Exhibit 10.1

 

*** Confidential Treatment Requested

 

Dated 10 February 2005

 

SUPPLIER NOVATION AND AMENDMENT AGREEMENT

between

BIOSIL LIMITED

HUTCHISON INTERNATIONAL INC.

MEDICOR AESTHETICS

and

INTERNATIONAL INTEGRATED INCORPORATED

 

2005

 

IMPORTANT NOTICE: THIS AGREEMENT HAS BEEN PREPARED BY BRODIES LLP ACTING ON
BEHALF OF BIOSIL LIMITED.  OTHER PROSPECTIVE PARTIES SHOULD CONSIDER TAKING
INDEPENDENT LEGAL ADVICE ON THE TERMS OF THIS AGREEMENT AND SHOULD SIGN IT ONLY
IF THEY ARE PREPARED TO BE BOUND BY ITS TERMS.

 

 

 

 

Brodies LLP

15 Atholl Crescent

Edinburgh EH3 8HA

T: 0131 228 3777

F: 0131 228 3878

Ref: GSC.BIO2.22

 

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CONTENTS

Clause

 

 

 

 

 

1.

Definitions and interpretation

 

2.

Condition Precedent

 

3.

Re-constitution and novation of the 2001 Agreement

 

4.

Hutchison’s obligations and release

 

5.

Modifications to 2001 Agreement and Volume Change Control Procedures

 

6.

III guarantee

 

7.

No partnership/agency

 

8.

Further assurance

 

9.

Assignment

 

10.

Announcements

 

11.

Confidentiality

 

12.

Costs and expenses

 

13.

Entire agreement

 

14.

Variation

 

15.

Severance

 

16.

Notices

 

17.

Counterparts

 

18.

Rights of third parties

 

19.

Governing law and jurisdiction/arbitration

 

 

 

 

Schedule 1            2001 Agreement

Schedule 2            Hutchison’s Obligations

Schedule 3            Modifications to 2001 Agreement

Schedule 4            Volume Change Control Procedures

Schedule 5            PMA Updates

Schedule 6            Data Storage and Process

Schedule 7            Product Change Control Procedures

Schedule 8            Guarantee

 

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DATE: 10 FEBRUARY 2005

PARTIES:

1                                          BIOSIL LIMITED (registered in the
Isle of Man under number 50222) whose registered office is at Global House, Isle
of Man Business Park, Douglas, Isle of Man, British Isles (“Biosil”);

2                                          HUTCHISON INTERNATIONAL INC., a
corporation incorporated under the laws of the State of Louisiana (corporation
number 72-1324212) and having its principal place of business at 7949 Jefferson
Hwy, Suite E, Baton Rouge, Louisiana 70809, United States of America
(“Hutchison”);

3                                          MEDICOR AESTHETHICS, a corporation
incorporated under the laws of the Nevada (corporation number E0016512005-8) and
having its principal executive offices at 6000 S. Eastern Avenue, Suite 9D, Las
Vegas, Nevada 89119, United States of America (“Aesthetics”); and

4                                          INTERNATIONAL INTEGRATED
INCORPORATED, a corporation incorporated under the laws of the British Virgin
Islands and having its principal executive offices at 4560 S.Decatur Blvd, Las
Vegas, Nevada 89103, United States of America (“III”).

 

INTRODUCTION AND BACKGROUND:

1                                          This Agreement is supplemental to the
2001 Agreement (as hereinafter defined) which was entered into between Biosil
and Hutchison and which related (inter alia) to a project to obtain regulatory
approval for the manufacture of the Products by Biosil and for their sale by
Hutchison in the Territory under Hutchison’s own brand label.

2                                          By notice dated 22 July 2004 Biosil
(acting through its attorneys, Messrs McGlinchey Stafford PLLC) lawfully
terminated the 2001 Agreement with stated effect from 23 July 2004.

3                                          Aesthetics is a wholly owned
subsidiary of III and has been in discussions with Biosil with a view to
agreeing terms upon which the 2001 Agreement might be reconstituted with effect
from the Effective Date and immediately then transferred by way of novation from
Hutchison to Aesthetics subject to the modifications set out in this Agreement.

4                                          Hutchison has agreed to transfer by
way of novation its rights and obligations under the 2001 Agreement to
Aesthetics upon the terms set out in this Agreement.

5                                          On the basis that Hutchison’s rights
and obligations under the 2001 Agreement will be transferred on the Effective
Date by way of novation to Aesthetics on the terms set out in this Agreement and
that III will guarantee to Biosil the due performance of Aesthetics’ obligations
(which III has agreed to do), Biosil has agreed to reconstitute the 2001
Agreement.

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AGREEMENT:

1                                         Definitions and interpretation

1.1                                 In this Agreement (except where the context
otherwise requires):-

1.1.1                                           Capitalised terms not otherwise
defined herein bear the same meanings are as ascribed to them in the 2001
Agreement;

1.1.2                                           Subject to Clause 1.1.1, the
following words shall have the following meanings:-

1.1.2.1                                            “2001 Agreement” means the
Supplier Agreement as amended in terms of Clause 23(1) of that Agreement by the
Letters.  Copies of the Supplier Agreement and the Letters are included in
Schedule 1;

1.1.2.2                                            “Business Day” means any day
which is not a Saturday, a Sunday or a bank or public holiday in the Isle of
Man;

1.1.2.3                                            “Change” means a change or
variation to the terms of this Agreement and/or the 2001 Agreement which is
agreed or determined in terms of the Volume Change Control Procedures;

1.1.2.4                                            “Condition Precedent” means
the condition precedent referred to in Clause 2.1;

1.1.2.5                                            “Effective Date” means the
date on which the Condition Precedent is fulfilled, subject always to the
provisions of Clause 2.2;

1.1.2.6                                            “GMP” means Good
Manufacturing Practice as set forth in the Quality Systems Regulations
established under the US Food, Drug and Cosmetics Act;

1.1.2.7                                            “Group” means, in relation to
any party, that party and any holding company or subsidiary of that party and
any subsidiary of that holding company;

1.1.2.8                                            “Guarantee” means the
Guarantee in the form set out in Schedule 8;

1.1.2.9                                            “Letters” means letters from
Biosil to Hutchison dated 27 June, 22 October, 12 November, 25 November (all
2002), 28 February, 23 May, 28 August and 20 November (all 2003) and 27 January
2004 all of which were agreed by Hutchison amending the terms of the Supplier
Agreement in terms of Clause 23(1) thereof;

1.1.2.10                                      “PMA” has the same meaning as “US
Regulatory Approvals” (a defined term in the 2001 Agreement);

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1.1.2.11                                      “Product Change Control
Procedures” means the change control procedures relating to the Products which
are contained in Schedule 7;

1.1.2.12                                      “Registered Name” means the name
of the person(s) in which the Registrations (or any of them) have been applied
for, or have been granted (as appropriate), for regulatory purposes, from time
to time.  To be clear, save where a Registration has been applied for, or is
being held in the Registered name of Biosil, the application for, or granting
of, a registration in a Registered Name does not confer legal or beneficial
ownership of that Registration on the Registered Name;

1.1.2.13                                      “Schedules” means the schedules to
this Agreement;

1.1.2.14                                      “Supplier Agreement” means the
Supplier Agreement dated 17 September 2001 between Biosil and Hutchison;

1.1.2.15                                      “Termination Notice” means the
notice dated 22 July 2004 in terms of which Biosil (acting through its
attorneys, Messrs McGlinchey Stafford PLLC) lawfully terminated the 2001
Agreement with stated effect from 23 July 2004; and

1.1.2.16                                      “Volume Change Control Procedures”
means the volume change control procedures contained in Schedule 4.

1.1.3                                           In this Agreement (except where
the context otherwise requires):-

1.1.3.1                                            any reference to a clause or
a Schedule is to the relevant clause or Schedule of or to this Agreement and any
reference to a paragraph is to the relevant paragraph of the Schedule in which
it appears;

1.1.3.2                                            the index and clause headings
are included for convenience only and shall not affect the interpretation of
this Agreement;

1.1.3.3                                            use of the singular includes
the plural and vice versa;

1.1.3.4                                            use of any gender includes
the other genders;

1.1.3.5                                            any reference to “persons”
includes natural persons, firms, partnerships, companies, corporations,
associations, organisations, governments, states, foundations and trusts (in
each case whether or not having separate legal personality);

1.1.3.6                                            the words “subsidiary” and
“holding company” have the meanings given to them by section 736 of the
Companies Act 1985 (of Parliament) and, to be clear, “company” includes any
corporation or body corporate, wherever incorporated;

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1.1.3.7                                            any reference to a person
being an “associate” of another shall be interpreted in accordance with section
435 of the Insolvency Act 1986 (of Parliament), and a person shall be regarded
as “connected” or “associated” with any person which is an associate of his and
with any company of which any director is an associate of his;

1.1.3.8                                            any reference to a statute,
statutory provision or subordinate legislation shall (except where the context
otherwise requires) be construed as referring to:

1.1.3.8.1                                                      such legislation
as amended and in force from time to time and to any legislation which (either
with or without modification) re-enacts, consolidates or enacts in rewritten
form any such legislation; and

1.1.3.8.2                                                      any former
legislation which it re-enacts, consolidates or enacts in rewritten form;

1.1.3.9                                            any reference to a document
being “in the agreed form” means a document in a form agreed by the parties and
initialled by, or on behalf of, all of them for the purpose of identification as
such;

1.1.3.10                                      any reference to an Isle of Man
legal term for any action, remedy, method of judicial proceeding, legal
document, legal status, court, official or any legal concept or thing shall, in
respect of any jurisdiction other than the Isle of Man, be deemed to include a
reference to what most nearly approximates in that jurisdiction to the Manx
legal term; and

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

1.1.4                                           The Schedules form part of this
Agreement and shall have effect as if set out in full in the body of this
Agreement and any reference to this Agreement includes the Schedules.

2                                         Condition Precedent

2.1                                 Save in respect of the rights and
obligations of the parties in terms of Clauses 11, 12, 16, 17, 18 and 19 which
shall come into effect on the date of this Agreement, the coming into force of
this Agreement is subject to and conditional in all respects on the fulfilment
of the Condition Precedent, that is the valid and effective execution by the
proposed parties thereto of the Guarantee.

2.2                                 If the Condition Precedent has not been
fulfilled:

2.2.1                                           by 1700 (UK time) on 25 February
2004; or

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2.2.2                                           within such longer period as
Biosil and III may (prior to the date referred to in Clause 2.1) agree between
them in writing;

this Agreement shall forthwith lapse and be of no further force and effect and
no party shall have any rights against any other party under this Agreement
except in respect of any breach by any of them of the provisions of Clauses 11,
12, 16, 17, 18 and 19 and the parties shall be released from all obligations
under this Agreement, but without prejudice to any rights or obligations which
may have already accrued prior to such lapse.

3                                         Re-constitution and novation of the
2001 Agreement

3.1                                 In consideration of the various covenants,
agreements and undertakings of the parties contained within this Agreement, as
from the Effective Date, the following shall occur simultaneously:-

3.1.1                                           The terms of the 2001 Agreement
are re-constituted with the intent that they shall be in full force and effect
as if the Termination Notice had not been given so that, subject to the
provisions of Clauses 3.1.2 and 3.1.3, the obligations of Biosil and Hutchison
thereunder are binding and enforceable in accordance with the terms of the 2001
Agreement;

3.1.2                                           Hutchison transfers to
Aesthetics, and Aesthetics accepts, the rights and obligations of Hutchison in
terms of the 2001 Agreement and Aesthetics undertakes to Biosil that it will
perform the rights and obligations of Hutchison under the 2001 Agreement, as
modified in terms of Clause 3.1.3, and shall be bound by its terms in every way
as if Aesthetics had been a party to it in place of Hutchison;

3.1.3                                           The terms of the 2001 Agreement
are modified (as between Biosil and Aesthetics) in accordance with the
provisions of Clause 4.

3.2                                 In the event of any ambiguity, inconsistency
or conflict between this Agreement and the terms of the 2001 Agreement, the
terms of this Agreement shall have precedence over the 2001 Agreement.

