**Exhibit 10.17**

DATED   20 DECEMBER 2006

**BLYTHHOMESCENTS INTERNATIONAL UK LIMITED (1)**

- and -

**COBCO813 LIMITED (2)**

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**SHAREPURCHASE AGREEMENT**

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Cobbetts LLP

Ship Canal House

King Street

Manchester

M2 4WB

DX: 14374 Manchester 1

Tel: 0845 404 2404

Fax: 0845 404 2414

SPM/IZR

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**Contents**
| **Clause** |   | **Page**                            |
|------------|--------|-------------------------------------|
|       |   |                                |   |   |
| 1          |   | INTERPRETATION                      |   | 1 |
|       |   |                                |   |   |
| 2          |   | SALE AND PURCHASE OF SALE SHARES    |   | 6 |
|       |   |                                |   |   |
| 3          |   | PURCHASE PRICE AND NET CASH PAYMENT |   | 6 |
|       |   |                                |   |   |
| 4          |   | COMPLETION                          |   | 9 |
|       |   |                                |   |   |
| 5          |   | WARRANTIES                          |   | 11 |
|       |   |                                |   |   |
| 6          |   | LIMITATIONS ON CLAIMS               |   | 11 |
|       |   |                                |   |   |
| 7          |   | TAX COVENANT                        |   | 15 |
|       |   |                                |   |   |
| 8          |   | INDEMNITIES                         |   | 15 |
|       |   |                                |   |   |
| 9          |   | RESTRICTIONS ON SELLER              |   | 16 |
|       |   |                                |   |   |
| 10         |   | CONFIDENTIALITY AND ANNOUNCEMENTS   |   | 18 |
|       |   |                                |   |   |
| 11         |   | FURTHER ASSURANCE                   |   | 19 |
|       |   |                                |   |   |
| 12         |   | ASSIGNMENT                          |   | 19 |
|       |   |                                |   |   |
| 13         |   | WHOLE AGREEMENT                     |   | 19 |
|       |   |                                |   |   |
| 14         |   | VARIATION AND WAIVER                |   | 20 |
|       |   |                                |   |   |
| 15         |   | COSTS                               |   | 20 |
|       |   |                                |   |   |
| 16         |   | NOTICE                              |   | 20 |
|       |   |                                |   |   |
| 17         |   | INTEREST ON LATE PAYMENT            |   | 22 |
|       |   |                                |   |   |
| 18         |   | SEVERANCE                           |   | 22 |
|       |   |                                |   |   |
| 19         |   | AGREEMENT SURVIVES  COMPLETION      |   | 22 |
|       |   |                                |   |   |
| 20         |   | THIRD PARTY RIGHTS                  |   | 23 |
|       |   |                                |   |   |
| 21         |   | SUCCESSORS                          |   | 23 |
|       |   |                                |   |   |
| 22         |   | COUNTERPARTS                        |   | 23 |

 

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| 23                                          |   | LANGUAGE                        |   | 23     |
|---------------------------------------------|--------|---------------------------------|--------|--------|
|                                        |   |                            |   |   |
| 24                                          |   | GOVERNING LAW AND  JURISDICTION |   | 23     |
|                                        |   |                            |   |   |
| STATUTORY ACCOUNTS AND TAX  COMPLIANCE FEES |   | 24                              |
|                                        |   |                            |
| SCHEDULE 1                                  |   | 25                              |
|                                        |   |                            |
| PART 1 PARTICULARS OF THE  COMPANY          |   | 25                              |
|                                        |   |                            |
| PART 2 THE COLONY  SUBSIDIARIES             |   | 26                              |
|                                        |   |                            |
| SCHEDULE 2 COMPLETION                       |   | 27                              |
|                                        |   |                            |
| SCHEDULE 3 WARRANTIES                       |   | 30                              |
|                                        |   |                            |
| SCHEDULE 4 TAX COVENANT                     |   | 32                              |

 

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**THIS AGREEMENT**is dated the 20th day of December 2006

**BETWEEN:**

(1)           **BLYTH HOMESCENTS INTERNATIONAL UK LIMITED**(registeredin England and Wales under Company Number 3646506) the registered office ofwhich is at 100 New Bridge Street, London EC4V 6JA (the “**Seller**”).

(2)           **COBCO 813 LIMITED** incorporated andregistered in England and Wales with company number 06006752 whose registeredoffice is c/o PKF, Sovereign House, Queen Street, Manchester M2 5HR (the “**Buyer**”).

**BACKGROUND**

(1)           The Seller is the legal and beneficial owner of, or is otherwise able toprocure the transfer of, the legal and beneficial title to the number of SaleShares comprising in aggregate the whole of the issued share capital of theCompany.

(2)           The Seller has agreed to sell and the Buyer has agreed to buy the SaleShares subject to the terms and conditions of this Agreement.

(3)           The Company is the owner of the issued share capital of various companies,short particulars of which are set out in Part 2 of Schedule 1 (“**the Colony Subsidiaries”**).

**IT IS AGREED THAT**

**1**              INTERPRETATION

1.1           The definitions andrules of interpretation in this clause apply in this Agreement.

1.1.1                **“Accounts”**means the audited abbreviatedfinancial statements of the Company as at and to the Accounts Date, comprisingthe abbreviated balance sheet of the Company together with the notes thereon,and Directors’ reports (a copy of which is attached to the Disclosure Letter.

1.1.2                **“Accounts Date”**means 31 December 2005.

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1.1.3                **“Business****”** means the business of the Company, namely themanufacture, marketing and sale of candles and candle related accessories toretailers and wholesalers in Europe;

1.1.4                **“Business Day****”** means a day (other than a Saturday, Sundayor public holiday) when banks in the City of London are open for business.

1.1.5                **“Buyer ́s Solicitors****”** means Cobbetts LLP (ref: SDF) of ShipCanal House, King Street, Manchester, M2 4WB.

1.1.6                **“CAA 2001****”** means the Capital Allowances Act 2001.

1.1.7                **“Claim and SubstantiatedClaim****”** have the meanings set out respectively inClause 6.

1.1.8                **“Company****”** means Colony Gift Corporation Limitedfurther details of which are set out inPart 1 of Schedule 1.

1.1.9                **“Companies Acts****”** means the Companies Act 1985 and theCompanies Act 1989.

1.1.10              **“Completion****”** means completion of the sale and purchase ofthe Sale Shares in accordance with this Agreement.

1.1.11              **“Completion Date****”** means the date of this Agreement.

1.1.12              **“Connected****”** in relation to a person, has the meaningcontained in section 839 of the ICTA 1988.

1.1.13              **“Control****”** means in relation to a body corporate, thepower of a person to secure that the affairs of the body corporate areconducted in accordance with the wishes of that person:

(a)           by means of the holdingof shares, or the possession of voting power, in or in relation to that or any otherbody corporate; or

(b)           by virtue of any powersconferred by the constitutional or corporate documents, or any other document,regulating that or any other body corporate,

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and a **“Change of Control”**occurs if a person who controls any body corporate ceases to do so or ifanother person acquires control of it.

1.1.14              **“Director****”** means each person who is a director orshadow director of the Company, the names of whom are set out in Schedule 1Part 1.

1.1.15              **“Disclosed****”** means fairly disclosed (with sufficientdetails to enable the Buyer to identify the nature and scope of the matterdisclosed) in or under the Disclosure Letter.

1.1.16              **“Disclosure Letter****”** means the letter from the Seller to theBuyer  with the same date as thisAgreement and described as the disclosure letter, including the bundle ofdocuments attached to it (**“****Disclosure Bundle****”**).

1.1.17              **“Encumbrance****”** means any interest or equity of any person(including any right to acquire, option or right of pre-emption) or anymortgage, charge, pledge, lien, assignment, hypothecation, security, interest,title, retention or any other security agreement or arrangement.

1.1.18              **“Event****”** has the meaning given in Part 1 of Schedule4.

1.1.19              **“FSMA****”** means the Financial Services and Markets Act2000.

1.1.20              **“Group****”** means in relation to a company (whereverincorporated) that company, any company of which it is a Subsidiary (itsholding company) and any other Subsidiaries of any such holding company; andeach company in a group is a member of the group. Unless the context otherwiserequires, the application of the definition of Group to any company at any timewill apply to the company as it is at that time.

1.1.21              **“ICTA 1988****”** means the Income and Corporation Taxes Act1988.

1.1.22              **“IHTA 1984****”** means the Inheritance Tax Act 1984.

1.1.23              **“ITEPA”**means the Income Tax (Earnings andPensions) Act 2003.

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1.1.24              “**Patent Licence”** means a licence of variousintellectual property rights including registered patent rights in the agreedform to be entered into on Completion between the Seller (1) and the Company(2).

1.1.25              **“Payables”** means all trade and other debts,accrued charges and all other amounts owing by the Company as at Completion.

1.1.26              **“Purchase Price****”** means the purchase price for the Sale Sharesto be paid or satisfied in accordance with Clause 3.

1.1.27              **“Purchase Price”**means the purchase price for the Sale Shares to bepaid in accordance with clause 3.

1.1.28              **“Receivables”**means all trade and other debts and amounts(including prepayments) owing to the Company in respect of services supplied bythe Company in the normal or usual course of carrying on its business as atCompletion.

1.1.29              **“Sale Shares****”** means the 14,520,070 Ordinary Shares of £1 each in the Company, all of which have beenissued and are fully paid.

1.1.30              **“Seller’s Solicitors****”** means Cobbetts LLP (ref: SPM/IZR) ofShip Canal House, King Street, Manchester M2 4WB.

1.1.31              **“Subsidiary****”** means in relation to a company whereverincorporated (a holding company) means a “subsidiary” as defined in section 736of the Companies Act 1985 and any other company which is a subsidiary (as sodefined) of a company which is itself a subsidiary of such holding company.Unless the context otherwise requires, the application of the definition ofSubsidiary to any company at any time will apply to the company as it is atthat time.

1.1.32              **“Supply Agreement”**means a supply agreement in the agreed form to beentered into on Completion between the Company (1) and Partylite Trading SA,being a subsidiary of the Seller (2).

1.1.33              **“Tax or Taxation****”** has the meaning given in Part 1 of Schedule4.

1.1.34              **“Tax Covenant****”** means the tax covenant as set out in Part 3of Schedule 4.

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1.1.35              **“Tax Claim****”** has the meaning given in Part 1 of Schedule4.

1.1.36              **“Tax Warranties****”** means the Warranties in Part 2 of Schedule3.

1.1.37              **“Taxation Authority****”** has the meaning given in Part 1 of Schedule4.

