management Accounts Date and do not materially overstate the profits of the Target for the period to which they relate.

2.5

Books and Records

(a)

All the accounts, books, ledgers, financial and other records, of whatsoever kind, of the Target are in its possession or under its control, are up-to-date and have been maintained in accordance with all applicable laws and GAAP on a proper and consistent basis and comprise complete and accurate records of all information required to be recorded therein.

(b)

All the accounting records and systems (including, without limitation, computerised accounting systems) of the Target are recorded, stored, maintained or operated or otherwise held by the Target and are not wholly or partly dependent on any other facilities or systems beyond the exclusive ownership or control of the Target.

(c)

The register of members and other statutory books of the Target are in its possession or under its control, are up-to-date and have been maintained in accordance with applicable laws and comprise a complete and accurate record of all information required to be recorded therein. The Target has not received any written notice that any information contained in any of the statutory books is incorrect or should be rectified.

2.6

Accounting Reference Date

The accounting reference date of the Target for the purposes of the Companies Acts has always been the date specified in Schedule 1.

FINANCE

3.1

Capital Commitments

(a)

As at the Management Accounts Date, the Target had no outstanding capital commitments in excess of £30,000 except as disclosed in the Last Accounts.

(b)

Since the Management Accounts Date, the Target has not made or agreed to make any capital expenditure or incurred or agreed to incur any capital commitments, nor has it disposed of or realised any capital assets or any interest therein, in each case in excess of £30,000.

3.2

Dividends and distributions

Since the Management Account Date, no dividend or other distribution (as defined in CTA 2010) has been or is treated as having been declared, made or paid by the Target.

3.3

Debtors

There are no debts owing to the Target other than trade debts incurred in the ordinary and normal course of business. Such debts do not exceed £25,000.00 in aggregate.

3.4

Liabilities

(a)

So far as the Seller is aware there are no liabilities (including contingent liabilities) which are outstanding on the part of the Target other than those liabilities disclosed in the Management Accounts or those which have been incurred in the ordinary and proper course of trading since the Management Accounts Date. Further, the Seller is not aware of any facts that are reasonably likely lead to a liability whether contingent or otherwise other than as disclosed.

(b)

The Target has not at any time been the tenant of, or a guarantor in respect of, any leasehold property other than the Property.

3.5

Trade Creditors

Trade debts incurred by the Target in the ordinary course of business since the Management Accounts Date do not exceed £100,000 in aggregate.

3.6

Bank and other borrowings

(a)

The Target has no outstanding loan capital, nor has it agreed to create or issue any such loan capital.

(b)

The Target has not factored any of its debts, or engaged in financing of a type beyond those shown or reflected in the Management Accounts.

(c)

The Target has not received notice (whether formal or informal) from any lenders of money to it, requiring repayment or intimating the enforcement of any security the lender may hold over any of its assets and there are no circumstances which could give rise to any such notice.

TRADING

4.1

Changes since Last Accounts Date

Since the Management Accounts Date:

(a)

the business of the Target has been carried on in the ordinary and normal course so as to maintain the same as a going concern, and there has not occurred any change or event that has had or is reasonably likely to have a material adverse effect; or

(b)

no resolution of the members of the Target has been passed, whether in general meeting or otherwise (other than any resolutions relating to the routine business of an annual general meeting);

(c)

the Target has not entered into any Material Contract with a value in excess of £25,000.00 outside the ordinary and normal course of business; and

(d)

the Target has not assumed or incurred any material liability (including any contingent liability) which is not provided for in the Last Accounts otherwise than in the ordinary and normal course of business.

4.2

Effect of Sale of the Shares

Compliance with the terms of this agreement does not and will not:

(a)

conflict with, or result in the breach of, or constitute a default under, any of the terms, conditions or provisions of any agreement, arrangement or instrument to which the Target is a party or any provision of its Memorandum or Articles of Association or any Security Interest, lease, contract, order, judgment, award, injunction, regulation or other restriction or obligation of any kind or character by which or to which any asset of the Target is bound or subject; or

(b)

result in the creation, imposition, crystallisation or the enforcement of any Security Interest on or over any of the assets, property or undertaking of the Target or result in any present or future indebtedness of the Target becoming due and payable prior to its stated maturity.

4.3

Material Contracts

The Target is not a party to any Material Contract which:

(a)

is of an unusual or abnormal nature or outside the ordinary and normal course of business; or

(b)

is for a fixed term of more than 12 months; or

(c)

is of a long-term nature (that is, unlikely to have been fully performed in accordance with its terms more than 12 months after the date on which it was entered into or undertaken); or

(d)

is not of an entirely arm's length nature; or

(e)

involves payment by it of amounts determined by reference to fluctuations in the rate of exchange for any currency; or

(f)

involves or is likely to involve the supply of goods, the aggregate sales value of which would represent in excess of 5% of its turnover for the preceding financial year; or

(g)

is a restrictive trading or other agreement or arrangement pursuant to which any part of its business is carried on or which in any way restricts its freedom to carry on the whole or any part of its business in any part of the world in such manner as it thinks fit; or

(h)

provided for the sale, transfer or disposal by the Target of any body corporate or business or assets in circumstances such that the Target remains subject to any liability (whether contingent or otherwise) which is not fully provided for in the Last Accounts.

4.4

Agency Agreements

There is not now outstanding any agreement or arrangement allowing any third party to act or trade as agent of the Target.

4.5

Outstanding Offers

No offer, tender, bid or proposal is outstanding which, if accepted, would result in the Target becoming a party to a Material Contract.

4.6

Powers of attorney and authority

(a)

No power of attorney given by the Target is in force.

(b)

There are not outstanding any authorities (express or implied) by which any person (other than a director of the Target) may enter into any contract or commitment to do anything on behalf of the Target.

4.7

Guarantees and indemnities

The Target has not entered into any guarantee or agreement for indemnity or for suretyship in respect of any debt, liability or obligation of any third party.

4.8

Insider contracts and arrangements

(a)

There is not now outstanding any debt, liability or obligation of the Target to the Seller other than normal trade indebtedness arising in the ordinary course of business.

(b)

So far as the Seller is aware, there are no agreements, arrangements or understandings (whether legally enforceable or not) between the Target and/or the Seller or any person who is a former shareholder of the Target or the beneficial owner of any interest in the Target or any Associate of any such person relating to the management of the Target's business, or the appointment or removal of directors of the Target, or the ownership or transfer of ownership of any shares or other securities in the Target or the letting of any of the assets of the Target, or the provision, supply or purchase of finance, goods, services or other facilities to, by or from the Target, or in any other respect relating to its business or affairs.

4.9

Defaults

(a)

The Target has neither received nor so far as the Seller is aware has reason to expect any notice in writing or otherwise from any counterparty that it is in material default under any Material Contract.

(b)

So far as the Seller is aware, the Target is not:

(i)

in material default under any obligations existing by reason of membership of any association or body;

(ii)

liable in respect of any representation or warranty (whether express or implied) or any matter giving rise to a duty of care on its part.

(c)

So far as the Seller is aware, no party to any Material Contract is in material default under such Material Contract and, so far as the Seller is aware, there are no facts, matters or circumstances which are likely to give rise to any such default.

4.10

Validity of agreements

(a)

Neither the Target nor the Seller has any knowledge of the invalidity of, or a ground for termination, rescission, avoidance or repudiation of any Material Contract.

(b)

No party with whom the Target has entered into any Material Contract has given written notice to terminate or rescind or has sought to repudiate or disclaim any such Material Contract.

4.11

Principal suppliers

(a)

No supplier (including any person connected in any way with any such supplier) accounts for more than 10% of the aggregate value of all purchases made by the Target.

(b)

A list of the top 20 suppliers of the Target by value of purchases made by the Target from such suppliers is attached to the Disclosure Letter.

(c)

During the 12 months preceding the date of this agreement, no significant supplier of the Target (being a supplier from whom the Target has made purchases having an aggregate value in excess of £25,000 during such period) has ceased to deal with the Target or has indicated an intention to cease to deal with the Target, either in whole or in part, and furthermore, no material supplier has changed or proposed to change payment terms in a significant way with the Target.

(d)

The Seller has no knowledge, information or belief that any significant supplier of the Target (being a supplier from whom the Target has made purchases having an aggregate value in excess of £25,000 during the 12 months preceding the date of this agreement) will or may cease to deal with the Target or will or may substantially reduce its supplies to the Target as a result of the provisions of this agreement.

4.12

Principal customers

(a)

No Customer (including any person connected in any way with any such Customer) accounts for more than 10% of the aggregate value of all sales made by the Target.

(b)

Except as provided in the Disclosure Letter, no Distributor has earned more than 10% of the aggregate value of commissions paid.

4.13

Licences and consents

(a)

So far as the Seller is aware, the Target has obtained all licences, permissions, authorisations and consents from any person, authority or body which are necessary for the proper carrying on of its business in the places and in the manner in which such business is now carried on.

(b)

A copy of each such licence, permission, authorisation or consent is attached to the Disclosure Letter.

(c)

All such licences, permissions, authorisations and consents are in full force and effect, are not limited in duration or subject to any unusual or onerous condition.

(d)

The Target is not in breach of any of the terms or conditions of any such licence, permission, authorisation or consent and so far as the Seller is aware there are no facts, matters or circumstances which might in any way prejudice the continuation or renewal of any such licence, permission, authorisation or consent.

(e)

So far as the Seller is aware no party is or will be entitled to terminate or revoke any such licence, permission, authorisation or consent as a result of the entry into or performance of this agreement or any of the transactions contemplated by this agreement.

4.14

Litigation

(a)

Except as plaintiff in relation to the collection of unpaid debts arising in the ordinary course of business (none of which exceeds £10,000 and which do not exceed £30,000 in aggregate), the Target is not involved and during the five years preceding the date of this agreement has not been involved in any legal or administrative or arbitration proceedings (whether as plaintiff or defendant or otherwise) and no such proceedings are pending or threatened and, so far as the Seller is aware, there are no facts, matters or circumstances which are likely to give rise to any such proceedings.

(b)

There is no unfulfilled or unsatisfied judgment or court order outstanding against the Target.

4.15

Investigations and disputes

(a)

The Target has not received any notice that any governmental or official investigation or inquiry concerning the Target or any of its directors or employees is in progress or pending. The Seller is not aware of any facts or circumstances that are likely to give rise to any potential governmental or official investigation or inquiry.

(b)

There is no dispute with any government or any agency or body acting on behalf of such government or any other body or authority in the United Kingdom or elsewhere in relation to the affairs of the Target and, so far as the Seller is aware, there are no facts, matters or circumstances which are likely to give rise to any such dispute.

(c)

So far as the Seller is aware the Target is not party to any undertaking or assurance given to any court or government or governmental agency or regulatory body which is still in force.

4.16

Compliance with laws

(a)

So far as the Seller is aware, the Target has conducted and is conducting its business in all material respects in accordance with all applicable laws and regulations whether of the United Kingdom or elsewhere.

(b)

So far as the Seller is aware the Target is not in breach of any order, decree or judgment of any court or any governmental or regulatory authority (whether of the United Kingdom or elsewhere).

4.17

Insolvency

(a)

The Target is not unable to pay its debts within the meaning of section 123 Insolvency Act 1986.

(b)

No order has been made or petition presented or meeting convened for the purpose of considering a resolution for the winding up of the Target nor has any such resolution been passed. No petition has been presented for an administration order to be made in relation to the Target and no receiver (including any administrative receiver) has been appointed in respect of the whole or any part of any of the property, assets or undertaking of the Target.

(c)

No composition in satisfaction of the debts of the Target or scheme of arrangement of its affairs or compromise or arrangement between it and its creditors and/or members or any class of its creditors and/or members has been proposed, sanctioned or approved.

(d)

No distress, execution or other process has been levied or applied for in respect of the whole or any part of any of the property, assets or undertaking of the Target.

(e)

The Target has not been a party to any transaction with any third party which, in the event of such third party going into liquidation or being the subject of an administration order or a bankruptcy order, would constitute (whether in whole or in part) a transaction at an undervalue, a preference, an invalid floating charge or an extortionate credit transaction or part of a general assignment of debts or (in Scotland) an unfair preference or a gratuitous alienation pursuant to the Insolvency Act 1986.

EMPLOYMENT

5.1

Employees and Terms of Employment

(a)

The Disclosure Letter sets out a list of all the directors of the Target and employees of the Target earning in excess of £40,000 per annum from such position together with particulars of the date of commencement of employment, period of continuous employment, job description or grade, age, salary and all material benefits provided and the applicable terms and conditions of employment of all such directors and employees of the Target.

(b)

No employees of the Target are on secondment, maternity leave or absent on grounds of disability or other long term leave of absence.

(c)

No outstanding offer of employment has been made by the Target to any person nor has any person accepted an offer of employment made by the Target but who has not yet commenced such employment.

(d)

There are no contracts for services (including without limitation consultancy agreements) between the Target and any person.

(e)

All subsisting contracts of service or contracts for services to which the Target is a party are determinable at any time by the Target on 6 months' notice or less without compensation.

(f)

No director or employee earning in excess of £40,000 per annum has given notice to the Target terminating his contract of employment which is outstanding as at the date of this agreement.

5.2

Bonus and other schemes

(a)

The Target does not have in existence or participate in any share incentive scheme or share option scheme nor is it proposing to introduce or participate in any such scheme.

(b)

There are no schemes (whether contractual or discretionary) in operation by, or in relation to, the Target under which any director or employee of the Target or former director or employee is entitled to any bonus, profit-share, commission or other incentive scheme (whether calculated by reference to the whole or part of the turnover, profits/losses or sales of the Target or otherwise).

(c)

The Target is not bound nor accustomed to pay any monies (other than in respect of contractual remuneration or emoluments of employment or pension benefits) to or for the benefit of any director or employee of the Target.

5.3

Changes in remuneration and terms and conditions

(a)

Since the Management Accounts Date or (where the relevant employment or holding of office commenced after such date), since the commencing date of the employment or holding of office no change has been made in the rate of remuneration, emoluments, pension benefits or other terms of employment, of any director or employee earning in excess of £20,000.00 per annum.

(b)

No agreement has been reached with any director, employee, trade union or other body representing employees that will or may on a future date result in an increase in any director’s or employee’s rate of remuneration or enhanced emoluments of employment or pension benefits.

5.4

Liabilities to employees

(a)

The salaries and other benefits of all employees have been paid up to the last payment date prior to Completion.

(b)

So far as the Seller is aware, no outstanding liability has been incurred by the Target so far as the Seller is aware for breach of any contract of employment or contract for services or redundancy payments, protective awards, compensation for wrongful dismissal or unfair dismissal or for failure to comply with any order for the reinstatement or re-engagement of any employee or in respect of any other liability arising out of the termination of any contract of employment or contract for services.

5.5

Compliance

(a)

All employees of the Target have received a written statement of particulars of employment as required by section 1 Employment Rights Act 1996 to the extent they are so entitled.

(b)

In relation to each of its employees, so far as the Seller is aware, the Target has complied in all material respects with all statutes, regulations, codes of conduct, collective agreements, terms and conditions of employment, orders and awards relevant to their conditions of service or to the relations between it and its employees or any recognised trade union.

(c)

During the period of five (5) years preceding the date of this agreement, the Target has not been a party to any "relevant transfer" (as defined in the Transfer of Undertakings (Protection of Employment) Regulations 2006, as amended) or failed to comply with any duty to inform and consult with appropriate representatives of any affected employees under Regulation 13 of the Transfer of Undertakings (Protection of Employment) Regulations 2006, as amended (or the equivalent provisions of the Transfer of Undertakings (Protection of Employment) Regulations 1981).

5.6

Employment Claims

(a)

There are no legal or other proceedings between the Target on the one hand and any director or employee of the Target or consultant or former director or employee of the Target or consultant on the other hand nor so far as the Seller is aware are any such proceedings pending or threatened.

(b)

In the five years preceding this agreement, no improvement or prohibition notice has been served on the Target in connection with the conduct of its business by any governmental body or regulatory agency responsible for health and safety.

5.7

Discrimination

In the five years preceding this agreement, there has been no recommendation made by an industrial tribunal nor any investigation by any governmental body or regulatory agency responsible for investigating or enforcing matters relating to sex, race or disability discrimination.

5.8

Effect of sale

The transactions contemplated by this agreement do not entitle any director or employee to any one-off payment, bonus or commission or to terminate his employment.

5.9

Redundancies

(a)

During the five years preceding the date of this agreement, the Target has not given notice of any redundancies to the relevant Secretary of State or started consultations with any trade union under Chapter II of Part IV Trade Union and Labour Relations (Consolidation) Act 1992 or failed to comply with any of its obligations under Chapter II of Part IV of such Act.

(b)

The Target has not given any notice of termination or dismissal or notice of redundancy to any of its employees which is outstanding as at the date of this agreement.

(c)

There are no severance, redundancy or other similar agreements or schemes conferring any entitlement on any of the directors and employees of the Target to receive any payment on the termination of their employment (except for contractual notice pay).

5.10

Collective Agreements

The Target has not entered into any collective agreement or arrangement with nor does it recognise a trade union, works council, staff association or other body representing any of its employees nor has it done any act which might be construed as recognition.

5.11

Industrial disputes

(a)

Neither the Target nor its directors or employees is involved in any actual or threatened trade dispute as defined by section 218 Trade Union and Labour Relations (Consolidation) Act 1992.

(b)

No dispute has arisen during the five (5) years preceding the date of this agreement between the Target and any material number or category of its employees (or any trade union or other body representing all or any of such employees) and, so far as the Seller is aware, there are no facts, matters or circumstances which may give rise to any such dispute.

5.12

Pensions

Except pursuant to the Pension Schemes, the Target has not prior to the date of this agreement paid, provided or contributed towards, and nor has the Target proposed nor is it under any obligation, liability or commitment however established (whether or not legally enforceable) to pay, provide or contribute towards, any benefits under a pension scheme (as defined by section 150 of the Finance Act 2004) for or in respect of any employee or former employee (including any spouse, child or dependent of any of them).

ASSETS

6.1

Ownership of assets

(a)

The Target is the legal and beneficial owner and has good and marketable title to all assets included in the Management Accounts or acquired by it since the Management Accounts Date (except for any current assets sold or realised in the ordinary and normal course of business since the Management Accounts Date). None of those assets are the subject of any Security Interest, equity, option, right of pre-emption or royalty except for:

(i)

any hire or lease agreement entered into in the ordinary course of business involving expenditure by the Target of less than £10,000 per annum (where the aggregate expenditure of the Target under all such agreements does not exceed £30,000 per annum); or

(ii)

retention of title provisions in respect of goods and materials supplied to the Target in the ordinary course of business; or

(iii)

liens arising in the ordinary course of business by operation of law.

(b)

So far as the Seller is aware, no claim has been or will be made by any person entitled to any Security Interest on or over any of the assets, property, or undertaking of the Target.

(c)

So far as the Seller is aware there is no dispute, directly or indirectly, between the Target and any person relating to any of the assets of the Target.

(d)

All of the assets owned by the Target or which the Target has a right to use are in its possession or under its control and are situated in the United Kingdom.

6.2

Assets sufficient for the business

In the Seller's reasonable opinion, the physical assets owned by the Target together with the services and facilities to which it has a contractual right comprise all the physical assets, services and facilities necessary for the carrying on of the business of the Target as now carried on.

6.3

Stock

(a)

The stock of raw materials, packaging materials and finished goods now held are not excessive and are adequate in relation to the current trading requirements of the business of the Target.

(b)

So far as the Seller is aware none of the stocks of the Target (whether of raw materials, components, parts, work in progress or finished products) contains any defect (whether of design, manufacture, assembly or otherwise) which could give rise to a material liability on the part of the Target to any third party outside the ordinary course of business if that stock or a product incorporating it were subsequently sold by the Target.

(c)

Since the Management Accounts Date, there has been no material increase or decrease in the level of the Target’s stock, and no material increase or decrease in the level of the Target’s stock is expected.

6.4

Leased assets

So far as the Seller is aware no circumstance exists or is likely to arise in relation to any asset held by the Target under a lease or similar agreement whereby the rental payable has been or is likely to be increased. Additionally, all such assets have at all relevant times been used for a qualifying purpose within the meaning of Part 2 Chapter 11 of the Capital Allowances Act 2001.

6.5

Plant and machinery

(a)

The plant, machinery, vehicles and other equipment owned or used by the Target:

(i)

are in satisfactory working order and have been regularly and properly maintained;

(ii)

are capable of doing the work for which they were designed or purchased and are not to any material extent surplus to requirements.

(b)

A copy of each maintenance contract in force in respect of any of the plant, machinery, vehicles and other equipment used by the Target is attached to the Disclosure Letter.

(c)

The plant register of the Target attached to the Disclosure Letter comprises a complete and accurate record of all the plant, machinery, vehicles and other equipment owned or used by the Target.

6.6

Insurance

(a)

The Target is now and has at all material times been adequately insured against accident, damage, injury, third party loss (including, without limitation, product liability), loss of profits and other risks normally insured against by persons carrying on the same type of business as that carried on by the Target.

(b)

Details of all claims made by the Target under any policy of insurance effected by it or for its benefit during the 2 years prior to the date of this agreement are disclosed in the Disclosure Letter.

(c)

Copies of all the insurances in place exclusively for the benefit of the Target Group at the time of Completion are attached to the Disclosure Letter.

6.7

Intellectual property rights

(a)

The Target Intellectual Property Rights comprise all the Intellectual Property necessary for the Target to operate its business as it is operated at the date of this agreement.

(b)

Without limitation to paragraph (a) above, the trade marks listed in the Disclosure Letter comprise all the trade marks necessary for the Target to operate its business as it is operated at the date of this agreement.

(c)

The Target owns all right, title, interest in and to, or have valid and continuing rights to use, sell, and license, all of the Intellectual Property used or acquired for use in conducting Target's business operations free and clear of any and all security interests, liens, or obligations to others. The Target has not given any co-existence and/or co-use agreements with any third party in connection with the Target Intellectual Property.

(d)

The Target is the sole registered proprietor (or, where relevant, applicant for registration) of all Registered Intellectual Property Rights.

(e)

The Domain Names are all the internet domain names owned or used by the Target. The Target is the sole registered proprietor of all the Domain Names.

(f)

So far as the Seller is aware, none of the Registered Intellectual Property Rights or Domain Names are the subject of any pending or threatened proceedings for opposition, cancellation, revocation, rectification, licence of right or relating to title or any similar proceedings anywhere in the world. The Seller is not aware of any circumstances which might result in any such proceedings.

(g)

So far as the Seller is aware there is no fact or matter (including any act or omission of the Target or the Seller) which might result in any registrations of Registered Intellectual Property Rights or Domain Names, either in whole or in part, being revoked, invalidated or rendered unenforceable or, in the case of applications for registration, which might prejudice the prospects of registration.

(h)

Other than pursuant to the IP Licences, the Seller and the Target have not granted and are not obliged to grant any licence, sub-licence, Security Interest or assignment in respect of any of the Target Intellectual Property Rights or the Third Party Intellectual Property Rights.

(i)

So far as the Seller is aware the Target has not infringed any Intellectual Property owned by any third party and has not breached any obligations of confidence owed to any third party.

(j)

So far as the Seller is aware no third party has infringed the Target Intellectual Property Rights, breached any obligations of confidence owed to the Seller or misappropriated or misused any Confidential Business Information.

(k)

Neither the Seller nor the Target nor any of their officers, employees or agents have made any threat in writing to bring proceedings for infringement of Intellectual Property which is actionable by virtue of applicable legislation.

(l)

The Seller and the Target have not, except in the ordinary and normal course of business, disclosed or permitted, agreed to, undertaken or arranged the disclosure of any Confidential Business Information to any person other than the Buyer.

6.8

Information technology

(a)

Details of the material parts of the Systems and all agreements or arrangements relating to the maintenance and support, security, disaster recovery management and use of the Systems are contained in the Disclosure Letter.

(b)

The Systems have the capacity and performance necessary to fulfil the present requirements of the Target, including those related to projects underway.

(c)

The Seller and the Target have not disclosed to any third party any source code or algorithms relating to any software forming part of the Systems.

(d)

In the 2 years prior to the date of this agreement:

(i)

there have been no bugs or viruses in or failures or breakdowns of the Systems or any part of them which have caused material disruption or interruption in or to the business of the Target;

(ii)

so far as the Seller is aware no person has gained unauthorised access to the Systems or any data stored on them; and

(iii)

The Target is in all material respects in compliance with any and all Data Protection requirements as might be required in the UK, EU or otherwise.

PROPERTIES

The Target has not at any time:

(a)

Had vested in it (whether as an original tenant or undertenant or as an assignee, transferee or otherwise) any freehold or leasehold property other than the Property; or

(b)

Given any covenant or entered into any agreement, deed or other document (whether as a tenant or undertenant or as an assignee, transferee, guarantor or otherwise) in respect of any freehold or leasehold property other than those disclosed to the Buyer in writing in relation to the Property in respect of which any contingent or potential liability remains with the Target.

7.2

Environmental, Safety and Health Matters

The Target has obtained and maintains in full force and effect all material ESH Permits and true and complete copies of these are contained in or annexed to the Disclosure Letter.

ANTI-CORRUPTION

8.1

For the purposes of this paragraph, "Associated Person": means in relation to a company, any person whatsoever (whether an employee, agent, subsidiary or otherwise) who performs or has performed services for or on that company's behalf.

8.2

A far as the Seller is aware, no Associated Person of the Target has bribed another person (within the meaning given in section 7(3) of the Bribery Act 2010) intending to obtain or retain business or an advantage in the conduct of business for the Target and/or any of the Subsidiaries, and the Target has in place adequate procedures in line with the guidance published from time to time by the Secretary of State under section 9 of the Bribery Act 2010 designed to prevent its Associated Persons from undertaking any such conduct.

8.3

The Target is not, and has never been, the subject of any investigation, inquiry or enforcement proceedings by any governmental, administrative or regulatory body or any Customer regarding any matter which would constitute an offence or alleged offence under the Bribery Act 2010, and no such investigation, inquiry or proceedings have been threatened or are pending and there are no circumstances likely to give rise to any such investigation, inquiry or proceedings.

Schedule 3

Warranty Limitations

Time limits for bringing claims

1.1

The Seller shall not be liable under the Warranties in respect of any claim unless and until it shall have received from the Buyer written notice containing details of the relevant claim including the amount of the claim and reasonable details of the matter or default which gives rise to the claim on or before the date which is 18 months from the Completion Date.

1.2

Any claim shall (if not previously satisfied, withdrawn or settled) be deemed to have been withdrawn and waived by the Buyer unless legal proceedings in respect of such claim have been commenced (by being both issued and served on the Seller) within 9 months of the notification of such claim to the Seller pursuant to paragraph 1.1.

Limitations on quantum

2.1

The Seller shall not be liable under the Warranties, the Tax Warranties or the Tax Covenant in respect of any claim:

(a)

unless the amount of the liability of the Seller for such claim exceeds £10,000; and

(b)

unless the aggregate amount of the liability of the Seller for all such claims exceeds £40,000.

2.2

Notwithstanding any other provision of this agreement the aggregate liability of the Seller under the Warranties, the Tax Warranties and the Tax Covenants shall not exceed £3,618,534.

No double counting

The Buyer shall not be entitled to recover damages in respect of any claim for breach of any of the Warranties or the Tax Warranties or otherwise obtain reimbursement or restitution more than once in respect of any one breach of Warranty or Tax Warranty or indemnity claim or claim under the Tax Covenant to the extent that the claim arises out of or in connection with the same circumstances.

Third party recoveries

4.1

The Seller shall not be liable under the Warranties in respect of any claim:

(a)

to the extent that recovery is made or is capable of being made by the Buyer or any member of the Buyer's Group under any policy of insurance or to the extent that recovery would have been capable of being made under any policy of insurance had the Buyer or any member of the Buyer’s Group effected policies of insurance on similar terms to those effected by or for the benefit of the Target Group which are in force as at the date of this agreement;

(b)

to the extent that the Buyer or any member of the Buyer's Group or those deriving title from the Buyer have already obtained reimbursement or restitution in respect of such claim from any third party.

4.2

Where the Buyer or any member of the Buyer’s Group has or may have a claim against any third party in relation to any matter which could give rise to a claim under the Warranties, the Buyer shall use all reasonable endeavours to recover any amounts due from such third party.

4.3

If the Seller pays to the Buyer an amount in respect of any claim under the Warranties and the Buyer or any member of the Buyer’s Group subsequently recovers from a third party (including, without limitation, any insurer or any tax authority) a sum which is referable to that claim, the Buyer shall repay to the Seller so much of the amount originally paid by the Seller as does not exceed the sum recovered from the third party.

Acts of the Buyer

The Seller shall not be liable under the Warranties in respect of any claim:

(a)

to the extent that such claim arises or is increased as a result of any breach by the Buyer of any of its obligations under this agreement or any agreement or document entered into pursuant to this agreement;

(b)

to the extent that such claim would not have arisen but for any transaction, arrangement, act or omission (or any combination of the same) carried out or effected at any time after Completion by the Buyer or any member of the Buyer's Group outside the ordinary course of its business; or

(c)

to the extent that such claim is attributable to or is increased by any voluntary act, omission, transaction or arrangement carried out by, at the request of the Buyer before Completion.

Accounting

The Seller shall not be liable under the Warranties in respect of any claim:

(a)

to the extent that specific provision, reserve or allowance for the matter giving rise to the claim has been made in the Management Accounts; or

(b)

to the extent that the claim relates to a specific liability of the Target Group included in the Management Accounts that has been discharged or satisfied below the amount attributed to it in the Last Accounts; or

(c)

to the extent that the claim relates to any contingency or other matter provided for in the Management Accounts has been over-provided for; or

(d)

to the extent that the claim would not have arisen but for any changes in accounting policy or practice of or affecting the Target Group where such changes are introduced after Completion save where such changes are required to comply with applicable law or regulation.

General limitations

The Seller shall not be liable under the Warranties in respect of any claim:

(a)

which is based upon a liability which, at the time such claim is notified to the Seller, is contingent only or otherwise not capable of being quantified unless and until such liability ceases to be contingent or becomes capable of being quantified. Subject to such claim being notified to the Seller within the time limits specified in paragraph 1.1, the time limit for issuing and serving proceedings for the purposes of paragraph 1.1 shall begin on the date on which such liability ceases to be contingent or becomes capable of being quantified;

(b)

which arises as a result of, or would not have arisen but for, or a liability is increased as a result of, legislation not in force at the date of this agreement or any change in legislation with retrospective effect after the date of this agreement;

(c)

which is capable of remedy, unless and until the Buyer has given the Seller not less than 20 Business Days’ written notice within which to remedy such breach and the Seller has failed to do so within such period;

Mitigation by the Buyer

The Buyer shall take all reasonable steps to mitigate any loss, liability or damage which is likely to give rise to a claim under the Warranties or the Tax Warranties. Nothing in this agreement shall relieve the Buyer of any common law or other duty to mitigate any loss, liability or damage suffered or incurred by it.

