SHARE PURCHASE AGREEMENT

relating to the sale and purchase of the whole of the issued share capital of Stanley House Distribution Limited

“A Ordinary Shares” means A Ordinary Shares of £1.00 each in the capital of the Target.

Agreed Claim means any claim made by the Buyer under this Agreement which is either:

“ASB” means the Accounting Standards Board Limited, a company registered in England and Wales (registered number ###-###-####), 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 Sellers, or which is an associated company of the Sellers within the meaning of section 449 of CTA 2010 (but as if in section 450 CTA 2010 there were substituted for the words “the greater part” wherever they appear the words “20% or more”) but excluding the Target Group.

“Authority” means any local, national, multinational, governmental or non-governmental authority, statutory undertaking, agency or public or regulatory body (whether present or future) which has jurisdiction over the Business (within the Restricted Area or otherwise) or any decision, consent or licence which is required to carry out the Business and “Authorities” will be construed accordingly.

“B Ordinary Shares” means B Ordinary Shares of £1.00 each in the capital of the Target.

“Business” means the business carried on by the Target Group as at, and before, Completion and includes any part of it.

“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.

“Buyer’s Solicitors’ Account” means the sterling client account maintained by the Buyer’s Solicitors from time to time.

“Capex Schedule” means the schedule of capital expenditure items contained at document 108 of the Disclosure Bundle.

“Cash Consideration” means the Consideration due in cash under clause 3.1(a) of this agreement.

“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 Target Shares in accordance with this Agreement.

“Completion Date” means the date of this Agreement.

“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:

“Consideration” means the amount payable for the Target Shares calculated in accordance with clause  3.

“Convertible Notes” means the instruments delivered from the Buyer to the Sellers in accordance with clause 3 of this Agreement.

“CTA 2010” means the Corporation Tax Act 2010.

“Customer” means each of the distributors of the Target Group and the end purchaser(s) of any products sold directly by the Target.

“CVSL Shares” means shares of common stock in CVSL issued and credited as fully paid and ranking pari passu with all shares of common stock in CVSL at the time of their issue and subject to any applicable restrictions which may be placed thereon.

“Deferred Shares” means Deferred Shares of £0.001 each in the capital of the Target.

“Disclosure Bundle” means the disclosure bundle in the agreed form annexed to the Disclosure Letter.

“Disclosure Letter” means the letter in the agreed form dated the same date as this Agreement from the Sellers to the Buyer relating to the Warranties and the Tax Warranties.

“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:

“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.

“Fiduciary” means a trustee, guardian, executor, administrator, receiver or any other person holding a legal or ethical relationship of trust with one or more parties.

“Financial Period” means four-week periods, in accordance with the four-week Financial Periods the Target has used in the Management Accounts.

“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.

“Intellectual Property” means any patents, trademarks, 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.

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

“Last Audited Accounts” means the audited consolidated balance sheet of the Target Group as at the Last Audited Accounts Date and the consolidated audited profit and loss account of the Target Group made up to the Last Audited Accounts Date and the auditor’s and the directors’ reports and notes thereon.

“Last Audited Accounts Date” means 29 February 2015.

“Management Accounts” means the unaudited balance sheet and profit and loss account of the Target Group for the Financial Periods from the Last Audited Accounts Date and ended on the Management Accounts Date included in the Disclosure Bundle.

“Management Accounts Date” means 12 September 2015.

“Ordinary Course of Business” means an action taken or omission which is consistent with the past customs and practices of the Target Group, including past practice with respect to quantity, amount, magnitude and frequency and standard employment policies and past practices with respect to management of cash and working capital, which is taken in the ordinary course of the normal day-to-day operations of the Target Group.

“Property” as used in this Agreement and including as otherwise specified in Schedule 2, means each item of tangible personal property including, without limitation, all office equipment, furniture, vehicles, machinery and equipment, tools, papers, documents, effects, and consisting and all other items, other than real property, owned or leased by the Target Group used or acquired for operating the business of the Target.

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

Relevant CVSL Share Price means the weighted average of the closing prices for CVSL Shares for each of the 10 trading days ending with the trading day five (5) Business Days preceding a Claim becoming an Agreed Claim.

“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.

“Sellers’ Solicitors” means Fladgate LLP, 16 Great Queen Street, London WC2B 5DG (ref: JAL/26242/0007).