4                                         Hutchison’s obligations and release

4.1                                 Without prejudice to the transfer by
Hutchison to Aesthetics of its rights and obligations under the 2001 Agreement
in terms of Clause 3.1.2, and to the corresponding obligations of Biosil to
Aesthetics in terms of the 2001 Agreement, Hutchison undertakes to Biosil and
separately to Aesthetics and III that it will comply with the obligations set
out in Schedule 2.

4.2                                 Without prejudice to the rights which are
transferred by Hutchison to Aesthetics pursuant to Clause 3.1.2 of this
Agreement and to Biosil’s corresponding obligations to Aesthetics in terms of
the 2001 Agreement, Hutchison hereby releases Biosil from its obligations to
Hutchison under the 2001 Agreement as from the Effective Date.

4.3                                 In the event that

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4.3.1                                           Hutchison duly and punctually
performs its obligations under Clause 3.1; and

4.3.2                                           Aesthetics duly and punctually
pays to Biosil the sums referred to in paragraph 1.2 of Schedule 3; and

4.3.3                                           the Panel Approval Date occurs
prior to 1 September 2005; and

4.3.4                                           if directed by Biosil to do so,
Hutchison completes the transfer of the Registrations (to Biosil’s satisfaction
but not otherwise) from the Registered Name of Hutchison to Biosil (or a person
nominated by Biosil in writing) in accordance with the requirements of paragraph
3 of Schedule 2;

(but not otherwise), Biosil agrees that it will

4.3.5                                           forthwith release Hutchison from
any claim to damages that it might otherwise be entitled to bring against
Hutchison arising out of the termination of the 2001 Agreement and for the
breaches by Hutchison of the 2001 Agreement set out in the Termination Notice;
and

4.3.6                                           agree to the discharge of the
security interest and termination of the UCC financing statement referred to in
Clause 7(6) of the 2001 Agreement, but pending such discharge and termination,
Hutchison shall continue to be bound by the provisions of Clause 7(6) of the
2001 Agreement insofar as it relates to the creation, maintenance and
enforcement of security interests, rights and remedies.

5                                         Modifications to 2001 Agreement and
Volume Change Control Procedures

5.1                                 With effect from the Effective Date the
terms of the 2001 Agreement are modified as between Biosil and Aesthetics in
accordance with the provisions of Schedule 3.

5.2                                 Biosil and Aesthetics shall comply with the
Volume Change Control Procedures in connection with any Change or proposed
Change.

6                                         III guarantee

6.1                                 In consideration for Biosil agreeing to the
re-constitution of the 2001 Agreement and the transfer, by way of novation, of
the rights and obligations of Hutchison to Aesthetics, III guarantees to Biosil
on demand the due and punctual observance and performance by Aesthetics of all
of the obligations of Aesthetics arising under or pursuant to this Agreement and
the 2001 Agreement (whether such obligations arise before or after the Effective
Date) and to include all payment obligations.

6.2                                 The obligations of III hereunder shall not
be discharged or affected in any way by any lack of, or limit on, the power or
authority of Aesthetics or any irregularity, unenforceability or invalidity of
any of the obligations of Aesthetics hereby guaranteed or by any time or other
indulgence or concession being granted to Aesthetics in respect of such
guaranteed obligations (whether or not III has knowledge thereof or consents
thereto) or any other act, deed or matter of any description.

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6.3                                 The guarantee by III is a continuing
guarantee and shall remain in full force and effect until all obligations of
Aesthetics guaranteed herein have been discharged in full.  The guarantee is in
addition to and shall not prejudice nor be prejudiced by any other guarantee,
indemnity or other security or right against III or any third party which Biosil
may have for the due performance of such guaranteed obligations.

6.4                                 Biosil may without any consent from III and
without affecting the liability of III hereby hold over, renew, modify or
release any security or guarantee now or hereafter held from or obligation of
Aesthetics or any other person in respect of the liabilities hereby guaranteed
and compound with or alter, replace, extend or renew this Agreement and/or the
2001 Agreement and the liability of III hereby shall continue in full force and
effect notwithstanding such act or event.

6.5                                 III waives any right it may have of
requiring Biosil to proceed first against Aesthetics under this Agreement and/or
the 2001 Agreement.  Any settlement or discharge between III and Biosil shall be
conditional upon any security or payment to Biosil by Aesthetics or any other
person not being invalidated, voided or reduced (in whole or in part) by virtue
of any provisions or enactments relating to bankruptcy, insolvency,
administration, moratorium periods, receivership or liquidation for the time
being in force in any applicable jurisdiction and Biosil shall be entitled to
recover the value or amount of any such security or payment from III
subsequently as if such settlement or discharge had not occurred.

6.6                                 To be clear, III acknowledges that it does
not acquire any rights under the 2001 Agreement.

7                                         No partnership/agency

Nothing in this Agreement is intended to or shall operate to create a
partnership or joint venture of any kind between the parties or any of them, or
to authorise any party to act as agent for any other, and no party shall have
authority to act in the name or on behalf of or otherwise to bind any other in
any way (including but not limited to the making of any representation or
warranty, the assumption of any obligation or liability and the exercise of any
right or power).

8                                         Further assurance

8.1                                 Aesthetics undertakes to Biosil that it
shall do or procure to be done all such further acts and things and execute or
procure the execution of all such other documents as Biosil may from time to
time reasonably require for the purpose of giving Biosil the full benefit of the
provisions of this Agreement and the 2001 Agreement.

8.2                                 Without prejudice to the generality of its
obligations under Clause 8.1, in the event that Aesthetics is either unwilling
or unable to comply with its obligations under paragraph 4.2 of Schedule 3 or to
perform a specific act or acts required to fulfil an obligation in terms of this
Agreement or the 2001 Agreement, Aesthetics irrevocably appoints Biosil as its
attorney to take all such steps and do such things in the name of Aesthetics as
may be required in order to fulfil such obligations including, but without
prejudice to the generality of the foregoing, executing any document or
documents that may be reasonably necessary therefor.

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9                                         Assignment

9.1                                 Hutchison shall not, without the prior
written consent of Biosil and Aesthetics, assign, transfer, charge or deal in
any other manner with this Agreement and/or the 2001 Agreement or any of its
rights or obligations under them, or purport to do any of the same, or
sub-contract any or all of its obligations under this Agreement and /or the 2001
Agreement.

9.2                                 Subject to clause 9.4, Aesthetics shall not,
without the prior written consent of Biosil, assign, transfer, charge or deal in
any other manner with this Agreement or any of its rights or obligations under
it, or purport to do any of the same, or sub-contract any or all of its
obligations under this Agreement.

9.3                                 Biosil shall not, without the prior written
consent of Aesthetics, assign, transfer, charge or deal in any other manner with
this Agreement or any of its rights or obligations under it, or purport to do
any of the same, but shall be entitled to sub-contract any or all of its
obligations under this Agreement to a reputable sub-contractor without such
consent provided, however, that Biosil agrees it shall be responsible for the
acts and omissions of such sub-contractors as if they were the acts and
omissions of Biosil.

9.4                                 Aesthetics shall be entitled to engage
reputable consultants and other contractors (including III and other members of
the Aesthetics Group or associates) to assist it to perform its obligations
under this Agreement and/or the 2001 Agreement provided that:-

9.4.1                                           Aesthetics agrees that it shall
be responsible for the acts and omissions of such consultants and contractors as
if they were the acts and omissions of Aesthetics;

9.4.2                                           Aesthetics notifies Biosil of
the engagement of each consultant and contractor and provides Biosil with such
information in relation to the consultant or contractor concerned (and the
services such consultant or contractor is to perform) as Biosil may reasonably
request; and

9.4.3                                           Aesthetics ensures that it
complies with the requirements of paragraph 5.4 of Schedule 3 in relation to
such consultants and contractors.

9.5                                 Each party is entering into this Agreement
for its benefit and not for the benefit of another person.

10                                  Announcements

None of the parties shall make any announcement relating to this Agreement or
its subject matter without the prior written approval of the other parties
except as required by law or by any legal or regulatory authority.

11                                  Confidentiality

11.1                           Subject to the provisions of Clause 11.2, none of
the parties shall issue any press release or publish any circular to
shareholders or any other public document containing, or make any statement
containing or otherwise disclose to any person who is not a party or a
representative or

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                                                adviser of such party,
information relating to or connected with or arising out of this Agreement, the
2001 Agreement or the matters contained in them, including information relating
to the business or affairs of the other parties without obtaining the previous
approval of the other parties to its contents and the manner of its presentation
and publication or disclosure (such approval not to be unreasonably withheld or
delayed).

11.2                           The provisions of Clause 11.1 do not apply to:-

11.2.1                                     any announcement relating to or
connected with or arising out of this Agreement, the 2001 Agreement or the
matters contained within them, required to be made by any party by virtue of any
applicable law or regulation and for the purposes of this provision Aesthetics
and/or III may disclose such information to MediCor Ltd (“MediCor”), their
ultimate parent company, to the extent strictly necessary to enable MediCor to
make such an announcement for the MediCor Group notwithstanding it is not a
party to this Agreement; or

11.2.2                                     any information which is or becomes
generally available to the public other than as a result of disclosure by either
party, its representatives or advisers contrary to its obligations hereunder; or

11.2.3                                     any information which is, was or
becomes available to the relevant party otherwise than pursuant to this
Agreement and free of any restrictions as to its use or disclosure.

11.3                           The provisions of this Clause 11 shall continue
to apply notwithstanding termination of this Agreement.

12                                  Costs and expenses

Each party shall pay its own costs relating to the negotiation, preparation,
execution and implementation by it of this Agreement and of each document
referred to in it.

13                                  Entire agreement

13.1                           This Agreement, the 2001 Agreement and the
documents referred to in them, constitute the entire agreement and understanding
of the parties and supersede any previous agreement between the parties relating
to the subject matter of this Agreement.

13.2                           Each of the parties acknowledges and agrees that
in entering into this Agreement, and the documents referred to in it, it does
not rely on, and shall have no remedy in respect of, any statement,
representation, warranty or understanding (whether negligently or innocently
made) of any person (whether party to this Agreement or not) other than as
expressly set out in this Agreement.

13.3                           Nothing in this clause shall operate to limit or
exclude any liability for fraud.

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14                                  Variation

Subject to the provisions of the Volume Change Control Procedures and the
Product Change Control Procedures to they extent that they may result in such a
variation, no variation of this Agreement, the 2001 Agreement or of any of the
documents referred to in them shall be valid unless it is in writing and signed
by or on behalf of

14.1                           (in the case of variations to Clause 3 and
Schedule 2 of this Agreement), Hutchison, Aesthetics and Biosil;

14.2                           (in the case of a variation to Clause 5 of this
Agreement), III, Aesthetics and Biosil;

14.3                           (in the case of a variation to any other
provisions of this Agreement, the 2001 Agreement or of any of the documents
referred to in them), Biosil and Aesthetics only.

15                                  Severance

15.1                           If any provision of this Agreement shall be found
by any court or administrative body of competent jurisdiction to be invalid or
unenforceable, such invalidity or unenforceability shall not affect the other
provisions of this Agreement which shall remain in full force and effect.

15.2                           If any provision of this Agreement is so found to
be invalid or unenforceable but would be valid or enforceable if some part of
the provision were deleted, the provision in question shall apply with such
modification(s) as may be necessary to make it valid and enforceable.

15.3                           The parties agree, in the circumstances referred
to in Clause 15.1 and if Clause 15.2 does not apply, to attempt to substitute
for any invalid or unenforceable provision a valid and enforceable provision
which achieves to the greatest extent possible the same effect as would have
been achieved by the invalid or unenforceable provision.

16                                  Notices

16.1                           Any notice or other communication (with the
exception of routine communications which may also be made by e-mail) given
under this Agreement shall be in writing and signed by or on behalf of the party
giving it and shall be served by delivering it personally or sending it by
pre-paid recorded delivery or registered post (or registered airmail in the case
of an address for service outside the country of origin) or fax to the address
and for the attention of the relevant party set out in Clause 16.2 (or as
otherwise notified by that party hereunder). Any such notice shall be deemed to
have been received:-

16.1.1                                     if delivered personally, at the time
of delivery;

16.1.2                                     in the case of pre-paid recorded
delivery or registered post, 72 hours from the date of posting;

16.1.3                                     in the case of registered airmail,
five days from the date of posting; and

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16.1.4                                     in the case of fax, at the time of
transmission.