Conduct of claims

9.1

If the Buyer becomes aware of any fact, matter or circumstance which is likely to give rise to a claim under the Warranties, the Buyer shall give notice of such fact, matter or circumstance to the Seller as soon as reasonably practicable and in any event within 20 Business Days of becoming aware of any such fact, matter or circumstance.

9.2

If any claim is made against the Buyer or any member of the Buyer's Group by any third party which is likely to in turn lead to a claim by the Buyer against the Seller under the Warranties then the Buyer shall;

(a)

give notice of such claim to the Seller as soon as reasonably practicable after the Buyer becomes aware of it;

(b)

(c)

take, and shall procure that each member of the Buyer’s Group shall take, all reasonable steps so as to recover or minimise or resolve such liability or dispute and, upon request by the Seller; and

(d)

comply with the reasonable requests of the Seller in relation to such claim including (without limitation) giving the Seller access to premises, personnel, documents and records for the purpose of investigating the matters giving rise to such claim.

Reduction in consideration

If any amount is paid by the Seller under the Warranties, the Tax Warranties or the Tax Covenant, the amount of such payment shall be deemed to constitute a reduction in the consideration payable under this agreement.

Limitation of scope of warranties

11.1

The only Warranties which shall apply in relation to Intellectual Property are the Warranties set out at paragraph 6.7 of Schedule 2.

11.2

The only Warranties which shall apply in relation to the Environment are the Warranties set out at paragraph 7.2 of Schedule 2.

No termination or rescission

Other than where expressly stated in this agreement, or in the case of fraud or intentional misrepresentation, the Buyer shall have no further rights to terminate or rescind this agreement or any agreement or document entered into pursuant to this agreement.

Schedule 4

TAX

Part 1 – Definitions and Interpretation

definitions

In this Schedule the following words and expressions (except where the context otherwise requires) have the following meanings:

"Actual Tax Liability" means any liability of the Target to make a payment of, or of an amount in respect of Tax whether or not presently payable, whether satisfied or unsatisfied at Completion, whether or not the same is primarily payable by the Target or the Buyer and whether or not the Target or the Buyer has, or may have, any right of reimbursement against any other person or persons.

"Auditors" means the auditors for the time being of the Target.

"Buyer's Relief" means:

(a)

any Relief arising to the Buyer or any member of the Buyer's Group (other than the Target);

(b)

any Relief (other than a Corresponding Relief) arising to the Target as a consequence of, or by reference to, an Event, occurring between the Management Accounts Date and Completion in the ordinary course of business of the Target;

(c)

any Relief (other than a Corresponding Relief) arising to the Target as a consequence of, or by reference to, an Event occurring after Completion or in respect of a period commencing after Completion; and

(d)

any Relief taken into account as an asset in the Management Accounts or applied in reduction of a provision for deferred Tax in the Management Accounts.

"Claim for Tax" means any assessment (including a self-assessment), notice, demand, letter or other document issued by or action taken by or on behalf of any person, authority or body from which it appears that the Seller is or may be liable under this Schedule or for a breach of the Tax Warranties.

"Corresponding Relief" means:

(a)

any Relief arising as a result of a liability in respect of which the Seller has made a payment under the Tax Covenant or for breach of any of the Tax Warranties;

(b)

any Relief arising as a result of or in connection with the Event or Events which gave rise to a liability in respect of which the Seller has made a payment under the Tax Covenant or for breach of any of the Tax Warranties;

(c)

any Relief which has been claimed in respect of:

(i)

an accounting period of the Target ending before Completion, or

(ii)

the pre-Completion part of the accounting period of the Target which is current at Completion,

which is disallowed by a Tax Authority so as to give rise to a liability in respect of which the Seller has made a payment under the Tax Covenant or for breach of any of the Tax Warranties and which remains available to be used in an accounting period of the Target other than the one in respect of which it was originally claimed,

in each case where such Relief does not fall within part (d) of the definition of Buyer's Relief.

"CTA 2009" means the Corporation Tax Act 2009.

"CTA 2010" means the Corporation Tax Act 2010.

"CTIP" means the Corporation Tax (Instalment Payment) Regulations 1998 (SI 1998/3175).

"Effective Tax Liability" has the meaning given to it in paragraph 2.2 of Part 1 of this Schedule.

"Event" means any transaction, arrangement, act, failure or omission (including the execution and performance of this agreement), Completion and any distribution, failure to distribute, acquisition, disposal, transfer, payment, loan or advance, the expiry of any time period, membership of or ceasing to be a member of any group or partnership or any change of intention relevant for Tax purposes or any change in the residence of any person for Tax purposes.

"Group Relief" means any of the following:

(a)

Relief surrendered or claimed pursuant to Part 5 CTA 2010; or

(b)

a Tax refund relating to an accounting period as defined by section 963(4) CTA 2010 (surrender of company tax refund etc within group) in respect of which a notice has been given pursuant to section 963(2) of that statute.

"ITA" means the Income Tax Act 2007.

"Non-availability" means loss, reduction, modification, cancellation, non-availability or non-existence.

"Overprovision" means:

(a)

the amount by which any provision for Tax (including for the avoidance of doubt any provision for deferred Tax) contained in the Management Accounts proves to be an over provision; and

(b)

the amount by which any repayment of Tax to the Target by a Tax Authority shown in the Management Accounts proves to be understated (or if no amount is shown, the amount of any repayment of Tax to the Target).

"Relief" means any loss, allowance, credit, relief, deduction, exemption or set-off from or against or in respect of Tax or any right to a repayment of Tax.

"Repayment" means the Target obtaining:

(a)

a repayment of Tax received by the Target in respect of which same Tax the Seller has made a payment under the Tax Covenant or for breach of any of the Tax Warranties; and

(b)

a repayment of Tax received by the Target as a result of the use of a Corresponding Relief,

and, in either case, where such repayment does not fall within paragraph (d) of the definition of Buyer's Relief.

"Saving" means the reduction or elimination of any Actual Tax Liability in respect of which the Seller would not have been liable under the Tax Covenant by the use of a Corresponding Relief.

"Seller's Relief" means any Relief other than a Buyer's Relief.

"Tax" means all forms of tax, charge, duty, impost, withholding, deduction, levy and governmental charge (whether national or local) in the nature of tax, whether of the United Kingdom, Ireland or elsewhere, and any amount payable to any Tax Authority or any other person as a result of any enactment relating to tax (but for the avoidance of doubt excluding water rates, business rates and other utility or local authority charges), together with all related penalties and interest.

"Tax Authority" means any statutory or governmental authority or body (whether in the United Kingdom, Ireland or elsewhere) involved in the collection or administration of Tax including H M Revenue & Customs.

"Tax Covenant" means the covenant set out in Part 3 of this Schedule.

"Tax Liability" means an Actual Tax Liability or an Effective Tax Liability.

"Tax Payment" means any balancing payment (as defined in sections 195 to 198 TIOPA), any payment referred to in section 171A(5) or 179A(11) TCGA and/or any payment referred to in section 799 CTA 2009.

"Tax Statutes" means any primary or secondary statute, instrument, enactment, order, law, by-law or regulation making any provision for or in relation to Tax.

"Tax Warranties" means the warranties set out in Part 2 of this Schedule.

"TCGA" means the Taxation of Chargeable Gains Act 1992.

"TIOPA" means the Taxation (International and Other Provisions) Act 2010.

"VAT" means value added tax within the meaning of the VATA.

"VATA" means the Value Added Tax Act 1994.

interpretation

2.1

In this Schedule "the Target" includes, in addition to the Target, the Subsidiary with the intent and effect that the provisions of this Schedule shall apply to and be given in respect of the Subsidiary as well as the Target.

2.2

In this Schedule "Effective Tax Liability" means the following:

(a)

the Non-availability in whole or in part of any Relief as described in sub-paragraph (d) of the definition of Buyer's Relief; or

(b)

the utilisation or set-off of any Buyer's Relief against any Tax or against income, profits or gains in circumstances where but for such utilisation or set-off an Actual Tax Liability would have arisen in respect of which the Seller would have been liable to the Buyer under the Tax Covenant.

2.3

The value of an Effective Tax Liability is as follows:

(a)

where the Effective Tax Liability involves the Non-availability of any Relief:

(i)

if the Relief is a right to repayment of Tax, the amount of the repayment which is not available; and

(ii)

in any other case, the amount of Tax which would not have been payable but for the Non-availability of the Relief;

(b)

where the Effective Tax Liability involves the utilisation or set-off of a Buyer's Relief the amount of Tax saved by such utilisation or set-off.

2.4

Reference in this Schedule to the result of any Event on or before Completion includes the combined result of two or more Events the first or some or part of which took place on or before Completion and where the Event or Events taking place after Completion is or are:

(a)

the completion of the disposal by the Target of any asset which was contracted to be sold by the Target before Completion where the proceeds of sale of such asset were i) reflected in the Management Accounts; or ii) received prior to Completion but have not been retained by the Target at Completion nor spent in the ordinary course of business of the Target between the Management Accounts Date and Completion;

(b)

the satisfaction of a condition to which the disposal by the Target of any capital asset pursuant to a contract entered into before Completion was subject (in which case the disposal shall, for the purpose of this Schedule, be treated as having been made before Completion and any liability for Tax arising from such disposal shall be treated as having arisen before Completion) where the proceeds of sale of such asset were i) reflected in the Management Accounts; or ii) received prior to Completion but have not been retained by the Target at Completion nor spent in the ordinary course of business of the Target between the Management Accounts Date and Completion;

(c)

the service of any notice pursuant to section 746 CTA 2010 or section 698 ITA

(d)

the issue, making, receipt or submission of any Claim for Tax;

(e)

any act or omission (including a failure to make a payment of Tax) or change in residence of any company (other than the Target) which was at any time before Completion a member of the same group of companies as the Target for the purposes of any Tax;

(f)

the making of any chargeable payment (as defined in section 1086 CTA 2010); or

(g)

the exercise of any option granted on or before Completion or the acquisition of any shares or securities pursuant to any right acquired on or before Completion

(h)

the death of any individual who, in the seven years preceding his death, was the donor of any asset owned by the Target at Completion.

2.5

Reference in this Schedule to income, profits or gains earned, accrued or received on or before Completion includes income, profits or gains which are deemed to be or are treated or regarded as earnings, accrued or received on or before Completion for any Tax purpose.

Part 2 – Tax Warranties

administration

1.1

The Target has accounted for and paid all Tax for which it is liable to account and pay and which was due and payable on or before the due date for payment and is under no liability to pay any penalty, fine, surcharge or interest in respect of Tax.

1.2

All payments by the Target to any person which are required by law to be made under deduction or withholding of Tax have been so made and the Target has if required by law to do so accounted to the relevant Tax Authority for the Tax so deducted or withheld.

1.3

All computations and returns that should have been made by the Target before Completion for any Tax purpose have been punctually made, were correct and complete in all material respects and are not the subject of any material dispute with any Tax Authority.

1.4

The Target has maintained and has in its possession or under its control all material records which it is required by any of the Tax Statutes to maintain.

1.5

No Tax Authority has agreed in writing to operate any special arrangement in relation to the Target's affairs.

1.6

The Target has not been subject to any non-routine audit, investigation or visit by any Tax Authority.

status of the target

2.1

The Target is and has always been resident in the United Kingdom for Tax purposes and is not and has not at any time been treated as resident in any other jurisdiction for any Tax purpose.

2.2

The Target is not and has at no time been an investment company or an investment trust company for the purposes of the Tax Statutes.

2.3

The Target does not have and has never had, or been treated at any time as having, a branch, agency or permanent establishment in, and the Target is not liable to Tax in, any jurisdiction other than the jurisdiction in which it was incorporated.

group relief

3.1

The Target has not in the last 3 years:

(a)

made or agreed to make a surrender of group relief pursuant to Part 5 CTA 2010 (group relief);

(b)

made nor is liable to make any payment for any surrender of group relief pursuant to Part 5 CTA 2010 surrendered or to be surrendered to it.

corporation tax – instalment payments

The Target is a "large company" as defined by regulation 3 CTIP and the Target has duly and punctually made all payments required to be made by CTIP.

corporation tax – distributions

The Target has not in the six years prior to Completion:

(a)

been concerned with or in any distribution for the purposes of Part 23 Chapter 5 CTA 2010 (demergers); or

(b)

at any time repaid or redeemed or agreed to repay or redeem any shares of any class of its share capital or otherwise reduced or agreed to reduce its share capital or any class thereof or issued any share capital as paid up otherwise than by the receipt of new consideration (as defined in section 1115 CTA 2010).

chargeable gains

6.1

The Target has not in the six years prior to Completion disposed of or acquired any asset in circumstances falling within section 17 TCGA (disposals and acquisitions treated as made at market value) and is not entitled to any capital loss to which section 18(3) TCGA (transactions between connected persons) may apply.

6.2

The Target has not been a party to or involved in any share for share exchange or any scheme of reconstruction or amalgamation such as are mentioned in sections 135 (exchange of securities for those in another company), 136 (reconstruction or amalgamation involving issue of securities) or 139 (reconstruction or amalgamation involving transfer of business) TCGA under which shares or debentures have been issued or any transfer of assets has been effected.

6.3

The Target has not at any time received any asset by way of gift.

6.4

Neither the Target nor any company which was a member of the same group of companies as the Target at the relevant time has made any claim under sections 152 to 157 inclusive TCGA (replacement of business assets).

close companies

The Target is not and never has been a close company as defined in section 439 CTA 2010 (close companies) or a close investment-holding company as defined in section 34 CTA 2010 (close investment-holding companies).

inheritance tax

8.1

The Target is not liable to be assessed to inheritance tax by virtue of Part VII Inheritance Tax Act 1984.

8.2

None of the shares in or assets owned by the Target are subject to an H M Revenue & Customs charge within section 237 Inheritance Tax Act 1984.

stamp duty etc

9.1

All instruments (other than those which have ceased to have any legal effect) to which the Target is a party as purchaser, lessee or assignee and which, whether in the United Kingdom, Ireland or elsewhere, are required to be stamped either with a particular stamp denoting that no duty has been chargeable or that the document has been produced to the appropriate authority, have been properly stamped, and no such documents which are outside the United Kingdom would attract stamp duty if they were brought into the United Kingdom.

9.2

Neither entering into this Agreement, Completion or the performance of this Agreement will result in the withdrawal of any stamp duty or stamp duty land tax relief granted on or before Completion which will affect the Target.

VALUE ADDED TAX

10.1

The Target has within the six years ending on the Last Accounts Date been treated as a member of a group of companies (the "VAT Group") for the purposes of section 43 VATA (groups of companies) of which the representative member is Findel plc (the "Representative Member").

10.2

All VAT due and payable to HM Revenue & Customs by the Representative Member or by the Target has been declared and paid in full.

10.3

Neither the Representative Member nor the Target is in default in respect of any prescribed accounting period as mentioned in section 59(1) VATA (default surcharge).

10.4

Neither the Target nor a relevant associate for the purposes of paragraph 2 of Schedule 10 VATA has exercised an option to tax which applies to any land owned by the Target at Completion pursuant to paragraph 2 of Schedule 10 VATA.

10.5

Neither the Target nor a relevant group member for the purposes of paragraph 21 of Schedule 10 VATA has made a real estate election in relation to any land owned by the Target at Completion pursuant to paragraph 21 of Schedule 10 VATA.

10.6

The Target has never made any supplies which are exempt from VAT of such proportion that it is unable to claim credit for all input tax paid or suffered by it.

GROUP TRANSACTIONS AND RELATED PARTY TRANSACTIONS

11.1

The Target has not in the last seven years acquired any asset from any company which at the time of the acquisition was a member of the same group of companies as defined in section 780 CTA 2009.

11.2

So far as the Seller is aware neither the execution nor the performance or completion of this Agreement, nor any other Event since the Management Accounts Date, has resulted or will result in any asset or liability being deemed to have been disposed of and/or reacquired by the Target and/or will result in the Target being deemed to have earned, accrued or received any income, profits or gains in each case other than in the ordinary course of business of the Target as carried on at Completion.

Part 3 – Tax Covenant

covenant

1.1

Subject as provided in this Schedule the Seller covenants with the Buyer to pay to the Buyer an amount equal to:

(a)

any Actual Tax Liability which arises before, on or after Completion, as a result of or by reference to an Event occurring (or deemed to occur for the purposes of any Tax Statutes) or income, profits or gains received by the Target on or before Completion; and

(b)

the value of any Effective Tax Liability; and

(c)

any Tax Liability in respect of inheritance tax which:

(i)

is at Completion in the form of a charge on, or gives rise to a power to sell, mortgage or charge, any assets of the Target or the Shares; or

(ii)

after Completion takes the form of a charge on, or gives rise to a power to sell, mortgage or charge, any assets of the Target or the Shares as a result of the death of any person after Completion which would, if the death had occurred immediately before Completion and the inheritance tax payable as a result had not been paid, have existed at Completion; or

(iii)

arises as a result of a transfer of value occurring or being deemed to occur on or before Completion (whether or not in conjunction with the death of any person whenever occurring) which increased or decreased the value of the estate of the Target; and

(d)

any Actual Tax Liability of the Target arising as a result of or by reference to:

(i)

the application of Chapter 6 Part 14 CTA 2010 or which is a secondary liability of the Target in each case arising as a result of the failure of any person who has prior to Completion been connected or associated for any Tax purpose with the Seller or the Target (other than the Target or the Buyer) at any time to pay any amount of Tax due to be paid by them;

(ii)

any liability of the Target (whether or not discharged on or before Completion) to pay or repay to any person (other than the Target) any Tax Payment under any agreement or arrangement entered into on or before Completion or any amount under any agreement or arrangement entered into before Completion relating to any surrender of Group Relief by or to the Target other than payments for Group Relief made in accordance with paragraph 8 of Part 4 of this Schedule;

(iii)

any liability of Target (whether or not discharged on or before Completion) to make a payment or increased payment in respect of Tax to any person under any indemnity, covenant, guarantee, charge, agreement or arrangement in respect of Tax entered into before Completion other than payments for Group Relief made in accordance with paragraph 8 of Part 4 of this Schedule;

(iv)

the Debt Waiver, whether arising before, on or after Completion;

(e)

any reasonable costs or expenses properly incurred by the Buyer or the Target in connection with or in consequence of any of the matters referred to at paragraphs 1.1(a) to 1.1(d) or in pursuing any Claim for Tax for which the Seller is liable under the Tax Covenant or in successfully taking any action under this Schedule.

Part 4 – Limitations and Procedure

limitations

1.1

The Seller shall not be liable in respect of any Tax Liability or any claim under the Tax Warranties to the extent that:

(a)

provision, reserve or allowance was made for such Tax Liability in the Management Accounts or such Tax Liability is discharged prior to Completion to the extent such payment or discharge has been taken into account in the preparation of the Management Accounts; or

(b)

such Tax Liability arises in the ordinary course of business of the Target carried on since the Management Accounts Date;

(c)

such Tax Liability would not have arisen but for any voluntary act, transaction or omission carried out by the Target, the Buyer or any member of the Buyer's Group outside the ordinary course of business after Completion which that person knew or ought reasonably to have known would give rise to the liability, save that this exclusion shall not apply where such transaction, action or omission:

(i)

is required by any legislation or other statutory requirement; or

(ii)

is carried out or effected pursuant to a legally binding obligation of the Target entered into on or before Completion; or

(iii)

is the provision of any information or disclosure legally required to be made to any Tax Authority;

(d)

such Tax Liability arises or is increased or any provision or reserve in respect of the Tax Liability in the Management Accounts is insufficient as a result of the imposition of any Tax or any increase in rates of Tax or any change in law or in the published practice or concession of any Tax Authority in each case occurring after Completion;

(e)

such Tax Liability arises or is increased or any provision or reserve in respect of the Tax Liability in the Management Accounts is insufficient as a result of any change after Completion in the bases, methods or policies of accounting of the Target but excluding any change required to comply with any law or generally accepted accounting practices or principles applicable to the Target;

(f)

the Tax Liability would not have arisen but for any claim, election, surrender or disclaimer made or notice or consent given or done, after Completion (other than (i) at the written request, direction or otherwise with the written approval of the Seller or (ii) the making, the giving or doing of which was taken into account in computing any provision for Tax in the Management Accounts) under, or in connection with the provisions of any enactment or regulation relating to Tax by the Target or any member of the Buyer's Group;

(g)

the Tax Liability would not have arisen but for the failure or omission by the Target or any member of the Buyer's Group (other than at the written request, direction or otherwise with the written approval of the Seller) to make any valid claim, election, surrender or disclaimer or give any notice, or consent under or in connection with, the provision of any enactment or regulation relating to Tax at Completion where the making, giving or doing of which was permitted by law and is taken into account in computing any provision in the Management Accounts;

(h)

such Tax Liability would not have arisen or would have been reduced or eliminated but for any act, omission, transaction or arrangement carried out at the written request or with the written approval of the Buyer;

(i)

any Seller's Relief is available (or is made available) to the Target or the Buyer at no cost to either (except to the extent such cost is recovered from the Seller and, for the avoidance of doubt, the availability of the Seller’s Relief shall, in itself, not constitute a cost to the Target) to reduce or eliminate the Tax Liability;

(j)

such Tax Liability arises or is increased or any provision or reserve in respect thereof as is mentioned in sub-paragraph 1.1(a) above is insufficient as a consequence of any failure or delay by the Buyer or the Target in complying with its obligations under the provisions of paragraph 3 (conduct of claims) or paragraph 11 (tax administration) of Part 4 of this Schedule;

(k)

the income, profits or gains in respect of which the Tax Liability arises were actually earned, accrued or received by the Target prior to the Management Accounts Date but were not reflected in the Management Accounts and were retained by the Target at Completion or expended in the ordinary course of business of the Target prior to Completion;

(l)

the Tax Liability would not have arisen but for a cessation or any change in the nature of conduct of any trade carried out by the Target being a change or cessation occurring on or after Completion; or

(m)

the Tax Liability arises as a consequence of an underpayment prior to Completion of the quarterly instalments of corporation tax in respect of the period between the Last Accounts Date and Completion as a consequence of the Target generating additional profits chargeable to corporation tax after Completion exceeding those reasonably assumed by the Seller or the Target in calculating such quarterly instalments.

1.2

The Seller shall not be liable in respect of any Tax Liability giving rise to a breach of the Tax Warranties if and to the extent that it has paid an amount to the Buyer in respect of such liability under the Tax Covenant or vice versa in respect of any claim under the Tax Covenant.

duration and extent

2.1

The Seller shall not be liable under the Tax Covenant or for breach of any of the Tax Warranties unless it has received from the Buyer written notice of the Claim for Tax which relates to that Tax Liability within the date which is six years from the end of the accounting period in which Completion occurs.

2.2

Any claim for breach of any of the Tax Warranties shall (if not previously satisfied, withdrawn or settled) be deemed to have been withdrawn and waived by the Buyer unless legal proceedings in respect of that claim have been commenced by being both issued and served on the Seller within nine months after the end of the period referred to in paragraph 2.1 of this Part.

2.3

For the avoidance of doubt the provisions of Schedule 3 of this agreement apply in respect of any Tax Liability mutatis mutandis as if the same were set out and repeated in this Schedule only to the extent that such provisions expressly refer to the Tax Warranties or the Tax Covenant.

conduct of claims

3.1

If the Target receives or becomes aware of a Claim for Tax, the Buyer shall or shall procure that the Target shall give written notice of such Claim for Tax to the Seller as soon as reasonably practicable and, in any event, in the case where the Claim for Tax consists of an assessment or demand for which the period for response or appeal is time limited, within fifteen Business Days prior to the expiry of such time limit (provided that failure to deliver such notice within such time frame should not restrict the ability of the Buyer to make a claim against the Seller pursuant to this Schedule or for breach of the Tax Warranties).

3.2

Subject to this paragraph 3.2 and paragraph 3.3 of this Part the Buyer shall or shall procure that the Target shall take such action to avoid, dispute, resist, appeal, mitigate, compromise or contest any Claim for Tax as the Seller may reasonably request in writing (any such action being an "Action") provided always that:

(a)

in each case, the Buyer and the Target shall be first indemnified to the Buyer's reasonable satisfaction by the Seller against all reasonable costs and expenses (including any additional Tax Liability) which may be properly incurred by the Buyer or the Target as a result of, or in taking the Action;

(b)

if prior to, or as a condition of, taking an Action, the Target is obliged to pay to, or lodge with, any Tax Authority any Tax which is the subject of the Claim for Tax (whether in whole or in part) (any such amount being the Payment) neither the Buyer nor the Target shall be obliged to take any such Action unless and until the Seller pays to the Buyer an amount equal to the Payment. Within 2 Business Days of receipt of any such amount from the Seller, the Buyer shall procure that the Target makes the Payment to the relevant Tax Authority;

(c)

if:

(i)

on the expiry of a period of 15 Business Days commencing on the date of any notice given by the Buyer to the Seller pursuant to paragraph 3.1, the Seller shall not have given to the Buyer written notice pursuant to this paragraph 3.2 requesting any Action to be taken; or

(ii)

on the expiry of that period the Seller shall not have provided the indemnity required in accordance with paragraph 3.2(a);

the Buyer and the Target shall be entitled to deal with the Claim for Tax on such terms as they shall in their discretion acting reasonably think fit.

(d)

the Buyer and the Target shall not be obliged to comply with any request of the Seller which involves appealing, or otherwise taking any action in respect of, any Claim for Tax before any tribunal, court or any other appellate body (or contesting any determination in respect of any Demand by any tribunal, court or other appellate body) unless leading tax counsel instructed by agreement between the Buyer and the Seller (at the sole expense of the Seller) and after full disclosure of all relevant information and documents advises in writing that such appeal will have more than a fifty per cent prospect of success;

(e)

the Buyer shall not be obliged to take any Action in relation to a Claim for Tax where any Tax Authority alleges in writing that fraudulent conduct, or conduct involving dishonesty, has been committed by the Seller or any member of the Target Group prior to Completion in connection with such Claim for Tax, provided that the Seller shall first be afforded a reasonable opportunity to contest or refute such allegation, and the foregoing provisions of this paragraph 3.2(e) shall only apply if the Tax Authority:

(i)

refuses to withdraw the allegation within 3 months of it being made; or

(ii)

does not provide, within 3 months of the allegation being made, sufficient evidence to demonstrate, to the satisfaction of the Buyer, that there is no fraudulent conduct, or conduct involving dishonesty on the part of the Seller or any member of a Target Group.

3.3

Subject to this paragraph 3.3 and paragraph 3.4 of this Part the Seller may (at the sole cost and expense of the Seller) elect to have any action referred to in paragraph 3.2 delegated to it and conducted by professional advisers nominated by it for this purpose acting in the name of the Target but reporting to the Seller in which event the Seller shall:

(a)

keep the Buyer fully informed of all material matters relating to the Action and deliver to the Buyer copies of all material documents and correspondence relating to the Action.

(b)

obtain the Buyer's prior written approval (not to be unreasonably withheld or delayed) to the content and sending of written communications relating to the Action to a Tax Authority;

(c)

obtain the Buyer's prior written approval (not to be unreasonably withheld or delayed) to the appointment of solicitors or other professional advisers;

(d)

notify the Buyer in writing of any meetings with a Tax Authority not less than 7 Business Days prior to any such meeting and the Buyer and/or any professional advisors of the Buyer shall be entitled to attend any such meeting;

(e)

obtain the Buyer's prior written approval (not to be unreasonably withheld or delayed) to:

(i)

the settlement or compromise of the Claim for Tax which is the subject of the Action; and

(ii)

the agreement of any matter in the conduct of the Action which is likely to affect the amount of the Claim for Tax.

3.4

The Buyer shall (or shall procure that the Target shall) provide such information and assistance as the Seller may reasonably require in connection with the preparation for any conduct of such proceedings.

3.5

If at any time the Seller has not exercised the election referred to in paragraph 3.3 above but requests that the Target take any action referred to in paragraph 3.2 above the provisions of paragraph 3.3 (other than paragraph 3.3(c)) shall apply as if references to the "Seller" are references to the "Buyer" and vice versa.

3.6

If there is a dispute between the Seller and the Buyer as to whether or not any action requested by the Seller under paragraph 3.2 is reasonable and the dispute is not resolved between the Seller and the Buyer, such dispute shall be referred for determination to an independent member of the Chartered Institute of Taxation or to an independent accountant specialising in Tax matters, in either case, of at least 10 years' experience, appointed by agreement between the Seller and the Buyer or (if they do not agree) upon the application made by either party to the President, for the time being, of the Chartered Institute of Taxation who shall also be authorised to determine how the costs of obtaining his opinion should be allocated between the parties hereto.

date for payment

4.1

A payment to be made by the Seller under this Schedule shall be made in cleared funds on the following dates:

(a)

in the case of an amount under paragraphs 1.1(a), 1.1(c) or 1.1(d) of Part 3 of this Schedule on or before the later of:

(i)

seven days after written demand for such payment; and

(ii)

two days before the date on which the Tax is finally due to the Tax Authority demanding the same (or would have been due but for the utilisation of any Relief);

(b)

in the case of an amount in respect of an Effective Tax Liability within paragraph 2.2(a) of Part 1 of this Schedule on or before the later of:

(i)

seven days after written demand for such payment; and

(ii)

two days before the date on which Tax becomes payable which would not have been payable if no liability had arisen under paragraph 2.2(b) of Part 3 of this Schedule or, in the case of a repayment of Tax, the date on which such repayment would have been made;

(c)

in the case of an amount in respect of an Effective Tax Liability within paragraph 2.2(b) of Part 1 of this Schedule, on or before the later of:

(i)

seven days after written demand for such payment; and

(ii)

two days before the date on which the Payment of Tax saved thereby would otherwise have become due and payable to the relevant Tax Authority; and

(d)

in the case of an amount under paragraph 1.1(e) of Part 3 of this Schedule within seven days of the Buyer giving written notice of the costs and expenses to the Seller.