1.1.38              **“Taxation Statute****”** has the meaning given in Schedule 3 Part 1to be entered into on Completion between the Seller (1) and the Company (2).

1.1.39              **“TCGA 1992****”** means the Taxation of Chargeable Gains Act1992.

1.1.40              **“TMA 1970****”** means the Taxes Management Act 1970.

1.1.41              **“Trademark Licences”**means two licences of various intellectual propertyrights in the agreed form to beentered into on Completion between Blyth Inc. (1) and the Company (2).

1.1.42              **“Trademark Assignment”** means an assignment of trademark registrationsbetween Carolina Designs Limited (1) and Candle Corporation of America (2).

1.1.43              **“Transaction****”** means the transaction contemplated by thisAgreement or any part of that transaction.

1.1.44              **“VATA 1994****”** means the Value Added Tax Act 1994.

1.1.45              **“Warranties****”** means the warranties in Clause 5 andSchedule 2 and the Tax Warranties.

1.2           Clause and scheduleheadings do not affect the interpretation of this Agreement.

1.3           A **person**includes a corporate or unincorporated body.

1.4           Words in the singularinclude the plural and in the plural include the singular.

1.5           A reference to onegender includes a reference to the other gender.

1.6           A reference to aparticular law is a reference to it as it is in force for the time being takingaccount of any amendment, extension, or re-enactment and includes anysubordinate legislation for the time being in force made under it

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provided that any such amendment, extension orre-enactment does not increase the liability of the Seller under thisAgreement.

1.7           **Writing**or **written** includes faxes but not e-mail.

1.8           Documents in **agreed form** are documents in the form agreed by the partiesor on their behalf and initialled by them or on their behalf foridentification.

1.9           References to clausesand schedules are to the clauses and schedules of this Agreement; references toparagraphs are to paragraphs of the relevant schedule.

1.10         Reference to thisAgreement include this Agreement as amended or varied in accordance with itsterms.

**2**              SALE AND PURCHASE OF SALE SHARES

2.1           On the terms of thisAgreement, the Seller shall sell and the Buyer shall buy, with effect fromCompletion, the Sale Shares with full title guarantee, free from allEncumbrances and together with all rights that attach (or may in the futureattach) to them including, in particular, the right to receive all dividendsand distributions declared, made or paid on or after the date of thisAgreement.

2.2           The Buyer is notobliged to complete the purchase of any of the Sale Shares unless the purchaseof all the Sale Shares is completed simultaneously.

**3**              PURCHASE PRICE AND NET CASH PAYMENT

3.1           The Purchase Price is£600,000 to be satisfied as follows:

3.1.1                As to £500,000 bythe payment in cash of such sum on Completion by the Buyer (“**Cash Consideration**”) to the Seller’sSolicitors on behalf of the Seller; and

3.1.2                As to £100,000 bythe payment in cash of such sum on 2 January 2008 by the Buyer to the Seller’sSolicitors on behalf of the Seller (“**theDeferred Consideration**”).

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3.2           The Purchase Priceshall be deemed to be reduced by the amount of any payment made to the Buyer:

3.2.1                for a breach of any Warranty; or

3.2.2                under Clause 8; or

3.2.3                under the Tax Covenant.

3.3           During the periodfollowing Completion up to and including 31 December 2006 the Buyer shall:

3.3.1                procure that thebusiness of the Company is carried on in the ordinary and usual course ascarried on prior to the date of this Agreement (save that the parties herebyacknowledge that the business will be closed from 22 December 2006 to 2 January2007);

3.3.2                not levy anycharge (by way of management charges or otherwise) on the Company;

3.3.3                use all reasonableendeavours as soon as possible after Completion to procure collection of theReceivables; and

3.3.4                as soon aspossible after Completion use all reasonable endeavours to procure the paymentof the Payables in accordance with the usual practice of the Company as carriedon prior to the date of this Agreement.

3.4           As soon as reasonablypracticable after 31 December 2006 and in any event on or before 13 January2007, the Buyer shall deliver to the Seller a statement (“**the Certificate”**)signed by a director of the Buyer certifying the amount equal to:

3.4.1                the level of theCompany’s and the Colony Subsidiaries’ cash book balances as at 31 December2006; less

3.4.2                the level of theCompany’s and the Colony Subsidiaries’ cash book balances as at the date ofCompletion

such amount (if any) being “**the Cash Level Difference**”

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3.5           The Buyer shall affordthe Seller reasonable access to its books and records and those of the Companyrelating to the period up to and including 31 December 2006 in relation to thecollection of the Receivables and discharge of the Payables.

3.6           Unless within 14Business Days of receipt by the Seller of the Certificate, the Seller notifiesthe Buyer in writing, giving reasonable particulars and reasons, of any respectin which they are not satisfied that the details of the Certificate, then itshall be final and binding as between the Buyer and the Seller.

3.7           If the Seller does sonotify the Buyer that it is not so satisfied, the parties shall endeavourwithin the period expiring 5 days after receipt of the Seller’s written noticeby the Buyer (excluding the day of receipt) to resolve the matter and if thematter is not so resolved it shall be resolved by an independent accountant inaccordance with the provisions of clauses 3.8 to 3.11

3.8           The IndependentAccountant shall be a firm of chartered accountants agreed on by the Seller andthe Buyer or, if they cannot agree on such appointment within 7 days of eitherparty giving notice in writing to the other that it desires an IndependentAccountant to be appointed, such firm of chartered accountants as may benominated on the application of either one of them by the President or othersenior officer for the time being of the Institute of Chartered Accountants inEngland and Wales.

3.9           If any disagreement ordispute under this agreement is referred to the Independent Accountant:

3.9.1                the parties willeach use all reasonable endeavours to co-operate with the IndependentAccountant in resolving such disagreement or dispute, and for that purpose willprovide to him all such information and documentation as he may reasonablyrequire;

3.9.2                the IndependentAccountant shall have the right to seek such professional assistance and adviceas he may required;

3.9.3                the fees of theIndependent Accountant and other professional fees incurred by him shall bepaid in such proportions and by such of the parties as may be directed by him;

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3.9.4                the IndependentAccountant will be requested by both parties to make a decision within 30 daysof the referral.

3.10         The IndependentAccountant shall act as expert and not as arbitrator and his decision shall befinal and binding on the parties.

3.11         The draft Certificateshall be determined as final and binding either pursuant to clause 3.6 above oras a result of agreement between the Buyer and the Seller or as a result of thedecision of the Independent Accountant pursuant to clause 3.9 above.

3.12         If the Cash LevelDifference:

3.12.1              is a positive amountthe Buyer shall, within 5 Business Days of the agreement or determination ofthe Certificate, pay such amount to the Seller.

3.12.2              is a negativeamount, the Seller shall, within 5 Business Days of the agreement ordetermination of the Certificate, pay such amount to the Buyer.

**4**              COMPLETION

4.1           Completion shall takeplace on the Completion Date:

4.1.1                at the offices of the Seller’sSolicitors; or

4.1.2                at any other place as agreed in writing bythe Seller and the Buyer.

4.2           At Completion theSeller shall:

4.2.1                deliver or cause to be delivered thedocuments and evidence set out in Part 1 of Schedule 2;

4.2.2                procure that a board meeting of the Companyis held at which the matters identified in Part 2 of Schedule 2 are carriedout; and

4.2.3                deliver any other documents referred to inthis Agreement as being required to be delivered by them; and

4.2.4                pay to the Buyer on behalf of the Company inrespect of the fees payable by the Buyer to Messrs Deloittes (in relation tothe work

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undertaken by them inrespect of the financial assistance exercise carried out on behalf of theCompany) a sum equal to the amount by which the aggregate fees payable by theCompany to Messrs Deloittes in respect of both their work carried out for thepurposes of the financial assistance exercise and the work carried out for thepurposes of preparation of the 2006 Accounts as referred to in Clause 25.1below exceed £10,000 (exclusive of VAT and any disbursements).

4.3           At Completion the Buyershall:

4.3.1                pay the Cash Consideration by telegraphictransfer to the Seller’s Solicitors(who are irrevocably authorised to receive the same) and otherwise inaccordance with Clause 3.1. Payment made in accordance with this clause shallconstitute a valid discharge of the Buyer’s obligations under Clause 3.1; and

4.3.2                deliver a certified copy of the resolutionadopted by the board of directors of the Buyer authorising the Transaction andthe execution and delivery by the officers specified in the resolution of thisAgreement, and any other documents referred to in this Agreement as beingrequired to be delivered by it.

4.4           As soon as possibleafter Completion the Seller shall send to the Buyer (at the Buyer ́s registeredoffice for the time being) all records, correspondence, documents, files,memoranda and other papers relating to the Company not required to be deliveredat Completion and which are not kept at any of the Properties.

4.5           During the periodfollowing Completion up to the date upon which the Buyer pays the DeferredConsideration to the Seller in full, the Buyer shall not and shall procure thateach member of the Buyer’s Group shall:

4.5.1                not knowinglyundertake any act or omission which is deliberately calculated to materiallyand adversely affect the ability of the Buyer to pay the Deferred Considerationto the Seller on the date upon which it is due;

4.5.2                not declare, makeor pay any dividend or distribution (whether of capital or of profits);

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4.5.3                carry on itsbusiness on the ordinary course.

**5**              WARRANTIES

5.1           The Buyer is enteringinto this Agreement on the basis of, and in reliance on, the Warranties.

5.2           The Seller warrants tothe Buyer that each Warranty is true, accurate and not misleading on the dateof this Agreement except as Disclosed.

5.3           Warranties qualified bythe expression **so far as the Seller is aware**orany similar expression are deemed to be given to the best of the knowledge, informationand belief of the Seller after it has made all reasonable and carefulenquiries.

5.4           Each of the Warrantiesis separate and, unless otherwise specifically provided, is not limited byreference to any other Warranty or any other provision in this Agreement.

5.5           The Warranties aregiven subject to all information of the Buyer has knowledge and the knowledgeof the Buyer shall for these purposes be deemed to be the knowledge of SimonMartin where, for the purpose of this clause 5.5 **knowledge** shall mean the actual knowledge of Simon Martin.

**6**              LIMITATIONS ON CLAIMS

6.1           The definitions andrules of interpretation in this clause apply in this Agreement.

6.1.1                **“Claim****”** means a claim for breach of any of theWarranties.

6.1.2                **“Substantiated Claim****”** means a Claim in respect of which liabilityis admitted by the party against whom such Claim is brought, or which has beenadjudicated on by a Court of competent jurisdiction and no right of appeal liesin respect of such adjudication, or the parties are debarred by passage of timeor otherwise from making an appeal.