Provided that if deemed receipt occurs before 9am on a Business Day the notice
shall be deemed to have been received at 9am on that day, and if deemed receipt
occurs after 5pm on a Business Day, or on a day which is not a Business Day, the
notice shall be deemed to have been received at 9am on the next Business Day.
For the purpose of this Clause, “Business Day” means any day which is not a
Saturday, a Sunday or a public holiday in the place at or to which the notice is
left or sent.

16.2                           The addresses and fax numbers of the parties for
the purposes of Clause 16.1 are:

Biosil:

Address:  Global House, Isle of Man Business Park, Douglas, Isle of Man, British
Isles

For the attention of:  Managing Director

Fax number: +44 (0)1624 661656

Hutchison:

Address:  7949 Jefferson Hwy, Suite E, Baton Rouge, Louisiana 70809 USA

For the attention of: John Hutchison, President

Fax number:  +1 (225) 927 6874

Aesthetics:

Address:  6000 S. Eastern Avenue, Suite 9D, Las Vegas, Nevada 89119 USA

For the attention of: Chief Operating Officer

Fax number: +1 (702) 260 4646

III:

Address:  4560 South Decatur Boulevard, Suite 300, Las Vegas, Nevada 89013-5253
USA

For the attention of:  Chief Operating Officer/ Chief Executive Officer

Fax number:  +1 (702) 932 4561

or such other address or facsimile number as may be notified in writing from
time to time by the relevant party to the other parties.

16.3                           In proving such service it shall be sufficient to
prove that the envelope containing such notice was addressed to the address of
the relevant party set out Clause 16.2 (or as otherwise notified by that party
hereunder) and delivered either to that address or into the custody of the
postal authorities

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                                                as a pre-paid recorded delivery,
registered post or airmail letter, or that the notice was transmitted by fax to
the fax number of the relevant party set out in Clause 16.2 (or as otherwise
notified by that party hereunder).

16.4                           Save for routine communications which may be made
by e-mail, service of notices or communications by e-mail will not to be
considered to be valid for the purposes of this Agreement or the 2001 Agreement.

17                                  Counterparts

This Agreement may be executed in any number of counterparts, each of which,
when executed and delivered, shall be an original, and all the counterparts
together shall constitute one and the same instrument.

18                                  Rights of third parties

No term of this Agreement shall be enforceable by a third party (being any
person other than the parties and their permitted successors and assignees).

19                                  Governing law and jurisdiction/arbitration

19.1                           This Agreement shall be governed by and construed
in accordance with Isle of Man law except that Biosil’s security interest,
rights and remedies under paragraph 7 of Schedule 3 shall be subject to the laws
of the State of Nevada.

19.2                           Each party irrevocably agrees to submit to the
non-exclusive jurisdiction of the Isle of Man courts over any claim or matter
arising under or in connection with this Agreement or the legal relationships
established by this Agreement.

19.3         Each party irrevocably consents to any process in any legal action
or proceedings arising out of or in connection with this Agreement being served
on it in accordance with the provisions of this Agreement relating to service of
notices.  Nothing contained in this Agreement shall affect the right

--------------------------------------------------------------------------------

to serve process in any other manner permitted by law:  IN WITNESS WHEREOF these
presents have been executed by the parties the day, month and year first before
written:

EXECUTED AND DELIVERED by BIOSIL LIMITED acting by JOHN ALAN ALSOP, one of its
directors, and who subscribed this Agreement in the presence of:

JEAN BELL

 

Witness signature

 

 

JEAN BELL

 

Witness name

 

[Signed “J A Alsop”]

1 GREENFIELD COTTAGE

 

Witness address

 

 

MAIN ROAD

 

 

 

 

ONCHAN

 

 

 

 

ISLE OF MAN

 

 

 

 

 

EXECUTED AND DELIVERED by HUTCHISON INTERNATIONAL, INC. acting by JOHN
HUTCHISON, its President, and who subscribed this Agreement in the presence of:

JAN GRAHAM

 

Witness signature

 

 

JAN GRAHAM

 

Witness name

 

[Signed “John Hutchison”]

2545 FAIRGATE

 

Witness address

 

 

BATON ROUGE LA

 

 

 

 

70816 US

 

 

 

 

 

EXECUTED AND DELIVERED by MEDICOR AESTHETICS, acting by DONALD K MCGHAN, its
Chairman, and who subscribed this Agreement in the presence of:

GREGORY K BAKER

 

Witness signature

 

 

GREGORY K BAKER

 

Witness name

 

[Signed “Donald McGhan”]

139 PARK LAKE TRACE

 

Witness address

 

 

 

HELENA A/a 35080

EXECUTED AND DELIVERED by INTERNATIONAL INTEGRATED INCORPORATED acting by
THEODORE ROBERT MALONEY, its President and Chief Executive Officer, and who
subscribed this Agreement in the presence of:

GREGORY K BAKER

 

Witness signature

 

 

GREGORY K BAKER

 

Witness name

 

[Signed “T R Maloney”]

139 PARK LAKE TRACE

 

Witness address

 

 

 

Helena A/a 35080

--------------------------------------------------------------------------------

 

SCHEDULE 1 — 2001 AGREEMENT

 

 

 

 

 

Signed by:

 

 

 

 

 

 

 

JOHN A ALSOP

 

JOHN C HUTCHISON, PRESIDENT

 

 

 

 

 

DONALD K MCGHAN

 

T R MALONEY

 

 

--------------------------------------------------------------------------------

 

 

THIS AGREEMENT is made the 17th day of September, 2001

 

BETWEEN

 

BIOSIL LIMITED, a company incorporated under the Companies Act 1931 (Company No
50222) and having its registered office at Global House, Isle of Man Business
Park, Douglas, Isle of Man, British Isles (hereinafter called “Biosil”) of the
one part, and

 

HUTCHISON INTERNATIONAL INC., a corporation incorporated under the laws of the
State of Louisiana (Corporation No 72-1324212) and having its principal place of
business at 7949 Jefferson Hwy, Suite E, Baton Rouge, Louisiana 70809, USA
(hereinafter called “Hutchison”) of the other part.

 

WHEREAS

 

1.                                       Biosil is a specialist in the design
and manufacture of a large range of silicone products for medical applications.

 

2.                                       Hutchison is a marketing company that
wishes to sell the implantable products specified in this Agreement within the
Territory under its own label.

 

3.                                       At the request of Hutchison, Biosil has
designed the Products (as hereinafter defined), has devised a process of
manufacture for the Products and has given Hutchison all assistance that
Hutchison has required with a view to obtaining regulatory approval for the sale
of the Products by Hutchison in the Territory. In doing so, Biosil has created
Intellectual Property in both the Products and the process of their manufacture
which is proprietary to Biosil.

 

4.                                       Biosil is to manufacture the Products
(as hereinafter defined) for Hutchison and will supply them exclusively to
Hutchison for marketing within the Territory under Hutchison’s brand label.

 

WHEREBY IT IS AGREED as follows:

 

1.                                      DEFINITIONS AND INTERPRETATION

 

In this Agreement the following definitions shall apply:

 

(1)                                  “Approval Date’ means the date or dates
upon which the Products can be lawfully marketed, distributed and sold in the
Territory or any part thereof;

 

(2) “Commencement Date” means 1 September 2001;

 

(3) “Delivery” means despatch and “Delivery Time” means the date of despatch;

 

--------------------------------------------------------------------------------

 

(4) “Direct Competitor” means any person (including, for the avoidance of doubt,
any company or other body corporate) who is authorized by the appropriate
Regulatory Authorities to distribute and/or sell breast implants of any kind in
the Territory and any holding company, subsidiary, associated company or other
person associated with, or otherwise interested in, such a person. For the
avoidance of doubt, for the purposes of this definition a company will be an
associated company of; and a person will be associated with, or interested in, a
person who is a Direct Competitor if the Direct Competitor has the power to
secure, solely or in conjunction with others, either directly or indirectly,
that the affairs of the company or person concerned are conducted in accordance
with the wishes of the Direct Competitor;

 

(5) “FDA” means the United States Department of Health & Human Resources, Food
and      Drug Administration or any successor body thereto;

 

(6) “Intellectual Property” means any patent, copyright, design, trade mark
(whether registered or unregistered), trade names or any other industrial,
intellectual property, or similar, right subsisting in any part of the world
including those subsisting in respect of the Products, and applications for any
of the foregoing;

 

(7) “Materials” includes any notes, calculations, specifications, reports,
design, drawings, models, prototypes, including information stored in electronic
form;

 

(8) date when applications for Pre-Market Approval for the Products have been
approved by the FDA Review Panel. If the application is not referred to the FDA
Review Panel then the Panel Review Date shall be deemed to have occurred 45 days
after the Submission Date;

 

(9) “Products” shall mean the products listed in Schedule I together with such
other product or products as the parties shall agree from time to time and
“Products’ shall be construed accordingly;

 

(10) “Quarter” means the period of three months commencing

 

(a) for the period prior to the Approval Date, on the Panel Approval Date, and
each consecutive period of three months thereafter, and any shorter period
commencing on a day following the end of a Quarter and ending on the Approval
Date; and

 

b) thereafter, on the Approval Date and each consecutive period of three months
thereafter, and any shorter period commencing on a day following the end of a
Quarter and ending on termination of this Agreement;

 

and “Quarterly” has a corresponding meaning;

 

--------------------------------------------------------------------------------

 

(11) “Registration” means all applications for, and all registrations,
permissions,  consents, approvals or licenses (including, without limitation,
those required to be made with or given by (as appropriate) any Regulatory Body
including (for the avoidance of doubt) the US Regulatory Approvals from the FDA)
required to enable the Products to be lawfully marketed, distributed and sold in
any part of the Territory and “Registrations” shall be construed accordingly;

 

(12) “Regulatory Body” means any government department or any body constituted
under any applicable law for licensing or other regulatory purposes relating to
the Products and whose approval, permission or consent is required to enable the
Products to he lawfully marketed, manufactured, distributed and sold in any part
of the world;

 

(13) “Specification” means the Product specifications determined by Biosil in
terms of clause 10(3);

 

(14)  when applications for the Pre-Market Approval for the Products are
submitted to the FDA and in relation to Canada means the date when applications
for approval to market the Products are delivered to the Canadian Federal Drug
Directorate;

 

(15) “The Territory” shall, subject to clause 11(2), mean:

 

Countries: United States of America; and
Canada

 

(16) “Us Regulatory Approvals” means any Pre-Market, or subsequent, Approvals
issued by the FDA in respect of the Products listed in Schedule 1.

 

Words importing one gender include all other genders and words importing the
singular include the plural and vice versa.

 

2.                                      THE PRODUCTS

 

(1) On or after the Panel Approval Date, Biosil shall during the period of this
Agreement manufacture in accordance with the Specification, and supply to
Hutchison, and Hutchison shall purchase from Biosil on a consignment basis, such
volumes of the Products as may be ordered by Hutchison under this clause 2 and
clauses 8 and 11(2).

 

(2) The maximum delivery time for Products shall be 12 weeks from receipt and
acknowledgement in writing by Biosil of a duly completed order from Hutchison.

 

(3) Only orders and order instructions (e.g. deliveries, priorities) received in
writing and signed by Hutchison authorized personnel will be accepted by Biosil.
Amendments to orders will only be considered if requested in writing by
Hutchison authorized personnel. For the purposes of this provision and Clause
6(2) ”authorized personnel” are those

 

--------------------------------------------------------------------------------

 

individuals whom Hutchison have designated in writing as being individuals who
have authority to place orders for the Products with Biosil on Hutchison’s
behalf.

 

(4) Hutchison shall, not less than two weeks before the beginning of each
Quarter, place with Biosil an order for the number of Products to be delivered
to Hutchison during that Quarter.

 

(5) Deliveries will be despatched on a fortnightly basis.

 

(6) The volume of Products for which orders are placed Quarterly will not exceed
30% above the annual target for the year of this Agreement in which the order is
placed (in terms of clauses 5 and 11(2) (as applicable)) divided by 4. In
addition, the volume of each size of Product for which orders are placed
Quarterly will not exceed 30% above the quantity forecast by Hutchison for the
year of this Agreement in which the order is placed (in terms of Clause 8(4))
divided by 4.

 

(7) Increases in requirements exceeding 30% above the animal targets will
require a minimum of 6 months’ notice and will be subject to confirmation and
agreement by both parties in writing.