4.2

Where the Seller fails to a make a payment in satisfaction of a liability under this Schedule by the due date for payment, the liability of the Seller shall be increased to include interest on such sum from the date on which the Seller becomes liable to make payment to the date of actual payment at a rate per annum being two per cent above the base rate from time to time of Barclays Bank plc compounded monthly (such interest to accrue after as well as before judgement).

withholding and tax

5.1

With reference to any payments made by the Seller under this Schedule:

(a)

all payments so made by the Seller shall be made gross, free of any rights of counterclaim or set-off and without any deductions or withholdings of any nature save for such deductions or withholdings as are required by law;

(b)

if the Seller is required by law to make any deduction or withholding from any payment it shall do so and the sum due in respect of such payment shall be increased to the extent necessary to ensure that after the making of such deduction or withholding the Buyer receives and retains (free of any liability in respect of any such deduction or withholding) a net sum equal to the sum which it would have received and retained had no such deduction or withholding been required to be made (and after giving credit for any relief from or credit in respect of Tax available to the Buyer in respect of the deduction or withholding or the matter giving rise to it except to the extent falling within paragraph (d) of the definition of Buyer's Relief);

(c)

if any payment is subject to Tax in the hands of the Buyer the Seller shall within seven days notice in writing being served on it by the Buyer pay to the Buyer such further amount or amounts as shall ensure that the net amount received in respect of such payment after such Tax is the same as it would have been were the payment not subject to such Tax (and after giving credit for any relief from or credit in respect of Tax available to the Buyer in respect of the payment or the matter giving rise to the payment) except to the extent falling within paragraph (d) of the definition of Buyer's Relief.

5.2

The Seller shall not be obliged to pay any additional amount under paragraph 5.1 in respect of any deduction or withholding or any Tax to the extent such deduction, withholding or Tax arises as a result of the assignment by the Buyer of the whole or any part of the benefit of this agreement.

overprovisions, Savings AND REPAYMENTS

6.1

If the Buyer becomes aware that there may have been an Overprovision or that the Target or a member of the Buyer's Group has or may have obtained a Repayment or a Saving, the Buyer shall (or shall procure that the Target shall) as soon as reasonably practicable, inform the Seller of that fact.

6.2

The Seller may request (at the cost and expense of the Seller) that the Auditors determine whether or not there has been any Overprovision, Repayment or Saving and the Buyer shall procure that the Auditors are instructed to provide their determination as soon as practicable.

6.3

In carrying out the determination referred to in paragraph 6.2 the Auditors shall act as experts and not as arbitrators and (in the absence of manifest error) their decision shall be final and binding on the parties to this agreement.

6.4

If the Auditors determine that there has been an Overprovision, Repayment or Saving then the amount of the Overprovision, Repayment or Saving (the "Relevant Amount") is to be dealt with in accordance with this paragraph 6.4:

(a)

the Relevant Amount shall first be set off against any payment due from the Seller under the Tax Covenant and/or for breach of any of the Tax Warranties;

(b)

to the extent there is an excess of the Relevant Amount after any amounts have been set off under paragraph 6.4(a), a refund shall be made to the Seller of any previous payment or payments made by the Seller under the Tax Covenant and/or for breach of any of the Tax Warranties and not previously refunded under this paragraph 6.4(b) up to the amount of any excess; and

(c)

to the extent that the excess referred to in paragraph 6.4(b) is not exhausted under that paragraph, the remainder of that excess shall be carried forward and set off against any future payment or payments which become due from the Seller under the Tax Covenant or for breach of any of the Tax Warranties.

6.5

Where any determination as is mentioned in paragraph 6.2 has been made, the Seller or the Buyer may (at the expense of the party so requesting) instruct the Auditors to review that determination in the light of all relevant circumstances, including any facts which have become known only since the determination, and to determine whether the determination remains correct or whether, in the light of those circumstances, the amount that was the subject of the determination should be amended.

6.6

If the Auditors determine under paragraph 6.5 that an amount previously determined should be amended, that amended amount shall be substituted for the purposes of paragraph 6.2 as the Relevant Amount in respect of the determination in question in place of the amount originally determined, and any adjusting payment (if any) as may be required by virtue of the above mentioned substitution shall be made as soon as reasonably practicable by the Seller or the Buyer as the case may be.

6.7

The Buyer will procure that the Target uses any Relief available to it which would give rise to a Repayment or Saving as soon as it is reasonably practicable for the Target to do so provided that the Target shall not be required to use such Relief in preference to any other Relief that is available.

recovery from other persons

7.1

If:

(a)

the Target or the Buyer is entitled to recover from any other person, (not being the Target but including, without limitation, a Tax Authority) any sum in respect of any matter to which this Schedule relates or in respect of the Tax Warranties; and

(b)

the Seller has first agreed to indemnify the Buyer and the Target against all reasonable costs which the Buyer and the Target may properly incur in connection with the taking of the following action,

then the Buyer shall or shall procure that the Target shall take all reasonable steps to enforce the recovery against the person in question (keeping the Seller fully informed of the progress of any action taken) provided that neither the Buyer nor the Target shall be required to take any action which would reasonably be expected to materially damage any of the Target's commercial relationships with a customer or supplier, or otherwise give rise to any material financial loss to the Target.

7.2

If the Target or the Buyer recovers from any third party any sum in respect of a liability for which a claim could be or has been made against the Seller pursuant to this Schedule or for breach of the Tax Warranties an amount equal to the amount so recovered together with any interest or repayment supplement thereon less the costs, fees and expenses incurred in obtaining it (insofar as not reimbursed by the Seller) shall:

(a)

if the Seller has at the time of the recovery made any payment pursuant to this Schedule or to satisfy a claim for breach of the Tax Warranties, be paid within seven days to the Seller by the Buyer (provided that the amount so paid to the Seller shall not exceed the amount of the payment made by the Seller pursuant to this Schedule or to satisfy a claim for breach of the Tax Warranties);

(b)

if any claim has been made by the Buyer pursuant to this Schedule but the Seller has not at any time of the recovery made payment in respect thereof, be set against and reduce pro tanto the claim against the Seller.

group relief

8.1

The Seller may (at its own cost and expense), so far as legally possible, reduce or extinguish any Tax Liability:

(a)

by reallocating for nil consideration a chargeable gain or chargeable realisation gain or any part of either such gain to any member of the Seller's Group under the provisions of section 792 CTA 2009;

(b)

by electing for nil consideration under section 171A TCGA 1992 that a disposal of an asset by the Target shall be treated as having been made by a member of the Seller's Group;

(c)

by surrendering or procuring the surrender of Group Relief to the Target for nil consideration; and

(d)

by claiming for nil consideration to roll-over or reinvest any income, profits or gains of the Target into the expenditure on replacement assets acquired by any member of the Seller's Group,

such that the Seller has no liability under the Tax Covenant or for breach of any of the Tax Warranties in respect of the Tax Liability and any claim already made in respect of the said Tax Liability is deemed for the purposes of this Schedule and this agreement never to have been made. For the avoidance of doubt, the Seller shall remain liable under the Tax Covenant or in respect of the Tax Warranties to the extent that such liability has not been reduced or extinguished by such valid reallocation, election, surrender or claim.

8.2

In relation to any Tax liability of the Target for which the Seller is not liable to make payment under the Tax Covenant or for breach of any of the Tax Warranties but which is capable of being mitigated or eliminated by the surrender of Group Relief:

(a)

the Seller shall be entitled to surrender or to procure the surrender of Group Relief to the Target from the Seller’s Group (to the maximum extent permitted by law); and

(b)

the Buyer shall procure that the Target pays to the company making the surrender an amount equal to 75% of the amount of Tax saved or capable of being saved by the Target by virtue of such surrender being validly and effectively made, that payment to be made on the date on which the Target would have been obliged to make a payment of Tax but for the availability of the Group Relief, provided that the provisions of this paragraph shall not have effect if and to the extent that payment in respect of a surrender has already been made on or before Completion.

8.3

The Buyer shall and shall procure that the Target shall use all reasonable endeavours to procure that all relevant claims, elections and surrenders are made and all other actions are taken as are required to effect the surrender and utilisation of the Group Relief referred to in this paragraph 8.

8.4

The Seller shall and shall procure that the relevant member of the Seller's Group surrendering Group Relief will, use all reasonable endeavours to procure that full effect is given to the claim, election or surrender to be made under this paragraph 8 and that such claims, elections and surrenders are allowed in full by the relevant Tax Authority and (without prejudice to the generality of the foregoing) the Seller shall, and shall procure that the relevant member of the Seller’s Group surrendering Group Relief will, sign and submit to the relevant Tax Authority all such surrenders and other documents and returns as may be necessary to secure that full effect is given to this paragraph.

8.5

In the event that any payment is made in accordance with this clause in respect of any claim for Group Relief made under this paragraph 8 and corporation tax falls nevertheless to be charged in respect of the taxable profits that the relevant claim was intended to relieve from such Tax (whether as a result of the relevant Tax Authority refusing to allow Group Relief or subsequently withdrawing Group Relief in respect of the relevant claim or for any other reason whatsoever), the Seller shall procure that the company that is the surrendering company in respect of the claim in question shall forthwith repay to the Target either the sum previously paid in respect of the relevant claim in accordance with this paragraph 8.2(b) or, as the case may be, such part of that sum as is attributable to the element of the claim that did not have the effect of relieving from corporation tax the taxable profits intended to be relieved by virtue of the claim.

VAT GROUP

9.1

The Seller confirms that the Representative Member (and for the purposes of this paragraph 9 the definitions of "Representative Member" and “VAT Group” shall be the same as that set out in paragraph 10.1 of Part 2 of this Schedule) shall as soon as reasonably practicable apply to HM Revenue & Customs to exclude the Target from the VAT Group and the Seller shall procure that the Representative Member shall use its reasonable endeavours to ensure the exclusion of the Target from the VAT Group with effect from Completion and in any event from the earliest date on which HM Revenue & Customs shall allow.

9.2

The Buyer undertakes to procure that the Target;

(a)

provides to the Representative Member after Completion such documents, information and assistance as it may reasonably require in writing to enable it to comply with its obligations in the making of VAT returns and accounting for VAT to HM Revenue & Customs in respect of supplies or acquisitions made by the Target for VAT purposes in the prescribed accounting period (as defined in section 25(1) VATA) current at Completion and in the event that the Target's exclusion from the VAT Group takes effect after the end of that prescribed accounting period in respect of supplies or acquisitions made by the Target in the next and any subsequent prescribed accounting period ("Relevant PAPs") in each case where they are, for the purposes of section 43 VATA (groups of companies), treated as made by the Representative Member; and

(b)

pays the Representative Member not less than two Business Days before the same is required to be paid to HM Revenue & Customs an amount equal to any VAT for which the Representative Member has to account (or would have to account but for any input tax credit or repayment of VAT due from HM Revenue & Customs in respect of actual supplies made to the members of the VAT Group other than the Target) to HM Revenue & Customs in respect of the Relevant PAPs and which results from supplies, deemed supplies, importations or acquisitions made by the Target in the Relevant PAPs but treated as made by the Representative Member under section 43(1) VATA (groups of companies) and, in computing such amount of VAT, credit shall be given to the Target for any input tax to which it is entitled under VATA on supplies, deemed supplies made to or importations or acquisitions made by the Target in the Relevant PAP, but treated as made to or by the Representative Member.

9.3

The Seller shall procure that the Representative Member shall properly and promptly comply with its obligations referred to in paragraph 9.2(a) of this Part and account to HM Revenue & Customs for any amount in respect of VAT paid by the Target pursuant to paragraph 9.2(b) of this Part and provide to the Buyer as soon as possible copies of the VAT returns referred to in paragraph 9.2(a) of this Part and any relevant correspondence or documentation sent to or received from HM Revenue & Customs in connection with any matter referred to in that paragraph.

9.4

The Seller undertakes to procure the Representative Member to claim as soon as possible and to pay to the Target an amount equal to any VAT which the Representative Member recovers (or would recover but for any payment due to HM Revenue & Customs in respect of actual supplies made by the members of the VAT Group other than the Target) from HM Revenue & Customs in respect of Relevant PAPs and which results from supplies or deemed supplies made to or importations or acquisitions made by the Target in the Relevant PAPs but treated as made to the Representative Member under section 43(1) VATA (groups of companies).

BUYER's COVENANT

10.1

The Buyer hereby covenants with the Seller to pay the Seller an amount equal to any Tax for which the Seller is or may be liable as a result of the application of section 710 or section 713 CTA 2010 (change in company ownership: corporation tax) where the taxpayer company or the transferred company (as defined in section 710(1)(a) and section 713(1)(a) respectively) is the Target together with any reasonable costs and expenses properly incurred by the Seller in connection with taking any successful action under this paragraph but only in circumstances where the Tax is directly or primarily chargeable against or attributable to the Target and arises:

(a)

in respect of income profits or gains earned, accrued or received in respect of any period after Completion; or

(b)

as a result of the failure of the Buyer or the Target to apply an amount provided for in the Management Accounts or an amount relating to profits arising since the Management Accounts Date but prior to Completion in the ordinary course of business of the Target or an amount paid by the Seller to the Buyer under this Schedule or to satisfy a claim for breach of the Tax Warranties to discharge a liability to which the amount relates by the due date for such discharge.

10.2

A payment to be made by the Buyer under this Schedule shall be made in cleared funds seven days after written demand for such payment.

10.3

Where the Buyer fails to make a payment in satisfaction of a liability under this Schedule by the due date for payment, the liability of the Buyer shall be increased to include interest on such sum from the date on which the Buyer becomes liable to make payment to the date of actual payment at a rate per annum being two per cent above the base rate from time to time of Barclays Bank plc compounded monthly (such interest to accrue after as well as before judgement).

10.4

Paragraphs 3 (Conduct of Claims) and 5 (Withholding and Tax) of Part 4 of this Schedule shall apply to the covenants contained in this paragraph 10 as they apply to the covenants contained in Part 3 of this Schedule replacing references to the Seller by the Buyer (and vice versa) and making any other necessary modifications.

10.5

The Buyer confirms that there is no present intention for the Target to cease to be a trading company within five Business Days of Completion.

administration

11.1

The Seller or its duly authorised agents shall prepare the accounts and corporation tax returns of the Target for all accounting periods ending on or before Completion to the extent that the same have not been prepared before Completion (the reasonable cost of which is borne by the Target) and the Buyer shall procure that the Target provides such access to its books, accounts and records as is reasonable to enable the Seller or its duly authorised agents to prepare the documentation and to deal with all matters relating thereto.

11.2

Without prejudice to the Buyer's rights under this Schedule or in relation to the Tax Warranties, the Buyer shall procure that the Target shall cause the accounts and returns mentioned in paragraph 11.1 of this Part so far as it is legally able to do so to be authorised, signed and submitted to the appropriate authority with such reasonable amendments, if any, as the Buyer may request and shall give the Seller or their agents all such assistance as may be reasonably required to agree those returns with the appropriate Tax Authority provided that the Buyer shall not be obliged to procure the signing and submitting of a document mentioned in paragraph 11.1 which it reasonably considers, to be materially false or inaccurate in any respect.

11.3

The Seller shall ensure that all material written communications to the relevant Tax Authority under this paragraph 11, are first sent to the Buyer (or its duly appointed tax advisers) as follows:

(a)

in the case of corporation tax relief returns and computations at least twenty Business Days before the due date for submission of the same; and

(b)

in the case of all other communications at least ten Business Days before the due date for submission of the same,

and the Seller shall incorporate any reasonable comments of the Buyer.

11.4

The Buyer shall ensure that all material written communications to the relevant Tax Authority in respect of the accounting period in which Completion takes place are first sent to the Seller (or its duly appointed tax advisers) as follows:-

(a)

in the case of corporation tax returns and computations at least twenty Business Days before the due date for submission of the same; and

(b)

in the case of all other communications at least ten Business Days before the due date for submission of the same,

and the Buyer shall consult with the Seller regarding the contents of such communications and (without prejudice to the Buyer's rights under this Schedule or in relation to the Tax Warranties) shall incorporate any reasonable comments of the Seller.

11.5

The Seller shall use or shall procure that its agents use all reasonable expedition to ensure that all the tax affairs of the Target conducted by the Seller or their agents under this paragraph are completed as soon as reasonably possible and shall keep the Buyer and its duly authorised agents fully informed of all matters relating to the submission, negotiation and agreement of the documents referred to in paragraph 11.1.

11.6

The Seller shall provide to the Buyer and the Target such documents, assistance and information (including, without limitation, access to books, accounts, personnel and records), as the Buyer may reasonably require in writing, in connection with the preparation, submission, negotiation or agreement of any of the accounts and corporation tax returns of the Target.

11.7

The provisions of paragraph 3 shall apply in priority to the provisions of this paragraph 11.

Corporation Tax Group Payment Arrangements

12.1

The Seller shall ensure that the Target is as soon as reasonably practicable and with effect from Completion removed from the group payment arrangement with HM Revenue and Customs under paragraph 79 of Schedule 7 to TIOPA.

12.2

The Seller shall:

(a)

procure that the nominated company (Nominated Company) for the purposes of any group payment arrangement (GPA) made pursuant to section 36 Finance Act 1998 (GPA) of which the Target is a member on or before Completion shall pay to HM Revenue and Customs an amount equal to any amount contributed to the Nominated Company by the Target pursuant to the GPA in respect of any or any instalment of corporation tax (Contributed Amount) no later than the date on which such corporation tax or instalment thereof is due and payable to HM Revenue and Customs;

(b)

procure that the Nominated Company shall promptly apportion to the Target each Contributed Amount, such apportionment to be made by reference to the corporation tax or instalment or instalments of corporation tax in respect of which the Contributed Amount was paid;

(c)

not, and shall procure that the Nominated Company shall not, without the prior written approval of the Buyer reapportion any amount previously apportioned to the Target pursuant to the GPA;

(d)

promptly pay or procure that there is paid to the Target an amount equal to:

(i)

the amount (if any) by which the Contributed Amount exceeds the liability of the Target to such corporation tax or such instalment thereof; and

(ii)

any interest received from HMRC in respect of such excess.

Schedule 5

Pre-Completion Undertakings

Positive undertakings

1.1

Subject to paragraph 3, between the date of this agreement and Completion the Seller will procure that:

(a)

the business of each member of the Target Group is carried on as a going concern in the ordinary and usual course as carried on prior to the date of this agreement;

(b)

the Buyer (and its advisers) are given all reasonable access to the directors and senior employees of each member of the Target Group and to inspect the books, records and documents (including all management information systems, accounting records and contracts) of each member of the Target Group;

(c)

the Buyer is provided with a copy of the monthly management accounts of the Target Group and such other information relating to the Target Group that the Buyer reasonably requires;

(d)

so far as it is reasonably able, nothing is done or allowed to be done which would result in a material breach of any of the Warranties if that Warranty were repeated on or at any time before Completion by reference to the facts and circumstances then existing (and without any additional disclosures against that Warranty being made). For the purposes of this paragraph a material breach is one that would, entitle the Buyer to bring any claim or claims for a breach of any of the Warranties if that Warranty were repeated on or at any time before Completion by reference to the facts and circumstances then existing (and without any additional disclosures against that Warranty being made), with a value or cumulative value of £108,556 or more;

1.2

The Seller will procure that the Target Group has:

(a)

at 20 February 2015 Working Capital (calculated consistently with the accounting policies used in the Management Accounts) of at least £4,253,949 and will between 20 February 2015 and Completion manage the Working Capital of the Target Group in the manner carried on prior to the date of this agreement; and

(b)

at Completion at least £866,000 of cash in bank.

Negative undertakings

Subject to paragraph 3, between the date of this agreement and Completion, the Seller will procure that no member of the Target Group will, without the prior written approval of the Buyer, do or agree, conditionally or otherwise, to do any of the following:

(a)

modify any rights attaching to any of its shares or allow any changes to its articles of association;

(b)

create any options or Security Interest over, or grant any rights to acquire, any of its shares any part of its assets and undertakings;

(c)

reduce its share capital, share premium account or capital redemption reserve or any other capital account or reserve or redeem, purchase or otherwise acquire any of its shares or other securities;

(d)

declare, pay or make any dividend or other distribution;

(e)

create any Security Interest over any of its shares or over vary the terms of, terminate, breach or waive the breach of, any material contracts to which it is a party;

(f)

appoint or terminate the employment of any senior employee, or alter or permit any alterations (including increases in emoluments) to be made to service agreements and/or terms of employment and/or contracts for services from time to time of any senior employee or alter or permit any alterations (including increases in emoluments) to be made to the service agreements and/or terms of employment and/or contracts for services of a material number of employees;

(g)

establish any pension scheme or make any material change to any of its existing pension schemes (whether as principal or participating employer) including any change in the basis of calculation of the level of contributions, the amendment of benefits or entitlement to benefits or commence the winding-up any scheme;

(h)

establish any share option scheme, any employee share scheme or any profit sharing or related scheme or vary or discontinue any of the same or make any unscheduled payment in respect of the same or grant, exercise, cancel or surrender any right granted under the same.

Exceptions

Nothing in this Schedule shall be deemed to prevent the Seller and/or the Target from:

(a)

to the extent there is cash in excess of £866,000 immediately before Completion (to the extent lawfully able) paying a dividend of such excess to the Seller;

(b)

(to the extent lawfully able) the transfer of Working Capital (by way of assignment of Receivables or transfer of excess stock or similar) from the Target Group to any member of the Seller's Group to the extent they exceed those figures set out in paragraph 1.2;

(c)

effecting the impairment of the Intra-Group Non-Trading Balances pursuant to clause 6.6(f); or

(d)

in the case of the Target, but not the Seller, issuing notices to Customers to change the terms of their credit accounts, to start the process to remove any regulated consumer credit products from the Business and avoid the need for Financial Conduct Authority approval. The credit accounts referred to in this paragraph are the credit facilities offered by the Target to its distributors to spread the cost of product orders and sales material until such time as they receive payments from their customers; and which facilities also enable the distributors to defer repayment over time through an interest bearing account with a minimum weekly payment subject to a monthly interest charge on the balance outstanding.

Schedule 6

Adjustments to the Consideration

Adjustment

1.1

The Consideration shall be adjusted in accordance with this Schedule 6. The Parties acknowledge that the Consideration has been based on the Target Group having Actual LTM EBITDA which equals Benchmark LTM EBITDA.

1.2

If Actual LTM EBITDA is:

(a)

greater than the Benchmark LTM EBITDA the Buyer shall pay to the Seller an aggregate sum equal to the amount by which the Actual LTM EBITDA exceeds the Benchmark LTM EBITDA, multiplied by 5; or

(b)

less than Benchmark LTM EBITDA the Buyer shall be entitled to a reduction in the cash portion of the Consideration payable equal to the CVSL Share Shortfall Amount, which shall be settled:

(i)

by first utilising the sum standing to the credit of the Retention Account in accordance with the provisions of clause 11; and

(ii)

to the extent the amount standing to the credit of the Retention Account is insufficient ("Retention Shortfall") by the subscription by the Seller, which the Seller hereby undertakes to do within 10 days of the Final Determination Date, of such number of CVSL Shares at the Relevant CVSL Share Price as is equal to the Retention Shortfall.

For the avoidance of doubt the provisions of this paragraph 1.2 do not reduce the aggregate Consideration payable

1.3

If any payment is due to the Seller pursuant to paragraph 1.2, then the Buyer may elect to:

(a)

satisfy some or all of such sum ("CVSL Share Excess Amount") through the issue to the Seller of such number of CVSL Shares as is equal to the CVSL Share Excess Amount divided by the Relevant CVSL Share Price, rather than paying in cash. Any such CVSL Shares shall be issued to the Seller on or before the tenth Business Day after the Final Determination Date; and/or

(b)

pay all or the balance of such payment in cash on or before the tenth Business Day after the Final Determination Date.

1.4

Any payment due from the Buyer to the Seller pursuant to paragraph 1.2 shall take effect as an increase in the Consideration.

Agreement/determination

2.1

The Buyer shall prepare and deliver a draft of the Completion Statement, or procure that the same is prepared and delivered, to the Seller within 10 days after the Completion Date.

2.2

The Completion Statement shall state the Actual LTM EBITDA, which shall be calculated in accordance with paragraph 3.

2.3

The Buyer shall grant to the Seller reasonable access to the books and records of the Target Group to enable it to carry out a review of the Completion Statement and the financial data contained within it. The Seller shall, within 10 days starting on the day after the date of delivery of the draft Completion Statement to it (such period of 10 days being the "Initial Period"), inform the Buyer whether or not it agrees with the draft Completion Statement. If:

(a)

within the Initial Period, the Seller informs the Buyer in writing that it agrees with the draft Completion Statement; or

(b)

the Seller fails to inform the Buyer in writing whether or not it agrees with the draft Completion Statement, the draft Completion Statement shall, irrevocably and for all purposes of this agreement, be deemed to have been agreed by all of the Parties and the Actual LTM EBITDA stated in it shall be the Actual LTM EBITDA for all purposes of this agreement.

2.4

If, within the Initial Period, the Seller informs the Buyer in writing that it is not prepared to agree the draft Completion Statement, the provisions of paragraph 2.5 shall apply.

2.5

Subject to paragraphs 2.3 and 2.4, the Buyer and the Seller shall have 20 days starting on the day after the Seller informs the Buyer in writing that it is not prepared to agree the draft Completion Statement. If, within such period ("Secondary Period"), the Seller and the Buyer agree the draft Completion Statement, as soon as such agreement is reflected in the draft Completion Statement and the revised Completion Statement is agreed in writing, the draft Completion Statement shall, irrevocably and for all purposes of this agreement, be deemed to have been agreed by the Seller and the Buyer and the Actual LTM EBITDA stated in it shall be the Actual LTM EBITDA respectively for all purposes of this agreement. If, however, they do not so agree the Completion Statement within the Secondary Period, the Seller or the Buyer may, at any time after the expiry of the Secondary Period, refer the matter(s) in dispute (whether that be in relation to the Actual LTM EBITDA or any component of any of it, any matter relating to the calculation of any of it, any other aspect of the draft Completion Statement or any other matter whatsoever which is related or ancillary to any of the foregoing) ("Matter(s) in Dispute") to an independent firm of chartered accountants appointed by agreement between the Seller and the Buyer or, in default of such agreement within 7 days after the expiry of the Secondary Period, to an independent firm of chartered accountants appointed by the President for the time being of the Institute of Chartered Accountants in England & Wales or its successor body ("Expert") pursuant to the procedure set out in the following sub-paragraphs of this paragraph 2.5 (this sentence and those sub-paragraphs being referred to as the "Expert Determination Procedure" and such determination by the Expert being referred to as the "Expert Determination"):

(a)

the Expert shall be, and shall have been, a Fellow of the Institute of Chartered Accountants for not less than 15 years;

(b)

the Expert Determination Procedure commences upon the first occasion when the Seller on the one hand or the Buyer on the other hand, as the case may be ("Notifier(s)"), give(s) to the other ("Recipient(s)") written notice (a "Referral Notice") requiring the referral of any Matter(s) in Dispute to Expert Determination under this paragraph 2.5. The Referral Notice shall:

(i)

be addressed to the Recipient(s);

(ii)

refer to this paragraph 2.5;

(iii)

identify the Matter(s) in Dispute with detail which is reasonably sufficient to enable the Recipient(s) to understand and respond to the Matter(s) in Dispute; and

(iv)

identify by name at least one, and not more than three, persons whom the Notifier proposes as the Expert;

(c)

the Recipient(s) shall, within five Business Days after the Referral Notice has been served upon him, them or it:

(i)

give written acknowledgement of receipt thereof; and

(ii)

indicate concurrence with the appointment of one of the nominees as Expert, or propose at least one, and not more than three, alternatives to hold such office;

(d)

if the Seller and the Buyer agree the appointment of a person as Expert (whether or not a person named by either of them pursuant to paragraph 2.5(b)(iv) or paragraph 2.5(c)(ii)), the Notifier shall immediately invite that person to accept his appointment as Expert. If, within seven days after such agreement, the Notifier fails to invite that person to accept such appointment, the Recipient(s) may invite that person to do so;

(e)

if the Notifier does not receive the acknowledgement of receipt and indication or proposal referred to in paragraph 2.5(c) within five Business Days after the service of the Referral Notice on the Recipient(s), the Notifier(s) shall invite to be the Expert the person, or any one of the persons, identified as being proposed Expert(s) in the Referral Notice in accordance with paragraph 2.5(b)(iv);

(f)

in default of appointment of an Expert pursuant to paragraph 2.5(d) or 2.5(e) within seven Business Days after service of the Referral Notice, the Notifier(s) shall apply to the President for the time being of the Institute of Chartered Accountants in England & Wales or its successor body. A nomination made by any person appointed by such President (or the body or institution) to make nominations of experts shall be as valid as if made by such President himself. The Notifier(s) shall use all reasonable endeavours to procure that a person so nominated (who shall not be the same person as, and who shall not, unless the Seller and the Buyer agree otherwise, be a partner, employee or agent in or of the same firm of chartered accountants as, any person proposed pursuant to paragraph 2.5(b)(iv) but rejected by the Recipient(s)) to be the Expert is appointed as the Expert and is able to commence the appointment within fifteen Business Days after the giving of the Referral Notice. The ability of any person to accept an appointment as the Expert, to commence that appointment immediately and to act in accordance with the time limits set out in this paragraph 2.5 shall be an important factor in the selection of the Expert (whether by agreement of the Seller and the Buyer or by presidential nomination) and the Seller and the Buyer shall use all reasonable endeavours to procure compliance with this paragraph 2.5;

(g)

any invitation to any person to accept his appointment as the Expert shall be accompanied by a certified copy of this agreement;

(h)

if a person who is invited to be the Expert in accordance with paragraph 2.5(d) or (e) or who is nominated to be the Expert in accordance with paragraph 2.5(f) makes acceptance by him of his appointment as Expert conditional upon acceptance of terms additional to those set out in this paragraph 2.5 ("Additional Terms"), he shall deliver the Additional Terms to both the Seller and the Buyer within two Business Days after such conditional acceptance and the Seller and the Buyer shall state in writing, within two Business Days after such delivery, whether or not they accept the Additional Terms without amendment. If the Seller, the Buyer and such person fail to agree the Additional Terms within three Business Days after delivery of them to the Seller and the Buyer, either:

(i)

the Seller on the one hand or the Buyer on the other hand may require such person and the other(s) to conduct the Expert Determination on the basis of this paragraph 2.5 and the Additional Terms without amendment; or

(ii)

both the Seller and the Buyer may agree to seek the appointment of an alternative Expert.