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AClaim is **connected** with another Claim or Substantiated Claim ifthey all arise out of the occurrence of the same event or relate to the samesubject matter.

6.2           This clause limits theliability of the Seller in relation to any Claim and where specified any claimunder the Tax Covenant.

6.3           The liability of theSeller for all Substantiated Claims when taken together shall not exceed anamount equal to the Purchase Price.

6.4           The Seller shall not beliable for a Claim unless:

6.4.1                the amount of a Substantiated Claim, or of aseries of connected Substantiated Claims of which that Substantiated Claim isone, exceeds £2,000;

6.4.2                the amount of all Substantiated Claims thatare not excluded under Clause 6.4.1 when taken together, exceeds £15,000, in which case the whole amount (and notjust the amount by which the limit in this Clause 6.4.2 is exceeded) isrecoverable by the Buyer.

6.5           The Seller are notliable for a Claim to the extent that:

6.5.1                the Claim relates to matters Disclosed;

6.5.2                the Claim relates to any matter specificallyand fully provided for in the Accounts;

6.5.3                the Claim is based upon a liability which iscontingent only unless and until such contingent liability becomes an actualliability and is due and payable, provided that this clause 6.5.3 shall notoperate to avoid a Claim made in reasonable particularity in respect of acontingent liability within the applicable time limit specified in clause 6.6below;

6.5.4                the Claim would not have occurred but for:

6.5.4.1                 any voluntary act, omission or transaction ofthe Buyer, or its directors, employees or agents, or the Company its directors,employees or agents or successors in title, after Completion done or omitted

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otherwise than in theordinary course of the business of the relevant company and in the knowledgethat such act, omission or transaction might give rise to a Claim;

6.5.4.2                 the passing of, or any change in, after theCompletion Date, any law, rule or regulation of any government, governmentaldepartment, agency or regulatory body;

6.5.4.3                 any change in the accounting reference dateof the Company or any change in accounting policy or practice of the Buyer orthe Company;

6.5.5                that the matter giving rise to the Claim iscovered by a policy of insurance of the Company in force on the Completion Dateand payment is made to the Company under such policy by the insurer in respectof such matter.

6.6           The Seller are notliable for a Claim or a claim under the Tax Covenant unless the Buyer has giventhe Seller notice in writing of the Claim or the claim under the Tax Covenant,summarising the nature of the Claim or claim under the Tax Covenant as far asis known to the Buyer and the amount claimed:

6.6.1                in the case of a claim made under the TaxWarranties or the Tax Covenant, within the period of seven years beginning withthe Completion Date; and

6.6.2                in any other case, within the period of 12months beginning with the CompletionDate.

6.7           If the Buyer becomes aware of a matter that may give rise to a Claimagainst the Seller, notice of that fact shall be given as soon as reasonablypracticable to the Seller and if the Claim in question is a result of or inconnection with a claim by or liability to a third party the Claim shall not becompromised or settled without the consent of the Seller (such consent not tobe unreasonably withheld or delayed) and the Buyer (if requested promptly inwriting by the Seller and indemnified to its reasonable satisfaction by theSeller against all costs, charges, liabilities and expenses which may as aresult be incurred by the Buyer or the Company) shall take and shall procurethe Company takes all such action as the Seller may reasonably request toavoid, dispute, resist,

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appeal, compromise or contestsuch claim or liability and shall make available and procure that the Companyshall make available to the Seller all such information and reasonableassistance as may be requested by the Seller and as is available to it or thembeing information relevant for the purpose of avoiding, disputing, resisting,appealing, compromising or contesting any such claim or liability and theSeller shall keep all such information confidential.

6.8           Where the Buyer or the Company has or may have a claim against a thirdparty in relation to any matter which may give rise to a Claim, the Buyer shallprocure that all reasonably endeavours are used by it and the Company torecover any amounts due from any such third party and shall, as soon asreasonably practicable after such recovery, reimburse the Seller the amount sorecovered (net of costs of recovery) up to the amount paid by the Seller inrespect of such Claim.

6.9           In relation to any Claim or alleged Claim and without prejudice to thevalidity of the Claim or alleged Claim in question, the Buyer shall allow, andshall procure that the Company allows, the Seller and their accountants andprofessional advisers to investigate the matter or circumstance alleged to giverise to such Claim and whether and to what extent any amount is payable inrespect of such Claim pursuant to the terms of this Agreement and for suchpurpose the Buyer shall give and shall procure that the Company gives, subjectto their being paid all reasonably out-of-pocket expenses, all such assistanceas the Seller or their accountants or professional advisers may reasonablyrequest including access to and copies of any relevant documents or otherrelevant information in the possession of the Buyer or the Company.

6.10         Nothing in this Agreement shall give the Buyer any right to rescind orterminate this Agreement and the Buyer’s sole remedy against the Seller shallbe in damages and shall be subject to the other provisions of this Clause 6.

6.11         Nothing in this Agreement shall in any way relieve the Buyer of itsduty to mitigate its loss.

6.12         Nothing in this Clause 6applies to a Claim or a claim under the Tax Covenant that arises or is delayedas a result of dishonesty, fraud, wilful misconduct or wilful concealment bythe Seller, its agents or advisers.

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6.13         The Seller shall notplead the Limitation Act 1980 in respect of any claims made under the TaxWarranties or Tax Covenant up to seven years after the Completion Date.

**7**              TAX COVENANT

The provisions of Schedule 4 apply in this Agreement.

**8**              INDEMNITIES

The Seller undertakes to indemnify, and to keep indemnified, the Buyer,the Company against all (or, in the case of the Italian JV Claim (as definedbelow) 95% of all) losses or liabilities (including, without limitation anydirect or indirect consequential losses or loss of profit and loss ofreputation, damages, claims, demands, proceedings, costs, expenses, penalties,legal and other professional fees and costs) which may be suffered or incurredby any of them and which arise directly or indirectly in connection with:-

8.1           a claim being madeagainst the Company (1) by Barry Stamper and Rochelle Stamper (a partnershipt/a Barry Stamper Agencies) (2) pursuant to the Commercial Agents’ (CouncilDirective) Regulations 1993 and for breach of contract following thetermination by the Company of an agency agreement, such claim having beenissued at the High Courts of Justice, Queens Bench Division, ManchesterDistrict Registry Mercantile Court under Claim Number 5MA70447 (**“the Stamper Claim**”) and

8.2           a claim being made byAndrew Carton, sales director of Colony Sarl, being one of the ColonySubsidiaries, against Colony Sarl following his ceasing to be an employee whichtook place in July 2006 (“**the Andrew CartonClaim**”)

8.3           the dispute between theCompany (1) and the Company’s JV partners in Italy, Massimo Esposito and SimonaGuerini (2) (“**the Italian JV Claim”**)

PROVIDED THAT in relation to the Stamper Claim, theAndrew Carton Claim and the Italian JV Claim the provisions of Clauses 8.3 and8.4 shall apply.

8.4           Subject to the Buyerand the Company being indemnified and secured to its reasonable satisfaction bythe Seller against all liabilities, costs, expenses, damages and lossessuffered or incurred in connection with the Stamper

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Claim or the Andrew Carton Claim or the Italian JVClaim (as the case may be) the Buyer shall, and shall procure that the Companyand any other relevant member of the Buyer’s Group will:

8.4.1                take such action as the Seller may reasonablyrequest to avoid, dispute, resist or compromise the Stamper Claim or the AndrewCarton Claim or the Italian JV Claim(as the case may be);

8.4.2                not accept or pay or compromise the StamperClaim or the Andrew Carton Claim or the Italian JV Claim (as the case may be)without the prior written consent of the Seller (not to be unreasonablywithheld or delayed);

8.4.3                keep the Seller promptly and adequatelyinformed as to the progress of the Stamper Claim, the Andrew Carton Claim andthe Italian JV Claim;

8.4.4                allow the Seller or its accountants or otherprofessional advisers reasonable access to relevant documents or otherinformation in the possession or under the control of the Buyer or the Companyor any other member of the Buyer’s Group (as the case may be);

PROVIDED THAT the Buyer shall not be requiredto undertake any act or omission which in its reasonable opinion materiallyaffects or prejudices its goodwill.

8.5           Where the Buyer, the Company or any other member of the Buyer’s Group(as the case may be) recovers any amounts in respect of the Stamper Claim orthe Andrew Carton Claim or the Italian JV Claim the Buyer shall, and shallprocure that the Company or any other member of the Buyer’s Group will,forthwith upon such recovery reimburse the Seller.

**9**              RESTRICTIONS ON SELLER

9.1           The Seller covenants with the Buyer that it shall not and will procurethat any member of the Seller’s Group from time to time will not either on itsor their own account:

9.1.1                at any time during the period of 2 years beginning with the Completion Date, inthe European Union carry on or beemployed,

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engaged or interested in anybusiness which would be in competition with any part of the Business as theBusiness was carried on at the Completion Date; or

9.1.2                at any time during the period of 2 years beginning with the Completion Date:

9.1.2.1                 offer employmentto, enter into a contract for the services of, or attempt to entice away fromthe Company, any individual who is at the time of the offer or attempt, and wasat the Completion Date, employed or directly or indirectly engaged in anexecutive or managerial position with the Company; or

9.1.2.2                 procure orfacilitate the making of any such offer or attempt by any other person; or

9.1.3                at any time after Completion, use in thecourse of any business the words “Colony” and “Wax Lyrical”

9.1.4                at any time during a period of 2 years beginning with the Completion Date,solicit or entice away from the Company any supplier to the Company who hadsupplied goods and/or services to the Company at any time during the 12 months immediately preceding the CompletionDate, if that solicitation or enticement causes or would cause such supplier tocease supplying, or materially reduce its supply of, those goods and/orservices to the Company.

9.2           The covenants in Clause9 are intended for the benefit of the Buyer and the Company and apply toactions carried out by the Seller in any capacity and whether directly orindirectly, on the Seller ́s own behalf, on behalf of any other person orjointly with any other person.

9.3           Nothing in Clause 9prevents the Seller from holding for investment purposes only:

9.3.1                any units of any authorised unit trust; or

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9.3.2                not more than 5% of any class of shares or securities of any company traded on arecognised stock exchange.