 

3.                                      PACKAGING AND MARKING OF THE PRODUCTS

 

(1) Hutchison will be responsible for the costs of all design, origination and
artwork for any container, package insert or label required in the assembly of
the Product and shall pay Biosil additional costs incurred by Biosil for any
changes to design or printing of any container or package insert.

 

(2) Hutchison will be responsible for all mark name or names on the Products and
for all packaging and literature designs for the Products and their promotion
and for ensuring that the said designs do not infringe or abuse the Intellectual
Property of any third parties. Hutchison shall be solely responsible for
infringement or any alleged infringement of Intellectual Property rights of
third parties.

 

(3) Hutchison will ensure that all promotional materials are marked accordingly
with all Patent Numbers and required quality or registration numbers relevant at
the time and that such promotional materials do not make any claims for the
Products as to performance, design or quality, that are inconsistent with those
given by Biosil or with the terms of any Registrations.

 

4.                                      TERMS OF SUPPLY

 

(1) The supply of the Products by Biosil to Hutchison shall be on an exclusive
basis for the Territory.

 

--------------------------------------------------------------------------------

 

(2) The supply of the Products from Biosil to Hutchison shall be governed by
Biosil’s terms and conditions of sale as amended from time to time, except in so
far as they are inconsistent with the express terms of this Agreement in which
ease the terms of this Agreement shall prevail. Delivery of Products hereunder
by Biosil shall be ex-works and the Products shall be at Hutchison’s risk from
the date that delivery takes place or, where Hutchison fails to take delivery on
the due date, from the date on which delivery ought to have taken place.

 

(3) Without prejudice to Hutchison’s right to contract for such work with third
parties (other than with Direct Competitors which shall not be permitted under
any circumstances) any extra requirements for Biosil to perform including, but
not limited to, master file access, testing, biocompatibility studies,
validations, information for Registrations, compilation and submission of
dossiers, will be by separate agreement and subject to Hutchison agreeing to pay
an additional charge to Biosil such charge not being less than the actual cost
to Biosil of meeting the requirements in question. All sub- contracted work will
be charged to Hutchison at a price equal to the cost to Biosil plus additional
5%.

 

(4) In consideration of the goods, services and other assistance provided by
Biosil to Hutchison, at Hutchison’s request, up to and including the
Commencement Date, Hutchison shall pay to the bank account of Biosil (details of
which appear below) the aggregate sum of £475,000 in three installments as
follows on the dates shown and upon receipt of such payments, Biosil will issue
a receipt

 

Payment

 

 

Date

118750

 

Panel Approval Date or 4 January 2002 whichever shall first occur

 

 

 

118750

 

Approval Date for the United States

 

 

 

237500

 

Anniversary of the date of this Agreement

 

In the event that this Agreement is lawfully terminated by Biosil or in the
event of termination of this Agreement in terms of clause 16(3) before any or
all of the installments have become due for payment in terms of the foregoing
provisions of this clause then all such sums shall become immediately due for
payment without demand by Biosil on the date of termination.

 

Such payments shall be free and clear of, and without deduction for, any taxes
or charges imposed by or under the authority of any Government or public
authority and, for the avoidance of doubt, a failure to pay such sums on the due
dates for payment shall he deemed to be a breach which is not capable of remedy.
For the purposes of this provision time shall be deemed to be of the essence.

 

--------------------------------------------------------------------------------

 

Biosil’s bank account to which the payments are to be made is as follows:-

 

Account Name: Biosil limited - Scotland

 

 

Account Number: 01415636

 

 

Sort Code: 3 0-12-80

Name and address of bank:

 

Lloyds TSB plc

 

 

P0 Box 8

 

 

Victory House

 

 

Douglas

 

 

Isle of Man lM99 IAII

 

 

British Isles

 

For the avoidance of doubt, this provision wi11 survive termination of this
Agreement.

 

5.                                      Prices

 

(1) The prices payable to l3iosil for the Products shall be initially those set
out in

 

(2) The prices payable under clause 5(1) above may be increased by 60 days prior
written notice to that effect given by Biosil to Hutchison provided that the
first review of such prices should take place (but without prejudice to the
exercise at any time of Biosil’s discretion in terms of clause 5(3) below) not
earlier than I January 2003. Increased prices notified to Hutchison by Biosil
shall take effect immediately upon the expiry of the 60 day notice period and
will apply to any Products ordered after the expiry of the 60 day notice period.

 

(3) Biosil shall use its reasonable endeavors to restrict price increases to
Hutchison to once per calendar year, but Biosil reserves the right, in its
absolute discretion, to increase prices at any time in accordance with clause
5(2) above.

 

(4) Prices will not be increased above 6% per annum without evidence to justify
an increase above this level.

 

(5) All charges after delivery in terms of sub-clause 4(2) together with the
cost of all relevant export and import documentation and customs duty (if any)
shall be for the account of and shall be paid by Hutchison.

 

6.                                      PA YMENT

 

(1) Hutchison shall pay the Mi prices specified in clause 5 above for all
Products supplied to it by Biosil within 60 days of the date of Biosils invoice
for such Products, Invoices will be raised at time of despatch. If the price is
not then paid, Biosil may subject to the provisions of clause 17(1)(a) (and for
the avoidance of doubt a failure to pay (other than

 

--------------------------------------------------------------------------------

 

a “persistent failure to pay” as defined below) is a breach which is capable of
remedy) terminate this Agreement and may maintain an action for the price even
though property in any Products supplied has not then passed to Hutchison. Such
payment shall be free and clear of, and without deduction for, any taxes or
charges imposed by or under the authority of any Government or public authority.
The maximum amount allowable as unsecured credit at any one time will be £
300,000. Biosil reserves the right to review and change credit terms without
notice. If the maximum amount allowable as unsecured credit is outstanding at
any time Biosil shall be entitled to suspend further deliveries of the Products
until such time as a sufficient amount of unused credit is available which
exceeds the price of the deliveries to he made.

 

(2) Invoices will be raised on a monthly basis for additional research and
development or regulatory work which Biosil carries out, or for fees from
subcontractors in respect of sub-contracts entered into by Biosil, as a result
of a purchase order issued by authorized personnel, and whether such work or
sub- contracts relate to any extra requirements of Hutchison in terms of clause
4(3) or otherwise. Such invoices shall be payable within 60 days of the date of
Biosil’s invoice and Biosil may terminate this Agreement by notice in writing
subject to the provisions of clause l7(l)(a) (and for the avoidance of doubt a
failure to pay (other than a “persistent failure to pay” as defined below) is a
breach which is capable of remedy) in the event that such invoice is not paid in
full on or by the due date for payment.

 

(3) A “persistent failure to pay? will occur if Hutchison without reasonable
cause (which shall not include, for the avoidance of doubt) an inability to pay
for any reason whatsoever) fails to pay Biosil invoices in full within the 60
day periods referred to in clauses 6(1) and (2) on three or more occasions in
any continuous period of 12 months whilst this Agreement subsists. In the event
of a persistent failure to pay occurring Biosil may terminate this Agreement
forthwith by notice in writing to Hutchison and may maintain an action for
payment of the invoices even though the property in any Products supplied has
not then passed to Hutchison.

 

7.                                      TITLE RETENTION; GRANT OF SEC1JRJTY
INTEREST

 

(1) Notwithstanding that risk in the Products shall pass to Hutchison upon
delivery, full legal and equitable title and interest in all and any Products
shall remain in Biosil and shall not pass to Hutchison until Biosil shall have
received payment in hill of all amounts due and owing from Hutchison to Biosil
for the time being (including any interest accounting and owing to Biosil) and
from time to time in respect of all such Products and all other Products
supplied by Biosil to Hutchison at any time. Consistent with applicable
Louisiana law, and to secure payment and performance of all of Hutchison’s
present and future obligations in favor of Biosil. whether under this Agreement,
or otherwise, of every nature and kind, Hutchison grants Biosil a continuing
security interest in all of Hutchison’s rights, title, and interest in all
Products supplied and delivered to Hutchison and in proceeds thereof, and in all
general intangible rights of Hutchison with respect thereto, and with respect to
the sale and distribution thereof, including without limitation,

 

--------------------------------------------------------------------------------

 

all Registrations and approval rights of Hutchison with respect thereto.
Hutchison agrees that Biosil shall have all of the default and enforcement
rights and remedies provided under Chapter 9 of the Louisiana Commercial Laws
(La. R.S. 10:9-101, et seq.). Nothing herein shall detract from the provisions
of clause 15(5).

 

(2) During such time as title in the Products remains in Biosil, and/or so long
as Biosil retains a security interest with respect to the Products, Hutchison
shall not remove, obscure, or delete any mark placed on the Products by Biosil
which may enable the Products to be identified and Hutchison agrees that it will
deliver up the Products at its own expense to Biosil forthwith upon request
during such time as title to them remains in Biosil.

 

(3) If during such time as title in the Products remains in Biosil, and/or so
long as Biosil retains a security interest with respect to the Products, any of
the Products are incorporated in or attached to or used as material for or in
the manufacture of other goods, the property in the whole of such goods shall
vest in and remain with Biosil and Hutchison shall hold such goods as consignee
of and to the order of Biosil until Biosil has received payment in full in
respect of the Products and Biosil4s rights in relation to the Products
(including its rights under this Agreement) shall extend to such goods.

 

(4) During such time as title in the Products remains in J3iosil, and/or so long
as Biosil retains a security interest with respect to the Products, Hutchison
shall have power to deal with or use the Products (and other goods in which the
Products are incorporated) as consignee of Biosil in the normal course of its
business and to dispose of the Products or such goods by way of bona tide sale
at fill market value.

 

(5) If Hutchison shall sell the Products or goods incorporating the Products it
shall hold all the proceeds of sale in trust for Biosil until payment of all
amounts due to Biosil.

 

(6) Hutchison authorizes Biosil to complete and file a UCC financing statement
in the appropriate filing office to complete perfection of Biosil’s security
interest granted under this Agreement. Hutchison agrees to notify Biosil in
writing should Hutchison ever change its corporate name, or reorganize under the
laws of another state.

 

(7) Hutchison warrants that it is not insolvent at the time of entering into
this appoint a receiver or to petition for a winding up or to exercise any other
rights over or against its assets or to take any action analogous to the
foregoing in any applicable jurisdiction.

 

(8) For the avoidance of doubt nothing in this clause 7 shall oblige Biosil to
accept the return from Hutchison of any of the Products supplied to it by Biosil
for credit or otherwise notwithstanding that title in such Products remain in
Biosil.

 

8.                                      PURGIASE TARGETS

 

(1) In this clause and clause 11(2) the following expressions have the following

 

--------------------------------------------------------------------------------

 

meanings:” year of this Agreement” shall mean each successive period of 12
months commencing on 1 January in each year whilst this Agreement subsists save
that the first Year of this Agreement will commence on the Approval Date and
will end on 31 December next following and a “Product” for the purposes of
determining the Minimum Numbers shall be Product sold on an arms length basis at
the frill price as determined by clause 5 (i.e. not samples etc);

 

“Minimum Number of Products’1 shall mean the number of Products to be purchased
by Hutchison from Biosil in each year of this Agreement as determined in
accordance with the following provisions of this clause and clause 11(2) and the
phrase “Minimum Number” shall be construed accordingly.

 

(2) For the purposes of clause 8(5), the Minimum Number of Products to be
purchased by Hutchison from Biosil in each year of this Agreement shall, unless
otherwise agreed in writing by the parties hereto! be the figure (if any) set
opposite each year of this Agreement as listed in clause 8(3) below:-

 

(3) (a)

Products -

Hutchison branded Saline Inflatable Mammary Implants (HTL,HSL,HTH.HSH)

 

 

 

 

Territory -

These targets are for the United States of America only. They exclude Canada
(see clause 11(2)).

 

Year of Agreement

 

Minimum Number of Products

 

1st (2002)

 

***

 

2nd (2003)

 

***

 

3rd (2004)

 

***

 

4th (2005)

 

***

 

5th (2006)

 

***

 

6th (2007)

 

***

 

7th (2008)

 

***

 

 

 

(b) Notwithstanding clause 8(3) (a) within 10 days of the Panel Approval Date
for the United States of America, Hutchison shall place an order with Biosil to
purchase a minimum of 500 Products per month in the period commencing at the
start of the calendar month after the Panel Approval Date and ending on either
(I) the Approval Date or (ii) 31 December 2001, whichever is later. Thereafter
the Minimum Number of Products to be purchased by Hutchison from Biosil in each
Year of this Agreement shall, unless otherwise agreed in writing by the parties
hereto, be as set out in clause 8(3)(a).