No Expert shall be deemed to have been appointed until he has delivered to each of the Seller and the Buyer written unconditional acceptance thereof, and his appointment shall take effect from the date of such acceptance;

(i)

whichever of the Seller on the one hand and the Buyer on the other hand appoints the Expert or requests a presidential nomination in accordance with this paragraph 2.5 shall use all reasonable endeavours to procure that the Expert confirms acceptance of the appointment in writing to both the Seller and the Buyer immediately upon acceptance of the appointment;

(j)

following the acceptance of his appointment by the Expert:

(i)

the Seller shall, within ten Business Days thereafter, make such written submission to the Expert as it reasonably thinks fit and shall serve the same on the Expert and the Buyer;

(ii)

within ten Business Days of such service, the Buyer shall make such written submission to the Expert as it reasonably thinks fit and shall serve the same on the Expert and the Seller;

(iii)

the Seller shall, within five Business Days thereafter, make such further written submission to the Expert as it reasonably thinks fit and shall serve the same on the Expert and the Buyer;

(iv)

within five Business Days after such service, the Buyer shall make such written further submission to the Expert as it reasonably thinks fit and shall serve the same on the Expert and the Seller;

(v)

the Seller and the Buyer shall each use all reasonable endeavours to co-operate with the Expert to resolve the Matter(s) in Dispute and, for that purpose, shall provide to the Expert and to each other all such information and documentation as the Expert and the other(s) shall reasonably require, including the giving to the Expert of such access to documents and persons and such assistance as may be so required; and

(vi)

for the avoidance of doubt, no action taken or decision or determination made by the Expert shall prevent the Seller and the Buyer agreeing the Completion Statement or any Matter(s) in Dispute;

(k)

the Expert shall, subject to paragraph 2.5(j), conduct his determination in such manner as he shall in his sole and unfettered discretion see fit, provided that he acts impartially. All written communications to and from the Expert, the Seller or the Buyer shall be copied to each of the other such persons, and the Expert shall not conduct any oral hearing or otherwise discuss any Matter(s) in Dispute other than in the presence of both a Sellers' Representative and a representative of the Buyer. The Expert may act inquisitorially and may take the initiative in ascertaining the facts and the law relevant to each Matter in Dispute;

(l)

the Expert shall act as expert and not as arbitrator;

(m)

the Expert shall deliver a written, final Expert Determination within fifteen Business Days after receipt by him of the submissions (if any) of the Buyer referred to in paragraph 2.5(j)(iv), or such longer period as the Seller and the Buyer may agree in writing. The Expert may, with the consent of the Notifier, extend that period of fifteen Business Days by not more than ten Business Days;

(n)

the Expert Determination shall be reflected in the draft Completion Statement and:

(i)

such draft Completion Statement shall, irrevocably and for all purposes of this agreement, be deemed to have been agreed by all of the Parties and to constitute the Completion Statement;

(ii)

the Actual LTM EBITDA stated in it shall, irrevocably and for all purposes of this agreement, be deemed to have been agreed by all of the Parties and the Actual LTM EBITDA stated in it shall be the Actual LTM EBITDA for all purposes of this agreement; and

(iii)

that Completion Statement shall, for all purposes of this agreement, be the Completion Statement which has been "determined pursuant to paragraph 2 of Schedule 6";

(o)

if the Expert dies, refuses to act or becomes incapable of acting, the Seller and the Buyer, acting in accordance with this paragraph 2.5, may appoint another person to act as Expert, and any Expert so appointed shall conduct the Expert Determination and the Expert Determination Procedure afresh;

(p)

the Seller and the Buyer shall each bear their own costs and shall pay the fees, costs and expenses of the Expert as to half by the Seller and half by the Buyer unless the Expert determines otherwise. The Expert may so determine if:

(i)

whichever of the Seller and the Buyer is ordered to pay any fees, costs or expenses acted (in the opinion of the Expert) improperly, unreasonably or negligently in bringing or opposing the reference or in the manner in which they, he or it conducted the reference; or

(ii)

this agreement specifies that any costs, fees and expenses incurred in respect of an Expert Determination should be borne other than equally;

(q)

any Expert Determination shall be final and shall bind the Buyer and all of the Sellers except in the case of fraud or manifest error; and

(r)

if and to the extent that an Expert Determination made by any Expert appointed pursuant to this paragraph 2.5:

(i)

fails to decide any matter or issue referred to him;

(ii)

creates an issue between the Seller and the Buyer as to the meaning or effect of the Expert Determination due to any material omission, lack of clarity or ambiguity on the face of the Expert Determination; or

(iii)

fails to decide any matter or issue not referred to him but which could properly have been referred to him and, until it has been resolved, prevents, inhibits or delays the parties in complying with his Expert Determination,

either the Seller (acting jointly) or the Buyer may apply to the Expert, within three calendar months after the date on which he made his Expert Determination, for a determination of such matter or issue pursuant to this paragraph 2.5, provided that paragraphs 2.5(j)(i) to (iii) inclusive shall not apply to such determination.

Basis of preparation of the Completion Statement

The Completion Statement shall be prepared, and the Actual LTM EBITDA shall be prepared in the proforma set out in paragraph 4 of this schedule and will be prepared:

(a)

by applying principles, bases, policies, practices, methodology, levels of materiality and categorisations consistent in all respects with those applied in the preparation of the Management Accounts; and

(b)

in accordance with GAAP.

Proforma

Schedule 7

Working Capital

EXECUTED as a deed by

for and on behalf of FINDEL PLC in the

presence of:

Witness

Signature	:
Name	:
Occupation	:
Address	:

EXECUTED as a deed by

for and on behalf of TRILLIUM POND AG

in the presence of:

Witness

Signature	:
Name	:
Occupation	:
Address	:

EXECUTED as a deed by

for and on behalf of CVSL Inc

in the presence of:

Witness

Signature	:
Name	:
Occupation	:
Address	:

Exhibit 10.2

DATED

Project Lake

(1) Express Gifts Limited

(2) Kleeneze Limited

SERVICE LEVEL AGREEMENT

Contents

1	Interpretation	4

2	Commencement and duration	11

3	Services	12

4	Operational Services	12

5	Service Levels	13

6	Effect of Customer's Defaults	13

7	Charging and invoicing	14

8	Governance	15

9	Supply chain	16

10	Audits	16

11	Change control	17

12	Key Personnel	17

13	Staff	17

14	Non-solicitation	17

15	IPRs	17

16	Grant of licences	18

17	IPR INDEMNITY	19

18	Data protection	19

19	Confidentiality	20

20	Security requirements	21

21	Warranties and representations	22

22	Compliance with Applicable Laws	22

23	Anti-bribery	22

24	Force majeure	23

25	Limitations on liability	23

26	RISK AND Insurance	24

27	Termination rights	25

28	Remediation Plan Process	26

29	General consequences of expiry and termination	27

30	Exit and service transfer	28

31	Dispute Resolution Procedure	29

32	expert determination	30

33	Assignment and novation	30

34	Variations	30

35	Waiver	30

36	No partnership or agency	31

37	Announcements	31

38	Severance	31

39	Further assurance	31

40	Entire agreement	31

41	Third party rights	32

42	Notices	32

43	Governing law	32

44	Jurisdiction	32

45	Counterparts	33

46	Rights and remedies	33

Schedule 1 Service Description		34

Schedule 2 Service Levels		41

Schedule 3 Customer's Responsibilities		43

Schedule 4 Charges		44

Schedule 5 Key Personnel		47

Schedule 6 Contract and Service Management		48

Schedule 7 Change Control Procedure		50

Schedule 8 Exit Plan and Service transfer arrangements		52

Schedule 9 Employees		56

APPENDIX 1 ACCOUNTING MONTHS		59

iii

THIS AGREEMENT is made the day of 2015

Parties:

(1)

Express Gifts Limited a company registered in England under number 718151 whose registered office is at 2 Gregory Street, Hyde, Cheshire, SK14 4TH (Supplier) and

(2)

Kleeneze Limited a company registered in England under number 5801085 whose registered office is at 2 Gregory Street, Hyde, Cheshire, SK14 4TH (Customer).

Background

(A)

The Customer selected the Supplier as its exclusive supplier and the Customer and the Supplier entered into negotiations regarding the provision of services to meet the Service Description.

(B)

As a result of such negotiations, the Customer has agreed to purchase, and the Supplier has agreed to supply, the Services on the terms and conditions of this agreement.

Agreed Terms

Interpretation

1.1

The definitions and rules of interpretation in this clause 1 apply throughout this agreement.

"Accounting Month"		means each time period during the Term of 4 or 5 weeks (as applicable), the end date of each time period being determined by reference to Appendix 1 and the expression Accounting Monthly shall be construed accordingly.
"Applicable Law"		means the laws of England and Wales and the European Union and any other laws or regulations which apply to the provision of the Services.
"Associated Company"		means any holding company from time to time of either party and any subsidiary from time to time of such party, or any subsidiary of any such holding company.
"Authorised Recipients"		means a party's employees, officers, representatives, advisers, sub-contractors and agents.
"Average Earnings Index"		means the index of average earnings for private-sector earnings as published by the Office for National Statistics from time to time, or failing such publication, that other index as the parties may agree most closely resembles such index.
"Background IPR"		means any and all IPRs that are owned by or licensed to either party and which are or have been developed independently of this agreement (whether prior to the Effective Date or otherwise).

"Change"		means any change to this agreement including to any of the Services.
"Change Control Note"		means the written record of a Change agreed or to be agreed by the parties pursuant to the Change Control Procedure.
"Change Control Procedure"		means the procedure for changing this agreement, as set out in Schedule 7.
"Change Request"		means a written request (in the case of the Customer) or a recommendation (in the case of the Supplier) for a Change which is submitted by one party to the other pursuant to the Change Control Procedure.
"Charges"		means the Operational Service Charges, the Transitional Assistance Service Charges and any other charges which may become due and payable pursuant to this agreement.
"Confidential Information"		means any information, however conveyed or presented, that relates to the business, affairs, operations, customers, processes, budgets, pricing policies, product information, strategies, developments, trade secrets, know-how, personnel and suppliers of the disclosing party or its Associated Companies, together with all information derived by the receiving party from any such information and any other information clearly designated by a party as being confidential to it (whether or not it is marked "confidential"), or which ought reasonably be considered to be confidential.
"Consents"		means all permissions, consents, approvals, certificates, permits, licences, agreements and authorities (whether statutory, regulatory, contractual or otherwise) necessary for the provision of the Services.
"Contract Year"		means a period of 12 months, commencing on the Effective Date and/or each anniversary of the Effective Date.
"Control"		means the beneficial ownership of more than 50% of the issued share capital of a company or the legal power to direct or cause the direction of the general management of the company, and controls, controlled and the expression change of Control shall be construed accordingly.
"Customer's Data"		means any data (including any Personal Data relating to the staff, customers or suppliers of the Customer), documents, text, drawings, diagrams, images or sounds (together with any database made up of any of those), embodied in any medium, that are supplied to the Supplier by or on behalf of the Customer, or which the Supplier is required to generate, process, store or transmit pursuant to this agreement.

"Customer's Group"		means the Customer, its ultimate holding company and all subsidiaries of its ultimate holding company.
"Customer's Operational Services Manager"		means the person identified as such in Schedule 5, or any replacement person appointed by the Customer pursuant to clause 12, being the person responsible for managing the Operational Services on behalf of the Customer.
"Customer's Representatives"		means the person identified as such in Schedule 5, or any replacement person appointed by the Customer pursuant to clause 12, being the person responsible for managing the Customer's overall relationship with the Supplier.
"Customer's Responsibilities"		means the responsibilities of the Customer as specified in Schedule 3.
"Customer's Software"		means the software which is owned by the Customer, or any member of the Customer's Group, and which is to be used by the Customer in the context of the receipt of any of the Services.
"Database"		means the compilation of any data supplied to the Supplier by, or on behalf of, the Customer or generated by the Supplier from any such data.
"Data Controller"		has the meaning set out in the Data Protection Act 1998.
"Data Processor"		has the meaning set out in the Data Protection Act 1998.
"Data Protection Legislation"		means the Data Protection Act 1998, the Data Protection Directive (95/46/EC), the Regulation of Investigatory Powers Act 2000, the Telecommunications (Lawful Business Practice) (Interception of Communications) Regulations 2000 (SI 2000/2699), the Electronic Communications Data Protection Directive (2002/58/EC), the Privacy and Electronic Communications (EC Directive) Regulations 2003 (SI 2426/2003) and all applicable laws and regulations relating to the processing of personal data and privacy, including where applicable the guidance and codes of practice issued by the Information Commissioner.
"Data Subject"		has the meaning set out in the Data Protection Act 1998.
"Default"		means any default of either party in complying with its obligations under this agreement.
"Dispute"		means any dispute under this agreement.
"Dispute Resolution Procedure"		means the dispute resolution procedure set out in clause 31.
"Documentation"		means all technical specifications, user manuals, operating manuals, process definitions and procedures, and all such other documentation as: (a) is required to be supplied by the Supplier to the Customer to enable it to use the Operational Services; and

		(b) is required to be developed by the Supplier in order to provide the Services.
"Effective Date"		means the date of “Completion” as defined in the Share Purchase Agreement between Findel PLC and Trillium Pond AG and CVSL Inc.
"Employment Regulations"		means the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (as amended).
"Exit Plan"		means the plan for the provision of the Transitional Assistance Services, which is to be developed by the parties pursuant to clause 30.
"Expert"		means an expert appointed pursuant to clause 32.
"Force Majeure Event"		means any cause affecting the performance by a party of its obligations under this agreement arising from acts, events, omissions or non-events beyond its reasonable control, including acts of God, riots, war, acts of terrorism, fire, flood, storm or earthquake and any disaster, epidemic or pandemic, industrial dispute, strikes, lock-outs, interruption or failure of any utility service.
"Good Industry Practice"		means, in relation to any undertaking and any circumstances, the exercise of skill, diligence, prudence, foresight and judgement and the making of any expenditure that would reasonably be expected from a skilled person engaged in the same type of undertaking under the same or similar circumstances.
"Insolvency Event"		means in respect of either party: (a) other than for the purposes of a bona fide reconstruction or amalgamation, such party passing a resolution for its winding up, or a court of competent jurisdiction making an order for it to be wound up or dissolved, or that party being otherwise dissolved; or (b) the appointment of an administrator of, or the making of an administration order in relation to, either party, or the appointment of a receiver or administrative receiver of, or an encumbrance taking possession of or selling, the whole or any part of the entity's undertaking, assets, rights or revenue; or (c) that party entering into an arrangement, compromise or composition in satisfaction of its debts with its creditors or any class of them, or taking steps to obtain a moratorium, or making an application to a court of competent jurisdiction for protection from its creditors; or (d) that party being unable to pay its debts, or being capable of being deemed unable to pay its debts, within the meaning of section 123 of the Insolvency Act 1986; or

		(e) that party entering into any arrangement, compromise or composition in satisfaction of its debts with its creditors.
"IPRs"		means any and all intellectual property rights of any nature anywhere in the world whether registered, registrable or otherwise, including patents, utility models, trade marks, registered designs and domain names, applications for any of the foregoing, trade or business names, goodwill, copyright and rights in the nature of copyright, design rights, rights in databases, moral rights, know-how and any other intellectual property rights which subsist in computer software, computer programs, websites, documents, information, techniques, business methods, drawings, logos, instruction manuals, lists and procedures and particulars of customers, marketing methods and procedures and advertising literature, including the "look and feel" of any websites.
"IPR Claim"		means any claim of infringement or alleged infringement (including the defence of such infringement or alleged infringement) of any IPRs used to provide the Services and licensed to the Supplier pursuant to Clause 16.1.
"Key Personnel"		means those personnel identified Schedule 5 for the roles attributed to such personnel, as modified pursuant to clause 12.
"Month"		unless stated otherwise, means a calendar month, and Monthly shall be interpreted accordingly.
"Operational Service Charges"		means the charges which become due and payable by the Customer to the Supplier in respect of the Operational Services, which shall be calculated in accordance with Schedule 4.
"Operational Services Managers"		means the Customer's Operational Services Manager and the Supplier's Operational Services Manager.
"Operational Services"		means the operational services described as such in the Service Description.
"Payment Plan"		means the plan for payment of the Charges as set out in Schedule 4.
"Personal Data"		has the meaning set out in the Data Protection Act 1998.
"Regulatory Bodies"		means those government departments and regulatory, statutory and other entities, committees and bodies which, whether under statute, rules or regulations are entitled by any Applicable Law to supervise, regulate, investigate matters dealt with in this agreement.

"Remediation Notice"		means a written notice given by the Customer to the Supplier pursuant to clause 28.1 to initiate the Remediation Plan Process.
"Remediation Plan"		means the plan agreed in accordance with clause 28 for the resolution of a Supplier's Default.
"Remediation Plan Process"		means the process for resolving certain of the Supplier's Defaults as set out in clause 28.
"Replacement Services"		means any services which are identical or substantially similar to any of the Services and which the Customer receives in substitution for any of the Services following the termination or expiry of this agreement, whether those services are provided by the Customer internally or by any Replacement Supplier.
"Replacement Supplier"		means any third party supplier of Replacement Services appointed by the Customer from time to time.
"Representatives"		means the Customer's Representatives and/or the Supplier's Representatives.
"Retail Prices Index"		means the Retail Prices Index (All Items, excluding mortgages) as published by the Office for National Statistics from time to time, or failing such publication, that other index as the parties may agree most closely resembles such index.
"Security Policy"		means the Supplier's security policy as updated from time to time.
"Service Credits"		means the sums attributable to a Service Failure as specified in Schedule 4.
"Service Description"		means the service description as set out in Schedule 1 as amended from time to time in accordance with the Change Control Procedure.
"Service Failure"		means a failure by the Supplier to deliver any part of the Operational Services in accordance with the Service Levels.
"Service Levels"		means the service levels to which the Operational Services are to be provided, as set out in Schedule 2.
"Services"		means the services to be delivered by or on behalf of the Supplier under this agreement, including the Operational Services, and the Transitional Assistance Services and Service means any of the Services (or any part of any of them).
"Supplier's Group"		means the Supplier, its ultimate holding company and all subsidiaries of its ultimate holding company.
"Supplier's Operational Service Manager"		means the person identified as such in Schedule 5, or any replacement person appointed by the Supplier pursuant to clause 12 being the person responsible for managing the Operational Services on behalf of the Supplier.
"Supplier's Personnel"		means all employees of the Supplier who are engaged in the provision of the Services from time to time.

"Supplier's Premises"		means any premises in the possession or control of the Supplier or any sub-contractor from which the Services are delivered, in whole or in part or in which records relating to the Services are kept.
"Supplier's Representative"		means the person identified as such in Schedule 5, or any replacement person appointed by the Supplier pursuant to clause 12, as the person responsible for managing the Supplier's overall relationship with the Customer.
"Supplier's Software"		means the software which is owned by the Supplier, or any member of the Supplier's Group, and which is to be used by the Supplier in the context of the provision of any of the Services
"Term"		means the duration of this agreement as varied by the duration of the Termination Period (as relevant).
"Termination Date"		means the date of expiry or termination of this agreement.
"Termination Fee"		means the fee payable by the Customer in accordance with clause 29.4.
"Termination Notice"		means any notice to terminate this agreement which is given by either party in accordance with clause 27.
"Termination Period"		means the period of up to 3 months as specified in the Termination Notice pursuant to clause 27.1 during which period the Customer may require the Supplier to continue to provide the Services after a Termination Notice has been given.
"Third Party Software"		means software which is proprietary to any third party.
"Transferring Employees"		means those employees of the Supplier whose contract of employment will be transferred to the Customer or a Replacement Supplier pursuant to the Employment Regulations on expiry or termination of this agreement or part or otherwise.
"Transitional Assistance Service Charges"		means the charges payable by the Customer to the Supplier for the provision of the Transitional Assistance Services, which shall be calculated in accordance with Schedule 4.
"Transitional Assistance Services"		means the services to be provided by the Supplier to the Customer pursuant to clause 30 to facilitate the transfer of the Services to the Customer or a Replacement Supplier.
"VAT"		means value added tax as provided for in the Value Added Tax Act 1994.
"Working Day"		means Monday to Friday, excluding any public holidays in England and Wales.

1.2

Words in the singular include the plural and in the plural include the singular.

1.3

Unless the context otherwise requires, a reference to one gender shall include a reference to the other genders.

1.4

Clause, schedule and appendix headings shall not affect the interpretation of this agreement.

1.5

References to clauses, schedules and appendices are, unless otherwise provided, references to the clauses of and schedules and appendices to this agreement.

1.6

A reference to a statute or statutory provision is a reference to it as it is in force for the time being, taking account of any amendment, extension or re-enactment and includes any subordinate legislation for the time being in force made under it.

1.7

If there is any conflict or ambiguity between the clauses of this agreement and the schedules, the conflict shall be resolved in accordance with the following order of precedence:

(a)

the clauses;

(b)

the schedules; and

(c)

the appendices.

1.8

Unless a right or remedy of a party is expressed to be an exclusive right or remedy, the exercise of it by a party is without prejudice to that party's other rights and remedies.

1.9

A reference to this agreement includes a reference to the schedules and appendices to this agreement.

1.10

Holding company and subsidiary: mean a "holding company" and "subsidiary" as defined in section 1159 of the Companies Act 2006 and a company shall be treated, for the purposes only of the membership requirement contained in subsections 1159(1)(b) and (c), as a member of another company even if its shares in that other company are registered in the name of (a) another person (or its nominee), whether by way of security or in connection with the taking of security, or (b) its nominee.

1.11

A reference to one gender shall include reference to the other genders.

1.12

A person includes a corporate or unincorporated body (whether or not having separate legal personality).

1.13

Any phrase introduced by the words including, includes, in particular or for example or similar shall be construed as illustrative and shall not limit the generality of the related general words.

1.14

Writing or written includes faxes and e-mail.

Commencement and duration

2.1

This agreement shall take effect on the Effective Date and shall (subject to termination in accordance with its terms) continue in force and effect until either party gives to the other party not less than 9 months' prior written notice to terminate, such notice may only be served by a party on or after (but not before) the expiration of a period of 9 Months from the Effective Date. The termination of the agreement by the Customer pursuant to this clause 2.1 is subject to the payment in full of the Termination Fee (if applicable).

Services

3.1

The Customer appoints the Supplier as its sole and exclusive supplier of the Services, and the Supplier shall provide the Services to the Customer pursuant to the terms and conditions of this agreement. Furthermore, and save as otherwise agreed within the terms of this Agreement or as otherwise consented to in writing by the Supplier, the Customer shall not during the Term directly or indirectly appoint or engage or permit the appointment or engagement of any third party to perform or perform itself services for the warehousing, fulfilment, and dispatch and return of goods for the Customer's distribution network in the UK and Ireland. Notwithstanding the foregoing, but subject to the obligation on the Customer to allow the Supplier to first propose terms to the Customer as set out in Schedule 1, the Customer is free to appoint third parties to provide or provide to itself any Services required in excess of the maximum capacity limits as set out in Schedule 1.

3.2

In providing each of the Services, the Supplier shall at all times:

(a)

provide the Services in accordance with Good Industry Practice;

(b)

provide the Services in accordance with all Applicable Laws;

(c)

obtain, maintain and comply with all Consents;

(d)

allocate sufficient resources to provide the Services in accordance with the terms of this agreement;

(e)

ensure that any of the Supplier's Personnel who are engaged in the provision of any of the Services shall, if required by the Customer, attend such meetings at the premises of the Customer or elsewhere as may be reasonably required by the Customer; and

(f)

provide such reasonable co-operation and information in relation to the Services to such of the Customer's other suppliers as the Customer may reasonably require for the purposes of enabling any such person to create and maintain any interfaces that the Customer may reasonably require.

3.3

The Customer shall at all times comply with the Customer's Responsibilities.

Operational Services

4.1

The Supplier shall provide the Operational Services to the Customer from the Effective Date.

4.2

The Supplier shall ensure that each of the Operational Services meets and satisfies the Service Description.

4.3

In the event of the Supplier's failure to provide any of the Operational Services, the Customer may, without prejudice to its other rights, require the Supplier to re-perform the applicable Operational Services.

Service Levels

5.1

The Supplier shall ensure that the Operational Services meet or exceed the Service Levels at all times from the Effective Date.

5.2

The Supplier shall provide the Customer with a monthly report detailing its performance in respect of each of the Service Levels.

5.3

Subject to the limit set out in clause 25.2(a), the Supplier shall automatically credit the Customer with the applicable Service Credits. Service Credits shall be shown as a deduction from the amount due from the Customer to the Supplier in the next invoice then due to be issued under this agreement. The parties agree that any such Service Credits have been calculated as, and are, a genuine pre-estimate of the loss likely to be suffered by the Customer.

5.4

The Operational Services Managers shall have regular monthly meetings to monitor and review the performance of this agreement, the achievement of the Service Levels and the provision of the Services. Such meetings shall be minuted by the Customer's Operational Services Manager and copies of those minutes shall be circulated to and approved by both parties.

5.5

Prior to each monthly meeting, the Customer's Operational Services Manager shall notify the Supplier's Operational Services Manager, and vice versa, of any problems relating to the provision of the Operational Services for discussion at the monthly meeting. Without prejudice to the procedure at clause 28, at the meeting the parties shall agree a plan to address such problems. Progress in implementing the plan shall be included in the agenda for the next monthly meeting.

5.6

A review meeting to assess the performance of the Supplier in the delivery of the Operational Services shall be held at 3-monthly intervals throughout the Term. Each meeting shall be attended by senior representatives of the Customer and of the Supplier, together with the Operational Services Managers.

5.7

The Customer and the Supplier shall review the Service Levels every 3 months throughout the Term and make any changes in accordance with the Change Control Procedure to reflect changes in the Service Description.

Effect of Customer's Defaults

6.1

If the Supplier would have provided, or procured the provision of, the Operational Services in accordance with the Service Levels or this agreement, but has failed to do so as a result of a Customer's Default, the Supplier shall, subject to the provisions of clause 6.2, have the rights and relief set out in clause 6.3(b).

6.2

The Supplier shall be required to notify the Customer as soon as reasonably practicable after it considers that a Customer's Default has arisen which is having, or which is likely to have, an adverse impact on the ability of the Supplier to deliver the Operational Services. If the Supplier fails to notify the Customer of the Customer's Default as soon as reasonably practicable, the Supplier may only benefit from the provisions of clause 6.3(b) from the Working Day which precedes the Working Day on which it notifies the Customer of the Customer's Default.

6.3

The Supplier shall:

(a)

use reasonable endeavours to continue to provide the affected Operational Services in accordance with this agreement but shall not otherwise be liable for any failure to provide or late provision of the Operational Services; and

(b)

be entitled to be paid for the provision of the Operational Services which have been affected by the Customer's Default together with any costs incurred which directly relate to such Customer's Default.

6.4

The Customer may challenge any notice received from the Supplier pursuant to clause 6.2 if it believes, in its reasonable opinion, that the alleged Customer's Default should not prevent the Supplier from performing the Operational Services in accordance with the Service Levels and this agreement. Any resulting disputes regarding the occurrence or impact of a Customer's Default which cannot be resolved within 30 Working Days may be referred by either party for resolution in accordance with the Dispute Resolution Procedure.

Charging and invoicing

7.1

In consideration of the provision of the Services by the Supplier, the Customer shall pay the Charges to the Supplier in accordance with the Payment Plan.

7.2

The Supplier shall invoice the Customer for payment of the Charges at the time the Charges are expressed to be payable in accordance with the Payment Plan. All invoices shall be directed to the Customer's Representative. Any such invoices shall take into account any Service Credits which have been accrued in the previous period.

7.3

The Customer shall pay the Charges which have become payable in accordance with the Payment Plan within 30 days of receipt of an undisputed invoice from the Supplier (Due Date).

7.4

The Supplier may, however, increase the Operational Service Charges:

(a)

on an annual basis with effect from 1 January each year in line with:

(i)

the higher of the percentage increase in the Retail Prices Index or the Average Earnings Index in the preceding 12-month period and the Supplier shall notify the Customer of all such increases (based on such index data available at the time of notification) by 31 December of the year prior to the increase taking effect. Promptly upon the Retail Prices Index and Average Earnings Index data being publicly available for each month of the proceeding 12-month period, the Supplier shall affirm or adjust in writing the price increase as previously notified and to the extent an adjustment is made this adjustment shall be back-dated to apply from 1 January and any over- payments or under-payments shall be addressed in the next invoice; and

(ii)

any increase in costs to the Supplier due to increases in lease and property costs relating to any premises or site used by the Supplier in the performance of the Operational Services; and

(b)

notwithstanding Clause 22, upon not less than 30 days’ prior written notice in line with any increase in costs to the Supplier in performing the Operational Services as a result of any change to Applicable Laws.

7.5

If the Customer receives an invoice which it reasonably believes includes a sum which is not valid and properly due:

(a)

the Customer shall notify the Supplier in writing as soon as reasonably practicable and in any event within 7 days of receipt of invoice;

(b)

the Customer's failure to pay the disputed Charges shall not be deemed to be a breach of this agreement;

(c)

the Customer shall pay the balance of the invoice which is not in dispute by the Due Date;

(d)

to the extent that the Customer is obliged, following resolution of the dispute, to pay an amount, then the Supplier may charge interest at the current statutory interest rate from the original Due Date until the date of payment;

(e)

to the extent that the Supplier is obliged to refund an amount to the Customer, interest shall be added to that amount at the current statutory interest rate; and

(f)

once the dispute has been resolved, where either party is required to make a balancing payment, it shall do so within 7 Working Days and, where the Supplier is required to issue a credit note, it shall do so within 30 Working Days.

7.6

The Supplier shall maintain complete and accurate records of, and supporting documentation for, all amounts which may be chargeable to the Customer pursuant to this agreement. Such records shall be retained for inspection by the Customer for 2 years from the end of the Contract Year to which the records relate.

7.7

Except as otherwise provided, the parties shall each bear their own costs and expenses incurred in respect of compliance with their obligations under this agreement.

7.8

All sums payable by either party under this agreement shall be paid in sterling.

7.9

The Charges are stated exclusive of VAT, which shall be added at the prevailing rate as applicable and paid by the Customer following delivery of a valid VAT invoice.

7.10

Neither party shall retain, deduct or set off any sums owed to it by the other party which have fallen due and payable against any sums due to the other party under this agreement or any other agreement or arrangement.

Governance

The parties agree to manage this agreement through the governance structure more specifically detailed in Schedule 6.

Supply chain

9.1

The Supplier may sub-contract (in whole or in part) any part of the Services and, upon written request, shall inform the customer of the identity of any sub-contractors and the nature of any obligations sub-contracted.