9.4           Each of the covenantsin Clause 9 is a separate undertaking by the Seller in and shall be enforceableby the Buyer separately and independently of its right to enforce any one ormore of the other covenants contained in Clause 9. Each of the covenants inClause 9 is considered fair and reasonable by the parties, but if anyrestriction is found to be unenforceable, but would be valid if any part of itwere deleted or the period or area of application reduced, the restrictionshall apply with such modifications as may be necessary to make it valid andenforceable.

9.5           The consideration forthe undertakings contained in Clause 9 is included in the Purchase Price.

**10**            CONFIDENTIALITY AND ANNOUNCEMENTS

10.1         Except so far as may berequired by law, and in such circumstances only after prior consultation withthe Buyer, the Seller shall not at any time disclose to any person or use tothe detriment of the Company this Agreement or any trade secret or otherconfidential information which they hold in relation to the Company and itsaffairs PROVIDED THAT the Buyer shall be permitted to disclose to itsemployees, suppliers, customers and stakeholders the fact that it has acquiredthe entire issued share capital of the Company but the Buyer shall not bepermitted to disclose the terms of the acquisition including (withoutlimitation) the amount of the Purchase Price.

10.2         No party shall make anyannouncement relating to this Agreement or its subject matter without the priorwritten approval of the other party except as required by law or by any legalor regulatory authority (in which case the parties shall co-operate, in goodfaith, in order to agree the content of any such announcement so far aspracticable prior to it being made).

10.3         This Clause 10 shall notbe applicable to information required to be disclosed by the Seller underregulations of the US Securities and Exchange Commission.

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**11**            FURTHER ASSURANCE

The Seller shall promptly execute and deliver all such documents, anddo all such things, as the Buyer may from time to time reasonably require forthe purpose of giving full effect to the provisions of this Agreement.

**12**            ASSIGNMENT

12.1         Except as providedotherwise in this Agreement, no party may assign, or grant any Encumbrance orsecurity interest over, any of its rights under this Agreement or any documentreferred to in it.

12.2         Each party that hasrights under this Agreement is acting on its own behalf.

12.3         The Buyer may assign itsrights under this Agreement (or any document referred to in this Agreement) butnot its obligations to a member of its Group provided that, if such assignee isto cease to be a member of its Group the Buyer will procure that all thebenefits in relation to this Agreement (or any document referred to in thisAgreement) that have been assigned to such member or its Group are re-assignedto the Buyer (or another member of its Group) immediately before such cessation.

12.4         If there is anassignment:

12.4.1              the Seller may discharge their obligationsunder this Agreement to the assignor until they receive notice of theassignment; and

12.4.2              the assignee may enforce this Agreement as ifit were a party to it, but the Buyer shall remain liable for any obligationsunder this Agreement.

**13**            WHOLE AGREEMENT

13.1         This Agreement, and anydocuments referred to in it, constitute the whole agreement between the partiesand supersede any arrangements, understanding or previous agreement betweenthem relating to the subject matter they cover.

13.2         Nothing in Clause 13operates to limit or exclude any liability for fraud.

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**14**            VARIATION AND WAIVER

14.1         Any variation of thisAgreement shall be in writing and signed by or on behalf of the parties.

14.2         Any waiver of any rightunder this Agreement is only effective if it is in writing and it applies onlyto the party to whom the waiver is addressed and to the circumstances for whichit is given and shall not prevent the party who has given the waiver fromsubsequently relying on the provision it has waived.

14.3         A party that waives aright in relation to one party, or takes or fails to take any action againstthat party, does not affect its rights in relation to any other party.

14.4         No failure to exercise ordelay in exercising any right or remedy provided under this Agreement or by lawconstitutes a waiver of such right or remedy or shall prevent any futureexercise in whole or in part thereof.

14.5         No single or partialexercise of any right or remedy under this Agreement shall preclude or restrictthe further exercise of any such right or remedy.

14.6         Unless specificallyprovided otherwise, rights arising under this Agreement are cumulative and donot exclude rights provided by law.

**15**            COSTS

Unless otherwise provided, all costs in connection with thenegotiation, preparation, execution and performance of this Agreement, and anydocuments referred to in it, shall be borne by the party that incurred thecosts.

**16**            NOTICE

16.1         A notice given under thisAgreement:

16.1.1              shall be in writing in the English language;

16.1.2              shall be sent for the attention of theperson, and to the address, specified in Clause 16 (or such other address orperson as each party may notify to the others in accordance with the provisionsof Clause 16); and

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16.1.3              shall be:

16.1.3.1               deliveredpersonally; or

16.1.3.2               sent by pre-paidfirst-class post or recorded delivery; or

16.1.3.3               (if the notice isto be served by post outside the country from which it is sent) sent byairmail.

16.2         Any notice to be given toor by all of the Seller under this Agreement is deemed to have been properlygiven if it is given to or by the Seller ́ representative named in Clause 16.3.

16.3         The addresses for serviceof notice are:

16.3.1              **Seller**

16.3.1.1               name: MichaelNovins, Vice President and General Counsel

Blyth Inc.

16.3.1.2               address: One WeaverStreet, Greenwich, CT 06831, USA

16.3.2              **Buyer**

16.3.2.1               address: c/o PKF,Sovereign House, Queen Street, Manchester M2 5HR

16.3.2.2               for the attentionof: Simon Martin

16.4         A notice is deemed tohave been received:

16.4.1              if delivered personally, at the time ofdelivery; or

16.4.2              in the case of pre-paid first class post orrecorded delivery two BusinessDays from the date of posting; or

16.4.3              in the case of airmail, five Business Days from the date of posting; or

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16.4.4              if deemed receipt under the previousparagraphs of Clause 16.4 is not within business hours (meaning 9.00 am to 5.30pm Monday to Friday on a day that is not a public holiday in the place ofreceipt), when business next starts in the place of receipt.

**17**            INTEREST ON LATE PAYMENT

17.1         Where a sum is requiredto be paid under this Agreement (other than under the Tax Covenant) but is notpaid before or on the date the parties agreed, the party due to pay the sumshall also pay an amount equal to interest on that sum for the period beginningwith that date and ending with the date the sum is paid (and the period shallcontinue after as well as before judgment).

17.2         The rate of interestshall be 2% per annum above the base lending rate for the time being of TheRoyal Bank of Scotland Plc.  Interestshall accrue on a daily basis and be compounded quarterly.

17.3          Clause 17 is withoutprejudice to any claim for interest under the law.

**18**            SEVERANCE

18.1         If any provision of thisAgreement (or part of a provision) is found by any court or administrative bodyof competent jurisdiction to be invalid, unenforceable or illegal, the otherprovisions shall remain in force.

18.2         If any invalid, unenforceableor illegal provision would be valid, enforceable or legal if some part of itwere deleted, the provision shall apply with whatever modification is necessaryto give effect to the commercial intention of the parties.

**19**            AGREEMENT SURVIVES COMPLETION

This Agreement (other than obligations that have already been fullyperformed) remains in full force after Completion.

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**20**            THIRD PARTY RIGHTS

20.1         Subject to Clause 20.2,this Agreement and the documents referred to in it are made for the benefit ofthe parties and their successors and permitted assigns and are not intended tobenefit, or be enforceable by, anyone else.

20.2         Each of the partiesrepresents to the others that their respective rights to terminate, rescind oragree any amendment, variation, waiver or settlement under this Agreement arenot subject to the consent of any person that is not a party to this Agreement.

**21**            SUCCESSORS

The rights and obligations of the Seller and the Buyer under thisAgreement shall continue for the benefit of, and shall be binding on, theirrespective successors and assigns.

**22**            COUNTERPARTS

This Agreement may be executed in any number of counterparts, each ofwhich is an original and which together have the same effect as if each partyhad signed the same document.

**23**            LANGUAGE

If this Agreement is translated into any language other than English,the English language text shall prevail.

**24**            GOVERNING LAW AND JURISDICTION

24.1         This Agreement and anydisputes or claims arising out of or in connection with its subject matter aregoverned by and construed in accordance with the law of England.

24.2         The parties irrevocablyagree that the courts of England have exclusive jurisdiction to settle anydispute or claim that arises out of or in connection with this Agreement.

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**25**            STATUTORY ACCOUNTS AND TAX COMPLIANCE FEES

25.1         The Buyer shall, andshall procure that the Company shall, co-operate (at the Seller’s expense) inthe preparation of the statutory accounts of the Company for year ended 31December 2006 (“the 2006 Accounts”) and shall provide to the Seller by no laterthan 15 February 2007 such information as the Seller and/or the auditors of theCompany (being Messrs Deloittes) may reasonably request in relation to thepreparation of the 2006 Accounts PROVIDED THAT the Seller shall be responsiblefor (and shall pay) the professional fees of Messrs Deloittes in relation totheir work undertaken for the purposes of the audit of the 2006 Accounts to theextent that the aggregate amount of Deloittes’ fees in respect of both theirwork carried out for the purposes of the audit of the 2006 Accounts and thework carried out for the financial assistance exercise (as referred to inclause 4.2.4 above) exceeds £10,000.

25.2         The Seller herebyacknowledges and agrees that it shall be responsible for (and shall pay) thosethird party professional fees incurred by the Buyer and/or the Company inrelation to any tax compliance matters which relate to the financial yearsended 31 December 2005 and 31 December 2006.

This agreement has beenentered into as a deed on the date stated at the beginning of it.