 

(c) Furthermore, in order to ensure that orders are placed by Hutchison with
Biosil on a regular basis, but without prejudice to Hutchison’s obligations to
purchase the annual Minimum Numbers of Products pursuant to this clause 8, from
and after the Approval

 

--------------------------------------------------------------------------------

 

Date or 31 December 2001 (whichever is later) Hutchison shall place an order
with Biosil to purchase a minimum of 1,000 Products per month to commence in the
calendar month immediately following and for each subsequent month during the
period of this Agreement. For the avoidance of doubt, any Products so ordered in
any year of this Agreement will count towards meeting the Minimum Number of
Products to be purchased in that year.

 

(d) The Minimum Number of Products to be purchased by 1-lutchison as set out in
clause 8(3) (a) above for first Year of this Agreement has been calculated on
the basis that it will subsist for a full calendar year. In the event that the
first year of this Agreement does not so subsist the Minimum Number of Products
to be purchased for that year will be number of the weeks are full weeks that
would have been available had the year consisted of a full calendar year.

 

(e) The Minimum Number of Products to be purchased for any year of this
Agreement shall not be less than the actual number of Products purchased for the
previous year.

 

(f) Minimum Numbers for any additional Products or Territories shall be agreed
separately in writing and in default of agreement shall be such targets as
Biosil may determine acting reasonably.

 

(4) Hutchison shall confirm to Biosil in writing at least three months in
advance of each year of this Agreement the forecasted number of units of each
Product to be purchased by Hutchison during that year of this Agreement.
Hutchison will also specify at the same time what size(s) of unit of each
Product it forecasts it will purchase during that year and the quantities of
each size it forecasts it will require. The annual Minimum Number of Products
broken down by size(s) of Products to be purchased shall be reviewed

 

(a) during the first four Years of this Agreement by both panics before the end
of the 6th month of each Year; and

 

(b) thereafter during the three month period before the start of each year of
this Agreement;

 

and the Minimum Number of Products broken down by size(s) of Products to be
purchased for that year may be adjusted following such review by agreement
between the parties.

 

(5) In the event that a Minimum Number of Products has not been specified for
the purpose of clause 8(3) or agreed for the purpose of clause 8(4), Biosil may
by notice in writing at any time before the expiry of 6 months from the start of
any year of this Agreement specify for the purpose of sub-clause (6) below, the
Minimum Number of Products for each year of this Agreement from the year of this
Agreement then current to the final year of this Agreement.

 

--------------------------------------------------------------------------------

 

(6) If Hutchison shall fail to purchase from Biosil in any year of this
Agreement the Minimum Number of Products as specified in clause 8(3) above or
determined in accordance with clause 8(5) above as the target for that year, or
13 clause l7(1)(a)) to terminate this Agreement by giving 30 days written notice
to Hutchison and for the purposes of clause 1 7(l)(a) such a failure shall be
deemed to be a breach capable of remedy.

 

9.                                      DUTIES OF HUTCHISON

 

Hutchison hereby undertakes and agrees with Biosil that it will at all times
while this Agreement is in force observe and perform the terms and conditions
hereof and will:

 

(1) At its own cost, use its best endeavors to introduce, sell, and at all times
to actively promote and extend the sale of all Products in all parts of the
Territory. This provision is of the essence of this Agreement and the basis on
which Biosil has consented to enter into it, and any failure by Hutchison to
carry out the provisions of this sub-clause shall be deemed to be a breach of
this Agreement which shall not be deemed to be capable of remedy.

 

(2) Without prejudice to the requirements of clauses 8 and 11(2) with regard to
purchase targets, purchase from Biosil such quantities of the Products as will
enable Hutchison to maintain sufficient stocks of the Products to meet all
reasonably foreseeable demands for the Products in the Territory.

 

(3) Will comply with all Registration requirements for the sale of and use of
the Products in the Territory. For Registration purposes, Biosil reserves the
right to communicate direct to the Regulatory Bodies to supply all data required
by them for the Territory and will liaise with Hutchison in relation to such
communications. Such work will be by separate appointment and subject to
additional costs in terms of clause 4 (3).

 

(4) Will not allow any Product to be sold or supplied outside the Territory and
shall ensure that all purchasers of the Products from Hutchison agree that the
Products shall not be re-sold or supplied outside the Territory. In particular,
if Hutchison seek to sell or supply the Products on or through the Worldwide Web
it will take all practicable measures required from time to time to ensure that
this provision is complied with.

 

(5) In all correspondence and other dealings relating directly or indirectly to
the sale or other disposition of the Products, Hutchison will clearly indicate
that it is acting on its own account.

 

(6) Will not represent itself impliedly or expressly to be the agent of Biosil
nor incur any liability on behalf of Biosil nor in any way purport either to
pledge Biosils credit or to accept any order or to make any contract binding
upon Biosil.

 

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(7) In relation to the Intellectual Property rights of Biosil from time to time
Hutchison will:

 

(a)                                  not cause or permit anything which may
damage or endanger such rights or Biosil’s title thereto or assist or allow
others to do so;

 

(b)                                 immediately bring to the attention of Biosil
any improper or unlawful use or infringement of any such rights (or any
suspicion of such use or infringement) which come to its notice;

 

(c)                                  take such reasonable action as Biosil may
direct at the expense of Biosil in relation to such use or infringement; and

 

(d)                                 without prejudice to the generality of the
foregoing, use every effort to safeguard such rights and the interests of
Biosil.

 

(8) Will not alter the Products and will comply fully with the legal and health
requirements for the sale of and use of and traceability of, the Products in the
Territory.

 

(9) Notwithstanding any termination of this Agreement, Hutchison will adopt
documented procedures for maintaining forward traceability, for complaint
handling, for the reporting of adverse incidents, for issuing advisory notices
and recalling Products and for record retention. Hutchison will retain for an
indefinite period all records including batch/control numbers for all Products
sold and will comply fully with Biosils instructions for any recall of Products
or Biosil’s requests for information regarding traceability of any Product, or
any advisory notices Biosil instruct to be issued.

 

(10) Will be responsible for the planning, permissions, monitoring, reporting,
funding and insurance coverage for any clinical trials that might be needed for
Registration purposes.

 

(11)Prior to the Commencement Date or which subsequently take place in
accordance with clause 9(13) below.

 

(12) Will keep Biosil fully and promptly informed about all aspects pertaining
to the sales and performance of the Products (whether the information be
positive or negative) and of all post-market reports or information received
which relate to the efficacy, function or design of the Products or any factors
which may effect production processes or future design changes or developments
of the Products.

 

(13) On a Quarterly ( 3 monthly ) basis detail to Biosil reports, returns and
other information in writing in accordance with Hutchison’s obligations under
this Agreement. In particular, Hutchison will timeously provide Biosil with all
of the

 

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information in writing that it requires in order to be able to discharge its
obligations and responsibilities under clauses 10(4) and (5).

 

(14) Keep accurate lists of sales of Products and customers purchasing the
Products and to provide a copy of this information to Biosil should either
Biosil be required under any applicable law or by any Regulatory Body to produce
the same or in the event that this Agreement is lawfully terminated.

 

(15)Will, in dealing with or handling the Products or returned Products, follow
the reasonable instructions of Biosil. arid will provide storage for the
Products to an approved standard (which meets relevant requirements (if any) of
any applicable Registrations) so as to ensure no contamination or infection
thereof and no deterioration in the quality or appearance thereof.

 

(16) Will provide purchasers of Products in the Territory with the benefits of a
guarantee against defects in manufacture in the same terms mutatis mutandis as
the warranty given by Biosil in clause 12(1) and (2) below.

 

(17) Will offer its customers at its own expense the benefit of its own
additional warranty to replace a Product together with a reasonably monetary
amount, to be determined by Hutchison after consultation with Biosil, to pay
towards reoperation costs.

 

(18) Will promptly submit in advance to Biosil for approval draft copies of all
reports, applications or submissions to any government department or Regulatory
Body which have been compiled for Registration or other purposes such draft
copies and will make such alterations or changes as Biosil may reasonably
require in so far as they make reference to Biosil data and/or Intellectual
Property. In particular, Hutchison acknowledges that such Intellectual Property
rights as subsist in the Product and the process of their manufacture belong to
Biosil and Hutchison will ensure that it takes all steps (pursuant to its
obligations in terms of clause 9(7) above) as Biosil may require to safeguard
its rights in such Intellectual Property and, without prejudice to the
generality of the foregoing, will ensure that such Intellectual Property is
clearly marked as confidential. In addition, Hutchison will ensure that it
properly notifies any Regulatory Body in the Territory to whom it makes any
report, application or submission of the rights given to Biosil under this
Agreement with respect to Registrations including the US Regulatory Approvals.
Hutchison will submit to Biosil copies of all final reports, applications,
submissions or other documentation prepared by or on behalf of Hutchison for
Registration or other legal purposes together with copies of all correspondence
with Regulatory Bodies on Registration matters.

 

(19) Will give Biosil every assistance in defending any product liability, or
intellectual Property infringement, claims against Biosil arising from the sale
of Products in the Territory.

 

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(20) Will confirm in writing to Biosil both the Submission Date and the Panel
Approval Date within 3 days of their occurring.

 

10.                               DUTIES OF BIOSIL

 

(1) Biosil will produce, maintain, control and own the technical dossier
(containing inter alia the detailed audit information relating to the design and
manufacture of the Products) for the Products and all Materials produced by
Biosil which concern the Products.

 

(2) Biosil will design and manufacture the Products in accordance with the
requirements of FDA 21 CFR Part 820 and any other applicable laws or regulations
in the Territory provided that such other requirements are notified by Hutchison
to Biosil with a sufficient lead time before orders for Products meeting such
requirements are placed for Biosil to carry out the work required to meet such
requirements.

 

(3) Drawings, manufacturing methods, which may reasonably be expected of them in
order to perform in accordance with the terms of this Agreement

 

(4) Subject to due compliance by Hutchison of its obligations to provide
reports, returns and information pursuant to clauses 9(11) and (12), ]3iosil
will be responsible for the investigation of Products which have been returned
in accordance with Biosil Quality Procedure (QP035) and advising Hutchison of
the need for the issue of advisory notices (via Hutchison) and initialization of
Product recalls in accordance with Biosil Quality Procedure (QP025) as updated
from time to time.

 

(5) Subject to due compliance by Hutchison of its obligations to provide
reports, returns and information pursuant to clauses 9(11) and (12), Biosil will
retain all records in accordance with Biosil Quality Procedure (QP28) as updated
from Lime to time.

 

(6) Biosil will be responsible for reporting to Regulatory Bodies any
significant changes regarding quality systems, products or processes as required
in accordance with FDA 21CFR Part 820.

 

(7) Biosil will allow reasonable access to Regulatory Bodies to any technical
documentation or records held by Biosil for the purpose of verifying conformance
with any Registration requirements in accordance with the terms of this
Agreement.

 

(8) Biosil will supply Hutchison with copies of certifications and any
conformity assessments carried out on Biosil and Hutchison will retain such
copies for review purposes.

 

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(9) Biosil will give all reasonable assistance in defending any product
liability, or any Intellectual Property infringement, claims against Hutchison
arising from the sale of the Products in the Territory.

 

11.                               RESTRICTIONS

 

(1) Hutchison undertakes that while this Agreement is in force it will not be
concerned or interested either directly or indirectly in the manufacture,
supply, reasonably) considers are the same as or similar to, or competitive with
the Products, or which either alone or in conjunction with some other product
perform, or are designed to perform, the same or a similar function to, or which
might otherwise interfere with the sale of any of, the Products.