9.2

Despite its right to sub-contract pursuant to this clause 9, the Supplier shall remain responsible for all acts and omissions of its sub-contractors and the acts and omissions of those employed or engaged by the sub-contractors as if they were its own. An obligation on the Supplier to do, or to refrain from doing, any act or thing shall include an obligation on the Supplier to procure that its employees, staff and agents and sub-contractors' employees, staff and agents also do, or refrain from doing, such act or thing.

Audits

10.1

The Supplier shall allow the Customer and its auditors to access any of the relevant Supplier's premises, personnel and relevant records as may be reasonably required but no more than twice per Contract Year (save for any audits undertaken in respect of a suspected fraud) in order to:

(a)

fulfil any legally enforceable request by any Regulatory Body; or

(b)

undertake verifications of the accuracy of the Charges or identify suspected fraud; or

(c)

undertake verification that the Services are being provided and all obligations of the Supplier are being performed in accordance with this agreement.

10.2

The Customer shall ensure that the conduct of each audit does not unreasonably disrupt the Supplier or delay the provision of the Services by the Supplier and that, where possible, individual audits are co-ordinated with each other to minimise any disruption.

10.3

Subject to the Customer's obligations of confidentiality, the Supplier shall provide the Customer (and its auditors and other advisers) with all reasonable co-operation, access and assistance in relation to each audit.

10.4

The Customer shall provide at least 10 Working Days' notice of its intention to conduct an audit unless such audit is conducted in respect of a suspected fraud, in which event no notice shall be required.

10.5

The parties shall bear their own costs and expenses incurred in respect of compliance with their obligations under this clause 10.

10.6

If an audit identifies that:

(a)

the Customer has overpaid any Charges, the Supplier shall pay to the Customer the amount overpaid within 30 days from the date of receipt of an invoice or notice to do so; and

(b)

the Customer has underpaid any Charges, the Customer shall pay to the Supplier the amount of the under-payment within 30 days from the date of receipt of an invoice for such amount.

Change control

Any requirement for a Change shall be subject to the Change Control Procedure.

Key Personnel

12.1

Each party shall appoint the persons named as such in Schedule 5 as the individuals who shall be responsible for the matters allocated to such Key Personnel. The Key Personnel shall be those people who are identified by each party as being key to the success of the operation of the Services and who shall be retained as far as reasonably practicable on the operation of the Services for such time as a person is required to perform the role which has been allocated to the applicable Key Personnel. The Key Personnel shall have the authority to act on behalf of their respective party on the matters for which they are expressed to be responsible.

12.2

The Supplier shall inform the Customer of the identity and background of any replacements for any of the Key Personnel as soon as a suitable replacement has been identified.

12.3

Each party shall ensure that the role of each of its Key Personnel is not vacant (in terms of a permanent representative) for more than 120 Working Days. Any replacement shall be as, or more, qualified and experienced as the previous incumbent and fully competent to carry out the tasks assigned to the Key Personnel whom he or she has replaced. A temporary replacement shall be identified with immediate effect from the Supplier or the Customer becoming aware of the role becoming vacant.

Staff

13.1

Both parties shall comply with the provisions of Schedule 9.

Non-solicitation

14.1

Except in respect of any transfer of staff pursuant to Schedule 9, neither party shall (except with the prior written consent of the other party) directly or indirectly solicit or entice away (or attempt to solicit or entice away) from the employment of the other party any person employed or engaged by such other party or (in the case of the Supplier by an Associated Company) in the provision or receipt of the Services at any time during the Term or for a further period of 12 months after the termination of this agreement other than by means of a national advertising campaign open to all comers and not specifically targeted at any of the staff of the other party.

14.2

If either the Supplier or the Customer commits any breach of clause 14.1, the breaching party shall, on demand, pay to the claiming party a sum equal to one year's basic salary or the annual fee that was payable by the claiming party to that employee, worker or independent contractor plus the recruitment costs incurred by the claiming party in replacing such person.

IPRs

15.1

Subject to clause 16:

(a)

the Customer shall not acquire any right, title or interest in or to the IPRs of the Supplier or its licensors, including:

(i)

the IPRs relating to the Supplier's Software;

(ii)

the IPRs relating to the Third Party Software licensed to the Supplier; and

(iii)

the IPRs relating to the Supplier's documentation, processes and procedures;

(iv)

the IPRs relating to the Supplier's know-how; and

(v)

the Supplier's Background IPRs.

(b)

the Supplier shall not acquire any right, title or interest in or to the IPRs of the Customer or its licensors, including:

(i)

the IPRs relating to the Customer's Software;

(ii)

the IPRs relating to the Third Party software licensed to the Customer;

(iii)

the IPRs relating to the Customer's documentation, processes and procedures;

(iv)

the IPRs relating to the Customer's know-how;

(v)

the IPRs relating to the Customer's Data;

(vi)

the IPRs relating to the Database; and

(vii)

the Customer's Background IPRs.

15.2

Where either party acquires, by operation of law, title to IPRs of the other referred to in clause 15.1, and this acquisition is inconsistent with the allocation of title set out in that clause 15.1, such IPRs shall be assigned by it to the other party on the request of the other party, whenever that request is made.

Grant of licences

16.1

The Customer hereby grants to the Supplier a royalty-free, non-exclusive, non-transferable licence during the Term to use:

(a)

the Customer's names, logos and trade marks;

(b)

the Customer's documentation, processes and procedures; and

(c)

the Customer's Data and the Database,

including the right to grant sub-licences to its sub-contractors, provided that any relevant sub-contractor has entered into a confidentiality undertaking with the Supplier.

16.2

The licence granted in clause 16.1 is granted solely to the extent necessary for performing the Services. The Supplier shall not use the licensed materials for any other purpose.

16.3

In the event of the termination or expiry of this agreement, the licences referred to in clause 16.1 shall terminate automatically and the Supplier shall deliver to the Customer all material licensed to the Supplier pursuant to clause 16.1 in its possession or control.

IPR INDEMNITY

17.1

The Customer shall, at all times during and after the Term, indemnify the Supplier and keep the Supplier indemnified against all losses, damages, costs or expenses and other liabilities (including legal fees) incurred by, awarded against or agreed to be paid by the Supplier arising from any IPR Claim except to the extent that such liabilities have resulted directly from the Supplier’s failure to properly observe its obligations under clause 17.2.

17.2

The Supplier shall:

(a)

notify the Customer in writing of any IPR Claim;

(b)

allow the Customer to conduct all negotiations and proceedings and provide the Customer with such reasonable assistance as is required by the Customer, each at the Customer's cost, regarding the IPR Claim; and

(c)

not, without prior consultation with the Customer, make any admission relating to the IPR Claim or attempt to settle it, provided that the Customer considers and defends any IPR Claim diligently, using competent counsel and in such a way as not to bring the reputation of the Supplier into disrepute.

Data protection

18.1

In so far as the Supplier processes any Personal Data on behalf of the Customer, the Supplier shall:

(a)

process the Personal Data only on behalf of the Customer (or, if so directed by the Customer, other members of the Customer's Group), only for the purposes of performing this agreement or otherwise only in accordance with instructions contained in this agreement or received from the Customer from time to time;

(b)

not otherwise modify, amend or alter the contents of the Personal Data;

(c)

at all times comply with the provisions of the Seventh Data Protection Principle set out in Schedule 1 of the Data Protection Act 1998 and implement appropriate technical and organisational measures to protect the Personal Data against unauthorised or unlawful processing and against accidental loss, destruction, damage, alteration or disclosure;

(d)

take reasonable steps to ensure the reliability of any of the Supplier's Personnel who have access to the Personal Data;

(e)

notify the Customer (within five Working Days) if it receives:

(i)

a request from a Data Subject to have access to that person's Personal Data; or

(ii)

a complaint or request relating to the Customer's obligations under the Data Protection Legislation; or

(iii)

any other communication relating directly or indirectly to the processing of any Personal Data in connection with this agreement;

(f)

provide the Customer with co-operation and assistance in relation to any complaint or request made in respect of any Personal Data, including by:

(i)

providing the Customer with full details of the complaint or request;

(ii)

complying with a data access request within the relevant timescales set out in the Data Protection Legislation;

(iii)

providing the Customer with any Personal Data it holds in relation to a Data Subject making a complaint or request within the timescales required by the Customer; and

(iv)

providing the Customer with any information reasonably requested by the Customer; and

(g)

not transfer Personal Data outside the European Economic Area without the prior written consent of the Customer and, where the Customer consents to such transfer, to comply with:

(i)

the obligations of a Data Controller under the Eighth Data Protection Principle set out in Schedule 1 of the Data Protection Act 1998 by providing an adequate level of protection to any Personal Data that is transferred; and

(ii)

any reasonable instructions notified to it by the Customer.

18.2

The Customer acknowledges that the Supplier is reliant on the Customer alone for direction as to the extent the Supplier is entitled to use and process the Personal Data. Consequently, the Supplier shall be entitled to relief from liability in circumstances where a Data Subject makes a claim or complaint with regards to the Supplier's actions to the extent that such actions directly result from instructions received from the Customer or the Supplier otherwise acting in accordance with the terms of this agreement.

Confidentiality

19.1

Except to the extent set out in this clause 19, or where disclosure is expressly permitted elsewhere in this agreement, each party shall:

(a)

treat the other party's Confidential Information as confidential; and

(b)

not disclose the other party's Confidential Information to any other person without the owner's prior written consent.

19.2

Clause 19.1 shall not apply to the extent that:

(a)

such information was in the possession of the party making the disclosure, without obligation of confidentiality, prior to its disclosure; or

(b)

such information was obtained from a third party without an obligation of confidentiality; or

(c)

such information was already in the public domain at the time of disclosure otherwise than through a breach of this agreement; or

(d)

such information was independently developed without access to the other party's Confidential Information.

19.3

A party may only disclose the Confidential Information of the other party to those of its Authorised Recipients who are involved in the provision or receipt of the Services and who need to know the information provided that it informs those Authorised Recipients of the Confidential nature of the Confidential Information before disclosure and remains liable for the Authorised Recipients' compliance with the confidentiality obligations set out in this agreement.

19.4

A party shall not use any of the Confidential Information of the other party received otherwise than for the purposes of this agreement.

19.5

Subject to Clause 37.1, a party may disclose the Confidential Information of the other party to the extent such Confidential Information is required to be disclosed by law, by any Regulatory Body or by a court or other authority of competent jurisdiction.

19.6

Nothing in this clause 19 shall prevent either party from using any techniques, ideas or know-how gained during the performance of this agreement in the course of its normal business to the extent that this use does not result in a disclosure of the other party's Confidential Information or an infringement of IPRs.

19.7

On the Termination Date, each party shall:

(a)

return to the other party all documents and materials (and any copies) containing the other party's Confidential Information;

(b)

erase all the other party's Confidential Information from computer and communications systems and devices used by it, including such systems and data storage services provided by third parties (to the extent technically practicable),

provided that a recipient party may retain documents and materials containing the other party's Confidential Information to the extent required by law or any applicable Regulatory Body or for internal audit and record keeping purposes. The provisions of this clause shall continue to apply to any such documents and materials retained by a recipient party.

19.8

Except as expressly stated in this agreement, no party makes any express or implied warranty or representation concerning its Confidential Information.

Security requirements

20.1

The Supplier shall comply with the Security Policy.

20.2

Each party shall advise the other as soon as it becomes aware of any breach, or potential breach, of the Security Policy or any other breach, or potential breach, of security which may adversely affect the Services.

Warranties and representations

21.1

Each party warrants, represents and undertakes that:

(a)

it has full capacity and authority to enter into and to perform this agreement;

(b)

this agreement is executed by a duly authorised representative of that party;

(c)

there are no actions, suits or proceedings or regulatory investigations pending or, to that party's knowledge, threatened against or affecting that party before any court or administrative body or arbitration tribunal that might affect the ability of that party to meet and carry out its obligations under this agreement;

(d)

once duly executed, this agreement will constitute its legal, valid and binding obligations;

(e)

its Representative shall be authorised to carry out the matters for which they are expressed to be responsible in Schedule 5.

21.2

Both parties agree that the terms and warranties set out in this agreement are in lieu of and exclude all other terms, conditions or warranties implied by statute, law or otherwise as to the merchantability, satisfactory quality of fitness for any particular purpose of the Services to the fullest extent permitted by law.

Compliance with Applicable Laws

22.1

The Supplier shall at all times carry out and provide the Services in compliance with all Applicable Laws. The Supplier shall maintain such records as are necessary pursuant to such Applicable Laws and shall promptly on request make them available for inspection by any Regulatory Body that is entitled to inspect them and by the Customer (or its authorised representative).

22.2

The Supplier shall consult with the Customer (and wherever possible agree with the Customer) on the manner, form and timing of changes it proposes to make to meet any changes in Applicable Laws where they would impact the Services or Service Charges but subject to Clause 22.4 shall not be required to obtain the Customer's prior written agreement to implement any change required to ensure that the Services are performed in compliance with any changes to Applicable Laws.

22.3

Any change which impacts any of the Services including the Service Levels shall be documented in accordance with the Change Control Procedure.

22.4

Without prejudice to the rest of this clause 22, the Supplier shall use reasonable endeavours to minimise any disruption caused by any changes in Applicable Laws introduced pursuant to this clause 22.

Anti-bribery

23.1

The Supplier shall :

(a)

comply with all applicable laws, statutes, regulations relating to anti-bribery and anti-corruption, including the Bribery Act 2010;

(b)

promptly report to the Customer any request or demand for any undue financial or other advantage of any kind received by the Supplier in connection with the performance of this agreement;

(c)

have and shall maintain in place throughout the term of this agreement its own policies and procedures, including adequate procedures under the Bribery Act 2010, to ensure compliance with the Bribery Act 2010 and will enforce them where appropriate.

Force majeure

24.1

Subject to the remaining provisions of this clause 24, neither party to this agreement shall in any circumstances be liable to the other for any delay or non-performance of its obligations under this agreement to the extent that such non-performance is due to a Force Majeure Event.

24.2

In the event that either party is delayed or prevented from performing its obligations under this agreement by a Force Majeure Event, such party shall:

(a)

give notice in writing of such delay or prevention to the other party as soon as reasonably possible, stating the commencement date and extent of such delay or prevention, the cause thereof and its estimated duration;

(b)

use reasonable endeavours to mitigate the effects of such delay or prevention on the performance of its obligations under this agreement; and

(c)

resume performance of its obligations as soon as reasonably possible after the removal of the cause of the delay or prevention.

24.3

As soon as practicable following the affected party's notification, the parties shall consult with each other in good faith and use all reasonable endeavours to agree appropriate terms to mitigate the effects of the Force Majeure Event and to facilitate the continued performance of this agreement.

24.4

The affected party shall notify the other party as soon as practicable after the Force Majeure Event ceases or no longer causes the affected party to be unable to comply with its obligations under this agreement. Following such notification, this agreement shall continue to be performed on the terms existing immediately prior to the occurrence of the Force Majeure Event unless agreed otherwise by the parties.

24.5

The Customer may, during the continuance of any Force Majeure Event, terminate this agreement in accordance with clause 27.2 in the circumstances set out in that clause.

Limitations on liability

25.1

Neither party limits its liability for:

(a)

death or personal injury caused by its negligence, or that of its employees, agents or sub-contractors; or

(b)

fraud by it or its employees; or

(c)

any other act or omission, liability for which may not be limited under Applicable Law; or

(d)

a deliberate breach of this agreement.

25.2

Subject to clause 25.1, the Supplier's total aggregate liability:

(a)

in respect of Services Credits, is limited, in each Contract Year, to 20% of the Operational Service Charges that are payable by the Customer in the applicable Contract Year; and

(b)

in respect of all claims, losses or damages in aggregate (including Service Credits) whether arising from tort (including negligence), breach of contract or otherwise under or in connection with this agreement, shall in no event exceed £3,000,000 (three million pounds sterling) in each Contract Year.

25.3

Subject to clause 25.1 , neither party shall in any circumstances be liable to the other party for:

(a)

any indirect, special or consequential loss or damage; or

(b)

(whether direct or indirect) any loss of profits, business opportunities, sales, contracts, revenue, anticipated savings or loss or damage to goodwill.

25.4

Subject to the provisions of clause 27.1, the Service Credits shall be the exclusive financial remedy for the Customer for each Service Failure for which a Service Credit has been set.

25.5

Nothing in this agreement shall be taken as in any way reducing or affecting a general duty to mitigate loss suffered by a party.

RISK AND Insurance

26.1

The Supplier shall maintain in force at least the following insurance policies with reputable insurance companies to cover its relevant potential liabilities in connection with this agreement:

(a)

a public liability insurance policy with a limit of at least £5,000,000 (five million pounds sterling) per claim; and

(b)

employer's liability insurance with a limit of at least £5,000,000 (five million pounds sterling) for claims arising from a single event or series of related events in a single calendar year.

26.2

On the written request of the Customer, the Supplier shall provide the Customer with a copy of each insurance policy. On the renewal of each policy, the Supplier upon request shall promptly send a copy of the receipt of the premium paid by the Supplier to the Customer.

26.3

Without prejudice to the monthly allowable damage provision at Schedule 2, risk of loss, theft or damage to goods of the Customer (or the Customer’s suppliers) shall transfer from the Customer to the Supplier upon completion of delivery at the Supplier's premises (or those of a third party appointed by the Supplier) and shall remain with the Supplier until despatch from the Supplier's premises (or those of a third party appointed by the Supplier) and the Supplier shall maintain and effect appropriate insurance for such goods whilst risk of loss, theft or damage resides with the Supplier.

Termination rights

27.1

Where the Customer wishes to terminate this agreement due to the Supplier's Default:

(a)

subject to clause 28, the Customer may terminate this agreement, immediately (subject to any specified Termination Period in the Termination Notice) by giving written notice to the Supplier if one or more of the circumstances set out in clause 27.1(d) occurs or exists;

(b)

where the Customer is terminating this agreement for a material Default, it may rely on a single material Default or on a number of Defaults or repeated Defaults that, taken together, constitute a material Default;

(c)

the Customer shall also inform the Supplier in the Termination Notice of the duration of the Termination Period during which it requires the Supplier to continue to provide, and/or procure the provision of, some or all of the Services. The Customer may extend or shorten such period by giving the Supplier at least 15 Working Days' notice subject to the maximum Termination Period of 3 months;

(d)

the events which shall entitle the Customer to issue a Termination Notice are as follows:

(i)

the Supplier is in material Default of this agreement and such Material Default is not remedied in accordance with the Remediation Plan Process; or

(ii)

the Supplier is in material Default of this agreement, which is irremediable; or

(iii)

the parties fail to agree the Remediation Plan in accordance with the Remediation Plan Process; or

(iv)

the Supplier fails to materially implement or materially complete the Remediation Plan in accordance with the Remediation Plan Process; or

(v)

an Insolvency Event affecting the Supplier occurs; or

(vi)

there is a change of Control of the Supplier.

27.2

The Customer may, during the continuance of any Force Majeure Event, terminate this agreement by written notice to the Supplier if a Force Majeure Event occurs that affects all or a substantial part of the Services and which continues for more than 20 Working Days.

27.3

The Supplier may terminate this agreement by giving not less than 9 months' prior written notice, such notice may only be served by the Supplier on or after (but not before) the expiration of a period of 9 Months from the Effective Date, to terminate in the event that in any consecutive twelve month period (such consecutive twelve month period may include time prior to the Effective Date) the aggregated volumes of picks undertaken by the Supplier at the Accrington site is less than 4.5 million.

Any notice required under this clause must be given before the expiry of 45 days following the end of the calendar month in which the trailing 12 month aggregate picks fell below 4.5 million at the Accrington site.

27.4

The Supplier may terminate this agreement immediately by giving the Customer written notice in the event that:

(a)

the Customer fails to pay an undisputed sum due to the Supplier under this agreement which, either singly or in aggregate, exceeds 50% of the Charges due and payable in the previous month and such failure continues for 30 days from receipt by the Customer of notice of non-payment from the Supplier;

(b)

an Insolvency Event affecting the Customer occurs; or

(c)

there is a change of Control of the Customer.

Remediation Plan Process

28.1

If the Supplier commits a material Default and the material Default is capable of remedy in all material respects other than time of performance, the Customer may not terminate this agreement pursuant to clause 27.1 without first operating the Remediation Plan Process. If the Supplier commits such a Default, the Customer shall give a Remediation Notice to the Supplier which shall specify the Default in outline and the actions the Supplier needs to take with respect to remedying the Default.

28.2

The Customer shall be under no obligation to initiate the Remediation Plan Process if it issues a Termination Notice pursuant to clause 27.1(a) in the circumstances set out in Clause 27.1(d)(ii),27.1(d)(v),27.1(d)(vi).

28.3

Within 10 Working Days of receipt of a Remediation Notice, the Supplier shall either:

(a)

submit a draft Remediation Plan, even if it disputes that it is responsible for the matters which are the subject of the Remediation Notice; or

(b)

inform the Customer that it does not intend to submit a Remediation Plan, in which event the Customer shall be entitled to serve a Termination Notice.

28.4

Acting reasonably and in good faith at all times, the Customer shall either approve the draft Remediation Plan within 5 Working Days of its receipt pursuant to clause 28.3, or it shall inform the Supplier why it cannot accept the draft Remediation Plan. In such circumstances, the Supplier shall address all such concerns in a revised Remediation Plan, which it shall submit to the Customer within 5 Working Days of its receipt of the Customer's comments. If no such notice is given, the Supplier's draft Remediation Plan shall be deemed to be agreed.

28.5

Once agreed, the Supplier shall immediately start work on the actions set out in the Remediation Plan.

28.6

If, despite the measures taken under clause 28.4, a Remediation Plan cannot be agreed within 5 Working Days then the Customer may elect to end the Remediation Plan Process and serve a Termination Notice.

28.7

If a Remediation Plan is agreed between the parties, but the Supplier fails to materially implement or materially complete the Remediation Plan by the required remedial plan completion date, the Customer may:

(a)

terminate this agreement by serving a Termination Notice; or

(b)

give the Supplier a further opportunity to resume full implementation of the Remediation Plan; or

(c)

escalate any issues arising out of the failure to implement the Remediation Plan in accordance with the Dispute Resolution Procedure.

28.8

If, despite the measures taken under clause 28.7, the Supplier fails to materially implement the Remediation Plan in accordance with its terms, the Customer may elect to end the Remediation Plan Process and refer the matter for resolution by the Dispute Resolution Procedure or serve a Termination Notice.

General consequences of expiry and termination

29.1

The Supplier shall continue to provide and/or procure the provision of the Operational Services to the required Service Levels, and shall ensure that there is no degradation in the standards of the Operational Services until the Termination Date.

29.2

Both parties shall comply with their obligations set out in Schedule 9.

29.3

On the Termination Date, the Supplier shall:

(a)

repay to the Customer any amount which it may have been paid in advance in respect of Services not provided or procured by the Supplier as at the Termination Date; and

(b)

provide access, during normal working hours, to the Customer and/or the Replacement Supplier for up to 6 months after the expiry or termination of this agreement to such information relating to the Services as remains in the possession or control of the Supplier.

29.4

The following termination fee shall be payable by the Customer to the Supplier immediately upon the Termination Date in the event that the Customer serves a notice pursuant to clause 2.1 to terminate this agreement with a Termination Date:

(i)

on or before the expiry of twenty four (24) Months from the Effective Date, £750,000 (seven hundred and fifty thousand pounds); or

(ii)

after the expiry of twenty four (24) Months from the Effective Date but on or before the expiry of thirty six (36) Months from the Effective Date, £500,000 (five hundred thousand pounds).

29.5

The provisions of clause 1, clause 5.3, clause 7.3, clause 7.6, clause 7.9, clause 7.10, clause 10, clause 14, clause 15, clause 16.3, clause 17.1, clause 18, clause 19, clause 21.2, clause 23, clause 25, clause 29, clause 30, clause 31, clause 35, clause 37, clause 39, clause 40, clause 41, clause 43, clause 44, clause 46 and the provisions of Schedule 4, Schedule 8 and Schedule 9 shall survive the termination for any reason of this agreement.

Exit and service transfer

30.1

In the event of the termination of this agreement by the Customer pursuant to clause 27.1 the Supplier shall provide the Transitional Assistance Services to the Customer in accordance with the requirements of the Exit Plan, both parties shall comply with their respective obligations set out in Schedule 8 and the Supplier shall co-operate with the Customer and/or the Replacement Supplier to the extent reasonably required to facilitate the smooth migration of the Operational Services from the Supplier to the Customer and/or the Replacement Supplier.

30.2

The Customer shall pay the Transitional Services Charges in respect of the provision of the Transitional Assistance Services.

30.3

The Supplier shall, within six months after the Effective Date, produce an Exit Plan based on the principles set out in Schedule 8 for the orderly transition of the Services from the Supplier to the Customer and/or any Replacement Supplier in the event of any termination or expiry of this agreement by the Customer pursuant to clause 27.1. Within 30 Working Days after the submission of that Exit Plan, the parties shall meet and use all reasonable endeavours to agree the contents of that Exit Plan, based on the principles set out in Schedule 8. If the parties are unable to agree the contents of the Exit Plan within that 30 Working Day period, the principles set out in Schedule 8 shall apply and either party may refer the Dispute for resolution in accordance with the Dispute Resolution Procedure.

30.4

The Supplier shall update the Exit Plan as relevant during the Term to reflect changes in the Services and shall keep the Exit Plan under continuous review. Following each update, the Supplier shall submit the revised Exit Plan to the Customer for review. Within 30 Working Days after the submission of the revised Exit Plan, the parties shall meet and use all reasonable endeavours to agree the contents of the revised Exit Plan, based on the principles set out in Schedule 8 and the changes that have occurred in the Services since the Exit Plan was last agreed. If the parties are unable to agree the contents of the revised Exit Plan within that 30 Working Day period, the previous version shall continue to apply and either party may refer the Dispute for resolution in accordance with the Dispute Resolution Procedure.

30.5

Until the agreement of the Exit Plan, the Supplier shall provide the Transitional Assistance Services in accordance with the principles set out in Schedule 8 and the last-approved version of the Exit Plan (insofar as this still applies) to the Customer in good faith. The Supplier shall ensure that it is able to implement the Exit Plan at any time.

30.6

In addition, within 30 days after service of a Termination Notice by the Customer pursuant to clause 27.1 , the Supplier shall update the Exit Plan into a final form that could be implemented immediately and in doing so, provide as much detail as is appropriate given the nature of the termination or expiry and the timing of termination, so that such Exit Plan can be submitted to the Customer for review and approval. The parties shall meet and use their respective reasonable endeavours to agree the contents of such Exit Plan based on the principles set out in Schedule 8. Until the agreement of the updated Exit Plan, the Supplier shall provide the Transitional Assistance Services in accordance with the last-approved version of the Exit Plan (insofar as this still applies) to the Customer in good faith.

Dispute Resolution Procedure

31.1

The parties shall attempt, in good faith, to resolve any Dispute promptly by negotiation which shall be conducted as follows:

(a)

the Dispute shall be referred, by either party, first to the Operational Services Managers of each of the parties for resolution;

(b)

if the Dispute cannot be resolved by the Operational Services Managers of the parties within 14 days after the Dispute has been referred to them, either party may give notice to the other party in writing (Dispute Notice) that a Dispute has arisen; and

(c)

within seven days of the date of the Dispute Notice, each party shall refer the Dispute to the Customer's Representative and the Supplier's Representative for resolution.

31.2

If the Customer's Representative and the Supplier's Representative are unable, or fail, to resolve the Dispute within 21 days of the date of the Dispute Notice, or within 14 days of the reference to the Customer's Representative and the Supplier's Representative pursuant to clause 31.1(c), the parties may attempt to resolve the Dispute by mediation in accordance with clause 31.3.

31.3

If, within 30 days of the Dispute Notice, the parties have failed to agree on a resolution, either party may refer any Dispute for mediation pursuant to this clause 31.3, but neither shall be a condition precedent to the commencement of any court proceedings, and either party may issue and commence court proceedings prior to or contemporaneously with the commencement of mediation. The following provisions shall apply to any such reference to mediation:

(a)

the reference shall be a reference under the Model Mediation Procedure (MMP) of the Centre of Dispute Resolution (CEDR) for the time being in force;

(b)

both parties shall, immediately on such referral, co-operate fully, promptly and in good faith with CEDR and the mediator and shall do all such acts and sign all such documents as CEDR or the mediator may reasonably require to give effect to such mediation, including an agreement in, or substantially in, the form of CEDR's Model Mediation Agreement for the time being in force; and

(c)

to the extent not provided for by such agreement of the MMP:

(i)

the mediation shall commence by either party serving on the other written notice setting out, in summary form, the issues in dispute and calling on that other party to agree the appointment of a mediator; and

(ii)

the mediation shall be conducted by a sole mediator (which shall not exclude the presence of a pupil mediator) agreed between the parties or, in default of agreement, appointed by CEDR.

31.4

If and to the extent that the parties do not resolve any Dispute or any issue in the course of any mediation, either party may commence or continue court proceedings in respect of such unresolved Dispute or issue.

31.5

Nothing in this clause 31 shall prevent either party from instigating legal proceedings where an order for an injunction, disclosure or legal precedent is required.

expert determination

Where pursuant to this agreement, a matter is to be referred to an Expert for determination, the following provisions shall apply to such Expert’s determination:

(a)

the Expert shall be a firm of consultants or other qualified professionals having a reputation as experts in the relevant field appointed in each instance by the agreement of the parties or, failing agreement, by the Institute of Chartered Accountants in England and Wales;

(b)

the decision of the Expert shall be final and binding upon the parties and shall not be capable of challenge, whether by mediation, arbitration or otherwise;

(c)

each party shall be entitled to make written submissions to the Expert and if a party makes any submission it shall also provide a copy to the other party and that other party shall have the right to comment on such submission. The parties shall make available to the Expert all books and records relating to the issues in dispute and shall render to the Expert any assistance requested of the parties;

(d)

the Expert shall act as an expert and not an arbitrator. The terms of engagement of the Expert shall include an obligation on the part of the Expert to establish a timetable for the making of submissions and replies and to notify the parties in writing of his decision within 20 Business Days from the date on which the Expert has been selected (or such other period as the parties may agree or as set forth herein);

(e)

the costs of the Expert shall be shared between the parties in such proportion as the Expert shall determine.

Assignment and novation

33.1

Neither party shall assign, novate or otherwise dispose of any or all of its rights and obligations under this agreement without the prior written consent of the other party.