“Sellers’ Solicitors’ Account” means the sterling client account maintained by the Sellers’ Solicitors from time to time, details of which will be provided to the Buyer’s Solicitors in advance of Completion.

“Share Consideration” means the CVSL Shares to be issued to the Sellers in accordance with clause 3.1(c).

“Shareholder Loan Letters” the letters in the agreed form from the Target to each of the Sellers confirming that, inter alia, following the occurrence of the matters set out in clause 4.5(d) the Shareholder Loans have been fully and finally settled by the Sellers.

“Shareholder Loans” means the loan of £750,100 from the Target to Robert Way and the loan of £249,900 from the Target to Andrew Lynton Cohen.

“Subsidiary” means Betterware Limited, brief details of which are set out in Part 2 of Schedule 1.

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

“Target” means Stanley House Distribution Limited, a company incorporated in England (Company Number 07960280); whose registered office is at Unit 2 Hurricane Park, Hartlands Parkway, Birmingham, B7 5PJ.

“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.

“Transaction Documents” means this agreement, the Disclosure Letter, the Convertible Notes, and each of the documents referred to in this Agreement as being in the agreed form.

“Target Shares” means all of the 67,000 (sixty-seven thousand) A Ordinary Shares, the 22,320 (twenty-two thousand three hundred and twenty) B Ordinary Shares and the 10,680 (ten thousand six hundred eighty) Deferred Shares.

“Target Group 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.

“UKLA” means the Financial Conduct Authority acting in its capacity as the UK Listing Authority.

“US Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute.

“US Person” means:

(a)Any natural person resident in the United States;

(c)Any estate of which any executor or administrator is a U.S. person;

(d)Any trust of which any trustee is a U.S. person;

(e)Any agency or branch of a foreign entity located in the United States;

(h)Any partnership or corporation if:

(i)    organised or incorporated under the laws of any foreign jurisdiction; and

“Warranties” means the warranties set out in Schedule 2, and Warranty shall mean any one of them.

(a)Robert Way: 732,236 CVSL Shares; and

(b)Andrew Cohen: 243,948 CVSL Shares.

and undertakes to hold all dividends and distributions and exercise all voting rights available in respect of such Target Shares (or, as applicable, to procure that all such dividends and distributions are held and all such voting rights are exercised) in accordance with the directions of the Buyer or its nominees and if any Seller is in breach of the applicable undertakings contained in this clause 5, he 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 5.1.

under any other provision of this agreement in connection with any matter or matters relating to any Dilapidation Claim or Freehold Claim.

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

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

(including the due diligence exercise conducted prior to Completion). If Completion occurs, no such costs incurred by or on behalf of the Sellers shall be charged to the Target Group.

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

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.

In order to induce the Sellers to enter into and perform this Agreement, CVSL represents and warrants to the Sellers as follows:

CVSL is a corporation duly organized, validly existing and in good standing under the laws of the State of Florida.

CVSL has full power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party and to perform its obligations hereunder and thereunder. All action on the part of CVSL and its directors, officers and stockholders necessary for the authorization, execution, delivery and performance by CVSL of this Agreement and the other applicable Transaction Documents to which CVSL is a party has been taken. This Agreement is the valid and binding obligation of CVSL, enforceable against CVSL in accordance with its terms, and the Transaction Documents to which CVSL is a party, when executed and delivered by CVSL, will constitute valid and binding obligations of CVSL, enforceable against CVSL in accordance with their respective terms, except, in each such case, as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium, and other similar laws relating to or limiting creditors’ rights generally and by equitable principles.

The execution and delivery by CVSL of this Agreement and the other Transaction Documents to which it is a party do not, and the performance by CVSL of its obligations under this Agreement and the other Transaction Documents to which it is a party and the consummation of the Transactions will not: (i) subject to the receipt of any required consent, approval or authorization of any Governmental Body or the termination or expiration of any waiting period under applicable law constitute a violation (with or without the giving of notice or lapse of time, or both) of any law or any Judgment applicable to CVSL; (ii) violate, conflict with, result in any breach of, or result in a default (with or without the giving of notice or lapse of time, or both) under, or create in any Person the right to accelerate, terminate, modify or cancel (or automatically do any of the foregoing) any Contract to which CVSL is a party or by which it is bound or to which any of its assets are subject; (iii) conflict with or result in a breach of or constitute a default under any provision of its governing documents, except in the case of clause (ii) above to the extent such violations, conflicts, breaches, defaults or other matters would not reasonably be expected to prevent or prohibit CVSL from performing its obligations under, and completing the transactions contemplated by, the Transaction Documents.