 

(2) Canada will be removed from the scope of this Agreement unless the
Submission Date for Canada has occurred within 90 days of the Approval Date for
the United States of America and Minimum Numbers of Products for the year of
this Agreement then current and each of the remaining years to be bought by
Hutchison for sale in Canada have been agreed within 2 months of the Submission
Date for Canada. In the event that Minimum Numbers for sales in Canada are so
agreed then the terms of clause 8(3)(a) shall be deemed to be repeated for
Canada as if Canada were the Territory and the Minimum Number of Products to be
purchased for Canada were the Minimum Numbers so agreed for Canada and the
remaining provisions of clause X shall apply separately to these purchase
targets in respect of Canada.

 

12.                               WARRANTIES ANI) INDEMNITIES

 

(1) Biosil warrants to Hutchison that all Products supplied:

(a)                                  will conform to any relevant description,
sample or specifications issued by Biosil.

(b)                                 will be free from defects in materials or
workmanship.

(c)                                  will be of satisfactory quality.

 

(2) If any Products covered by the warranty given in sub-clause (I) above do not
conform with the terms of such warranty, Hutchison shall be entitled to require
Biosil to take back such Products and to replace them with Products conforming
to the said warranty, provided that such Products are returned with all
traceability data attached.

 

(3) Hutchison agrees that any Product returned from a third party who claims it
is defective, will not be accepted as defective until it has first been returned
by Hutchison to Biosil for inspection, in accordance with l3iosil’s returns
procedures as notified by Biosil to Hutchison from time to time, after which
time a report shall be issued to Hutchison. Only in the event that such report
agrees that the Product is defective will Biosil replace the Product with a
non-defective Product.

 

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In contact with human tissue will not be accepted back unless it is accompanied
by a decontamination certificate from the third party.

 

13.                               CONFIDENTIALITY

 

(1)In this clause 13 the following terms have the following meanings:

 

“1997 Agreement” means the contract customer agreement between Biosil and
Hutchison dated 1 July 1997 whose terms are superseded by this Agreement;

 

“Confidentiality Agreement” means the confidentiality agreement between Biosil
and Hutchison executed by the parties on 6 and 13 September 2000;

 

“Confidential Information” includes technical data, chemical characterizations,
designs, know-how, test data, biocompatibility data, specifications, formulae,
formulations, processes, operating and testing procedures, regulatory data and
submissions, and any other information marked as or identified as
“Confidential”, any of which may be disclosed electronically or in documentary
or other tangible form or orally or by demonstration or visual inspection. For
the avoidance of doubt “Confidential Information” excludes information or data
which relates to the sales and clinical performance of the Products by
Hutchison;

 

“Permitted Purpose”

 

a)                                      for Hutchison means the use of
Confidential information for the purpose of assisting Hutchison in completing
its master file / design file and obtaining regulatory or other official
approvals to allow lawful sale of the Products within the Territory and

 

b)                                     for Biosil means the use of the
Confidential Information for the purpose of obtaining regulatory or other
approvals to allow lawful sale of the Products by Hutchison in the Territory and
to assist in obtaining regulatory or other official approvals for the lawful
sale of its own products in other territories.

 

(2) Each party, including their agents, hereto undertakes both while this
Agreement is in force and at any time thereafter not to disclose to any third
party any information relating to the business or the other except in so far as
may be necessary for the proper performance of this Agreement or the extent that
such information is generally available to the public.

 

(3) Each party in receipt of Confidential Information disclosed hereunder (the
“Recipient”) undertakes with the party disclosing that Confidential Information
directly or indirectly (the “Discloser”) to

 

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(a) maintain it in confidence, not to disclose any of it to any third party
other than for the Permitted Purpose or unless compelled to do so by a valid
order of a court having appropriate jurisdiction without the prior written
permission of the Discloser and not to use any of it other than for the
Permitted Purpose unless otherwise agreed in writing with the Discloser.

 

(b) return to the Discloser all Confidential Information disclosed and all
samples supplied under this Agreement within 10 days of a request for their
return by the Discloser.

 

(4) The Recipient shall limit dissemination of Confidential Information within
its organization to those of its employees who need to receive it for the
Permitted Purpose and shall ensure that such employees are made aware of the
Recipient’s obligations hereunder and arc bound to uphold them.

 

(5) The Recipient may not disclose any Confidential Information received
hereunder to any of its subsidiary, holding or associate companies which is not
a party to this Agreement unless and until such company has entered into an
Agreement under which it gives undertakings which are equivalent to those given
by the Recipient hereunder.

 

(6) A disclosure of Confidential Information by the Recipient to a third party
for the Permitted Purpose in terms of clause 13(3)(a) above shall only he made
if that third party gives undertakings to the Recipient which are equivalent to
those given by the Recipient hereunder, A duplicate original of the Agreement
executed between the Recipient and the third party shall be mailed immediately
to the Discloser upon execution, The requirement for the Recipient to obtain
such undertakings shall not apply in the case of a disclosure to a third party
which is a Regulatory Body or a notified body which has responsibility for
approving or regulating the lawful sale or marketing of products of the
Recipient in any particular jurisdiction.

 

(7) The Recipients obligations hereunder shall not apply or shall cease to apply
to any information which:

 

(a) the Recipient can demonstrate to the written satisfaction of the Discloser
by written records was known to it prior to disclosure hereunder otherwise than
as a result of a previous confidential disclosure by the Discloser;
(b) is in the public domain or comes into the public domain through no fault of
Recipient;
(c) is disclosed to the Recipient without restriction on disclosure by a third
party under no obligation of confidentiality to the Discloser with respect
thereto.

 

(8) Specific information which is not itself within any of the exceptions
specified in clause 13(7) above shall not be brought within any of those
exceptions simply because it is embraced by general information which is so
within.

 

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(9) The fact that information may itself come within any of the exceptions
specified in clause 13(7) above shall not prevent the fact of its adoption or
use by the Discloser from remaining Confidential information.

 

(10) The disclosure of Confidential Information hereunder and the extent of such
Confidential Information disclosed is at the complete discretion of the
Discloser.

 

(11) No license of any patent, copyright, know-how or other intellectual
Property right is granted to the Recipient by this Agreement, and no license
shall be deemed to have arisen or be implied by way of estoppels or otherwise
provided that (for the avoidance of doubt) Hutchison shall be entitled to sell
the Products within the Territory in accordance with this Agreement.

 

(12) The parties agree that the terms of this Agreement shall apply to all
Confidential Information disclosed by the parties to each other pursuant to the
terms of the 1997 Agreement and the Confidentiality Agreement notwithstanding
the date of this Agreement.

 

(13) All obligations of the parties under the foregoing provisions of this
clause 13
 of this Agreement.

 

(14) Notwithstanding the other provisions of this clause 13, in the event that
this Agreement expires without being renewed other than through the fault of
Biosil or is lawfully terminated by Biosil under clause 17

 

(a) Biosil may use any Confidential Information disclosed by Hutchison to it for
the purpose of obtaining regulatory or other official approvals to allow sale of
the Products by Biosil (or any third party nominated by Biosil) within the
Territory; and

 

(b) Hutchison will forthwith disclose to l3iosll such Confidential Information
in its possession as Biosil may reasonably require for such purposes.

 

14,                               INTELLECTUAL PROPERTY RIGHTS

 

(1) All Intellectual Property and Materials owned by Biosil and Hutchison as at
the date of this Agreement shall remain vested in them.

 

(2) Where any new Material is created for the purpose of this Agreement by
either party then, save to the extent that such Material embodies the
Intellectual Property of the other party, the rights in the Intellectual
Property in such new Material shall belong to the party which creates it.

 

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(4) The issuing of a charge for payment for the compilation of Material or work
undertaken as per clause 4(3) will not constitute a transfer of Intellectual
Property or rights.

 

(5) Any Intellectual Property devised jointly by Biosil and Hutchison pursuant
to the terms of this Agreement shall be owned jointly by the parties and the
rights of the panics to use such Intellectual Property shall be regulated by the
following provisions of this clause 14.

 

(6) Each party grants to the other a royalty-free license to use its
Intellectual Property and any Intellectual Property which is jointly owned in
terms of clause 14(5). The terms of such licenses are as follows:-

 

(a) in the case of the license from Biosil to Hutchison the license shall
subsist for the duration of this Agreement or any renewal thereof and the
Intellectual Property which is licensed shall only be used by Hutchison for the
purposes of fulfilling its obligations under this Agreement and for no other
purpose;

 

(b) subject to paragraph (c) in the case of the license from Hutchison to Biosil
the license shall be irrevocable and without limit in point of time and Biosil
may use the Intellectual Property licensed to it for the purposes of obtaining
regulatory or other official approvals to allow sale by Biosil (or any third
party nominated by Biosil) of its products in any part of the world other than
the Territory;

 

(c) In the event that this Agreement expires without being renewed other than
through the fault of Biosil or is lawfully terminated by Biosil under clause 17,
the license granted by Hutchison to Biosil hereunder shall extend so that Biosil
may additionally use the Intellectual Property licensed to it for the purposes
of obtaining regulatory or other official approvals to allow sale of the
Products by Biosil (or any third party nominated by Biosil) in the Territory and
may market, manufacture, distribute and sell products incorporating such
Intellectual Property in any part of the world including the Territory In the
event that this provision applies, Hutchison will forthwith disclose to Biosil
any Materials relating to the Intellectual Property licensed to Biosil under
such irrevocable license as Biosil may reasonably require.

 

(7) On termination or expiry of this Agreement Hutchison shall at Biosil’s sole
option:

 

(a) deliver up to Biosil all Materials provided by Biosil together with any
copies of them which remain in its possession, power or control; or

 

(b) within 7 days destroy any Materials created for the purpose of this
Agreement which embody any of the Intellectual Property of Biosil.

 

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15.                               REGISTRATIONS

 

Biosil acknowledges that the Registrations shall be applied for, and registered,
in the sole name of Hutchison subject only to the rights of Biosil under this
clause 15. Hutchison hereby undertakes and agrees with Biosil:

 

(1) that Hutchison will not allow any Registrations to lapse arid will apply
timeously for any renewal of such Registrations;

 

(2) subject in all circumstances to the provisions of clause 1 7(3), that it
shall not sell or otherwise dispose of the Registrations to a Direct Competitor
under any circumstance nor shall it sell or otherwise dispose of the
Registrations to any other third party other than on terms

 

(a) which oblige that third party to assume all rights and obligations of
Hutchison to Biosil under this Agreement as if that third party had been the
original party thereto instead of Hutchison; and

 

(b) which are directly enforceable by Biosil against the third party;

 

(3) that Hutchison will at all times act in accordance with the laws of the
Territory and not commit any act which would adversely affect the Registrations;

 

(4) that where this Agreement expires without renewal other than through the
fault of Biosil, is lawfully terminated by Biosil (other than where clause
15(5) below applies) or on the occurrence of an event in relation to Hutchison
of the type mentioned in clause 17(3) in circumstances where Biosil does not
terminate the Agreement:

 

(a) Biosil shall be entitled to the full right, title and interest in and to all
Registrations (whether effected in joint names or otherwise) and  Hutchison
shall hold the benefit of such Registrations in trust for Biosil;

 

(b) Hutchison will take all such steps and do such things as may be required in
order to transfer to Biosil the benefit of the Registrations under the laws of
the Territory including, but without prejudice to the generality of the
foregoing, executing any document or documents required to effect such transfers
under the laws of the Territory in compliance with all formalities of the laws
of the Territory;

 

(c) in the event that any or all of the Registrations are not capable of
transfer, Hutchison will co-operate fully with Biosil in securing equivalent
Registrations for Biosil or for such party as Biosil may nominate;

 

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(5) In the event of the occurrence or an event of the type set out in clause
17(1) (b) affecting Hutchison, Hutchison shall forthwith notify Biosil in
writing that the event has occurred and shall offer to sell all Registrations to
Biosil

 

(a) at a price of US$ 8,000,000 where the event occurs in the first year after
the Commencement Date; and

 

(b) at a price, where the event occurs in subsequent years. of US$8,000000 less
USS 714,000 for each anniversary of the Commencement Date that has passed prior
to the occurrence of the event unless and until such time as the price is
reduced to US$3,000,000 whereupon the such price shall remain at US$3,000,000
for the remainder of the period of this Agreement.