Variations

34.1

No variation of this agreement shall be effective unless it is in writing and signed by the parties (or their authorised representatives).

Waiver

35.1

A waiver of any right or remedy under this agreement or by law is only effective if given in writing and shall not be deemed a waiver of any subsequent breach or default.

35.2

A failure or delay by a party to exercise any right or remedy provided under this agreement or by law shall not constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict any further exercise of that or any other right or remedy. No single or partial exercise of any right or remedy provided under this agreement or by law shall prevent or restrict the further exercise of that or any other right or remedy.

No partnership or agency

Nothing in this agreement is intended to, or shall be deemed to, establish any partnership or joint venture between any of the parties, constitute any party the agent of another party, or authorise any party to make or enter into any commitments for or on behalf of any other party.

Announcements

37.1

No party shall make, or permit any person to make, any public announcement concerning this agreement without the prior written consent of the other parties (such consent not to be unreasonably withheld or delayed), except where such public announcement is required by law, any governmental or regulatory authority (including, without limitation, any relevant securities exchange), any court or other authority of competent jurisdiction the prior written consent of the other party shall not be required but the parties shall consult with the intention of agreeing a co-ordinated release of any such public announcement including with regard to content and timing.

37.2

Each party acknowledges to the other that nothing in this agreement, either expressly or by implication, constitutes an endorsement of any products or services of the other party (including the Services) and each party agrees not to conduct itself in such a way as to imply or express any such approval or endorsement.

Severance

If any provision or part-provision of this agreement is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part-provision shall be deemed deleted. Any modification to or deletion of a provision or part-provision under this clause shall not affect the validity and enforceability of the rest of this agreement.

Further assurance

Each party shall, and shall use all reasonable endeavours to procure that any necessary third party shall, execute and deliver such documents and perform such acts as may reasonably be required for the purpose of giving full effect to this agreement.

Entire agreement

40.1

This agreement constitutes the entire agreement between the parties and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter.

40.2

Each party agrees that it shall have no remedies in respect of any statement, representation, assurance or warranty (whether made innocently or negligently) that is not set out in this agreement. Each party agrees that it shall have no claim for innocent or negligent misrepresentation or negligent misstatement based on any statement in this agreement.

Third party rights

41.1

This agreement does not create, and shall not be construed as creating, any right under the Contracts (Rights of Third Parties) Act 1999 which is enforceable by any person who is not party to this agreement.

Notices

42.1

A notice given to a party under or in connection with this agreement shall be in writing and sent to the party at the address or to the email address given in this agreement or as otherwise notified in writing to the other party.

42.2

The following table sets out methods by which a notice may be sent and, if sent by that method, the corresponding deemed delivery date and time:

Delivery method		Deemed delivery date and time
Delivery by hand and marked for the attention of: - mark Ashcroft, for notices to the Supplier; - [XXXXX], for notices to the customer..		On signature of a delivery receipt or at the time the notice is left at the registered office address of the relevant party.
Pre-paid first class recorded delivery post or other next working day delivery service and marked for the attention of: - mark Ashcroft, for notices to the Supplier; - [XXXXX], for notices to the customer.		9.00 am on the second Working Day after posting to the registered office address of the relevant party or at the time recorded by the delivery service as being left at the registered office address of the relevant party.
email		at the time of transmission sent to for notices to the supplier and [email] for notices to the customer

42.3

This clause does not apply to the service of any proceedings or other documents in any legal action or, where applicable, any arbitration or other method of dispute resolution.

Governing law

This agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales.

Jurisdiction

Each party irrevocably agrees that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this agreement or its subject matter or formation (including non-contractual disputes or claims).

Counterparts

45.1

This agreement may be executed in any number of counterparts, each of which when executed shall constitute a duplicate original, but all the counterparts shall together constitute the one agreement.

45.2

Transmission of the executed signature page of a counterpart of this agreement by (a) fax or (b) e-mail (in PDF, JPEG or other agreed format) shall take effect as delivery of an executed counterpart of this agreement. If either method of delivery is adopted, without prejudice to the validity of the agreement thus made, each party shall provide the others with the original of such counterpart as soon as reasonably possible thereafter.

45.3

No counterpart shall be effective until each party has executed and delivered at least one counterpart.

Rights and remedies

Except as expressly provided in this agreement, the rights and remedies of a party provided under this agreement are in addition to, and not exclusive of, any of its rights or remedies provided by law.

THIS AGREEMENT has been entered into on the date stated at the beginning of it.

Schedule 1
Service Description

The nature of the Services to be provided by the Supplier are warehousing, fulfilment, and dispatch and return of goods for the Customer's distribution network in the UK and Ireland.

More specifically the Services are to handle the Customer's goods for resale from its UK and overseas product suppliers from the point of delivery to the Supplier at its warehouse facility to the point of dispatch including:

unloading of the goods from delivery vehicles

inspection of the external packaging to assess damage in transit and other agreed inbound quality control procedures

putting received goods into warehouse facilities

accepting orders from the Customer and dispatching orders picking and packing the Customer's orders for dispatch to its distributor network

personalising items as noted on the Customer's distributor orders

loading packed parcels into vehicles for the Customer's delivery provider

rotating and checking stock of the Customer's goods

maintaining a suitable environment for and security of the Customer's goods when they are at the Supplier's premises

reporting the status of stock, orders despatched, and incorrectly picked items weekly monthly performance reporting to demonstrate compliance with the Service Levels

attending contract management meetings in accordance with this Agreement

The Customer agrees the following limitations to the Services provided by the Supplier:

The following monthly maximum limits apply

Accrington		- 4,500 pallets
Chadderton		- 2,000 pallets
Chadderton (catalogues)		- 500 pallets
External		- 10,000 pallets

“External” includes stock held externally in Supplier ‘leased’ warehouses such as at The Bear, Widnes and Unit 3 Time Tech Park, Burnley and such other premises leased by the Supplier now or in the future.

Accrington site Collate SKUs : 1,900

Chadderton site Non Collate SKUs: 184

Sales Aids at Chadderton: 250

In the event that at any time during the Term the Customer has a requirement for the Services (or services of a similar nature) in excess of the maximum limits above it shall first notify the Supplier who shall be given the opportunity to propose terms to the Customer on which it can fulfil such excess requirements before the Customer approaches or appoints a any third party in connection with the excess requirements.

The average number of items per parcel will be between 18 and 26 during an Accounting Month. For the avoidance of doubt, any proposed changes to these averages shall be subject to the Change Control Procedure.

Personalisation of items is a service that the Supplier only provides to the Customer for jointly sold 'common' items. Where a Customer specific item would require personalisation the Customer must get the prior agreement of the Supplier to provide the personalisation service in advance of selling the item. The Supplier may provide personalisation services for Customer specific items when the Customer agrees to pay for any additional equipment and training the Supplier will have to incur and the cost of personalising the item. Any personalised items will not be merged with the main parcel.

The maximum number of 24-hour picks for the collate service is 65,000 per day. The Supplier can limit pro rata the number of next day orders it can accept during periods of high demand. In this event, the Supplier shall inform the Customer by 15.00 hrs the day before the order is due for dispatch.

The normal working hours of the Supplier are as indicated in the follows for the current year.

Each December the Supplier will submit to the Customer the normal working hours upon which its costings are based. These will remain similar year to year and are designed to match supply with demand throughout the year.

The design, production and printing of the Customer's print catalogues is not part of this Agreement.

The Supplier may refuse to render the Services in connection with any new SKU introduced from the Effective Date where the addition of that SKU would require the Supplier to incur additional time and expense either in order to prepare its facilities and equipment to accept the SKU and/or on an on-going basis as a result of the nature of the SKU. Should Supplier refuse to render such Services in connection with any new SKU introduced from the Effective Date, then Customer shall be entitled to have the Services provided herein with regard to such new SKUs satisfied by a third party of its choosing with no additional obligations being owed to Supplier with regard to such new SKUs.

Summary of IT Services

Subject to the Customer’s ongoing compliance with Findel IT Security and Acceptable Use policies, the Supplier shall provide as part of the Operational Services the IT services set out in Exhibit A below (which the Supplier acknowledges are all of the day-to-day IT services (excluding any development, project and upgrade works and/or services) that were performed by the Supplier on behalf of the Customer as part of the provision of the Operational Services immediately prior to 5 February 2015 at no additional charge to the Customer ("IT Services"). For the avoidance of doubt, any Services relating to IT services not expressly specified below shall be provided subject to agreed terms between the parties.

The Customer may notify the Supplier of Customer’s termination of all or any part of the services listed in the table IT Services provided that any such termination shall not effect or is likely to effect the Supplier’s ability to perform any part of the remaining Operational Services and such notice shall be made in writing by Customer and be no less than ninety (90) days before the termination shall be effective. Following the expiration of the notice period, the Customer shall be entitled to have any such services to which IT Services to which the notice was given automatically terminated subject to the IT department’s availability to carry out any change(s) . Should Customer give such written notice of termination or requested change, Supplier shall use reasonable efforts to assist and support Customer as reasonably required for Customer’s implementation and transition to a new provider.

Exhibit A

IT Service Heading

Inidicative
Costs

Activities Included in SLA

Example Activities excluded from SLA

Aptos Accounting recharge

£3.2k

1. Existing Server Hardware or Virtual Machine & Data Centre hosting (including all existing environmental controls)

2. Hardware break/fix maintenance of all associated system components to current SLA’s

3. Data Back-up, Recovery, IT Disaster Recovery on existing cycles

4. Ongoing ‘right to use’ licence subscriptions at current version numbers

5. General System housekeeping including

a. Operating System Patch Management

b. Application Patch Management

c. Database administration

6. Support of existing network connectivity

7. Support of existing desktop and terminal services access

8. Support of existing Remote access

9. Minor modifications (less than 1 day FTE)

1. Capacity requirement increases

2. Implementation of new features / functionality

3. Major modifications including

a. Operating system version upgrades

b. Application version upgrades either driven by the supplier or requested by Kleeneze

c. Hardware upgrades associated with 1a & 1b

4. Changes driven by UK Law or legislation

Warehouse Management System (IWACS) recharge

£7.8k

1. Existing Server Hardware or Virtual Machine & Data Centre hosting (including all existing environmental controls)

2. Hardware break/fix maintenance of all associated system components to current SLA’s

3. Data Back-up, Recovery, IT Disaster Recovery on existing cycles

4. Ongoing ‘right to use’ licence subscriptions at current version numbers

5. General System housekeeping including

a. Operating System Patch Management

1. Capacity requirement increases

2. Implementation of new features / functionality

3. Major modifications including

a. Operating system version upgrades

b. Application version upgrades either driven by the supplier or requested by Kleeneze

c. Hardware upgrades associated with 1a & 1b

4. Changes driven by UK Law or legislation

		b. Application Patch Management c. Database administration 6. Support of existing network connectivity 7. Support of existing desktops, terminals, scanners, label printers. 8. Support of existing Remote access 9. Minor modifications (less than 1 day FTE)
Web Domain Names	£4.4k	1. Management and renewal of all existing domain names 2. Domain Name Services Management (including web & mail records) to enable use of existing domain names	1. Acquisition and management of any new domain names
Infrastructure & Software charges	£25.7k	1. Ongoing supply, support and management of all Kleeneze infrastructure software, services, hardware maintenance support, connectivity and security at existing levels	1. Capacity requirement increases 2. Implementation of new features / functionality requested by Kleeneze 3. Major modifications including a. Operating system version upgrades b. Application version upgrades either driven by the supplier or requested by Kleeneze c. Hardware upgrades associated with 1a & 1b 4. Changes driven by UK Law or legislation
Office 365 Subscriptions	£35k	1. Ongoing supply, support and management of existing Office 365 subscriptions until contract end in June 2016	1. Increases in capacity / volumes required by Kleeneze 2. Existing Microsoft agreement terminates in June 2016 and will be subject to renegotiation with Microsoft at prevailing rates
IT Support Staff Annual recharge (estimate)	£17.3k	1. All EGL & Group IT staff day to day operational support at existing levels	1. Any increases above 5% of existing support brought about by Kleeneze business changes
IT Consumables	£5.1k	1. Supply of all IT consumables at existing levels (+/- 5%)	1. Any increases above 5% of existing consumable usage brought about by Kleeneze business changes or clear misuse

Network recharge (WAN, LAN, Internet, etc.)	£27.7k	1. Ongoing supply, support and maintenance of all network components and connectivity used by Kleeneze at current levels	1. Any increases above 5% of existing network usage brought about by Kleeneze business changes or clear misuse 2. Major office reorganisations resulting in 5 or more network point moves /re-cabling
Telephony (Avaya recharge)	£9.9k	1. Ongoing supply, support and maintenance of all office and contact centre telephony systems, components, handsets, headsets and connectivity used by Kleeneze at current levels	1. Beyond Economical Repairs to handsets and headsets not covered by maintenance or due to misuse 2. Increases to system capacity, handset and connections required by Kleeneze 3. Implementation of new functionality, features or systems required by Kleeneze 4. Major modifications including a. Operating system version upgrades b. Application version upgrades either driven by the supplier or requested by Kleeneze c. Hardware upgrades associated with 1a & 1b 5. Changes driven by UK Law or legislation
Telephony (Calls ~ estimate & Lines)	£11.4k	1. Ongoing supply, support and maintenance of all telephony lines components and connectivity used by Kleeneze at current levels	1. Any increases above 5% to existing call volumes / running costs brought about by Kleeneze business changes or clear misuse
Mobile phones (estimate)	£9.3k	1. Ongoing supply, support and maintenance of all existing mobile phone handsets, connections and services used by Kleeneze at current levels	1. Any increases above 5% to existing call volumes / running costs brought about by Kleeneze business changes or clear misuse 2. New or replacement handsets / mobile devices
IT Operations, M/F processing, Data Centre & Printing	£210k	Ongoing provision of IT Operational Services based upon current levels :- 1. Mail Order batch processing. (5 processes a week delivered to warehouse for 7am).	1. Any increases above 5% to existing print or processing volumes brought about by Kleeneze business changes or clear misuse 2. Any increases to the frequency of batch processing runs

Schedule 2
Service Levels

The Supplier agrees to fulfil the Customer's orders and load them onto the Customer's delivery partner(s) vehicles as follows:

Order preparation

The Customer must use the Supplier's prescribed format to send electronic orders to the Supplier, who will accept them for next day dispatch up to 15.15 hrs each Working Day ("Cut Off Time"). A schedule of working times and cut offs is in Schedule 1.

Orders that are received after the Cut Off Time will be excluded from the performance calculations for the following Working Day and will be deemed received on the next Working Day.

From time to time during peak demand an extension to the Cut Off Time might be offered at additional cost to the Customer. The Customer may accept this offer or reject it and maintain the standard Cut Off Time.

Where the Supplier suffers a service failure it may offer to extend the Cut Off Time when it is reasonably practicable to do so and will make no additional charge to the Customer for orders received up to the revised Cut Off Time.

The Supplier offers the following level of service for the picking and packing of Customer orders:

Within each Accounting Month 99.0 percent of non-personalised items in orders received by the Cut Off Time will be available for loading onto the Customer's approved distribution partner's vehicle by the end of the following Working Day

In addition certain items from Collinson's as well as international shipments are shipped by the Suppliers delivery partners Royal Mail and for Ireland City Air express The cost of shipment will be recharged to the Customer each accounting month.

Note:-

International - Royal Mail (Supplier licence) - Requires Customs Documentation from the Customer

Channel Islands - Royal Mail (Supplier licence) - Requires Customs Documentation from the Customer

Ireland – City Air Express (Customer only)

Within each Accounting Month 99.0 percent of personalised items will be dispatched within eight Working Days of receipt of the order by the Supplier subject to the exception that personalised items will be held on Navision for 3 days to avoid single item dispatches (as per current operating procedures).

All orders will, in any event, be dispatched within nine Working Days of the order dispatch Cut Off Time.

For the avoidance of doubt, if the Customer's delivery partner fails to collect parcels during time the slot provided by the Supplier there shall be no failure of a Service Level and those orders will be excluded from the calculation of service performance.

The Supplier will not substitute the delivery partner chosen by the Customer without the prior written approval of the Customer. The Customer acknowledges that personalised orders from Collinson's which are sent out via Royal Mail, a delivery partner of the Supplier.

The Supplier will not accept any orders and there shall be no failure of a Service Level where the Customer has not ensured sufficient stock to fulfil the order is at the Supplier's relevant dispatch warehouse.

The Supplier will reimburse the item cost to the Customer for all damage to the Customer's stock in its control above a monthly allowable damage allowance of 0.75% of the Customer's cost of goods sold each month reported at month-end. This excludes any stock damaged in transit to or from the Supplier's facilities.

All personalised stock holding currently belongs to the Supplier. The Customer will be charged for the stock after dispatch. A percentage of stock is damaged during personalisation. The Customer will be charge the same percentage pro rata to their sales as the Supplier.

The Customer is responsible for quality control of inbound stock. Except for checking the pallet when containers are unloaded the Supplier will only inspect the condition of stock when it is being picked. The Customer will be notified about any stock damaged during inbound transit as soon as the Supplier becomes aware of the damage.

If the contents allocated to a single parcel cannot physically fit into the parcel an additional parcel maybe created for delivery.

Schedule 3
Customer's Responsibilities

In order to facilitate the provision of the Services by the Supplier, the Customer shall (in addition to those Customer responsibilities and obligations identified elsewhere in this agreement), be responsible for the following:

Access

The Customer shall:

(a)

provide the Supplier with access to appropriate members of the Customer's staff, as such access is reasonably requested by the Supplier, in order for the Supplier to discharge its obligations under this agreement;

(b)

respond to and provide such documentation, data and other information as the Supplier reasonably requests in order for the Supplier to perform its obligations under this agreement;

(c)

to the extent that the following are not expressly provided for elsewhere in this agreement, using its reasonable endeavours, respond to requests for information in a prompt and timely manner, where such requests are reasonably made by or on behalf of the Supplier to enable the Supplier to comply with its obligations under this agreement;

(d)

procure and maintain for the Term at its own cost and expense all licences, consents, software, hardware, equipment and other assets required to receive the full benefit of the Services.

operational services

(a)

each quarter the Customer shall provide to the Supplier, in an agreed form, a rolling non-binding forecast of:

(i)

the number of orders and average picks per order by Working Day and product SKU for the following 12-months; and

(ii)

the number of orders and average picks per order by product type of collate, non-collate and personalised items by Working Day for the period between the following 13 months to 36 months.

(b)

It is the Customer's responsibility to ensure the management of its goods to enable the Supplier to fulfil all orders submitted to it. Furthermore, the Customer shall give Supplier no less than 7 days' prior written notice of any requirement for the Supplier to transfer goods between any of its facilities or the external facilities used to perform the Services in order to fulfil any orders. The Customer shall maintain inventory records of volume of goods and location of goods based on data supplied by the Supplier.

Schedule 4
Charges

Part 1 - Charges

Operational Service Charges

The Operational Services Charges shall comprise of a variable Accounting Monthly fee based on the components set out below:

The variable Accounting Monthly fee will be invoiced at the end of each Accounting Month for the variable element of the service costs based on the following volumes and costs. At the end of each Accounting Month the Supplier will invoice the Customer the actual volume multiplied by the standard cost for each location.

(a)

Fulfilment Costs

Accrington

Fulfilment at £0.54 per pick

Container de-stuffing at £300 per container

Chadderton

Fulfilment at £1.26 per pick

Failsworth - returns

Fulfilment at £0.91 per pick

External Storage

RHD at £3.00 per pallet

£1.15 per pallet per week, or part week in storage

Container de-stuffing at £300 per container

Subject at all times to clause 7.4, the aforementioned "per pick" costs are fixed for the first Contract Year. Thereafter, and no more than once per Contract Year and only within the last three (3) month of a Contract Year, either party (but not both in any Contract Year) may elect in writing to the other party to review and agree changes to any one or more of the aforementioned "per pick" costs on the basis of deceases and/or increases to the Supplier's costs and charges taken into account to calculate the "per pick" costs from the Effective Date (or the date of the last review pursuant to this paragraph). In the event that the parties have not agreed in writing to a change within 45 days of a party's written election, either party may refer the issue to an Expert for final binding determination as to the change to be implemented to the “per pick” costs and the date such change shall take effect. The parties agree that any changes to the "per pick" cost shall not have retrospective effect.

(b)

Personalisation Costs

Personalisation costs including the cost of the common stock and packaging used and duty paid by the Supplier for the Customer's products will be recharged at cost each Accounting Month. Customer rectification requirements will be fulfilled by the Supplier if internal resource is available and recharged at cost each Accounting Month. Should internal resource not be available the Customer shall use a third party supplier at its own cost and expense.

(c)

Brochure Costs

Chadderton Kleeneze brochure and product kit builds will be recharged at cost each Accounting Month (based on agreed fixed rates).

(d)

Delivery and Dispatch Costs

Dispatches from Collinson's and International shipments via Royal Mail or Express City Parcels.

Each Accounting Month the Supplier will recharge the delivery costs for the Customer's parcels from Collinson's and International deliveries to the Customer.

(e)

Carbon Commitment and Packaging Waste Costs

Carbon Commitment and packaging waste costs will be recharged Accounting Monthly to the Customer based on the pro rata costs incurred.

(f)

Insurance Costs

The cost of insurance of the Customer’s stock under the Supplier’s control, together with the appropriate part of the cost of insurance of the Supplier’s premises, plant and machinery shall be recharged on a proportionate basis. As of the Effective Date the costs shall be recharged at a cost of £5,477 per annum for stock insurance and £26,901 for plant, machinery and premises insurance. Any increases in such costs during the Term imposed on the Supplier shall be passed on to the Customer on a proportionate basis.

Transitional Assistance Service Charges

These will be billed on a time and materials basis to the Customer for services provided during the execution of the Exit Plan.

Part 2 - Service Credits

Service Credits are to be calculated as follows:

If, owing to failure by the Supplier, the proportion of parcels dispatched on time falls below 99% during an Accounting Month the following Service Credits will apply:

Between 99% and 95% of parcels not dispatched on time: the fulfilment cost will be reduced by 50% of the Accrington average site pick cost for the day when the dispatch should have occurred for the number of parcels not dispatched on time.

Below 95% of parcels not dispatched on time: the fulfilment cost will be reduced by 100% of the Accrington average site pick cost for the day when the dispatch should have occurred for the number of parcels not dispatched on time.

Schedule 5
Key Personnel

Part - Customer's Key Personnel

Name		Job title
		Customer's Representative
		Customer's Operational Services Manager
		CUSTOMER'S senior finance Representative

Part 2 - Supplier's Key Personnel

Name		Job title
		Supplier's Representative
		Supplier's Operational Services Manager
		Supplier's senior finance Representative

Schedule 6
Contract and Service Management

This Agreement will be managed as follows:

Open-book accounting will operate for costs and recharges

The Key Personnel will be responsible for the governance of this Agreement

There will be an attempt to resolve operational difficulties as quickly and as close to the source as possible; providing the Service to the Customer is a key part of the Customer's business

The Supplier will produce the following reports using agreed templates:

Weekly report of orders taken, dispatched and back-logs

Accounting Monthly report of collate and non-collate, non-personalised and personalised dispatches made and measured against the Service Level

Accounting Monthly picks at each facility

Accounting Monthly personalised orders from the Customer as a percentage of total personalised orders. Any backlog and the proportion of 24 hour delivery limitations will also be reported

Accounting Monthly report of damaged and written off stock listed by SKU and showing costs from the Customer

Accounting Monthly quality assurance findings

Quarterly maximum pallet holding and site total cost per item ("CPI") costs for the preceding quarter

Quarterly calculation of under- or over-charge based on volumes and CPI data

Weekly reports will be provided by 17.00 hrs each Monday or on the next Working Day if Monday is not a Working Day.

Accounting Monthly and quarterly reports will be provided by 17.00 hrs on the fourth Working Day of the next month

Review of reports

The Operational Service Managers will use e-mail to review the weekly reports

The Operational Service Managers will review monthly reports at the monthly review meeting

The Representatives will review quarterly reports and the compliance with Service Levels at the formal quarterly review meeting

The agenda will include:

Review of previous action

Quarterly review of Service Levels

Any problems that require remediation

Any Remediation Plans that have been agreed, the person accountable and the date for completion

Agree Service Credits

Anything known by either party that might affect the Agreement or either party's performance of its obligation

Update on Change Control items

Changes to Key Personnel

Status of the Exit Plan

Update the Exit Plan when relevant

Percentage of non-personalised orders dispatched the following working day [day 1] from the order Cut Off Time

Percentage of personalised orders dispatched within eight Working Days of order Cut Off Time, day 1 being the next working day

Accounting Monthly rolling average time, in working days, to dispatch all non-personalised orders

Accounting Monthly rolling average time, in working days, to dispatch all personalised orders

Accounting Number of hours fulfilment facility was unavailable for planned fulfilment work each month

Accounting Monthly and quarterly trend in CPI by facility

Cost of damaged stock

Maximum pallet holding at each facility

Delivery slots missed by Customer's dispatch partners

Pick error report weekly

In addition all reports produced by the Supplier for the Customer as at the Effective Date will continue to be provided by the Supplier to the Customer.

Schedule 7
Change Control Procedure

Principles

1.1

Where the Customer or the Supplier sees a need to change this agreement, the Customer may at any time request, and the Supplier may at any time recommend, such Change only in accordance with the Change Control Procedure set out in paragraph 2 of this Schedule 7.

1.2

Until such time as a Change is made in accordance with the Change Control Procedure, the Customer and the Supplier shall, unless otherwise agreed in writing, continue to perform this agreement in compliance with its terms prior to such Change.

1.3

Any discussions which may take place between the Customer and the Supplier in connection with a request or recommendation before the authorisation of a resultant Change shall be without prejudice to the rights of either party.

Procedures

2.1

Discussion between the Customer and the Supplier concerning a Change shall result in any one of the following:

(a)

no further action being taken; or

(b)

a request to change this agreement by the Customer; or

(c)

a recommendation to change this agreement by the Supplier.

2.2

Where a written request for an amendment is received from the Customer, the Supplier shall submit two copies of a Change Control Note signed by the Supplier to the Customer within three weeks of the date of the request or inform the Customer that the Supplier is unable to comply with such written request for a Change.

2.3

A recommendation to amend this agreement by the Supplier shall be submitted directly to the Customer in the form of two copies of a Change Control Note signed by the Supplier at the time of such recommendation. The Customer shall give its response to the Change Control Note within three weeks.

2.4

Each Change Control Note shall contain:

(a)

the title of the Change;

(b)

the originator and date of the request or recommendation for the Change;

(c)

the reason for the Change;

(d)

full details of the Change, including any specifications;

(e)

the price, if any, of the Change;

(f)

a timetable for implementation, together with any proposals for acceptance of the Change;

(g)

a schedule of payments if appropriate;

(h)

details of the likely impact, if any, of the Change on other aspects of this agreement including:

(i)

the timetable for the provision of the Change;

(ii)

the personnel to be provided;

(iii)

the Charges;

(iv)

the Documentation to be provided;

(v)

the training to be provided;

(vi)

working arrangements; and

(vii)

other contractual issues;

(i)

the date of expiry of validity of the Change Control Note; and

(j)

provision for signature by the Customer and the Supplier.

2.5

For each Change Control Note submitted by the Supplier the Customer shall, within the period of the validity of the Change Control Note:

(a)

allocate a sequential number to the Change Control Note; and

(b)

evaluate the Change Control Note and, as appropriate:

(i)

request further information; or

(ii)

arrange for two copies of the Change Control Note to be signed by or on behalf of the Customer and return one of the copies to the Supplier; or

(iii)

notify the Supplier of the rejection of the Change Control Note.

2.6

A Change Control Note signed by the Customer and by the Supplier shall constitute an amendment to this agreement.

Schedule 8
Exit Plan and Service transfer arrangements

Definitions

1.1

The definitions in this paragraph apply in this Schedule 8.

"Business Process Manual"

means the manual which is prepared by the Supplier and which details the business procedures which it follows in the provision of the Services.

Purpose of Schedule

2.1

The Supplier is required to ensure (to the extent such matters are within its reasonable control) the orderly transition of the Services from the Supplier to the Customer or any Replacement Supplier in the event of a termination of this agreement pursuant by the Customer pursuant to clause 27.1. This Schedule sets out the principles of the exit and service transition arrangements which are intended to achieve this and upon which the Exit Plan shall be based.

Exit Plan

The Exit Plan shall:

(a)

address each of the issues set out in this Schedule 8 to facilitate the transition of the Services from the Supplier to the Replacement Supplier and/or the Customer and shall ensure to the extent reasonably practicable that there is no material disruption in the supply of the Services and no material deterioration in the quality of delivery of the Services;

(b)

detail how the Services will transfer to the Replacement Supplier and/or the Customer including details of the processes, documentation, data transfer, systems migration, security and the segregation of the Customer's technology components from any technology components run by the Supplier or any of its sub-contractors (where applicable);

(c)

specify the scope of the Transitional Assistance Services that may be required by the Customer, any charges that would be payable for the provision of Transitional Assistance Services and detail how such services would be provided (if required) during the Termination Period;

(d)

provide a timetable and identify critical issues for carrying out the Transitional Assistance Services; and

(e)

set out the management structure to be put in place and employed during the Termination Period.

Obligations during the Term

4.1

The Supplier and the Customer shall each appoint an exit manager and provide written notification of such appointment to each other within 6 months after the Effective Date. The Supplier's exit manager shall be responsible for ensuring that the Supplier and its employees, agents and sub-contractors comply with this Schedule. The Supplier shall ensure that its exit manager has the requisite authority to arrange and procure any resources of the Supplier as are reasonably necessary to enable the Supplier to comply with this Schedule 8. The exit managers shall liaise with one another in relation to all issues relevant to termination and all matters connected with this Schedule 8 and each party's compliance with it.

4.2

On reasonable notice, the Supplier shall provide to the Customer and/or to its Replacement Supplier (subject to the Replacement Supplier entering into reasonable written confidentiality undertakings with the Supplier), such material and information as the Customer shall reasonably require in order to facilitate the preparation by the Customer of any invitation to tender and/or to facilitate any potential Replacement Supplier undertaking due diligence (including in relation to the Services Customer's Data, and Transferring Employees).

Transitional Assistance Services

5.1

The Customer shall be entitled to require the provision of Transitional Assistance Services by sending the Supplier a notice to that effect (Transitional Assistance Notice) at any time prior to termination initiated by the Customer pursuant to clause 27.1. The Transitional Assistance Notice shall specify:

(a)

the date from which Transitional Assistance Services are required;

(b)

the nature and extent of the Transitional Assistance Services required; and

(c)

the period during which it is anticipated that Transitional Assistance Services will be required (Transitional Period) (which shall continue no longer than 3 months after the date that the Supplier ceases to provide the Services or, in the event that a Termination Period is specified by the Customer, no longer than the end of the Termination Period).