The shares of Common Stock issued or to be issued in respect of the Share Consideration are duly authorized and, when issued and paid for in accordance with this Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all Encumbrances. The shares of Common Stock issued or to be issued upon conversion of the Convertible Notes are duly authorized and, when issued upon conversion of the Convertible Notes, will be duly and validly issued, fully paid and nonassessable, free and clear of all Encumbrances.

The authorized capital stock of CVSL consists of: (i) 250,000,000 CVSL Shares, of which 34,367,095 shares are issued and outstanding; and; (ii) 500,000,000 shares of Preferred Stock, $0.0001 par value per share. Since May 11, 2015, CVSL has not issued any CVSL Shares, other than pursuant to CVSL’s equity based compensation plans and arrangements. All of the issued and outstanding CVSL Shares of CVSL have been duly authorized and validly issued, are fully paid and non-assessable and have been issued in compliance with applicable federal and state securities laws. None of CVSL’s outstanding CVSL Shares were issued in violation of any preemptive rights, rights of first refusal or other similar rights. Other than pursuant to CVSL’s equity based compensation plans and arrangements or as disclosed in CVSL’s other filings with the United States Securities and Exchange Commission, there are no: outstanding or authorized subscriptions, warrants, options or other rights granted by CVSL to purchase or acquire, or preemptive rights with respect to the issuance or sale of, the capital stock of CVSL, or which obligate or may obligate CVSL to issue any additional shares of its capital stock or any securities convertible into or evidencing the right to subscribe for any shares of its capital stock. Neither the acquisition of the Stock Consideration pursuant to this Agreement or CVSL Shares issuable upon conversion of the Convertible Notes (whether taken together or separately) will give rise to any rights to acquire or receive, or obligate CVSL to issue any additional shares of its capital stock or any securities convertible or exchangeable for its capital stock.

Since January 1, 2014, all documents that CVSL is required file with the United States Securities and Exchange Commission (the “SEC”), including registration statements, prospectuses, reports, schedules, forms, statements and other documents, exhibits and all other information incorporated by reference (collectively referred to herein as the “SEC Reports”), have been timely filed (or, filed within the time granted to CVSL under a valid extension), except for the Current Report on Form 8-K/A related to the Kleeneze transaction, for which CVSL is seeking guidance from the SEC.

As of their respective dates, or, if amended or supplemented prior to the date of this Agreement, as of the date of such amendment or supplement, each SEC Report complied in all material respects with the requirements of the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as the case may be, and the rules and regulations of the SEC thereunder applicable to such SEC Report.

The financial statements of CVSL included in the SEC Reports (the “CVSL Financial Statements”) comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing (or, if an amendment with respect to any such document was filed, when such amendment was filed). The CVSL Financial Statements have been prepared in accordance with GAAP, except as may be otherwise specified in CVSL Financial Statements or the notes thereto, and fairly present in all material respects the financial position of CVSL and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. Since March 31, 2015 (the “CVSL Balance Sheet Date”): (a) there has been no event, occurrence or development that has or that could reasonably be expected to result in a CVSL Material Adverse Effect; (b) neither CVSL nor any material subsidiary has incurred any Liabilities (contingent or otherwise) other than (x) Liabilities incurred in the ordinary course of business and (y) Liabilities not required to be reflected in CVSL Financial Statements pursuant to GAAP or required to be disclosed in filings made with the SEC; (c) CVSL has not altered its method of accounting or the identity of its independent registered public accounting firm; and (d) CVSL has not declared or made any payment or distribution of cash or other property to its stockholders or officers or directors (other than in compliance with existing stock option, stock award, stock appreciation or phantom stock plans of CVSL (collectively, “CVSL Stock Plans”)) with respect to its capital stock, or purchased or redeemed (or made any agreements to purchase or redeem) any shares of its capital stock.

Since the Balance Sheet Date and other than repurchases of Common Stock pursuant to the terms of equity awards under CVSL Stock Plans, there has not been (a) any declaration, setting aside or payment of any dividend on, or other distribution (whether in cash, stock or property) in respect of, any of CVSL’s capital stock, or any purchase, redemption or other acquisition by CVSL of any of CVSL’s capital stock or any other securities of CVSL or any options, warrants, calls or rights to acquire any such shares or other securities except for repurchases from employees following their termination pursuant to the terms of their pre-existing stock option or purchase agreements, or (ii) any split, combination or reclassification of any of CVSL’s capital stock.