 

In the event that Biosil declines to accept Hutchison’s offer Hutchison shall be
free to sell all (but not pan) of the Registrations to a third party (other than
a Direct Competitor) on a bona fide arms length basis at a price which is not
less than the price at which they were offered to Biosil provided that, before
it sells to such third party

 

(i)                                     Hutchison discloses to Biosil that it
has received an offer from the third party for the Registrations and discloses
the identity of such third party and the price offered for the Registrations;
and

 

(ii)                                  Hutchison offers to Biosil a right of
first refusal to purchase the Registrations on the same tents as those offered
by the third party and Biosil declines to purchase on such terms;

 

(6) that it will provide Biosil with copies of all Registrations, all
applications for Registrations and all correspondence from, and all approvals,
consents or licenses, including any updates or renewal demands issued by any
Regulatory Body, government department or other body in the Territory which
relate to Registration matters; and

 

(7) that it will keep Biosil fully informed of any matters that may affect
Registrations and provide J3iosil with such information as Biosil may request
from time to time in relation to Registration matters.

 

16.                               TERM OF AGREEMENT

 

(1) Subject to the provisions for earlier termination herein contained, this
Agreement shall continue in force until 31 December 2008.

 

(2) Provided that both parties have met their obligations in accordance with
this Agreement, this Agreement may be renewed for a further period of 7 years,
subject to a

 

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review of terms and performance targets during the final year of this Agreement
in advance of the second 7 year term.

 

(3) Unless otherwise agreed in writing by both parties, this Agreement will
automatically terminate if the Panel Approval Date for sales of the Products in
the United States of America has not occurred by 1 July 2002, or if any
Registrations are suspended for any reason for a period longer than 3 months.
Where the approval given by the FDA Review Panel on the Panel Approval Date is
subject to conditions or qualifications, this Agreement will automatically
terminate if these conditions or qualifications are not acceptable to both
parties (acting reasonably).

 

17.                               TERMINATION

 

(1) Either party may terminate this Agreement forthwith by notice in writing to
the other if such other:-

 

(a) Shall have committed a breach of this Agreement which in the ease of a
breach capable of remedy, shall not have been remedied within 30 days of the
receipt by the party in default of a notice from the innocent party identifying
the breach and requiring its remedy save that the innocent party shall not be
entitled to terminate this Agreement pursuant to this provision in circumstances
where it would not have been practicable to remedy such breach within the said
30 day period, if and for so long as the party in breach has within the 30 day
period taken all practicable steps to remedy the breach as soon as possible
after receiving the notice and continues to do so after the 30 day period has
expired until the breach is remedied.

 

(b) Is unable to pay its debts or enters into liquidation whether compulsorily
or voluntarily (other than for the purpose for effecting a reconstruction or
amalgamation) or compounds with or convenes a meeting of its creditors or has a
receiver appointed of all or any part of its assets or takes or suffers any
similar action in consequence of a debt, or ceases for any reason to carry on
business or any similar occurrence under the laws of any jurisdiction affects
Hutchison.

 

(2) Biosil shall be entitled to terminate this Agreement forthwith by notice in
writing to Hutchison, if Hutchison at any time challenges the validity of any
Intellectual Property of Biosil.

 

(3) Either party shall be entitled to terminate this Agreement forthwith by
notice in writing to the other if a Direct Competitor acquires an interest in,
or is involved (directly or indirectly) in the control or management of; the
other party, its business or assets (including, for the avoidance of doubt, the
Registrations).

 

(4) Biosil shall be entitled to terminate this Agreement forthwith by notice in
writing to Hutchison in the event that any of the Registrations are revoked, or
made subject to

 

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conditions or restrictions which have the effect that Biosil cannot be
reasonably expected to perform its obligations under this Agreement.

 

18.                               CONSEQUENCES OF TERMINATION

 

Upon the termination of this Agreement howsoever arising:

 

(1) The rights of either party against the other which have accrued up to the
date of termination shall not be affected, but Hutchison shall not be entitled
to any compensation, damages or payment for goodwill, which may have been
established, or to any similar payment, notwithstanding any statutory or enacted
provision or rule of law to the contrary;

 

(2) Any provision of this Agreement which is expressly or by implication to
continue in effect after such termination shall not be affected and shall remain
in full force and effect;

 

(3) Save as may be necessary to enable Hutchison to sell off stocks of Products
pursuant to the provisions of clause 18(1) above, Hutchison shall at its own
expense promptly return to Biosil any documents or papers relating to the
business of Biosil which it has in its possession; and

 

(4) Hutchison will pay to Biosil upon demand for any stocks of Products held or
of materials, work in progress, parts, packing, labels etc purchased
specifically for the production of the Products. The value of such stocks will
be determined at the absolute discretion of Biosil.

 

19.                               ASSIGNMENT

 

(1) Subject to clause 19(2), neither path’ hereto shall assign, sub-contract,
transfer or charge any of its rights or obligations under this Agreement.

 

(2) If Hutchison is entitled to sell the Registrations to a person as provided
in clause 15(2), then as a condition of such a sale of the Registrations,
Hutchison shall transfer the whole of its rights and obligations under this
Agreement to the purchaser on terms which are directly enforceable by Biosil
against the purchaser and which oblige the purchaser to assume the rights and
obligations of Hutchison under this Agreement as if the purchaser had been the
original party to this Agreement instead of Hutchison. In such event, Hutchison
shall be relieved of further obligation hereunder.

 

20.                               FORCE MAJEURE

 

Neither party shall be liable to the other for any default hereunder where the
same is due to causes beyond the control of the party in default, provided that
any party seeking to rely on this provision shall give written notice to the
other containing MI particulars of

 

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the act or matter which it claims has put the due performance of its obligations
under this Agreement beyond its control and provided further that this clause
shall cease to apply when such act or matter has ceased to have effect on the
performance of this Agreement.

 

21.                                 NOTICES

 

Any notices shall, unless otherwise expressly stated, be in writing and shall be
given by sending the same by e-mail, registered post or facsimile transmission
to the respective parties as follows:-

 

 

Biosil:

Address as above

 

FAO:

Mr J. A. Alsop

 

Fax No:

441624661656

 

E-mail:

john@biosil.co.uk

 

 

 

 

 

Hutchison:

Mr. J. Hutchison

 

Fax No:

0012259276874

 

E-mail:

hutchisonimplants@earthlink.net

 

or to such other address as may be designated in writing from time to time. Any
notice sent by registered post shall be deemed (in the absence of evidence of
earlier receipt) to have been delivered 7 days after its despatch. Any notice
given by e-mail or facsimile transmission shall be deemed to have been delivered
on the next working day following transmission.

 

22.                                 JURISDICTION

 

Except as otherwise provided below, this Agreement shall be governed by Isle of
Man law in every particular including formation and interpretation and shall be
deemed to have been made in the Isle of Man and all parties agree to submit to
the non-exclusive Jurisdiction of the Isle of Man Courts and any proceedings
will be in the English Language. Biosil’s security interest rights and remedies
under clause 7 of this Agreement shall be subject to the laws of the State of
Louisiana (U.S.A.).

 

23.                                 ENTIRE AGREEMENT, VARIATION AND GENERAL

 

(1) This Agreement constitutes the entire understanding of the parties and there
are no promises, terms, conditions or obligations whether oral or written,
express or implied, other than those contained or referred to herein and no
amendment shall be valid unless accepted in writing by both parties.

 

(2) In the event that any provision of this Agreement is declared by any
judicial or other competent authority to be voids voidable, illegal or otherwise
unenforceable in whole or part the other provisions of this Agreement and the
remainder of the affected provision

 

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shall remain in full force and effect unless Biosil in Biosil’s discretion
decides that the effect of such declaration is to defeat the original intention
of the parties in which event Biosil shall be entitled to terminate this
Agreement by 30 days’ notice in writing to Hutchison.

 

AS WITNESS whereof the hands of the duly authorized representatives of the
parties have been set the day, month and year first before written.

 

SIGNED by and on behalf of

 

BIOSIL LIMITED

 

J.A. Alsop, Signature

 

in the presence of Witness:
Full Name: Brenda Haslam Signature of Witness
Address: 6 Seafield Crescent Onchan, Isle of Man
Occupation: Secretary

 

 

SIGNED by and on behalf of
HUTCHISON INTERNATIONAL

 

John Hutchison, Siganture

 

in the presence of Witness:
Full Name: Carol Denn Signature of Witness
Address: H51 Florida St. – 8th Floor – Bank One Centre, Baton Rouge, LA 70802
Occupation: Legal Secretary

 

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SCHEDULE 1 - PRODUCTS

 

Hutchison Branded Saline Inflatable Mammary Implants

 

Anterior Diagram Valve

 

 

 

Textured Shell

HTL / HTH

 

 

Smooth Shell

HSL / HSH

 

 

Various sizes of each

 

 

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SCHEDULE 2 - PRICES

 

CAT NO’S

 

PRODUCT

 

PRICE£

 

 

 

 

 

HTL

 

Hutchison Branded Saline Inflatable Mammary Implants (Low Profile):

 

***

 

 

 

 

 

HTH

 

Hutchison Branded Saline Inflatable Mammary Implants (High Profile):
- Textured Shell

 

***

 

 

 

 

 

HSL

 

Hutchison Branded Saline Inflatable Mammary Implants (Low Profile):

 

***

 

 

 

 

 

HSH

 

Hutchison Branded Saline Inflatable Mammary Implants (High Profile):
- Smooth Shell

 

***

 

 

 

 

 

HSL-S/HSH-S

 

Sizers for the above Inflatable Implants:

 

***

 

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SCHEDULE 2 — HUTCHISON’S OBLIGATIONS

Without prejudice to, and in pursuance of, its obligations under the 2001
Agreement, Hutchison agrees that

1                                         Confidentiality

1.1                                 It will comply with the provisions of Clause
13 of the 2001 Agreement without limit in point of time notwithstanding the
transfer of its obligations generally thereunder by way of novation to
Aesthetics except that Hutchison shall not be entitled to use or disclose
Confidential Information, whether directly or indirectly, for any purpose except
as permitted in terms of this Schedule 2.

1.2                                 It will forthwith (and in any event within
21 days of the Effective Date) disclose to Biosil and separately  to Aesthetics
all Confidential Information in its possession or under its power or control
which relates to the Registrations and its communications with Regulatory
Bodies, such Confidential Information to include:-

1.2.1                                           copies of all
confidentiality/non-disclosure agreements in place with third parties; and

1.2.2                                           copies of all contracts
Hutchison has in place with third parties undertaking any outstanding work for
the PMA submission process.

1.3                                 It will forthwith (and in any event within
21 days of the Effective Date) provide to Biosil and separately to Aesthetics a
report on the status of each of the PMA application modules which it has
submitted to the FDA in relation to the Products providing a comprehensive
report on all matters relevant to the status of the applications made for PMA,
to include the following:-

1.3.1                                           filing status for the PMA
including:-

1.3.1.1                                            dates of submission for all
PMA modules and all PMA Amendments;

1.3.1.2                                            approval for each module;

1.3.1.3                                            timeline for submitting final
PMA module;

1.3.1.4                                            timeline for FDA PMA filing
decision;

1.3.2                                           status of all outstanding PMA
deficiencies including:-

1.3.2.1                                            details of PMA deficiencies,
including copies of all correspondence with FDA relating to these;

1.3.2.2                                            corrective action being
taken;

1.3.2.3                                            parties undertaking the
corrective action;

1.3.2.4                                            timelines for completion of
corrective action and submission of data to FDA to address outstanding
deficiencies;

--------------------------------------------------------------------------------

1.3.3                                           the exact whereabouts and format
of raw data comprised within each module;

1.3.4                                           copies of all submitted PMA
modules including copies of all:-

1.3.4.1                                            subsequent PMA amendments;

1.3.4.2                                            correspondence with FDA since
each of the original module submissions.

1.4                                 It will forthwith (and in any event within 7
days of receiving a request from Biosil or Aesthetics so to do) disclose to
Biosil and separately to Aesthetics any other Confidential Information in its
possession or under its control which Biosil or Aesthetics reasonably require
for the purposes contemplated by this Agreement (in the case of Biosil and
Aesthetics) and for obtaining regulatory or other approvals to allow sale by
Biosil (or any third party nominated by Biosil) of its products in any part of
the world other than the Territory.