5.2

The Customer shall have an option to extend the Transitional Period beyond the period specified in the Transitional Assistance Notice by written notice to the Supplier provided that such extension shall not extend beyond the maximum period referred to in paragraph 5.1(c) of this Schedule 8.

5.3

The Customer shall have the right to terminate its requirement for Transitional Assistance Services by serving not less than 20 days' notice upon the Supplier to such effect.

5.4

The Transitional Assistance Services shall be provided in good faith and in accordance with Good Industry Practice.

5.5

The Supplier shall use reasonable endeavours to continue to provide the Services (or the relevant part of them) during the Transitional Period in accordance with the Service Levels unless the parties agree otherwise pursuant to paragraph 5.6 of this Schedule 8.

5.6

Where the Supplier demonstrates to the Customer's reasonable satisfaction that transfer of the Services during the Transitional Period will have an adverse effect on the Supplier's ability to meet a particular Service Level, the parties shall vary the relevant Service Level and/or the applicable Service Credits to take account of such adverse effect.

5.7

During the Transitional Period, the Supplier shall, in addition to providing the Services and the Transitional Assistance Services, provide to the Customer any reasonable assistance requested by the Customer to allow the Services to continue without interruption and to facilitate the orderly transfer of the Services. Any additional reasonable costs incurred by the Supplier in this regard which are not already in the scope of the Transitional Assistance Services or the Exit Plan shall be provided on a time-and-materials basis .

5.8

The Customer and the Supplier acknowledge that the transition of the Services to the Replacement Supplier may be phased over a period of time so that certain identified Services are transferred to the Replacement Supplier before others.

5.9

The Customer shall, at the Supplier's reasonable request, require the Replacement Supplier and any agent or personnel of the Replacement Supplier, to enter into an appropriate confidentiality undertaking with the Supplier.

5.10

The Supplier shall comply with all of its obligations contained in the Exit Plan.

5.11

Each party shall comply with all of its obligations regarding its personnel in accordance with Schedule 9 (Employees).

5.12

Upon termination or expiry of the Transitional Assistance Services :

(a)

the Supplier shall cease to use the Customer's Data and, at the direction of the Customer either:

(i)

provide the Customer or Replacement Supplier with a complete and uncorrupted version of the Customer's Data in electronic form (or such other format as reasonably required by the Customer); or

(ii)

destroy (including removal from any hard disk) or return (at the Customer's option) all copies of the Customer's Data not required to be retained by the Supplier for statutory compliance purposes and confirm in writing that such destruction has taken place;

(b)

the Supplier shall return to the Customer such of the following as are in the Supplier's possession or control:

(i)

all materials created by the Supplier under this agreement, the IPRs in which are owned by the Customer;

(ii)

any other equipment which belongs to the Customer; and

(iii)

any items that have been on-charged to the Customer, such as consumables.

5.13

The Transitional Assistance Services to be provided by the Supplier shall include (without limitation) such of the following services as the Customer may specify:

(a)

providing to the Customer an up-to-date Business Process Manual;

(b)

providing assistance and expertise as reasonably necessary to examine all operational and business processes (including all supporting documentation) in place;

(c)

providing details of work volumes and staffing requirements over the preceding 12 months;

(d)

analysing and providing information about capacity and performance requirements, processor requirements and bandwidth requirements, and known planned requirements for capacity growth;

(e)

providing appropriate training to those Customer and/or Replacement Supplier staff responsible for internal training in connection with the provision of the Services;

(f)

providing for transfer to the Customer and/or the Replacement Supplier of all knowledge reasonably required for the provision of the Services which may, as appropriate, include information, records and documents; and

(g)

answering all reasonable questions from the Customer and/or the Replacement Supplier regarding the Services.

Schedule 9
Employees

Interpretation

1.1

The definitions and rules of interpretation in this paragraph apply in this Schedule 9.

"Staffing Information"		means in relation to all persons detailed on the Supplier's Provisional Staff List in an anonymised format and subject to the Data Protection Legislation: (a) their ages, dates of commencement of employment and gender; (b) their relevant notice periods and details of any contractual redundancy payment schemes; (c) the current wages, salaries, profit sharing, incentive and bonus arrangements applicable to them; (d) details of other employment-related benefits including (without limitation) medical insurance, life assurance, pension or other retirement benefit schemes, share option schemes and customer car schemes applicable to them; (e) any outstanding claims brought by or on behalf of such individuals (including in respect of personal injury claims).

"Service Transfer Date"		means the date on which the Services (or any part of the Services), for whatever reason transfer from the Supplier to the Customer or any Replacement Supplier.
"Supplier's Final Staff List"		means a list of the Transferring Employees.
"Supplier's Provisional Staff List"		means a list prepared and updated by the Supplier of all the Supplier's Personnel engaged in, or wholly or mainly assigned to, the provision of the Services or any part of the Services at the date of preparation of the list.

Employment exit provisions

2.1

This agreement envisages that subsequent to the commencement of this agreement, the identity of the provider of the Services (or any part of the Services) may change (whether as a result of termination of this agreement, or part, or otherwise) resulting in a transfer of the Services in whole or in part (Service Transfer). If a Service Transfer is a relevant transfer for the purposes of the Employment Regulations then, in such event, the Customer or a Replacement Supplier would inherit liabilities in respect of the Transferring Employees.

2.2

The Supplier agrees that, subject to compliance with the Data Protection Legislation:

(a)

within 20 days of the earliest of:

(i)

receipt of a notification from the Customer of a Service Transfer or intended Service Transfer; or

(ii)

receipt of the giving of notice of early termination of this agreement or any part thereof;

it shall provide the Supplier's Provisional Staff List and the Staffing Information to the Customer or, at the direction of the Customer, to a Replacement Supplier (to the extent that such information has not been previously provided to such person(s) and remains unchanged) and it shall provide an updated Supplier's Provisional Staff List when reasonably requested by the Customer or, any Replacement Supplier; and

(b)

at least 28 days before the Service Transfer Date, the Supplier shall prepare and provide to the Customer and/or, at the direction of the Customer, to the Replacement Supplier, the Supplier's Final Staff List.

2.3

The Supplier warrants that the Supplier's Provisional Staff List, the Supplier's Final Staff List and the Staffing Information will be true and accurate in all material respects as at the date such lists and/or information is prepared.

2.4

In connection with a relevant transfer pursuant to paragraph 2.1 of this Schedule 9, the Supplier shall comply with its obligations under Regulation 11 of the Employment Regulations.

2.5

In connection with a relevant transfer to which the Employment Regulations apply, the parties agree that:

(a)

the Supplier shall perform and discharge all its material legal obligations in respect of all the Transferring Employees for its own account up to and including the Service Transfer Date. The Supplier shall indemnify the Customer and any Replacement Supplier in full for and against all claims costs, expenses or liabilities whatsoever and howsoever arising, incurred or suffered by the Customer or any Replacement Supplier including without limitation reasonable legal expenses and other professional fees (together with any VAT thereon) in relation to:

(i)

the Supplier's failure to perform and discharge any such obligation;

(ii)

any act or omission by the Supplier on or before the Service Transfer Date in relation to the Transferring Employees;

(iii)

all and any claims in respect of all emoluments and outgoings in relation to the Transferring Employees (including without limitation all wages, bonuses, PAYE, National Insurance contributions, pension contributions and otherwise) payable in respect of any period on or before the Service Transfer Date;

(iv)

any claim made by or in respect of any person employed or formerly employed by the Supplier other than a Transferring Employee for which it is alleged the Customer or any Replacement Supplier may be liable by virtue of this agreement and/or the Employment Regulations; and

(v)

any act or omission of the Supplier in relation to its obligations under Regulation 13 of the Employment Regulations except to the extent that the liability arises from the Customer or Replacement Supplier's failure to comply with the Employment Regulations.

2.6

The Supplier shall indemnify the Customer and any Replacement Supplier in respect of any claims arising from any act or omission of the Supplier in relation to any other Supplier's Personnel who is not a Transferring Employee during any period whether before, on or after the Service Transfer Date.

2.7

The Customer shall indemnify the Supplier in full for and against all claims costs, expenses or liabilities whatsoever and howsoever arising, incurred or suffered by the Supplier including without limitation reasonable legal expenses and other professional fees (together with any VAT thereon) arising from or as a result of:

(a)

any act or omission by the Customer or the Replacement Supplier relating to a Transferring Employee occurring on or after the Service Transfer Date;

(b)

all and any claims in respect of all emoluments and outgoings in relation to the Transferring Employees (including without limitation all wages, bonuses, PAYE, National Insurance contributions, pension contribution and otherwise) accrued and payable after the Service Transfer Date;

(c)

any failure by the Customer or a Replacement Supplier to comply with its or their obligations under the Employment Regulations; and

(d)

the termination of employment of any of the Transferring Employees by the Customer or a Replacement Supplier on or after the Service Transfer Date.

2.8

The parties shall co-operate (and the Customer shall procure that any Replacement Supplier shall co-operate) to ensure that any of their obligations pursuant to the Employment Regulations and as a consequence of a Service Transfer will be fulfilled.

2.9

The Customer shall assume (or shall if applicable procure that the Replacement Supplier shall assume) the outstanding obligations of the Supplier in relation to any Transferring Employees in respect of accrued holiday entitlements and accrued holiday remuneration prior to the Service Transfer Date.

APPENDIX 1
ACCOUNTING MONTHS

Month End Date	Year End

23/01/2015
20/02/2015
27/03/2015	Year End FY15
24/04/2015
22/05/2015
26/06/2015
24/07/2015
21/08/2015
25/09/2015
23/10/2015
20/11/2015
25/12/2015
22/01/2016
19/02/2016
25/03/2016	Year End FY16
22/04/2016
20/05/2016
24/06/2016
22/07/2016
19/08/2016
23/09/2016
21/10/2016
18/11/2016
23/12/2016
20/01/2017
17/02/2017
24/03/2017	Year End FY17
21/04/2017
19/05/2017
23/06/2017
21/07/2017
18/08/2017
22/09/2017
20/10/2017
17/11/2017
22/12/2017
19/01/2018
16/02/2018
30/03/2018	Year End FY18
27/04/2018

25/05/2018
29/06/2018
27/07/2018
24/08/2018
28/09/2018
26/10/2018
23/11/2018
28/12/2018
25/01/2019
22/02/2019
29/03/2019	Year End FY19
26/04/2019
24/05/2019
28/06/2019
26/07/2019
23/08/2019
27/09/2019
25/10/2019
22/11/2019
27/12/2019
24/01/2020
21/02/2020
27/03/2020	Year End FY20

Signed by [NAME]
for and on behalf of KLEENEZE LIMITED	Director

Signed by TIM KOWALSKI
for and on behalf of EXPRESS GIFTS LIMITED	Director

Exhibit 10.3

	DATED 2015

	FINDEL PLC	(1)

	and

	KLEENEZE LIMITED	(2)

TRANSITIONAL SERVICES AGREEMENT
relating to the sale and purchase of the issued share capital of Kleeneze Limited

CONTENTS

1	DEFINITIONS AND INTERPRETATION	3

2	SERVICES	7

3	CHARGES	9

4	LIMITATION OF LIABILITY	10

5	TERM AND TERMINATION	11

6	CONSEQUENCES OF TERMINATION	12

7	FORCE MAJEURE	12

8	CONFIDENTIALITY	13

9	INTELLECTUAL PROPERTY RIGHTS	14

10	EMPLOYEES	15

11	DATA PROTECTION	16

12	ANTI-BRIBERY COMPLIANCE	17

13	ACCESS RIGHTS	17

14	ENTIRE AGREEMENT	18

15	NO PARTNERSHIP OR AGENCY	18

16	VARIATIONS AND WAIVERS	19

17	ASSIGNMENT	19

18	COUNTERPARTS	19

19	THIRD PARTY RIGHTS	19

20	NOTICES	19

21	DISPUTE RESOLUTION	20

22	APPLICABLE LAW AND JURISDICTION	22

Schedule 1		23

PART 1 SERVICE COMPONENTS AND CHARGES		23

PART 2 REPRESENTATIVES		24

Schedule 2 THIRD PARTY COMPONENTS		25

PART 1 THIRD PARTY COMPONENTS		25

APPENDIX 1		26

PART 1		26

PART 2		27

PART 3		30

PART 4		30

PART 5		31

DATE OF AGREEMENT

2015

PARTIES

(1)

FINDEL PLC, a company incorporated in England (Company Number 00549034) whose registered office is at 2 Gregory Street, Hyde, Cheshire, SK14 4TH (the "Seller"); and

(2)

KLEENEZE LIMITED, a company incorporated in England (Company Number 05801085) whose office is at 2 Gregory Street, Hyde, Cheshire, SK14 4TH (the "Company").

INTRODUCTION

The Seller and Trillium Pond AG ("Buyer") have entered into the Share Purchase Agreement under which the Buyer acquired the whole of the issued share capital of the Company and its wholly owned Subsidiary.

The parties have agreed that the Seller shall provide certain services to the Company on a transitional basis after Completion necessary for the continued operation of the business of the Company, subject to, and in accordance with, the terms and conditions of this Agreement.

IT IS AGREED THAT:

DEFINITIONS AND INTERPRETATION

1.1

In this Agreement, the following words and expressions shall have the following meanings:

"Agreement" means this agreement and includes the introduction and the schedules to it.

"Business Day" means any day (other than a Saturday, Sunday or English public or bank holiday).

"Charges" means the sums payable in respect of each of the Service Components by the Company under this Agreement in accordance with clause 3 as set out in Schedule 1.

"Commencement Date" has the meaning ascribed to it in clause 5.1.

"Company Data" means data and information relating to the Company and the Company's business that is generated and/or processed as part of the Service Components including, for the avoidance of doubt, any customer names and contact details.

"Comparison Period" means the period of 12 months expiring on the date of Completion.

"Completion" has the meaning ascribed to it in the Share Purchase Agreement.

"Confidential Information" means the contents of this Agreement and all information of a confidential nature in whatever form received, accessed or obtained by a party or any member of its Group (the "Receiving Party") from, or on behalf of, the other party or any member of its Group (the "Disclosing Party") as a result of, or in connection with, this Agreement and/or any Third Party Contract, including Personal Data, other than:

(a)

any information which is rightfully in the possession of the Receiving Party or any other member of its Group prior to the disclosure by the Disclosing Party and acquired on a non-confidential basis from sources other than the Disclosing Party or any member of its Group;

(b)

any information which is in the public domain otherwise than as a result of a breach of this Agreement by the Receiving Party or any member of its Group; and

(c)

any information which is demonstrated by the Receiving Party to the Disclosing Party to have been independently developed by the Receiving Party without reference to the information of the Disclosing Party or any member of its Group.

"Data Controller" has the meaning ascribed to it in the Data Protection Act 1998.

"Data Subject" has the meaning ascribed to it in the Data Protection Act 1998.

"Designated Personnel" means:

(a)

any employees of the Company or independent contractors in the course of providing services to the Company, who prior to the date of Completion, were permitted to access the Seller's Systems in order to fulfil their duties in relation to the Business; or

(b)

any employees of the Company, Buyer, Buyer’s representatives or independent contractors in the course of providing services to the Company who are permitted by the Seller to access the Seller's Systems (such permission not to be unreasonably withheld or delayed).

"Disclosing Party" has the meaning ascribed to it in the definition of Confidential Information.

"Due Date" means the date falling 30 days after the date of any invoice issued by the Seller.

"Force Majeure Event" has the meaning ascribed to it in clause 7.1.

"Group" means in respect of any party to this Agreement, that party, any parent undertaking of that party and any subsidiary undertaking of that party or any such parent undertaking from time to time.

"Intellectual Property Rights" means any patents, trade marks, service marks, registered designs, utility models, design rights, copyright (including copyright in computer software), database rights, semi-conductor topography rights, inventions, trade secrets and other confidential information, know-how, business or trade names (including internet domain names and e-mail address names) and all other intellectual and industrial property and rights of a similar or corresponding nature in any part of the world, whether registered or not or capable of registration or not and including the right to apply for and all applications for any of the foregoing rights and the right to sue for infringements of any of the foregoing rights.

"Loss" means any losses, liabilities, costs, damages and expenses suffered or incurred by either party or any member of its Group arising out of or in connection with this Agreement.

"Month" means a calendar month beginning on the Completion Date and each subsequent calendar month thereafter (and "Monthly" shall be construed accordingly).

"Notice" has the meaning ascribed to it in clause 20.1.

"Party" means a party to this Agreement.

"Personal Data" has the meaning ascribed to it in the Data Protection Act 1998.

"Personnel" means any directors, officers, employees, agents, contractors, sub-contractors or professional advisers of a party or any other member of its Group.

"Policies" means all such internal policies including security, access and computer and/or network-related user policies as apply within the Seller's business from time to time and of which the Company has been notified.

"Receiving Party" has the meaning ascribed to it in the definition of Confidential Information.

"Regulations" means the Transfer of Undertakings (Protection of Employment) Regulations 2006 as amended from time to time.

"Relevant Authority" means any judicial, quasi-judicial, statutory, governmental or quasi-governmental agency, body or authority.

"Replacement Services" means any services provided in place of or substitution for the Service Components, an individual Service Component, or any part of an individual Service Component

"Representative" means the person(s) listed within Part 2 of Schedule 1.

"Review Meetings" has the meaning ascribed to it in clause 2.15.

"Share Purchase Agreement" means the agreement entered into by the Seller, the Buyer and CVSL Inc under which the Buyer acquires from the Seller its shareholdings in the Company.

"Service Components" means the various services which are described in Part 1 of Schedule 1 and which are to be provided by the Seller to the Company (and which include, for the avoidance of doubt, the Third Party Components).

"Service Term" means, in respect of a Service Component, the period beginning on the date of Completion and ending at the end of the applicable maximum duration set out in the Schedules (unless terminated earlier in accordance with the terms of this Agreement).

"Subsidiary" means Kleeneze (Ireland) Limited, brief details of which are set out in Part 2 of Schedule 1 of the Share Purchase Agreement.

"Systems" means the IT systems used by or on behalf of the Seller in providing the Service Components.

"Term" means the term of this Agreement, as determined in accordance with clause 5.1.

"Third Party Components" means those elements of the Service Components which constitute services and rights made indirectly available to the Company by third parties, including (without limitation) those listed in Part 1 of Schedule 2.

"Third Party Contracts" means those contracts entered into by the Seller under which a third party provides Third Party Components.

"Third Party Provider" means the provider of a Third Party Component.

"Transferred Employee" has the meaning given in clause 10.1.

"VAT" means value added tax as provided for in the Value Added Tax Act 1994.

1.2

The terms "subsidiary undertaking" and "parent undertaking" shall have the meanings ascribed thereto in section 1162 of the Companies Act 2006.

1.3

Unless the context otherwise requires:

(a)

words denoting the singular include the plural and vice versa;

(b)

words denoting any gender include all other genders;

(c)

any reference to "persons" includes individuals, bodies corporate, companies, partnerships, unincorporated associations, firms, trusts and all other legal entities;

(d)

all references to time are to London time.

1.4

Clause headings are for convenience only and shall not affect the interpretation of this Agreement. Any reference to a clause, sub-clause, paragraph or schedule is to the relevant clause, sub-clause, paragraph or schedule of this Agreement.

1.5

The schedules to this Agreement shall for all purposes form part of this Agreement.

1.6

Any reference to a document being in the "agreed form" means a document in a form agreed by the parties and initialled by, or on behalf of, each of them for the purposes of identification.

1.7

1.8

SERVICES

2.1

In consideration of and subject to the payment of the Charges in accordance with clause 3, the Seller shall provide (or procure the provision of) the Service Components to the Company in each case for the applicable Service Term subject to, and in accordance with, the terms and conditions of this Agreement.

2.2

Unless otherwise agreed by the parties in writing (and subject to clauses 2.6 to 2.12 (inclusive) and 2.16), the nature and/or scope of the Service Components shall be the same in all material respects as was provided to the Company in the Comparison Period.

2.3

Save in respect of the Third Party Components, the Seller shall provide the Service Components with reasonable skill and care and, in any event:

(a)

to the same standard as is afforded to other recipients within the Seller's Group of services that are the same as, or equivalent to, the applicable Service Components; and

(b)

in respect of any Service Components which are not provided to other recipients within the Seller's Group, to the same standard as was provided to the Company in the Comparison Period.

2.4

In the case of the Seller's provision of the Third Party Components, the Seller shall use reasonable endeavours following Completion to procure during the Service Term: (i) the provision and performance of the Third Party Components for the benefit of the Company and (ii) the benefit of the relevant rights in favour of the Company, in each case to the same standard as is afforded to other recipients within the Seller's Group or, in respect of any Service Components which are not provided to other recipients within the Seller's Group, to the same standard as was provided to the Company in the Comparison Period.

2.5

Subject to clause 2.7, the Company acknowledges and agrees that, from time to time during the Term, the terms of any Third Party Contract may be varied or otherwise replaced as a result of the renewal or negotiation of the relevant Third Party Contract by the Seller and the relevant Third Party Provider and that accordingly, the nature of the Third Party Components may vary during the Term. The Seller shall use its reasonable endeavours to ensure that any such variation or replacement is made with minimal disruption and interruption to the operations of the business of the Company.

2.6

The Seller agrees that it shall not agree to any variation of a Third Party Contract which would have a detrimental effect on the Third Party Components provided to the Company, except:

(a)

with the Company's prior written consent; or

(b)

where the variation will affect Third Party Components provided to any of the Seller's Group to a similar and proportionate extent.

2.7

The Company acknowledges and agrees that, during the Term, the Seller may (subject to clause 2.9), with Company’s prior written consent (not to be unreasonably withheld or delayed), replace any of the Third Party Components with identical or materially similar services and/or facilities provided by a different third party. In the event that the Seller enters into a contract with a third party for the provision of replacement services, the Seller agrees to procure the provision of such third party services for the benefit of the Company in accordance with clause 2.4.

2.8

In the event any Third Party Contract is to be varied, replaced or terminated, the Seller shall notify the Company as soon as reasonably practicable, but not less than 15 days, in advance of such variation, replacement or termination (save that, where the Seller is not able to provide notice in advance, it shall inform the Company promptly of such variation, replacement or termination following the event) together with details regarding the variation, replacement or termination. Company

2.9

The Seller shall inform the Company as soon as reasonably practicable of any circumstances that the Seller becomes aware of which the Seller considers are likely to materially adversely affect the performance of the Seller’s obligations under this Agreement.

2.10

Where the Company makes the Seller aware of any material issues in respect of any Third Party Components, the Seller shall use all commercially reasonable efforts to cooperate and assist the Company in resolving such issues, including by raising the issues with the Third Party Provider on behalf of the Company.

2.11

In the event of a material default of a Third Party Provider in relation to a Third Party Contract, which has a material adverse impact on the business of the Company, the Seller shall use reasonable endeavours to enforce the terms of such Third Party Contract for the benefit of the Company to the extent that such Third Party Contract relates to Service Components. In the event the Seller recovers any Loss, including without limitation any damages, settlement payments, any rights of set off or any other form of compensation in respect of such enforcement, the Seller shall make a proportionate allocation of such recovered Loss between the members of its Group and the Company (based upon the level of Loss suffered by each such entity).

2.12

The Company may request that a change is made to all or any part of the Service Components at any time, and any such request shall be made in writing and given due consideration by the Seller. The Seller shall promptly and in good faith inform the Company if the Seller can comply with any such request and shall calculate and (as relevant) inform the Company of any change to the Charges or any impact on time frame for provision of the Service Components that would result from the change to the Service Components, and if the request can be met by the Seller the Company shall be entitled, at its option, to decide whether it will go ahead with the change to the Service Components on that basis. Where the parties agree to implement a change on this basis, the Charges shall be adjusted accordingly. The Seller shall not unreasonably withhold or delay its agreement to any such change request proposed by the Company.

2.13

Each party shall, and shall procure that each member of its Group shall, at all times during the Term:

(a)

respond promptly to any request for guidance or instruction which is reasonably required by the other party to enable the other party to perform its obligations under this Agreement; and

(b)

co-operate and liaise with the other party as necessary or desirable for the performance of the other party's obligations.

2.14

The Company shall at all times during the Term:

(a)

comply with the Policies when accessing the Systems; and

(b)

when taking and utilising the benefit of the Service Components, observe the terms and conditions of all Third Party Contracts to the extent that the terms and conditions relate to the Service Components.

2.15

The Company shall use reasonable endeavours to ensure it does not do, or fail to do, anything which operates to put the Seller in breach of contract under any of the Third Party Contracts (other than as may be an unavoidable consequence of a party's performance of its obligations or exercise of its rights under this Agreement (including the proper provision or receipt of the Service Components)).

2.16

The Company agrees that it shall use commercially reasonable practices and will not, in accessing the Systems, introduce or negligently permit the introduction of any computer virus, Trojan horse or similar destructive, disruptive or nuisance programs.

2.17

The Representatives shall be responsible for coordinating and managing the provision of the relevant Service Components, and will work with each other to address any problems that arise in connection with the Service Components.

2.18

The parties’ Representatives shall hold meetings to review the provision of the Service Components under this Agreement to which they are assigned ("Review Meetings"). Review Meetings shall be held where reasonably required at the request of either party. Each party shall be entitled to change its representative in respect of any of the service categories listed in Part 2 of Schedule 1 at any time on providing written notice to the other party.

CHARGES

3.1

The Company shall pay the Charges on a Monthly basis and the amount payable in respect of each Month shall be equal to the aggregate the amounts ascribed individually within Schedule 1 to each of those Service Components which have been provided by the Seller during all of the relevant Month (or a pro rata portion of such amount where such Service Components have been provided by the Seller during only part of the relevant Month).

3.2

The Seller shall provide the Company with such receipts and other evidence as the Company reasonably requires to evidence such costs.

3.3

The Seller shall promptly notify the Company in the event it is notified that the costs for any Third Party Components provided by the Seller are likely to increase from the amounts that have been previously been payable in respect of such Third Party Components.

3.4

The Company shall, subject to the submission by the Seller of a valid undisputed invoice (which shall be rendered Monthly in arrears and shall be valid for VAT purposes to the extent that VAT is applicable), pay the Seller the Charges due and owed by Company in respect of each Month on or before the Due Date.

3.5

All amounts referred to in this Agreement are exclusive of VAT, which shall (if required) be payable at the appropriate rate on the same date as the payment to which such VAT relates.

3.6

If the Company disputes any invoice or other request for payment, the Company shall notify the Seller in writing within 15 Business Days from Company’s receipt of such invoice. The parties shall negotiate in good faith to attempt to resolve the dispute promptly. The Seller shall provide all such evidence as may be reasonably required by the Company to verify the disputed invoice or request for payment. If the parties have not resolved the dispute within 45 days of the Company giving notice to the Seller, the dispute shall be resolved in accordance with clause 20. Where only part of an invoice is disputed, the undisputed amount shall be paid on the Due Date as set out in clause 3.4.

LIMITATION OF LIABILITY

4.1

Neither party limits its liability for:

(a)

death or personal injury caused by its negligence, or that of its employees, agents or sub-contractors; or

(b)

fraud by it or its employees; or

(c)

any other act or omission, liability for which may not be limited under applicable law.

4.2

Subject to clause 4.1, the Seller's total aggregate liability in respect of all claims, losses or damages in aggregate whether arising from tort (including negligence), breach of contract or otherwise under or in connection with this Agreement, shall in no event exceed £200,000.

4.3

Subject to clause 4.1, the liability of a party for any failure or delay in performing its obligations under this Agreement shall be reduced to the extent that such failure or delay was caused by (i) an act or omission of the other party in breach of this Agreement; or (ii) a failure or disruption to the availability of the Seller's Systems to the extent that such failure or disruption is caused by a Force Majeure Event.

4.4

Subject to clause 4.1 and save to the extent that the Seller successfully recovers any Loss under a Third Party Contract pursuant to clause 2.11 (in which case the terms of clause 2.11 shall apply), the liability of the Seller for any failure or delay in performing its obligations under this Agreement shall be reduced to the extent that such failure or delay was caused by a failure or disruption to any services and/or facilities provided to the Seller under a Third Party Contract.

4.5

Subject to clause 4.1, neither party shall in any circumstances be liable to the other party for:

(a)

any indirect, special or consequential loss or damage; or

(b)

(whether direct or indirect)any loss of profits, business opportunities, sales, contracts, revenue, anticipated savings or loss or damage to goodwill.

TERM AND TERMINATION

5.1

This Agreement shall commence on the date of Completion (“Commencement Date”) and, unless and until terminated in accordance with its terms, shall continue in full force and effect until all of the Service Components have expired or been terminated.

5.2

With the exception of the Company Car Leases, the Company may terminate this Agreement in respect of one or more Service Components at any time prior to expiry of the Service Term by giving not less than 30 Business Days’ notice to the Seller.

5.3

Either party (the "notifying party") shall be entitled to terminate this Agreement with immediate effect by giving notice to the other party:

(a)

if the other party has committed a material breach of this Agreement and (where such breach is capable of remedy) does not remedy such breach within 10 Business Days after receipt of a Notice from the notifying party specifying the breach and requiring it to be remedied; or

(b)

if the other party commits a series of persistent minor breaches which when taken together amount to a material breach; or

(c)

if the other party ceases or threatens to cease to carry on its business; or

(d)

if the other party is unable to pay its debts within the meaning of section 123 of the Insolvency Act 1986; or

(e)

if a voluntary arrangement or a scheme of arrangement or composition with its creditors is entered into in relation to the other party; or

(f)

if a dissolution occurs, a winding-up petition is presented (and not withdrawn or discharged within 14 days) or a winding-up resolution (other than a voluntary winding-up for reconstruction) is passed (whether by the directors or shareholders) in relation to the other party; or

(g)

if a liquidator, receiver or administrator is appointed in respect of the other party or any of its assets, or notice to appoint an administrator is given by the other party, its directors or by a qualifying floating charge holder (as defined in the Insolvency Act 1986); or

(h)

if any event occurs in a jurisdiction outside England and Wales similar or analogous to any of the events referred to in clauses 5.3(d) to 5.3(g) (inclusive).

5.4

This Agreement shall automatically terminate with respect to a Third Party Component if: (i) the Third Party Contract relating to that Third Party Component expires or terminates or (ii) the Third Party Provider makes any claim against the Seller and/or the Company as a result of the Seller's provision to the Company of that Third Party Component and/or as a result of any act or omission of the Company.