Except where expressly stated in this Schedule 2 each of the Warranties will be deemed repeated by the Sellers in relation to each Target Group Company and any reference in this Schedule 2 to the Target will be deemed to be a reference to each Target Group Company.

Accurate details of all:

are contained in the Disclosure Letter and in relation to the Financial Facilities, Treasury Transactions and Lease Agreements:

adjustment to the rental or to payments at a future date under any of the relevant Lease Agreements.

The Target:

Amounts represented by cheques, warrants, mandates or any other payment instructions issued or given by the Target which at the date of this agreement remain outstanding or unpaid or unperformed do not exceed in the aggregate £30,000.

The Target's provisions (as stated in the Management Accounts) in respect of bad or doubtful debts are in all material respects reasonable having regard to the facts and circumstances of which the Sellers are aware, and are consistent with the past practice of the Target in that regard.

There are no creditors of the Target to whom the Target is indebted by more than £20,000 for a period of more than thirty (30) days since the due date.

The Target is neither a party to, nor has any liability (including any prospective or contingent liability) under, any guarantee, the effect of which is to secure or support an obligation of a third party.

The Target does not hold any security (including any guarantee) which is not valid and enforceable by the Target against the grantor.

No-one is entitled to receive from the Target any finder's fee, brokerage or commission or other benefit in connection with the sale of the Target Shares.

and there is no reason to expect the Target to be called upon to do any such thing in the future in relation to goods or services previously supplied or agreed to be supplied before the date of this agreement.

the business of the Target Group being varied, avoided, cancelled, repudiated, rescinded, prematurely determined, declared to be invalid or not renewed.

The Target has not committed any material breach of any contract, agreement or arrangement to which it is a party and which is material to the business of the Target Group and so far as the Sellers are aware, no fact or circumstance exists which would give rise to a breach of this kind by the Target.

The Target is not a party to any contract, obligation or arrangement which:

There is no agreement or arrangement which:

No substantial part of the Business is carried on under the agreement or consent of a third party.

The Target is not a party to any confidentiality or secrecy agreement or undertaking or other arrangement outside its ordinary course of business which may restrict its use or disclosure of any information.

There is no outstanding agreement or arrangement by virtue of which the Target is under a prospective or contingent liability to dispose of its fixed assets or business or any part of them.

The Target is not a party to any agreement or arrangement or under any obligation under which it is or may become liable to make any investment (as referred to in section 22 of the Financial Services and Markets Act 2000) with, or to deposit any money with or to provide any loan or financial accommodation or credit (other than normal trade credit) to, any person or to subscribe for, acquire, dispose of or underwrite any investment.

Neither the Sellers nor any person connected with any of the Sellers has any interest in any other company or business which has a trading relationship with or is in competition with the Target.

Since its incorporation, the Target's Business has not been interrupted or otherwise materially or adversely affected by any event or circumstances not having a similar effect on business of the same type and scale as the Business.

The Target does not use, or otherwise carry on its Business under, any name other than its corporate name.

No loan has been made by the Target in breach of the Consumer Credit Act 1974 and the Target does not require a licence under the Consumer Credit Act 1974 in relation to its Business.

The Target keeps an up to date register of the fixed assets used by it in the Business and this register (a copy of which is contained in the Disclosure Bundle) is accurate.

All the fixed assets, plant, machinery, vehicles and equipment owned or used by the Target:

The Target owns or has and will at Completion have the right to use all assets and rights it needs to carry on the Business as carried on before the date of this agreement.

The trading stock currently held by or on behalf of the Target, except to the extent that provision has been made in the Management Accounts:

The Target has exclusive ownership (free of any Security Interest) of and direct control of and access to:

Employees means all employees employed by Target on the date of this agreement.

Senior Employee means an Employee earning gross remuneration equal to or in excess of £30,000 per annum.

Workers trainees, agency workers (as defined in the Agency Workers Regulations 2010), consultants, sub-contractors, non-executive directors, secondees or employees on secondment (to and from the Target), night workers (for the purposes of the Working Time Regulations 1998), volunteers or workers (as defined in Section 230 of the Employment Rights Act (ERA)).

The Target does not have any Workers.

any Employee, nor are any negotiations with or on behalf of any such Employee for any such increase or alterations expected to take place within the twelve months immediately following the date of this agreement.