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**SCHEDULE1**

**PART1PARTICULARS OF THE COMPANY**
| Name:                            |   | Colony Gift Corporation Limited                                                                                                                             |
|----------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                             |   |                                                                                                                                                        |
| Registration  number:            |   | 01499611                                                                                                                                                    |
|                             |   |                                                                                                                                                        |
| Registered  office:              |   | 100 New Bridge Street, London EC4V 6JA                                                                                                                      |
|                             |   |                                                                                                                                                        |
| Authorised share  capital        |   | Amount: £15,000,000  Divided into: 15,000,000 Ordinary Shares of £1 each                                                                          |
|                             |   |                                                                                                                                                        |
| Issued share  capital            |   | Amount: £14,520,070  Divided into: 14,520,070 Ordinary Shares of £1 each                                                                          |
|                             |   |                                                                                                                                                        |
| Directors and  shadow directors: |   | Stephen Robert Evans  Louise McMahon  Simon Martin                                                                                                          |
|                             |   |                                                                                                                                                        |
| Secretary:                       |   | Simon Martin                                                                                                                                                |
|                             |   |                                                                                                                                                        |
| Auditor                          |   | Deloitte & Touche LLP                                                                                                                                   |
|                             |   |                                                                                                                                                        |
| Registered  Charges              |   | Legal Charge dated 21  July 1998 in favour of Barclays Bank Plc 

Mortgage dated 10 October 1997 in favour of Barclays  Mercantile Business Finance Limited |

 

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**SCHEDULE1**

**PART2THE COLONY SUBSIDIARIES**
| **Name of  Subsidiary**       | ** ** | **Place of Incorporation** | ** ** | **No of Shares held/  Percentage holding** |
|-------------------------------|------------|----------------------------|------------|--------------------------------------------|
|                          |       |                       |       |                                       |
| Fragrant  Memories Limited    |       | England                    |       | 100%                                       |
|                          |       |                       |       |                                       |
| Nature’s Scents  Limited |       | England                    |       | 100% (held by  Fragrant Memories Limited)  |
|                          |       |                       |       |                                       |
| Colony Private  Label Limited |       | England                    |       | 100%                                       |
|                          |       |                       |       |                                       |
| Colony Italy                  |       | Italy                      |       | 75%                                        |
|                          |       |                       |       |                                       |
| Colony  Deutschland GmbH      |       | Germany                    |       | 100%                                       |
|                          |       |                       |       |                                       |
| Colony Iberia SA              |       | Spain                      |       | 75%                                        |
|                          |       |                       |       |                                       |
| Colony Sarl                   |       | France                     |       | 100%                                       |
|                          |       |                       |       |                                       |
| Carolina Designs  Limited     |       | England                    |       | 100%                                       |

 

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**SCHEDULE2COMPLETION**

**Part 1 - What the Seller shall deliver to theBuyer at Completion**

1              At Completion, theSeller shall deliver or cause to be delivered to the Buyer the followingdocuments and evidence:

1.1           transfers of the SaleShares executed by the registered holders in favour of the Buyer;

1.2           the share certificatesfor the Sale Shares in the names of the registered holders or an indemnity inthe agreed form for any lost certificates;

1.3           the waivers, consentsand other documents required to enable the Buyer to be registered as the holderof the Sale Shares;

1.4           an irrevocable power ofattorney in agreed form given by the Seller in favour of the Buyer to enablethe beneficiary (or its proxies) to exercise all voting and other rightsattaching to the Sale Shares before the transfer of the Sale Shares isregistered in the register of members;

1.5           in relation to theCompany, the statutory registers and minute books (written up to the time ofCompletion), the common seal, certificate of incorporation and any certificatesof incorporation on change of name;

1.6           the writtenresignation, executed as a deed and in the agreed form, of the directors andsecretary of the Company from their offices and employment with the Company, exceptfor Stephen Evans, Simon Martin and Louise McMahon who are not resigning

1.7           a certified copy of theminutes of the board meeting held pursuant to Part 2 of Schedule 2;

1.8           in relation to theCompany:

1.8.1                statements fromeach bank at which the Company has an account, giving the balance of eachaccount at the close of business on the last Business Day before Completion;

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1.8.2                all cheque booksin current use and written confirmation that no cheques have been written sincethose statements were prepared;

1.8.3                details of theircash book balances; and

1.8.4                reconciliationstatements reconciling the cash book balances and the cheque books with thebank statements delivered;

1.9           evidence, in agreedform, that any indebtedness (other than indebtedness incurred in the ordinarycourse of trading) owing to the Seller or any member of the Seller’s Group) hasbeen discharged or waived;

1.10         evidence, in agreed form,that the Company has been discharged from any responsibility for theindebtedness, or for the default in the performance of any obligation, of theSeller or any member of the Seller’s Group; and

1.11         all charges, mortgages,debentures and guarantees to which the Company is a party and, in relation toeach such instrument and any covenants connected with it:

1.11.1              a sealed dischargeor release in the agreed form; and

1.11.2              if applicable, asworn and completed Form 403a (declaration that part of the property orundertaking charged has been released from the charge).

**Part 2 - Matters for the board meeting atCompletion**

1              The Seller shallcause a board meeting of the Company to be held at Completion at which thematters set out in Part 2 of Schedule 2 shall take place.

2              A resolution toregister the transfer of the Sale Shares shall be passed at such board meetingof the Company, subject to the transfers being stamped at the cost of theBuyer.

3              All directors andthe secretary of the Company shall resign from their offices and employmentwith the Company with effect from the end of the relevant board meeting, exceptfor Stephen Evans, Simon Martin and Louise McMahon.

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4              The persons theBuyer nominates shall be appointed as directors and secretary of the Company(but not exceeding any maximum number of directors contained in the relevantcompany’s articles of association). The appointments shall take effect at theend of the board meeting.

5              All the existinginstructions and authorities to bankers shall be revoked and replaced with newinstructions and authorities to those banks in the form the Buyer requires.

6              The address of theregistered office of the Company shall be changed to the address required bythe Buyer.

7              The accountingreference date of the Company shall be changed to the date required by theBuyer.

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**SCHEDULE3WARRANTIES**

1              **POWER TO SELL THE COMPANY**

1.1           The Seller has allrequisite power and authority to enter into and perform this Agreement inaccordance with its terms and the other documents referred to in it.

1.2           This Agreement and theother documents referred to in it constitute (or shall constitute whenexecuted) valid, legal and binding obligations on the Seller in the terms ofthe agreement and such other documents.

1.3           Compliance with theterms of this Agreement and the documents referred to in it shall not breach orconstitute a default under any of the following:

1.3.1                any agreement or instrument to which theSeller is a party or by which any of them is bound; or

1.3.2                any order, judgment, decree or otherrestriction applicable to the Seller.

2              **SHARES IN THE COMPANY AND SUBSIDIARIES**

2.1           The Sale Sharesconstitute the whole of the allotted and issued share capital of the Companyand are fully paid.

2.2           The Seller is the legaland beneficial owners of the Sale Shares.

2.3           The Company has nosubsidiaries other than the Colony Subsidiaries.

2.4           The Sale Shares arefree from all Encumbrances.

2.5           No right has beengranted to any person to require the Company to issue any share capital and noEncumbrance has been created in favour of any person affecting any unissuedshares or debentures or other unissued securities of the Company.

2.6           No commitment has beengiven to create an Encumbrance affecting the Sale Shares (or any unissuedshares or debentures or other unissued securities of the Company) or for any ofthem to issue any share capital and no person has claimed any rights inconnection with any of those things.

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2.7           Other than in relationto the Colony Subsidiaries the Company:

2.7.1                does not hold orbeneficially own and has not agreed to acquire, any securities of anycorporation;

2.7.2                is not and hasagreed to become a member of any partnership or other unincorporatedassociation, joint venture or consortium (other than recognised tradeassociations);

2.7.3                does not have,outside its country of incorporation, any branch or permanent establishment;and

2.7.4                has not allottedor issued any securities that are convertible into shares.

2.8           The Company has not atany time:

2.8.1                 purchased,redeemed or repaid any of its own share capital; or

2.8.2                given anyfinancial assistance in connection with any acquisition of its share capital orthe share capital of its holding company (as that expression is defined insection 736 of the Companies Acts) as it would fall within sections 151 to 158(inclusive) of the Companies Acts.

2.9           All dividends ordistributions declared, made or paid by the Company have been declared, made orpaid in accordance with its memorandum, articles of association, the applicableprovisions of the Companies Acts and any agreements or arrangements made withany third party regulating the payment of dividends and distributions.

3              **CONSTITUTIONAL AND CORPORATE DOCUMENTS**

The copies of thememorandum and articles of association or other constitutional and corporatedocuments of the Company contained in the Disclosure Bundle are true, accurateand complete in all material respects and copies of all the resolutions andagreements required to be annexed to or incorporated in those documents by thelaw applicable are annexed or incorporated.

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**SCHEDULE4**

**TAXCOVENANT**

**PART1**

**Definitions and interpretation**

**DEFINITIONS AND INTERPRETATION**

1              In this schedule, unless the contextotherwise requires, the following words and expressions shall have thefollowing meanings:

1.1            “**Buyer’s Group**” means the Buyer and anycompany within the same group or association of companies as the Buyer for anyTax purpose;

1.2           “**Event**” means any act, omission, event ortransaction;

1.3           “**Group Relief**” means:

1.3.1                 reliefsurrendered or claimed pursuant to Chapter IV Part X ICTA 1988; and

1.3.2                 a Tax relating toan accounting period as defined in section 102(3) of the Finance Act 1989(surrender of company Tax refund etc within group) in respect of which a noticehas been given pursuant to section 102(2) of that statute.

1.4           “**Liabilityfor Taxation”** means:

1.4.1                any liability ofthe Company to make a payment of or increased payment of Tax whether or not thesame is primarily payable by the Company and whether or not the Company has ormay have any right of reimbursement against any other person or persons;

1.4.2                the set-off of anyPost Completion Relief against income, profits or gains earned, accrued orreceived on or before Completion in circumstances where, but for such set-off,the Company would have had a liability to make a payment of or increasedpayment of Tax in respect of which the Seller would have been liable under part3 of this schedule**in which casethe amount of the Liability for Taxation shall be the amount of Tax saved bythe Company as a result of such set-off; and

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1.4.3                any liability ofthe Company to make a payment pursuant to an indemnity, guarantee or covenantentered into before Completion under which the Company has agreed to meet orpay a sum equivalent to or by reference to another person’s Tax liability, inwhich case the Liability for Taxation shall be equal to the amount of theliability;

1.5           “**Post Completion Relief**” means:

1.5.1        any Relief of the Buyerand/or any member of the Buyer’s Group (other than the Company); and

1.5.2        a Relief of the Company tothe extent that it arises by reference to an Event occuring after Completion;

1.6           “**RelevantPerson**” means the Seller and any person (other than the Company)which is or has been connected with the Seller;

1.7           “**Relief**”means any loss, relief, allowance, credit, exemption or set-off available inrelation to Tax or to the computation of income, profits or gains for thepurposes of Tax or any right to repayment of Tax;

1.8           “**Tax**”or “**Taxation**” means any tax, duty, impost,levy or tariff in each case in respect of tax but excluding the uniformbusiness rate, council tax, water rates and other local authority rates orcharges and (unless due to the default or delay of the Buyer) any penalty, fineor interest payable in connection with any such tax, duty, impost, levy ortariff;

1.9           “**TaxationAuthority**” means means any statutory or governmental authority orbody of any jurisdiction involved in the collection or administration of Tax;

1.10         “**Tax Claim**”means any notice, demand, assessment, letter or other document issued, oraction taken, by or on behalf of any Taxation Authority and the submission ofany Tax form, return or computation from which, in either case, it appears tothe Buyer that the Company is or may be subject to a Liability for Taxation orother liability in respect of which the Seller is or may be liable under thisschedule;

1.11         “**TaxationStatute**” means any statute, statutory instrument, regulation orlegislative provision wheresoever enacted, issued or adopted providing for,

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imposing orrelating to Taxation and shall include any statute, enactment, law, statutoryinstrument, order, regulation or provision which amends extends consolidates orreplaces the same or which has been amended extended consolidated or replacedby the same;

2              In this schedule “Company” shall inaddition to the Company include every subsidiary of the Company to the intentand effect that the provisions of this schedule shall apply and be given inrespect of each subsidiary as well as the Company.