CONSEQUENCES OF TERMINATION

6.1

This clause 6 shall apply on termination of this Agreement and on the termination of an individual Service Component. References to the Service Components shall where applicable be read as a reference to the relevant individual Service Component.

6.2

Following termination of this Agreement and/or an individual Service Component:

(a)

the Company shall pay to the Seller all sums due up to the date of termination in respect of each terminated Service Component within 20 days following termination;

(b)

the Seller shall deliver to the Company all documents, information, and materials generated by the Seller exclusively in connection with the provision of the Service Components to the Company; and

(c)

each party shall promptly return to the other party all equipment, materials and property belonging to the other party that the other party had supplied to it or a member of its Group in connection with the supply of the relevant Service Components being terminated.

6.3

The termination of this Agreement and/or an individual Service Component (howsoever caused) shall be without prejudice to:

(a)

any other rights which either party may have under this Agreement which existed at or before the date of termination;

(b)

any liabilities accrued prior to the date on which the termination takes effect; and

(c)

any rights or obligations of either party which are expressly stated to survive, or by their nature survive, termination of this Agreement including clauses 4, 5, 6, 7, 8, 9, 10, 11; 12.1 and 14 to 22.

FORCE MAJEURE

7.1

In this clause 7 a "Force Majeure Event" shall mean any event or circumstance which is beyond the reasonable control of a party including, but not limited to:

(a)

in respect of the Seller, the delay, failure or inability of any third party to provide any services upon which the Seller is dependent in providing the Service Components to the Company or the existence of a valid and bona fide claim from any such third party that the Seller's provision of the Service Components constitutes a breach of the relevant third party contract; and/or

(b)

in respect of either party, acts of God, riots, war, acts of terrorism, fire, flood, storm or earthquake and any disaster, epidemic or pandemic, industrial dispute, strikes, lock-outs, interruption or failure of any utility service.

7.2

Subject to the remaining provisions of this clause 7, neither party to this Agreement shall in any circumstances be liable to the other for any delay or non-performance of its obligations under this Agreement to the extent that such non-performance is due to a Force Majeure Event.

7.3

In the event that either party is delayed or prevented from performing its obligations under this Agreement by a Force Majeure Event, such party shall:

(a)

(b)

use reasonable endeavours to mitigate the effects of such delay or prevention on the performance of its obligations under this Agreement; and

(c)

resume performance of its obligations as soon as reasonably possible after the removal of the cause of the delay or prevention.

7.4

7.5

The affected party shall notify the other party as soon as practicable after the Force Majeure Event ceases or no longer causes the affected party to be unable to comply with its obligations under this Agreement. Following such notification, this Agreement shall continue to be performed on the terms existing immediately prior to the occurrence of the Force Majeure Event unless agreed otherwise by the parties.

CONFIDENTIALITY

8.1

Subject to clause 8.2, a Receiving Party shall treat in confidence all Confidential Information and shall not:

(a)

disclose in whole or in part Confidential Information to any person not a party to this Agreement; or

(b)

use Confidential Information for a purpose other than for the exercise of its rights, or the performance of its obligations, under this Agreement.

8.2

Notwithstanding the provisions of clause 8.1, a Receiving Party may disclose Confidential Information:

(a)

to its own Personnel to the extent required for the proper performance of this Agreement (conditional upon the Receiving Party procuring that such Personnel keep such Confidential Information confidential in accordance with clause 8.1);

(b)

to its own professional advisors, provided that such recipients are themselves bound by obligations of confidentiality to the Receiving Party in respect of such information and;

(c)

to the extent that such Confidential Information is required to be disclosed by law and/or by any Relevant Authority, provided that the Disclosing Party (if it is lawful to do so) is notified in advance that such disclosure is to be made and the Disclosing Party has notified the Receiving Party of the confidential nature of the information.

8.3

If any Receiving Party becomes aware of any breach of confidence by any of its Personnel it shall promptly notify the Disclosing Party.

8.4

Following termination of this Agreement, the Receiving Party shall, if requested to do so by the Disclosing Party, as soon as reasonably practicable, procure that all Confidential Information in its possession or under its custody or control (or in the possession of, or under the custody or control of, any other member of its Group) is returned, deleted or destroyed (save to the extent prohibited by relevant laws or regulations) in accordance with the written instructions of the Disclosing Party and shall confirm in writing to the Disclosing Party that it has done so.

8.5

Each Receiving Party undertakes to apply to the Confidential Information at least the same security measures and degree of care as it applies to its own confidential information.

8.6

The provisions of this clause 8 shall survive the termination of this Agreement.

INTELLECTUAL PROPERTY RIGHTS

9.1

Subject to clauses 9.3 and 9.5, the Company agrees that if the Seller, in the performance of its obligations under this Agreement, makes available to the Company any Intellectual Property Rights owned by, or licensed to, the Seller or a member of the Seller's Group:

(a)

those Intellectual Property Rights will remain the sole property of the Seller or the relevant member of the Seller's Group, or their licensors (as appropriate); and

(b)

the Seller, or the member of the Seller's Group, or their licensors (as appropriate) owning such Intellectual Property Rights or materials, shall own all Intellectual Property Rights subsisting in any and all adaptations of, modifications and enhancements to and works derived from (and goodwill arising in relation to) such materials or Intellectual Property Rights,

all such Intellectual Property Rights being the "Seller's Intellectual Property Rights".

9.2

To the greatest extent the Seller is entitled to, the Company shall be licensed on a royalty free, non-exclusive, non-sublicenceable and non-transferable basis to use the Seller's Intellectual Property Rights solely for, and only to the extent necessary for, the receipt and use of the Service Components.

9.3

The Intellectual Property Rights in the Company Data and all materials relating exclusively to the business of the Company that are produced by the Seller in its provision of the Service Components shall at all times remain the sole property of, or vest in, the Company, and the Seller hereby assigns or shall procure the assignment to the Company with full title guarantee all of the Intellectual Property Rights in the Company Data and all such materials.

9.4

The Company hereby grants on a royalty free, non-exclusive, non-transferable basis a licence to the Seller (with authority to grant sub-licences thereunder) to use the Company Data and all materials relating exclusively to the business of the Company that are produced by the Seller in its provision of the Service Components during the relevant Service Term solely for, and only to the extent necessary for, the provision of the Service Components.

9.5

In the event that, following Completion, a Third Party Provider (in the course of or in connection with the provision of the Service Components) produces materials that relate exclusively to the business of the Company and assigns its rights in such materials to the Seller, the Seller agrees that it hereby assigns to the Company with full title guarantee all of the Intellectual Property Rights in such materials. The Company hereby grants a royalty free, non-exclusive, non-transferable licence to the Seller (with authority to grant sub-licences thereunder) to use such Intellectual Property Rights for the purpose of providing the Service Components and in connection with its obligations as set out in this Agreement.

9.6

Each party shall, at its own cost, promptly do or procure the doing of all such acts and things and execute or procure the execution of all such documents may from time to time be required to give effect to this clause 9.

9.7

Except as expressly provided in this Agreement, no rights or obligations in respect of a party’s Intellectual Property Rights are granted to the other party or to be implied from this Agreement.

employees

10.1

Although neither the Company nor the Seller expects the Regulations will apply as a result of any of the arrangements or services contemplated by this Agreement, the following clauses set out the parties' rights and obligations should the Regulations apply.

10.2

Subject to clause 10.3 below, if at any time by virtue of the Regulations any employment, any contract of employment, or any liability regarding the employment of any person employed (or formerly employed) by the Seller, any other member of the Seller's Group, or any Third Party Provider (or any agents, contractors, subcontractors, suppliers and/or associates of such parties) in connection to the provision of the Service Components under this Agreement transfers or is alleged to transfer to the Company, any member of its Group and/or any provider of Replacement Services in connection with the Service Components and/or any Replacement Services (or any part of them) (Transferred Employee), the Seller shall indemnify the Company, each member of the Company's Group and any provider of Replacement Services (as applicable) in full for and against all Loss (whether incurred directly or pursuant to a warranty or indemnity given to a third party) arising out of or in connection with the employment of any Transferred Employee prior to the date of transfer and/or any termination of such employment by the Company if a notice terminating the employment of the Transferred Employee is served by the Company within two months of the Company receiving notice from an employee or the Seller that there has been such transfer.

10.3

Any termination by the Company referred to above is subject to:

(a)

the Company, upon becoming aware of the alleged application of the Regulations to any Transferred Employee, notifying the Seller in writing within 7 days becoming aware;

(b)

the Seller shall within 14 days of being notified in accordance with clause 10.3(a), be entitled to re-employ or offer employment to such Transferred Employee; and

(c)

if such Transferred Employee has not accepted such re-employment or offer of employment within 21 days of the notification under clause 10.3(a) the Company may terminate such contract of employment conditional on compliance with all statutory and contractual obligations.

DATA PROTECTION

11.1

The Parties acknowledge and agree that during the Term the Parties shall each process Personal Data. The Parties acknowledge that the factual arrangement between them shall dictate the role of each as Data Controller and/or Data Processor in respect of the Data Protection Act 1998.

11.2

Each Party (the “first party”) confirms that, when acting as the other party's (the “second party’s”) data processor (as defined by the Data Protection Act 1998), the first party shall:

(a)

process the Personal Data only on behalf of the second party (or, if so directed by the second party, other members of the second party's Group), only for the purposes of performing this Agreement or otherwise only in accordance with instructions contained in this Agreement or received from the second party from time to time;

(b)

not otherwise modify, amend or alter the contents of the Personal Data;

(c)

(d)

take reasonable steps to ensure the reliability of any of the first party's Personnel who have access to the Personal Data;

(e)

notify the second party (within five Business Days) if it receives:

(i)

a request from a Data Subject to have access to that person's Personal Data; or

(ii)

a complaint or request relating to the second party's obligations under the Data Protection Act 1998; or

(iii)

any other communication relating directly or indirectly to the processing of any Personal Data in connection with this Agreement;

(f)

provide the second party with co-operation and assistance in relation to any complaint or request made in respect of any Personal Data, including by:

(i)

providing the second party with full details of the complaint or request;

(ii)

complying with a data access request within the relevant timescales set out in the Data Protection Act 1998;

(iii)

providing the second party with any Personal Data it holds in relation to a Data Subject making a complaint or request within the timescales required by the second party; and

(iv)

providing the second party with any information reasonably requested by the second party.

11.3

The Seller shall have no liability to the Company with regard to any act or omission of a Third Party Provider relating to the processing of any Personal Data by or on behalf of a Third Party Provider.

ANTI-BRIBERY COMPLIANCE

12.1

The Seller shall:

(a)

comply with all applicable laws, statutes, regulations and codes relating to anti-bribery and anti-corruption including the Bribery Act 2010;

(b)

promptly report to the other party any request or demand for any undue financial or other advantage of any kind received by it in connection with the performance of this Agreement; and

(c)

have and shall maintain in place throughout the term of this Agreement its own policies and procedures, including adequate procedures under the Bribery Act 2010, to ensure compliance with the Bribery Act 2010, and will enforce them where appropriate.

ACCESS RIGHTS

13.1

The Seller grants the Company the right to access the Seller's Systems in accordance with the provisions of this clause 13 and solely to the extent reasonably required in order to be able to receive the relevant Service Components.

13.2

The parties agree that the rights of access to the Seller's Systems granted under clause 13.1 shall be limited such that:

(a)

only Designated Personnel shall be permitted to access the Seller's Systems on behalf of the Company;

(b)

Designated Personnel shall only be entitled to access the Seller's Systems for those legitimate purposes in order to be able to receive and use the relevant Service Components; and

(c)

the Seller shall, acting in good faith, be entitled to withhold access to all or part of the Seller's Systems for all or any Designated Personnel where the Seller has reasonable grounds to believe Company that its Policies have been or are likely to be contravened by the relevant Designated Personnel.

13.3

If, at any time during the term of this Agreement, any Designated Personnel ceases for whatever reason to be an employee of the Company or its Group, such individual shall automatically and immediately cease to be deemed Designated Personnel and the Company shall procure that such person does not subsequently access (or permit any third party to access) the Seller's Systems.

13.4

The Company shall be wholly liable for the acts and omissions of all Designated Personnel such that (without limitation) any liabilities arising as a direct result of any act or omission of any Designated Personnel shall be deemed a liability assumed by the Company.

ENTIRE AGREEMENT

14.1

This Agreement (together with the Share Purchase Agreement) contains the entire agreement and understanding of the parties and supersedes all prior agreements, understandings or arrangements (both oral and written)) in relation to the subject matter of this Agreement.

14.2

No representation, undertaking or promise shall be taken to have been given or be implied from anything said or written in negotiations between the parties prior to this Agreement, and the Company acknowledges that it is entering into this Agreement without reliance on any undertaking, warranty or representation given by or on behalf of the Seller other than as expressly contained in this Agreement, provided that nothing in this clause shall limit or exclude the liability of the Seller for fraud.

14.3

The parties acknowledge and agree that the express terms and conditions of this Agreement are in lieu of all representations, warranties, conditions, terms, undertakings and obligations implied by statute, common law or otherwise, all of which are hereby excluded to the fullest extent permitted by law.

14.4

Neither party shall have any remedy in respect of any untrue statement made by the other upon which that party relied in entering into this Agreement (unless such untrue statement was made fraudulently) and that party's only remedy shall be for breach of contract as provided in this Agreement.

14.5

If any term of this Agreement is found to be illegal, invalid or unenforceable under any applicable law, such term shall, insofar as it is severable from the remaining terms, be deemed omitted from this Agreement and shall in no way affect the legality, validity or enforceability of the remaining terms.

NO PARTNERSHIP OR AGENCY

15.1

Nothing in this Agreement shall constitute or be deemed to constitute a partnership or joint venture between the parties, nor appoint either party as the agent of the other party for any purpose.

VARIATIONS AND WAIVERS

16.1

No variation of this Agreement shall be effective unless made in writing signed by or on behalf of both parties and expressed to be such a variation.

16.2

No failure or delay by either party or time or indulgence given in exercising any remedy or right under or in relation to this Agreement shall operate as a waiver of the same, nor shall any single or partial exercise of any remedy or right preclude any further exercise of the same or the exercise of any other remedy or right.

16.3

No waiver by either party of any requirement of this Agreement, or of any remedy or right under this Agreement, shall have effect unless given in writing and signed by such party. No waiver of any particular breach of the provisions of this Agreement shall operate as a waiver of any repetition of such breach.

ASSIGNMENT

17.1

Neither party shall, without the prior consent of the other (such consent not to be unreasonably withheld or delayed), create a trust in respect of, charge, transfer or assign any of its rights or obligations under this Agreement.

COUNTERPARTS

18.1

This Agreement may be executed as two counterparts and execution by each party of any one of such counterparts shall constitute due execution of this Agreement.

THIRD PARTY RIGHTS

19.1

Save to the extent that rights and benefits are expressly stated to operate in favour of a party's Group members, the parties do not intend this Agreement or any part of it to be enforceable by any other person by virtue of the Contracts (Rights of Third Parties) Act 1999. The parties to the Agreement may amend or terminate the Agreement without the consent of any third party beneficiaries.

NOTICES

20.1

Any notice, consent, request, demand, approval or other communication to be given or made under or in connection with this Agreement (each a "Notice" for the purposes of this clause) shall be in English, in writing and signed by or on behalf of the person giving it.

20.2

Service of a Notice must be effected by one of the following methods:

(a)

by hand to the relevant address set out in clause 20.4 and shall be deemed served upon delivery if delivered prior to 6pm, during a Business Day, or at the start of the next Business Day if delivered at any other time;

(b)

by prepaid first-class post to the relevant address set out in clause 20.1 and shall be deemed served at the start of the second Business Day after the date of posting;

(c)

by prepaid international airmail to the relevant address set out in clause 20.4 and shall be deemed served at the start of the fourth Business Day after the date of posting; or

(d)

by email transmission to the relevant email address set out in clause 20.4 and shall be deemed served on despatch if despatched prior to 6pm during a Business Day, or at the start of the next Business Day if despatched at any other time, provided that in each case a receipt indicating complete transmission or sending of the Notice is obtained by the sender and that a copy of the Notice is also despatched to the recipient using a method described in clauses 20.2(a) to 20.2(c) (inclusive) no later than the end of the next Business Day.

20.3

In clause 20.2 "during a Business Day" means any time between 9.30 a.m. and 5.30 p.m. on a Business Day based on the local time where the recipient of the Notice is located. References to "the start of [a] Business Day" and "the end of [a] Business Day" shall be construed accordingly.

20.4

Notices shall be marked as follows:

(a)

Notices for the Company shall be marked for the attention of:

Name: John Rochon Jr.

Address: [• ] 2400 Dallas Pkwy. #230, Plano, TX 75093

Email: [• ]

Copied to: Lisa Burke

Address: [• ]

Email: [• ]

(b)

Notices for the Seller shall be marked for the attention of:

Name: Mark Ashcroft

Address: 2 Gregory Street, Hyde, Cheshire, SK14 4TH

Email:

20.5

A party may change its address for service provided that it gives the other party not less than 28 days' prior notice in accordance with this clause 20. Until the end of such notice period, service on either address shall remain effective.

DISPUTE RESOLUTION

21.1

If a dispute arises in connection with this Agreement ("Dispute") then, except as expressly provided in this Agreement, the parties shall follow the dispute resolution procedure set out in this clause 21:

21.2

The parties shall attempt, in good faith, to resolve any Dispute promptly by negotiation which shall be conducted as follows:

(a)

the Dispute shall be referred, by either party, first to the [• ] of each of the parties for resolution;

(b)

if the Dispute cannot be resolved by the [• ] of the parties within 14 days after the Dispute has been referred to them, either party may give notice to the other party in writing (Dispute Notice) that a Dispute has arisen; and

(c)

within seven days of the date of the Dispute Notice, each party shall refer the Dispute to the Company's [• ] and the Seller's [• ] for resolution.

21.3

If the Company's [• ] and the Seller's [• ] are unable, or fail, to resolve the Dispute within 21 days of the date of the Dispute Notice, or within 14 days of the reference to the Company's [• ] and the Seller's [• ] pursuant to clause 21.2(c), the parties may attempt to resolve the Dispute by mediation in accordance with clause 21.4.

21.4

If, within 60 days of the Dispute Notice, the parties have failed to agree on a resolution, either party may refer any Dispute for mediation pursuant to this clause 21.4, but neither shall be a condition precedent to the commencement of any court proceedings, and either party may issue and commence court proceedings prior to or contemporaneously with the commencement of mediation. The following provisions shall apply to any such reference to mediation:

(a)

the reference shall be a reference under the Model Mediation Procedure (MMP) of the Centre of Dispute Resolution (CEDR) for the time being in force;

(b)

(c)

to the extent not provided for by such agreement of the MMP:

(i)

(ii)

the mediation shall be conducted by a sole mediator (which shall not exclude the presence of a pupil mediator) agreed between the parties or, in default of agreement, appointed by CEDR.

21.5

21.6

Nothing in this clause 21 shall prevent either party from instigating legal proceedings where an order for an injunction, disclosure or legal precedent is required.

APPLICABLE LAW AND JURISDICTION

22.1

This Agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales.

22.2

Each party irrevocably agrees that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim arising out of or in connection with this Agreement or its subject matter or formation (including non-contractual disputes or claims).

THIS AGREEMENT has been duly executed on the date first stated above.

Schedule 1

PART 1

SERVICE COMPONENTS AND CHARGES

Service Component	Description	Service Term	Charges
HR Support	HR Support (as detailed in Appendix One Part One)	6 Months from the Commencement Date	£ 15,000 per annum/£1,250 per Month
Finance Support	Finance Support to Kleeneze accounts department (as detailed in Appendix One Part Two)	12 Months from the Commencement Date	£ 42,844 per annum/ £3,570.33 per Month
Company Car Leases	Rights and liabilities under the lease arrangements on identified company cars (as detailed in Appendix One Part Three) leased by Express Gifts Limited for the use of Kleeneze staff. The parties will use reasonable endeavours to transfer the rights and obligations from Express Gifts Limited to the Company on or before the expiry of 30 days of the Commencement Date.	The sooner of the transfer of the relevant contract/lease agreement to the Company or the expiry of the last of each contract/lease arrangements to terminate or expire.	As detailed in Appendix One Part Three.
Audit and Insurances	Audit and Insurances (as detailed in Appendix One Part Four)	Audit services - 6 Months from the Commencement Date Insurances - up to and including 31 March 2015.	As detailed in Appendix One Part Four.

An summary of charges is described in Appendix One Part Five

PART 2
REPRESENTATIVES

1.1

HR Support Services

(a)

For the Seller: [• ]

(b)

For the Company: [• ]

1.2

Finance Support Services

(a)

For the Seller: [• ]

(b)

For the Company: [• ]

1.3

Company Car Leases Services:

(a)

For the Seller: [• ]

(b)

For the Company: [• ]

1.4

Audit and Insurances Services:

(a)

For the Seller: [• ]

(b)

For the Company: [• ]

Schedule 2
THIRD PARTY COMPONENTS

PART 1
THIRD PARTY COMPONENTS

Service Component

Third Party
Provider

Description of Third Party Component

Company Car Leases

Activa Contracts

Alphabet GB Limited

Grosvenor Contracts
Leasing Limited

TCH Leasing

The lease of the identified cars from a third party.

Audit and Insurances

Aviva

Zurich

Lloyds

ACE European

Group

AIG Europe

Royal & Sun Alliance

Allianz Engineering

Chubb

Continued insurance cover up to and including 31 March 2015 underwritten by a third party

APPENDIX 1

PART 1

HR TSA Costs

Assisting in the production of job descriptions

Placing job advertisements

Interview invite letters and assistance with interviewing when required

Job Offer/Induction paperwork

Advice/assistance with all people related issues

Producing paperwork connected to disciplinary/grievance hearings/absence

Attendance at disciplinary/grievance hearings/back to work interviews as and when required

Assistance/advice/guidance connected to reorganisation of the workforce structure

Manage the employee engagement survey process and facilitate the improvement planning sessions

Delivery of basic management training connected to internal process, i.e. disciplinary/grievance, family friendly, absence

Processing leaver information, conducting exit interviews

Producing settlement agreements where appropriate

The above services take up 15 hours per week which equates to £15,000 per annum

PART 2

FINANCE TSA Costs

Name:	Number of Staff Headcount	Charge
		£
Clerks/Assistants	3		3,194
Middle Management	2		22,421
Senior Accountants	3		11,641
NI			5,588
			42,844

Name:

Role:

Summary

Time:

Tasks

Deadlines:

Ann Dean

Supplier Payments

Clerks /Assistants

Part

Produce payment runs. Assist with payment queries. Supplier set up forms etc

Daily/Weekly/Monthly

Angela Hudson

Senior Management Accountant

Middle Management

Part

70%

Weekly Reports KPI etc

Monday 10am

Casgh Reporting/Forecasting

Daily month end

Managing all staff

Control the flow of Foreign invoices. Dealing with all the queries from banks etc

Daily month end

Accounts analysis

Volume profit checks and payments

Preparation of Accruals/Prepayments

Month end accounts/Journals

Conference Cost control

Weekly/Monthly

Prepare P& L and balance sheet

Leslie Von Tonder

Payroll Manager

Middle Management

Part

Managing any work undertaken on Kleeneze staff / Payment of Payrolls

Weekly /Monthly

Alison Morrison

Payroll Clerk

Part

Produce weekly monthly payrolls

Weekly Monthly

Ian Lan

Finance Accountant

Senior Management

Part

Assistance with payment files, bacs payments, Finnace system, Uploads of forecast etc

Madeleine Smith

Financial Controller

Senior Management

Part

10%

Preparation of vat return

Vat/Production of Group Packs/High Level Assistance when required/ Manage staff/ Workloads

Management accounts packs to FD for Month End

Thrs following month end

Provide assistance to the Senior management accountant as and when required

Daily

Support in managing staff

Daily

Control the Financial System used and any changes necessary

Various

Involvemnt in all the new systems( eg Warehouse stock system changes)

Various

Provide expertise in meetings (eg KPMG on bad debt, vat relief etc)

Various

Rosemary Wooff

Stock Movement Control

Senior Management

Part

10%

Control all stock balances in the trial balance

Weekly Monthly in line with management accounts deadlines

Understand all the stock systems within the business.

Provide extensive support on any stock issues arising. Eg (Product set up issues etc)

PI counting

perpetual

Stock queries arising from the matching of invoices

Andrew Barrett

Stock Journals

Clerks /Assistants

Part

Produce journals reports to support Stock movement control

Daily

Naela Kauser

Accounts Assistant

Clerks /Assistants

Part

Controlling the production of Sales ledger invoices either sundry ledger or Group ledger

Weekly/Monthly

PART 3

PART 4

Annual Insurance and Audit

	FY15/16 Budget		FY14/15 Budget

Life Assurance		12,460		12,460

Medical Insurance		5,741		5,220

Audit Fee		61,967		61,967

Insurance Premium		121,841		109,867

PART 5

TSA Costs Annual

	£m
SUPPORT COSTS			COMMENTS

HR		0.02	Recharge based on pro rata of current annual charge for Kleeneze based on 15 hours per week

FINANCE		0.04	Recharge based on pro rata of current annual charge for Kleeneze based on 154 hours per week covering various level within finance

BACK OFFICE TOTAL		0.06
		-

TOTAL SUPPORT COSTS		0.06

GROUP		COMMENTS

LIFE ASSURANCE	0.01	Current annual premium for Kleeneze
MEDICAL INSURANCE	0.01	Current annual premium for Kleeneze
INSURANCE PREMIUM	0.12	Current annual premium for Kleeneze
AUDIT FEE	0.06	Limited audit scope to include audit of Kleeneze while under Findel ownership
LEASE CARS	0.04	£36.7k represents Jan 15 - Dec 15. Jan 16 - Feb 18 is one car at £454 per month.
TOTAL GROUP COSTS	0.24

TOTAL ANNUAL COSTS	0.30

Signed by Tim Kowalski
for and on behalf of FINDEL PLC	Director

Signed by John Rochon, Jr.
for and on behalf of KLEENEZE LIMITED	Director

Exhibit 99.1

CVSL SIGNS AGREEMENT TO ACQUIRE KLEENEZE

For Immediate Release

(Dallas, TX, February 6, 2015) -- CVSL Inc. [NYSE MKT: CVSL] announced today that it has signed an agreement to acquire Kleeneze, a United Kingdom-based direct-to-consumer company. The consummation of the acquisition is subject to certain conditions, including approval by the New York Stock Exchange MKT.

Kleeneze is one of the UK’s longest-operating, largest and best-known direct-to-consumer businesses. Founded in 1923, the company has grown into a community of more than 7,000 independent distributorships, offering a wide variety of several thousand cleaning, health, beauty, home, outdoor and other products to customers across the U.K. and Ireland. Kleeneze is a founding member of the U.K. Direct Selling Association.

Under the terms of the agreement, CVSL will purchase 100% of the shares of Kleeneze from Findel PLC. Both the CVSL and Findel boards have approved the terms. It is anticipated that closing will take place by the end of the First Quarter.

“Kleeneze has an extensive product line, a nearly century-long heritage, a well-known brand and a robust presence throughout the U.K. We believe Kleeneze will be an outstanding addition to our CVSL family of companies,” said John Rochon Jr., CVSL’s vice chairman and head of its investment committee. “Kleeneze gives CVSL a very significant presence in the UK and represents an important step forward in CVSL’s international expansion.”

“Becoming part of the CVSL family of companies will open an important and exciting new chapter in the long, distinguished history of Kleeneze,” said Lisa Burke, Managing Director of Kleeneze. “This will allow us to be part of a global, public company, while at the same time maintaining our own unique identity. We view this as the best of all worlds,” she added.

Commenting on the transaction, Roger Siddle, CEO of Findel, said: “CVSL represents a natural home for Kleeneze. We believe that this transaction is in the best interests of both Findel and Kleeneze, allowing Kleeneze to benefit from the extensive expertise and support of CVSL whilst allowing Findel to focus its resources on growing its core businesses.”

With the addition of Kleeneze, CVSL will include nine companies. The combined trailing 12 month revenue of CVSL and Kleeneze, based upon the most recently reported results, as of September 30, 2014, was over $180 million.

About CVSL

CVSL is a growing group of direct-to-consumer companies that connect social media networks into an ever-expanding virtual “community” of social commerce. Within CVSL, each company retains its own separate brand identity, sales force and compensation plan. CVSL companies currently include The Longaberger Company, a 42-year old maker of hand-crafted baskets and other home décor items; Your Inspiration At Home, an award-winning maker of hand-crafted spices and other gourmet food items from around the world; Project Home, a direct seller of tools designed for women as well as home security systems; Agel Enterprises, a global seller of nutritional products in gel form as well as a skin care line, operating in 40 countries; Paperly, which offers a line of custom stationery and other personalized products; My Secret Kitchen, a U.K.-based seller of gourmet food products; and Uppercase Living, which offers an extensive line of customizable vinyl expressions for display on walls in the home.

Cautionary Note Regarding Forward-Looking Statements:

This press release contains forward-looking statements that involve risks and uncertainties. All statements other than statements of historical fact contained in this press release are forward-looking statements. We have attempted to identify forward-looking statements by terminology including “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” or “will” or the negative of these terms or other comparable terminology. Although we do not make forward-looking statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are based upon current beliefs, expectations and assumptions and include statements regarding the contribution of Kleeneze to CVSL and the timing of the anticipated closing. These statements are subject to a number of risks and , uncertainties, including the risk that the conditions to closing of the Kleeneze transaction are not satisfied as to which no assurance can be given, our ability to consummate the transaction when anticipated, our ability to successfully integrate Kleeneze into our company and other risks outlined under “Risk Factors” in our Annual Report on Form 10-K for our fiscal year ended December 31, 2013, our Quarterly Reports on Form 10-Q, including the Quarterly Report filed with the Securities and Exchange Commission for the quarter ended September 30, 2014, and those risks discussed in other documents we file with the Securities and Exchange Commission, which may cause our actual results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements to differ materially from expectations. Except as required by law, we undertake no obligation to update or revise publicly any of the forward-looking statements after the date of this press release to conform our statements to actual results or changed expectations.

CVSL Media Contact: Russell Mack (rmack@cvsl.us.com)

CVSL Investor Relations: (scottp@cvsl.us.com)

Findel Media Contact: Stephen Malthouse / Will Smith +44 (0) 207 353 4200 (findel@tulchangroup.com)