The Target does not have and is not proposing to introduce any share incentive scheme, share option scheme or profit sharing bonus or other incentive scheme for any director, officer or Employee.

Contract Based Schemes means the Betterware Limited Group Personal Pension Scheme with AEGON and the Group Stakeholder Pension Plan with Standard Life provided by the Target Group and/or any personal pension schemes to which the Target Group currently contributes.

Disclosed Schemes means the Life Assurance Scheme and the Contract Based Schemes or such one of them as the context requires.

Employee means an employee or former employee of the Target Group.

Life Assurance Scheme means the Betterware Limited Group Life Assurance Scheme established by a declaration of trust dated 18 July 2011.

Money Purchase Benefits means benefits as defined in section 181 of the Pension Schemes Act 1993.

Relevant Benefits means any relevant benefits as defined in section 393B of the Income Tax Earnings and Pensions Act 2003 except that it will include the benefits specified in sections 393B(2).

In this paragraph 8, unless the context otherwise requires:

Intellectual Property means patents, utility models, rights to inventions, copyright and neighbouring and related rights, moral rights, trade marks, service marks, trade, brand and business names, domain names, rights in get-up and trade dress, goodwill and the right to sue for passing off and unfair competition, rights in designs, rights to use, and protect the confidentiality of, confidential information (including know-how and trade secrets), in each case whether registered or unregistered and including all applications for and rights to apply for and be granted, renewals or extensions of, and rights to claim priority from, such rights and all similar or equivalent rights or forms of protection subsisting at any time in any part of the world but excluding any intellectual property in computer software (including source codes).

Target IPR means all material Intellectual Property owned by the Target or used or required by the Target in connection with the Business.

Technical Information means all designs, specifications, data sheets, calculations, methods, techniques, processes, discoveries, formulations, inventions, performance, pricing data and other manufacturing, engineering, technical, commercial and financial data and information relating to the Business, including (without limitation) any such data and information relating to the manufacture, sale, use and maintenance of products and services offered by the Target.

Complete and accurate particulars are included within the Disclosure Letter of:

steps reasonably required have been taken for the maintenance and protection of such Target Group Intellectual Property Rights.

Since the Management Accounts Date, the Target has not sold or otherwise disposed of any Intellectual Property owned or used by the Target.

So far as the Sellers are aware, the Target has not infringed the Intellectual Property of any other person, and none of the activities of the Business have given rise to any obligation upon the Target to pay any royalty, fee, compensation or any other sum whatsoever in connection with the use of any third party Intellectual Property.

There is not currently, and within the past 6 years there has not been, any actual or , so far as the Sellers are aware, threatened infringement (including misuse of confidential information) or any event which would constitute an infringement or misuse by any third party of any of the Target Group Intellectual Property Rights.

The Target has not granted and is not obliged to grant any licences under any Target Group Intellectual Property Rights and/or Technical Information and has not agreed to disclose any know-how or Technical Information to any person.

The Target does not use, or otherwise carry on its business under, any name other than its corporate name and its letters, invoices and order forms comply with all applicable legislation.

All inventions made by any employees of the Target and used or enjoyed by the Target were made in the course of the normal duties of the employee concerned for the purposes of section 39 of the Patents Act 1977 (or the equivalent provision under foreign law) and no claim for compensation under section 40 of that Act (or the equivalent provision under foreign law) or otherwise has been made against the Target nor, so far as the Sellers are aware, will any such claim be made.

The Target IPR comprises all material Intellectual Property necessary or convenient for the carrying on of the Business after the date of this agreement in a similar manner, and to a similar extent, to which it is or has been conducted at, or immediately before, the date of this agreement.

The following definitions are used in this paragraph 8.13:

Data Protection Legislation means the Regulatory Requirements, the Data Protection Act 1998, any legislation in force from time to time in the United Kingdom which implements the Data Protection Directive 95/46/EC of the European Parliament, the Privacy and Electronic Communications (EC Directive) Regulations 2003, the Regulation of Investigatory Powers Act 2000, the Consumer Protection from Unfair Trading Regulations 2008 and regulations made under those Acts or regulations and the equivalent in any other relevant jurisdictions

Data Subject has the meaning in the Data Protection Act 1998

Personal Data has the meaning in the Data Protection Act 1998

Processing has the meaning in the Data Protection Act 1998, and Process and Processed will be construed accordingly

Regulatory Requirements means any rules, requirements, directions, guidelines and codes of practice made by any regulator or industry body relating to the Processing of Personal Data

Sensitive Personal Data has the meaning in the Data Protection Act 1998.