3              Any reference to a Liability for Taxationin respect of income, profits or gains earned, accrued or received shallinclude a Liability for Taxation in respect of income, profits or gains deemedto have been or treated or regarded as earned, accrued or received for any Taxpurpose and any reference to Liability for Taxation on the happening of anyEvent shall include a Liability for Taxation where such Event (for the purposesof the Taxation Statute in question) is deemed to have occurred or is treatedor regarded as having occurred.

4              Reference to an Event occurring on orbefore Completion shall be deemed to include:

4.1           any combination of two or more Events all ofwhich shall have occurred (or be deemed for the purposes of Tax to haveoccurred) on or before Completion; and

4.2           any combination of two or more Events atleast one of which shall have taken place or be deemed for the purposes of anyTax to have occurred on or before Completion provided that any Event or Events which take place (or are deemed totake place) after Completion shall only be taken into account if they are:

4.2.1.       the completion of the disposal of any assetwhich was contracted to be sold by the Company on or before Completion or theperformance of any other act by virtue of a legally binding obligation enteredinto by the Company on or before Completion;

4.2.2.       the satisfaction of a condition to which thedisposal of any asset pursuant to a contract entered into by the Company on orbefore Completion is subject provided that such disposal shall only be treatedas occurring on or before Completion to the extent that it gives rise to aliability to Taxation in respect of deemed (as opposed to actual) income,profits or gains and only Taxation arising in respect of the

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amount by which the deemed income, profits or gains of  the Company exceeds the actual income, profitsand gains shall be treated as arising in consequence of an Event occurring onor before Completion;

4.2.3.       the failure of any person (other than any memberof the Buyer’s Group) who was at any time prior to Completion a member of  the same group of companies as the Companyfor the purposes of the Taxation in question or was associated with the Companyfor the purposes of the Taxation in question to discharge a liability for Taxwithin a specified period or the expiry of such a period which failure givesrise to a liability of the Company pursuant to section 767A or 767AA ICTA 1988or any of sections 189, 190 or 191 TCGA 1992;

4.2.4.       the making of any chargeable payment (as definedin section 214 ICTA 1988).

5              For the purposes of this Schedule 4,where any document in the possession or under the control of the Company or tothe production of which the Company is entitled and on which the Company needsto rely is not (or is not properly) stamped, the stamp duty (together with anyaccrued interest and/or penalties in respect of such stamp duty) required to bepaid in order that such document be fully and properly stamped shall,notwithstanding that the Company may be under no legal obligation to stamp thedocument be treated as a liability of the Company arising on the date when thedocument was executed and “Liability for Taxation” shall be construedaccordingly

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**PART 2TAXATION WARRANTIES**

1              **GENERAL**

1.1           Notices and returns

1.1.1                All notices,returns, computations and any other necessary information submitted by theCompany to any Taxation Authority for the purposes of Taxation were accurateand complete when submitted and remain accurate and complete in all materialrespects.

1.1.2                The Company is notand, in the period of six years ended on the Accounts Date, has not been indispute with or subject to enquiry or investigation by any Taxation Authority(other than routine enquiries concerning the corporation tax computations ofthe Company, all of which have been resolved) and so far as the Seller is awarethere are no facts or circumstances likely to give rise to or be the subject ofany such dispute, enquiry or investigation.

1.2           Payment of Taxation due

All Taxation forwhich the Company is or has been liable to account for has been duly andpunctually paid (insofar as such Taxation ought to have been paid) and theCompany is under no liability (and has not within the three years prior to thedate of this agreement been liable) to pay any penalty, fine, surcharge orinterest in connection with any Taxation.

1.3           Deductions andwithholdings

The Company hasduly and properly made all deductions and withholdings in respect of, or onaccount of, any Tax (including amounts required to be deducted under the PAYEand National Insurance systems) from any payments made by it which it isobliged or entitled to make and (to the extent required to do so) has accountedin full to the relevant Taxation Authority for all amounts so deducted orwithheld.

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1.4           Concessions andarrangements

The amount ofTaxation chargeable on the Company during any accounting period ending on orwithin the six years before the Accounts Date has not depended on anyconcessions, agreements or other formal or informal arrangements with anyTaxation Authority.

1.5           Calculation of Taxationliability

The Company has(to the extent required by law) preserved and retained in its possessioncomplete and accurate records relating to its Tax affairs (including PAYE andNational Insurance records and VAT records) and the Company has sufficientrecords relating to past events to calculate the profit, gain, loss, balancingcharge or balancing allowance (all for Tax purposes) which would arise on anydisposal or on the realisation of any assets owned at the Accounts Date oracquired since that date but before Completion.

1.6           Secondary liabilities

So far as theSeller is aware the Company is not, nor will it become, liable to make apayment to any person (including any Taxation Authority) in respect of anyliability to Taxation of any other person where that other person fails todischarge a liability to Taxation to which it is or may be primarily liable.

2              **CHARGEABLE GAINS**

2.1           Acquisition costs

The sum whichwould be allowed as a deduction from the consideration under section 38 TCGA1992 (acquisition and disposal costs etc) received for each asset of theCompany (other than trading stock) if disposed of on the date of this agreementwould not be less than (in the case of an asset held on Accounts Date) the bookvalue of that asset shown or included in the Accounts or (in the case of anasset acquired since the Accounts Date) an amount equal to the considerationgiven for its acquisition.

2.2           Transactions not atarms length

The Company hasnot disposed of or acquired any asset in circumstances falling within section17 or 18 TCGA 1992.

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3              **CAPITAL ALLOWANCES**

3.1           Tax written down value

Save to the extentreflected in the deferred tax provision in the Accounts, no balancing charge inrespect of any capital allowances claimed or given would arise if any asset ofthe Company (or, where computations are made for capital allowances purposesfor pools of assets, all the assets in that pool) were to be realised for aconsideration equal to the amount of the book value thereof as shown orincluded in the Accounts.

4              **DISTRIBUTIONS**

4.1           The Company has notmade any repayment of share capital or issued any share capital as paid upotherwise than by the receipt of new consideration.

4.2           The Company has notmade (nor is it deemed to have made) any distribution within the meaning ofICTA 1988 except dividends properly authorised and disclosed in its auditedaccounts.

5              **LOAN RELATIONSHIPS**

5.1           All interests,discounts and premiums payable by the Company in respect of its loanrelationships (within the meaning of section 81, Finance Act 1996) are eligibleto be brought into account by the Company as a debit for the purposes ofChapter II of Part IV, Finance Act 1996 at the time and to the extent that suchdebits are recognised in the statutory accounts of the Company.

5.2           The Company has neverbeen a party to a loan relationship that had an unallowable purpose (within themeaning of paragraph 13, Schedule 9, FA 1996).

6              **CLOSE COMPANIES**

6.1           Closeinvestment-holding company status

The Company isnot, and has never been, a close investment-holding company as defined insection 13A, ICTA 1988.

6.2           Distributions

The Company hasnever made a distribution within section 418 ICTA 1988.

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6.3           Loans to participators

Any loans oradvances made or agreed to be made by the Company within sections 419 and 420or section 422 ICTA 1988 have been disclosed in the Disclosure Letter and theCompany has not released or written off or agreed to release or write off thewhole or any part of any such loans or advances.

7              **GROUPS OF COMPANIES**

7.1           The Company has notentered into, or agreed to enter into, an election pursuant to section 171A ofTCGA 1992 or paragraph 66 of Schedule 29 to the Finance Act 2002.

7.2           Neither the executionnor completion of this agreement, nor any other event since the Accounts Date,will result in any chargeable asset being deemed to have been disposed of andre-acquired by the Company for Taxation purposes under section 179 of TCGA1992, paragraphs 58 or 60 of Schedule 29 to the Finance Act 2002, paragraph 12Aof Schedule 9 to the Finance Act 1996, paragraph 30A of Schedule 29 to theFinance Act 2002, or as a result of any other Event since the Accounts Date.

8              **COMPANY RESIDENCE**

8.1           The Company has alwaysbeen resident in the United Kingdom for corporation tax purposes and has neverat any time been treated for the purposes of any double taxation arrangementsor for any other tax purpose as resident in any other jurisdiction and theCompany does not hold shares in a company which is not resident in the UnitedKingdom and which would be a close company if it were resident in the UnitedKingdom in circumstances such that a chargeable gain accruing to the companynot resident in the United Kingdom could be apportioned to the Company pursuantto section 13 of TCGA 1992.

9              **ANTI-AVOIDANCE**

9.1           Anti-avoidance

The Company hasnot been a party to, nor has been otherwise involved in, any transaction,scheme or arrangement the main purpose of which, or one of the main purposes ofwhich was the avoidance or deferral of a liability to Tax.

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9.2           Transactions betweenassociated persons

All transactionsor arrangements made by the Company have been made on fully arm’s length termsand there are no circumstances in which 770A of or schedule 28AA to ICTA 1988could apply causing any Taxation Authority to make an adjustment to the termson which such transaction or arrangement is treated as being made for taxationpurposes.

10            **INHERITANCE TAX**

10.1         No transfers of value andassociated operations

The Company hasnot made any transfer of value within sections 94 and 202, IHTA 1984, nor hasit received any value such that liability might arise under section 199, IHTA1984 , nor has it been a party to associated operations in relation to atransfer of value as defined by section 268, IHTA 1984.

10.2         HM Revenue & Customscharge

There is nounsatisfied liability to inheritance tax attached to or attributable to theSale Shares or any asset of the Company and none of them are subject to anycharge as mentioned in section 237 and 238, IHTA 1984.

10.3         Power of sale, mortgageor charge

No asset owned bythe Company, nor the Sale Shares are liable to be subject to any sale, mortgageor charge by virtue of section 212 (1), IHTA 1984.

11            **VAT**

11.1         Returns and payments

11.1.1              The Company isregistered as a taxable person for the purposes of VAT in the United Kingdomunder schedule 1 VATA 1994 and has never been treated as (nor applied to be) amember of a group of companies for VAT purposes.