In this paragraph 9, unless the context otherwise requires:

Computer Systems means the computer systems, communications systems and equipment (including network and telecommunications equipment, smartphones and mobile devices), hardware, firmware and software (including associated preparatory materials, user manuals and other related documentation), in each case used by the Target

IT Contracts means all arrangements and agreements under which any third party (including without limitation any source code deposit agent) provides any element of, or services relating to any element of, the Computer Systems, including leasing, hire purchase, licensing, software-as-a-service, maintenance and services agreements

Systems Data means any data held, processed and/or transmitted by the Computer Systems

The Target has not created (nor does it own any Intellectual Property in), any source code which is either material to the Business or is a material asset of the Target.

which has resulted in significant or repeated disruption or loss to the Target, and suitable back-up systems are utilised to ensure that, in the event of any fault in the Computer Systems, no more than one day's data would be lost.

In respect of any third party rights which are used or required to be used by the Target in its use of the Computer Systems, the Target has in force valid licences for such use (the material terms of which are accurately described in the documentation attached to the Disclosure Bundle) and the Target has not breached the terms of such licences.

The Computer Systems and the IT Contracts comprise all the property rights and assets in respect of information technology necessary or convenient for the carrying on of the Business after the date of this agreement in a similar manner, and to a similar extent, to which it is or has been conducted at, or immediately before, the date of this agreement, and the Computer Systems have sufficient capacity to meet the current requirements of the Business. Within the last 2 years, the Target has not made any plans to materially change, replace, develop or update any element of the Computer Systems and no such plans are in existence at the date of this agreement.

In this paragraph 10, the following definitions have the following meanings:

Lease means the lease under which the Property is held dated 18 December 2014 and made between (1) Universities Superannuation Scheme Limited and (2) the Subsidiary

Property means the leasehold property known as Unit 2, Hurricane Park, Heartlands Spine Road, Birmingham

Schedule means appendix 2 to the Disclosure Letter

The Target has obtained and maintains in full force and effect all ESH permits and true and complete copies of these are contained in the Disclosure Bundle.

Accurate and up to date particulars of all insurance policies maintained by the Target together with copies of all insurance policies in force under which the Target has a legal, equitable or other interest that is insured (Policies) are contained in the Disclosure Bundle.

In respect of the Policies:

The Target has all Authorities that are necessary to enable the Target to carry on the Business in the manner carried on immediately prior to Completion.

Regulations means any law, legislation, instrument, rule, order, regulation, code, standard, directive, bye-law or decision of any Authority which concerns or may affect the Business in any jurisdiction

The Target is conducting and has at all material times conducted its Business in all material respects in accordance with all Regulations.

Subsidiaries, have been allotted and issued and are fully paid or credited as fully paid.

Save for its interests in the Target’s Subsidiary, the Target has no:

and has no outstanding obligation to acquire any such interest or Overseas Branch and no outstanding obligations or responsibilities in relation to any such interest or Overseas Branch formerly owned by it.

There is no Security Interest, option or right to acquire on, over or affecting any of the Target Shares or any shares in any of the Subsidiaries (whether issued, authorised or otherwise), there is no agreement or commitment (conditional or otherwise) to give or create any of the foregoing and no person has made any claim to be entitled to any of the foregoing.

No share or loan capital of the Target is now under option or is agreed or resolved conditionally or unconditionally to be created or issued or put under option.

The Target:

Accurate copies of the articles of association of the Target are contained in the Disclosure Bundle.

The Target has not been involved in any restructuring, including any merger, de-merger or hive-down or hive-up of any assets, during the six years prior to the date of this agreement.

There is no shadow director of the Target.

There are no powers of attorney or other authorities (express or implied) which are still outstanding or effective to or in favour of any person to enter into any contract or commitment or to do anything on behalf of the Target (other than on the authority of directors or of employees as either is ostensible or is implied to enter into routine contracts in the normal course of their duties).

to or which could result in the Target being in administration (which steps would include issuing an application to the Court or filing with the Court a notice of intention to appoint an administrator).

All factual information relating to the Sellers and or the Target which is contained in the schedules to this agreement is accurate in all material respects.

principal amount due to the Sellers under the Convertible Notes equal to the amount of the Agreed Claim (or part thereof after applying any reduction pursuant to paragraph 1.5(a) above); and