11.1.2              The Company hascomplied in all material respects with all statutory provisions, rules,regulations, orders and directions in respect of VAT, promptly submittedaccurate returns and, maintained full and accurate VAT records and the Companyhas not been subject to any interest, forfeiture, surcharge or penalty,

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nor been given anynotice under sections 59, 59A or 64, VATA 1994, nor been given a warning withinsection 76(2), VATA 1994, nor been required to give security under paragraph 4,Schedule 11, VATA 1994.

11.2         Taxable supplies andinput tax credit

All supplies madeby the Company are taxable supplies and the Company has not been or will bedenied full credit for all input tax.

11.3         VAT and Properties

The Company hasnot made and is not otherwise bound by any election to waive exemption from VAT(pursuant to paragraph 2, Schedule 10, VATA 1994).

11.4         Capital goods scheme

No asset of theCompany is a capital item, the input tax on which could be subject toadjustment in accordance with the provisions of Part XV, VAT Regulations 1995.

11.5         Transfer of Going Concern

The Company hasnot been party to a transaction to which Article 5 of the Value Added Tax(Special Provisions) Order 1995 (transfer of business as a going concern) has(or has purported to have been) applied.

11.6         Bad debt relief

11.6.1              The Company has notmade any claim for bad debt relief under section 36, VATA 1994 and there are noexisting circumstances by virtue of which any refund of tax obtained or claimedmay be required to be repaid.

11.6.2              There are nocircumstances by virtue of which there could be a claw-back of input tax fromthe Company under section 36(4), VATA 1994.

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12            **STAMP DUTY AND SDLT**

12.1         Stamp duty

Any document thatmay be necessary in proving the title to any asset that is owned by the Companyat Completion or any document that the Company may wish to enforce or producein evidence is duly stamped.

12.2         Withdrawal of Relief

Neither enteringinto this agreement nor Completion will result in the withdrawal of a stampduty or stamp duty land tax relief granted on or before Completion which willaffect the Company.

12.3         SDLT

The DisclosureLetter sets out full and accurate details of any chargeable interest (asdefined under section 48 of the Finance Act 2003) acquired or held by theCompany before completion in respect of which the Seller are aware or oughtreasonably to be aware that an additional land transaction return will berequired to be filed with a Taxation Authority and/or a payment of stamp dutyland tax made on or after Completion.

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**PART 3**

**Tax Covenant**

1              **COVENANT**

Subject as hereinafterprovided the Seller hereby covenants to pay to the Buyer an amount equal to:

1.1           any Liability forTaxation which arises as a result of an Event occurring on or before Completionor in respect of income, profits or gains earned, accrued or received on orbefore Completion;

1.2           any Liability forTaxation arising or assessed as a consequence of the failure of a RelevantPerson at any time to pay Tax;

1.3           any Liability forTaxation falling within paragraph 1.4.4 of part 1 of this schedule;

1.4           all reasonable costsand expenses incurred by the Company or the Buyer in connection with asuccessful claim under this schedule; and

1.5           any Liability forTaxation arising directly as a result of the waiver/capitalisation of any intercompany indebtedness on or before Completion.

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**PART 4**

**Limitations and procedure**

1              **LIMITATIONOF SELLER’S LIABILITY**

1.1           The provisions ofclauses 6.3 (maximum) shall not apply but clauses 6.4 (disregard and deminimis) and 6.6 (time limits) of this Agreement shall apply to this scheduleas if the same were set out herein in full and the liability of the Sellerunder this schedule shall be limited or excluded accordingly.

1.2           The Seller shall not beliable under any Taxation Waranty or any claim under Part 3 (Tax Covenant) inrespect of any Liability for Taxation to the extent that:

1.2.1                a provision orreserve in respect thereof was made in the Accounts and has been paid or dischargedon or before Completion or to the extent that the payment or discharge  of such liability has been taken into accountin the Accounts and has been paid or discharged on or before Completion;

1.2.2                such Liability forTaxation arises from any act or transaction of the Company in the ordinarycourse of business since the Accounts Date;

1.2.3                such Liability forTaxation arises or is increased as a result only of any change in TaxationStatute or any increase in rates of Tax (in each case) announced and cominginto force after Completion which has retrospective effect;

1.2.4                such Liability forTaxation arises or is increased as a result of any change in the accountingpolicies or practices of the Company after Completion save where such change ismade in order to comply with generally accepted accounting principles in theUnited Kingdom;

1.2.5                such Liability forTaxation would not have arisen or would have been reduced or eliminated but fora failure or omission on the part of the Buyer after Completion to make anyclaim, election, surrender or disclaimer or to give any notice or consent (“Relevant

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Claim”) afterCompletion the making, giving or doing of which was taken into account incomputing the provision for Tax in the Accounts provided that written detailsof such Relevant Claim were given to the Buyer in sufficient time to enable itor the Company to make the Relevant Claim;

1.2.6                such Liability forTaxation would not have arisen but for the voluntary amendment or withdrawal(in whole or in part) after Completion of any claim election or surrenderproperly made before Completion or the making of any disclaimer afterCompletion;

1.2.7                such Liability forTaxation would not have arisen but for a voluntary act or transaction carriedout by the Buyer or the Company after Completion otherwise than:

1.2.7.1             in the ordinarycourse of business of the Company; or

1.2.7.2             pursuant to a legallybinding obligation in existence at Completion or any act required by law; or

1.2.8        any Relief other than aPost Completion Relief is available to the Company to relieve or mitigate thatliability;

1.2.9        the liability has beenmade good or satisfied (otherwise than by the Buyer);

1.2.10      the liability arises or isincreased as a result of the failure by the Company after Completion to submitany returns, notices, computations or other information required to be made byit or not submitting such returns, notices, computations or other informationwithin the appropriate time limits or otherwise than on a proper basis;

1.2.11      the liability arises or isincreased as a result of the Company or Buyer failing to act in accordance withany of the provisions of this agreement;

1.2.12      the rate or average rate ofany Taxation for any period which is applicable to the Company increasing as aresult of the sale and

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purchase of theCompany under the Agreement, including the Company ceasing to be subject tocorporation tax at the small companies’ rate (or qualifying for relief undersection 13(2) of the ICTA 1988) and becoming subject to corporation tax at therate applicable to companies generally; or

1.2.13      such Liability for Taxationis a liability to interest on instalment payments paid on or before Completionunder paragraph 7 of the Corporation Tax (Instalment Payments) Regulations 1998which interest is only payable by reason of any instalment payments made beforeCompletion proving to be insufficient as a result of profits earned by theCompany after Completion proving to be greater than was reasonably estimated bythe Company at the time such instalment was made;

1.2.14      such Liability for Taxationwould not have arisen but for a change in the accounting reference date of anyperson made on or after Completion

1.2.15      such Liability for Taxationis in respect of stamp duty or stamp duty reserve tax payable on the transferor agreement to transfer the Sale Shares pursuant to this agreement.

1.2.16      the Buyer has recovereddamages or any other amount under this Agreement (whether for breach ofWarranty, or otherwise) in respect of the same loss, liability, damage or Eventor the Buyer or the Company have otherwise obtained reimbursement orrestitution from the Seller.

2              **DISPUTES ANDCONDUCT OF TAX CLAIMS**

2.1           If the Buyer or theCompany shall become aware of a Tax Claim the Buyer shall, or shall procurethat the Company shall, as soon as reasonably practicable (and in any event, inthe case of the receipt of a Tax Claim consisting of any assessment or demandfor Tax or for which the time for response or appeal is limited, not less than15 clear days prior to the day on which the time for response or appealexpires) give written notice thereof to the Seller but so that the giving ofsuch notice shall not be a condition precedent to the Seller’s liability underthis schedule.

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2.2           Subject to the Sellerindemnifying the Company and the Buyer to the reasonable satisfaction of theBuyer against all reasonable costs and expenses (including any additional Tax)which may be incurred thereby, the Buyer shall (and shall procure that theCompany shall) take such action as the Seller may reasonably request in writingto the Buyer (including delegating the conduct of the action to the Seller)provided always that:

2.2.1                the Company shallnot be obliged to appeal against any assessment for Tax if, having given theSeller notice of the receipt of that assessment, the Buyer has not within 10Business Days thereafter received instructions from the Seller, in accordancewith the provisions of this paragraph 2.2 to make that appeal;

2.2.2                the Buyer and theCompany shall not be obliged to comply with any instruction of the Seller whichinvolves contesting any assessment for Tax before any court or other appellatebody (excluding the General and SpecialCommissioners of HM Revenue & Customs and the VAT and Duties Tribunal)unless the Seller provides the Buyer with the written opinion of Tax Counsel(after disclosure of all relevant information and having regard to all therelevant circumstances) of at least 10 years’ call that an appeal against theassessment will on the balance of probabilities be successful;

2.2.3                the Buyer and theCompany shall not be obliged to comply with any instruction of the Seller tomake a settlement or compromise of a Tax Claim which is the subject of adispute or agree any matter in the conduct of such dispute which in thereasonable opinion of the Buyer could materially adversely affect the futureTax position of the Company or any member of the Buyer’s Group.

2.3           The Seller shall havethe right to have any action mentioned in paragraph 2.2 conducted by theirnominated professional advisers provided that the appointment of suchprofessional advisers shall be subject to the approval of the Buyer (suchapproval not to be unreasonably withheld or delayed).

2.4           If the Seller does notrequest the Buyer or the Company to take any action under paragraph 2.2 orfails to indemnify the Buyer and the Company to the Buyer’s reasonablesatisfaction within a period of time (commencing with the

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date of the notice givento the Seller) that is reasonable having regard to the nature of the Tax Claimand the existence of any time limit in relation to avoiding, disputing,defending, resisting, appealing or compromising such Tax Claim and which periodshall not in any event exceed a period of 45 days the Buyer or the Companyshall be free to pay or settle the Tax Claim on such terms as it may in itsreasonable discretion think fit.

2.5           The Buyer shall keepthe Seller fully informed of the progress in settling the relevant Tax Claimand shall, as soon as reasonably practicable forward, or procure to beforwarded, to the Seller copies of all material correspondence pertaining toit.

2.6           If it is alleged by anyTaxation Authority in writing that the Seller (at any time) or the Company(prior to Completion) has committed any act or omission constituting fraudulentconduct relating to Tax then the provisions of paragraph 2.2 shall not applyand the Seller shall cease to have any right thereunder.

3              **PAYMENT DATEAND INTEREST**

3.1           Where the Seller isliable to make any payment under this schedule, the due date for the making ofthat payment (the “Due Date”) shall be the later of the date falling fiveBusiness Days after the Buyer has served a written notice on the Sellerdemanding that payment and:

3.1.1                in any case thatinvolves an actual payment of Tax (including any payment pursuant to paragraph1.4 of part 3 of this schedule), the date falling two Business Days before thelast date on which the Tax in question must be paid to the relevant TaxationAuthority or person entitled to the payment (after taking into account anypostponement of the due date for payment which is obtained) in order to avoidincurring a liability to interest or a charge fine or penalty; or

3.1.2                in any case thatinvolves a Liability for Taxation falling within paragraph 1.4.2 of part 1 ofthis schedule the last date upon which the Taxation is or would have beenrequired to be paid to the relevant Taxation Authority in respect of the periodin which the Loss of the Relief occurs or, if the Relief that is lost is aright to

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repayment of Tax, thedate upon which the repayment of Tax would have actually been received; or

3.1.3                in any case thatinvolves a Liability for Taxation falling within paragraph 1.4.3 of part 1 ofthis schedule the date upon which the Taxation saved by the Company is or wouldhave been required to be paid to the relevant Taxation Authority; or

3.1.4                in any case thatinvolves a Liability for Taxation falling within paragraph 1.4.4 of part 1 ofthis schedule not later than the fifth day before the day on which the Companyis due to make the payment or repayment.

3.2           If any sums required tobe paid by the Seller under this schedule are not paid on the Due Date, then,except to the extent that the Seller’s liability under part 2 of this schedulecompensates the Buyer for the late payment by virtue of it extending tointerest and penalties, such sums shall bear interest (which shall accrue fromday to day after as well as before any judgment for the same) at the rate of 2per cent per annum over the base rate from time to time of Barclays Bank Plc or(in the absence thereof) at such similar rate as the Buyer shall select fromthe day following the Due Date up to and including the day of actual payment ofsuch sums such interest to be compounded quarterly.

4              **TAXATION OFPAYMENTS**

4.1           Any sum payable by theSeller to the Buyer under this agreement shall be paid free and clear of anydeduction or withholding whatsoever, save only as may be required by law.

4.2           If any deduction orwithholding is required by law to be made from any payment by the Seller underthis agreement or if the Buyer is subject to Taxation in respect of suchpayment the Seller shall increase the amount of the payment by such additionalamount as is necessary to ensure that the net amount received and retained bythe Buyer (after taking account of all deductions or withholdings or Taxation)is equal to the amount which it would have received and retained had thepayment in question not been subject to any deductions or withholdings orTaxation provided that this paragraph shall

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not apply to any interestpayable under paragraph 3.2 of this part of this schedule.

4.3           If, at any time afterany increased payment is made by the Seller as a consequence of the applicationof this paragraph, the Buyer receives or is granted a credit against orremission from any Tax payable by it which it would not otherwise have receivedor been granted but for such increased payment, the Buyer shall, to the extentthat it can do so without prejudicing the retention of the amount of suchcredit or remission, reimburse the Seller with the amount of such credit orremission.

5              **RECOVERYFROM OTHER PERSONS**

5.1           If the Company, theBuyer or any member of the Buyer’s Group is or becomes entitled to recover fromany other person (including a Taxation Authority) any amount which is referableto a Liability for Taxation in respect of which the Seller has made a paymentunder this schedule, the Buyer shall or shall procure that the Company shall:

5.1.1                notify the Sellerof its entitlement; and

5.1.2                if required by theSeller and, subject to the Buyer, or as appropriate the Company, beingindemnified by the Seller against the reasonable costs of the Buyer or, asappropriate, the Company in connection with taking the following action, theBuyer shall, or shall procure that the Company shall, take such action as isreasonably requested by the Seller to enforce recovery against that person orTaxation Authority

5.2           In the event that theCompany, the Buyer or any member of the Buyer’s Group recover any sum referredto in paragraph 5.1 (whether after taking any action at the request of theSeller under that paragraph or otherwise), the Buyer shall, as soon asreasonably practicable, account to the Seller for the lesser of:

5.2.1                the sum recovered(including any related interest or related repayment supplement) less any Taxon that amount and any reasonable costs incurred in recovering the same (saveto the extent that that amount has already been made good by the Seller underparagraph 5.1.2); and

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5.2.2                any amount paid bythe Seller under this schedule in respect of the Liability for Taxation givingrise to the relevant Tax Claim plus costs for which the Seller has indemnifiedand paid to the Buyer and/or the Company under this paragraph.

6              **CORRESPONDING RELIEFS**

6.1           If:

6.1.1                a payment by theSeller in respect of any Liability for Taxation under a Tax Claim or the mattergiving rise to the Liability for Taxatiion in question results in the Company,the Buyer or any member of the Buyer’s Group receiving or becoming entitled toany Relief which they utilise (including by way of repayment of Tax) (“CorrespondingRelief”)

then an amount equal tothe Tax saved by the Corresponding Relief at the date such Corresponding Reliefis utilised (“Relevant Amount”), shall be dealt with in accordance withparagraph 6.2.

6.2           The Relevant Amountshall:

6.2.1                first be set offagainst any payment then due from the Seller under this schedule;

6.2.2                secondly, to theextent that there is an excess (within 7 days after receipt by the Buyer of awritten demand by the Seller) there shall be refunded to the Seller anyprevious payment or payments made by the Seller under this schedule up to theamount of the excess; and

6.2.3                thirdly, to theextent that the excess referred to in paragraph 6.2.2 has not been exhaustedunder that paragraph, the remainder of such excess shall be carried forward andbe set against any further such payment or payments in chronological orderuntil exhausted.

6.3           If the Company or theBuyer become aware of any circumstances which shall or may give rise to theapplication of this paragraph 6, the Buyer shall, or shall

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procure that the Companyshall, as soon as reasonably practicable give written notice of the same to theSeller.

6.4           The Seller may requirethe auditors of the Company for the time being (at the Seller’s cost andexpense) to certify the existence and quantum of any Relevant Amount and thedate on which the Corresponding Relief is utilised and, in the absence ofmanifest error, their decision shall be final and binding.

7              **TAX RETURNS**

7.1           The Seller or theSeller’s duly appointed agents shall, subject to the provisions of clause 25.2of this Agreement, at the reasonable cost of the Company be entitled toprepare, submit and agree the corporation tax returns and computations of theCompany (“Returns”) for all accounting periods ended on or prior to 31 December2006.

7.2           The Seller shalldeliver to the Buyer for comments any Returns, documents or correspondence anddetails of any information or proposal (“Relevant Information”) which itintends to submit to HM Revenue & Customs before submission to the HMRevenue & Customs and shall take account of the reasonable comments of theBuyer and make such amendments to the Relevant Information as the Buyer mayreasonably require in writing within 30 days of the date of delivery of theRelevant Information prior to its submission to HM Revenue & Customs.

7.3           The Seller shalldeliver to the Buyer copies of any correspondence sent to, or received from, HMRevenue & Customs in relation to the Returns and shall keep the Buyer fullyinformed of its action under this paragraph.

7.4           Subject to paragraphs7.2 and 7.3 above, the Buyer shall procure that:

7.4.1                the Company causesthe Returns to be properly authorised and signed andmake all such claims,surrenders, disclaimers, notices or elections in relation to all accountingperiods ended on or prior to Completion as the Seller shall reasonably require;

7.4.2                the Companyprovides to the Seller such information and assistance, including such accessto its books and records, which may reasonably be required to prepare, submit,negotiate and agree the Returns; and

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7.4.3                any correspondencewhich relates to the Returns shall, if received by the Buyer or the Company orits agents or advisers, be properly copied to the Seller.

7.5           In respect of anymatter which gives rise or may give rise to a Tax Claim, the provisions ofparagraph 2 of this part 4 of this schedule with respect to conduct of taxclaims shall apply instead of the provisions of this paragraph 7.

7.6           The Seller shall useall reasonable endeavours to agree the Returns as soon as reasonablypracticable and shall deal with all matters promptly and diligently and withinapplicable time limits.

8              **BUYER’S COVENANT**

8.1           The Buyer covenantswith the Seller to pay to the Seller an amount equal to any of the following:

8.1.1                any liability orincreased liability to Tax of the Seller or any person connected with theSeller arising by virtue of the non-payment of Tax by the Company, the Buyer orany member of the Buyer’s Group save that this paragraph 8.1.1 shall not applyin respect of any Tax for which the Seller are liable to make (but have not yetmade) payment to the Buyer under part 3 of this schedule.

8.1.2                the reasonablecosts and expenses of the Seller in connection with any liability referred toor in taking any action under this paragraph.

Paragraphs 2 (conduct oftax claims), 3 (payment date and interest) and 4 (taxation of payments) of thispart 4 of this schedule shall apply mutatis mutandis to the covenant in favourof and payments to the Seller under this paragraph as they apply to payments tothe Buyer under part 3 of this schedule.

9              **GROUP RELIEF**

The Buyer shall procure that the Company, to theextent permissible and to the extent a Liability for Taxation is not therebycreated, enters into and signs all returns, claims, consents, surrenders,elections and notifications to effect the surrender to the Seller’s Group bythe Company (at no cost to the Seller’s Group) of all Group Relief available.

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| **EXECUTED**and**DELIVERED**as  a**DEED**by**BLYTH**    |   |   |
|---------------------------------------------------------|--------|--------|
| **HOMESCENTS  INTERNATIONAL UK LIMITED**                |   |   |
|                                                    |   |   |
|                                                    |   |   |
| Acting by its  duly authorised attorney                 |   |   |
| ** **                                              |   |   |
| ** **                                              |   |   |
| Signature:                                              |   |   |   |   |
|                                                    |   |   |   |
| Name                                                    |   |   |   |   |
|                                                    |   |   |   |   |
|                                                    |   |   |   |   |
|                                                    |   |   |
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| **EXECUTED**and**DELIVERED**as a**DEED**by**COBCO 813** |   |   |
| LIMITED acting by a director and a director/secretary   |   |   |
| ** **                                              |   |   |
|                                                    |   |   |
| DIRECTOR                                                |   |   |
|                                                    |   |   |
| Signature:                                              |   |   |   |   |
|                                                    |   |   |   |
| Name                                                    |   |   |   |   |
|                                                    |   |   |   |
| SECRETARY/DIRECTOR                                      |   |   |
|                                                    |   |   |   |
| Signature:                                              |   |   |   |   |
|                                                    |   |   |   |
| Name                                                    |   |   |   |   |
|                                                         |        |        |  |  |  |

 

54

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