1.5                                 It grants to both Aesthetics and Biosil
(insofar as Biosil needs the same) separately an irrevocable royalty free,
perpetual licence to use any such Confidential Information as it provides to
them pursuant to the provisions of this paragraph 1, to be used:-

1.5.1                                           by Biosil for the purpose of
obtaining regulatory or other approvals to allow sale by Biosil (or any third
party nominated by Biosil) of its products in any part of the world other than
the Territory; and

1.5.2                                           by Aesthetics for the purpose of
obtaining regulatory or other approvals to allow sale of the Products by
Aesthetics in the Territory.

1.6                                 Forthwith upon completion of its obligations
in terms of this Schedule 2 or earlier where it no longer needs to hold the same
to perform such obligations, Hutchison will return to Biosil (or to any third
party nominated in writing to Hutchison by Biosil for such purposes) all
Confidential Information in its possession which was disclosed to it by Biosil
in terms of the 2001 Agreement and, if requested to do so by Biosil, Hutchison
will provide Biosil with a sworn affidavit by an appropriately authorised
officer of Hutchison confirming that in relation to Biosil’s Confidential
Information, Hutchison has complied with its obligations under this paragraph.

2                                         Intellectual property

2.1                                 Biosil and Aesthetics shall each have a
perpetual, irrevocable, royalty free licence on the terms set out in Clause
14(6) of the 2001 Agreement (to include a licence in terms of Clause 14(6)(c)
thereof restricted, in the case of Aesthetics, for use for the purposes of
seeking regulatory approvals to allow sale of the Products in the Territory) to
use Hutchison’s Intellectual Property to which that clause would have applied
(had the 2001 Agreement not been novated to Aesthetics in terms of this
Agreement).

2.2                                 Hutchison shall forthwith (and in any event
within 21 days of the Effective Date) deliver to Aesthetics any Materials
relating to the Intellectual Property licensed to Biosil and Aesthetics under
paragraph 2.1 above.

2.3                                 Hutchison shall forthwith (and in any event
also within 21 days of the Effective Date) deliver to Aesthetics any other
Materials in its possession, power or control which are relevant to the 2001
Agreement.

3                                         Transfer of PMA

3.1                                 Biosil is the legal and beneficial owner of,
and entitled to the full right title and interest in and to, the Registrations
and Hutchison acknowledges and declares that it holds the benefit of such
Registrations (including those where it is the Registered Name) in trust for
Biosil absolutely.

3.2                                 Upon receipt by Hutchison of a written
direction from Biosil requiring Hutchison to transfer the Registrations into the
Registered Name of Biosil (or another person nominated by Biosil) Hutchison
shall provide full co-operation with Biosil to enable the Registrations to be
transferred into the Registered Name of Biosil or such nominee (as appropriate),
and without limiting this general obligation, will take all such steps and do
such things as Biosil requires in order to transfer the benefit of the
Registrations to Biosil (or such other nominated person) under the laws of the
Territory to include executing any document or documents required to effect such
transfer under the laws of the Territory in compliance with all the formalities
of the laws of the Territory.  In the event that any or all of the Registrations
are not capable of transfer, Hutchison will co-operate fully with Biosil, and
will take all such steps and do such things as Biosil may require, to secure
equivalent Registrations for Biosil or for such other person as Biosil may
nominate.

4                                         Further Assurance and Other Assistance

4.1                                 Without prejudice to the foregoing
provisions of this Schedule, it will promptly provide to both Biosil and
Aesthetics such co-operation and assistance as they may require for the purposes
contemplated by this Agreement, the 2001 Agreement and, in particular, to assist
in obtaining GMP approval and the US Regulatory Approvals from the FDA as soon
as practicable after the Effective Date.

4.2                                 In the event that it is either unwilling or
unable to comply with its obligations under this Agreement and, in particular,
this Schedule, it irrevocably appoints Biosil as its attorney to take all such
steps and do such things in the name of Hutchison as may be required in order to
fulfil its obligations under this Agreement including, but without prejudice to
the generality of the foregoing, executing any document or documents that it may
be necessary or desirable to execute for the purpose of discharging such
obligations.

Signed by:

JOHN A ALSOP       
                                                                                               
JOHN C HUTCHISON, PRESIDENT

DONALD K MCGHAN                   
                                                                               
T R MALONEY

SCHEDULE 3 — MODIFICATIONS TO 2001 AGREEMENT

The terms of the 2001 Agreement are modified as follows and the terms of the
2001 Agreement shall be construed accordingly.

1                                         Panel Approval Date and GMP

1.1                                 For the purposes of Clause 16(3) of the 2001
Agreement, the 2001 Agreement will automatically expire if the Panel Approval
Date for sales of the Products in the United States of America has not occurred
by 1 September 2005 (or such other date as Biosil and Aesthetics may otherwise
agree in writing).  This date (or any subsequent date agreed by Biosil and
Aesthetics from time to time) is called the “Extension Date.”

1.2                                 In consideration for Biosil agreeing to
re-constitute the 2001 Agreement on the terms set out in this Agreement and, in
addition, continuing to dedicate certain manufacturing facilities at its factory
premises in Cumbernauld, Scotland, exclusively for production of the Products,
Aesthetics agrees to make the following payments to Biosil:-

1.2.1                                           US$250,000 on the last date of
execution of this Agreement;

1.2.2                                           a further US$125,000 payment on
1 March 2005; and

1.2.3                                           a final US$125,000 payment on 1
July 2005.

1.3                                 If requested to do so, Aesthetics agrees
that it will, at its own cost and expense, provide Biosil with such advice and
assistance as Biosil reasonably requires in connection with its application for
GMP.

1.4                                 Aesthetics agrees that a failure to pay any
sum due in terms of paragraph 1.2 of this Schedule within seven days of its due
date for payment will be deemed to be a breach of the 2001 Agreement which is
not capable of remedy and which, without further notice, will entitle Biosil to
terminate this Agreement and the 2001 Agreement pursuant to Clause 17(1)(a) of
the 2001 Agreement on the grounds of Aesthetics’ material breach.

1.5                                 In the event that the Extension Date passes
without agreement having been reached between Biosil and Aesthetics to extend
the Extension Date then the 2001 Agreement shall automatically expire without
fault being attributed to any party and the provisions of the 2001 Agreement
shall be applied accordingly.

2                                         Letters

2.1                                 Subject to the exceptions listed in
paragraph 2.2 below, the terms set out in the Letters shall not apply (as
between Aesthetics and Biosil) and are superseded by this Agreement.  To be
clear, the parties acknowledge that the payments and reductions against prices
previously agreed in terms of the 27 January 2004 letter that forms part of the
2001 Agreement do not apply.

2.2                                 The following Letters (or parts of them, as
indicated) are not superseded by this Agreement and remain in full force and
effect as between Biosil and Aesthetics:-

2.2.1                                           Letter of 27 June 2002 in its
entirety save that the order for the first 1,000 Products should be received
within 7 days of the date of GMP approval;

2.2.2                                           The second paragraph, point (b)
of the Letter of 25 November 2002; and

2.2.3                                           Letter of 28 February 2003 in
its entirety.

3                                         Pricing, Payment and Purchase Targets

3.1                                 For the purposes of Clause 8(3)(a) of the
2001 Agreement, the Minimum Number of Products for each year of this Agreement
are now as follows:-

                                                Year of this
Agreement                                                                     
Minimum Number of Products

                                                1st
(2005)                                                                                                                              
* * *

                                                2nd
(2006)                                                                                                                             
* * *

                                                3rd
(2007)                                                                                                                              
* * *

                                                4th
(2008)                                                                                                                              
* * *

                                                5th
(2009)*                                                                                                                           
* * *

                                                6th
(2010)*                                                                                                                           
* * *

                                                7th
(2011)*                                                                                                                           
* * *

* Subject to renewal of the 2001 Agreement in accordance with the provisions of
Clause 16(2).

The Minimum Number of Products for any year of this Agreement may be the subject
of adjustment in accordance with the Volume Change Control Procedures.

3.2                                 In the event that the number of Products
purchased by Aesthetics in any year of this Agreement exceeds the Minimum Number
of Products for that year by the percentages specified in the left hand column
in the table below then Aesthetics shall be entitled to a reduction against the
prices (exclusive of VAT) that would otherwise be payable under the 2001
Agreement in respect of the numbers of Products purchased in excess of the
specified percentages, such discount to be calculated in accordance with the
right hand column in the table below.  To be clear, however, the discounts
indicated are not cumulative.

Additional Products Purchased

Above Minimum Number of Products (%)                     Discount Against Price

***                                                                        
                                ***

***                                                                        
                                ***

***                                                                        
                                ***

***                                                                        
                                ***

3.3                                 Aesthetics shall pay the prices for all
Products or additional work ordered by it:-

3.3.1                                           prior to the Approval Date
against a pro forma invoice basis (ie with payment in advance before an order is
accepted); and

3.3.2                                           after the Approval Date within
30 days of the date of Biosil’s invoice for such Products.

3.4                                 To the extent necessary, Clauses 6(1) and
6(2) of the 2001 Agreement shall be deemed amended accordingly but will
otherwise remain in full force and effect.  Furthermore, Aesthetics agrees that
in the event that Aesthetics fails to pay any sum due in terms of paragraph
3.3.2 of this Schedule within the 30 day period therein mentioned than Biosil
may serve a default notice on Aesthetics giving Aesthetics a further 7 days to
make payment.  If Aesthetics fails to pay such sum within that further 7 day
period then Aesthetics will be deemed to be in breach of the 2001 Agreement and
such breach be deemed to be incapable of remedy and therefore, without further
notice, Biosil will be entitled to terminate this Agreement and the 2001
Agreement pursuant to Clause 17(1)(a) of the 2001 Agreement on the grounds of
Aesthetics’ material breach.

3.5                                 In terms of Clause 5(4) of the 2001
Agreement, Biosil agrees that prices will not be increased above 6% per annum
and the words “without evidence to justify an increase above this level”, will
be deemed deleted.  The prices payable for the Products referred to in Clause
5(1) of the 2001 Agreement will not be increased prior to the first anniversary
of the Approval Date.  Notwithstanding the foregoing provisions of this clause,
in the event that Biosil proposes that the prices be increased by an amount
which, although below the 6% per annum figure previously mentioned above,
exceeds the increase in price which would have been applied had prices been
increased by an amount equal to the change in the Producer Price Index (Chemical
and Allied Products — WPU06) as of the immediately preceding year of this
Agreement as published by the United States Bureau of Labor Statistics then the
following provisions will apply:-

3.5.1                                           Biosil will notify Aesthetics of
the price increase that is to take effect in terms of Clause 5(2) of the 2001
Agreement;

3.5.2                                           If Aesthetics wishes to object
to such price increase then it shall notify Biosil accordingly in Writing within
30 days of receipt of the notice from Biosil in terms of paragraph 3.5.1;

3.5.3                                           Upon receipt of such notice from
Aesthetics, Biosil may withdraw the proposed increase in prices within the
original 60 day period set out in paragraph 3.5.1 above but if it chooses not to
do so then within 30 days of the price increase taking effect in accordance with
Clause 5(2) Aesthetics may give not less than 12 months’ prior written notice to
Biosil to terminate the 2001 Agreement without fault being attributed to any
party and the provisions of the 2001 Agreement shall be applied accordingly.

3.6                                 Biosil shall not be under any obligation to
commence the manufacture of Products unless and until:-

3.6.1                                           GMP or any other required
approvals have been granted by the FDA; and

3.6.2                                           Aesthetics can demonstrate (to
Biosil’s reasonable satisfaction) that it is in a position to comply with all of
its obligations under the 2001 Agreement which are relevant to the sale of the
Products in the Territory including final labelling and packaging requirements. 
The provisions of Clause 8(3)(b) and (c) of the 2001 Agreement shall be
construed accordingly.

4                                         Registrations and Intellectual
Property Rights

4.1                                 III and Aesthetics each acknowledge that
Biosil is the legal and beneficial owner of the Registrations as of the
Effective Date, to include the application(s) for US Regulatory Approvals which
is/are ongoing in the United States of America and that Biosil will be the legal
and beneficial owner of all such Registrations including any US Regulatory
Approvals, once granted by the FDA, for which any applications are made or
continued (whether in the Registered Name of Hutchison, III, Aesthetics or
otherwise) in the period after the Effective Date.

4.2                                 III and Aesthetics will provide Biosil with
all necessary co-operation and assistance to ensure that any Registrations in
existence as of the Effective Date are transferred into the Registered Name of
Biosil or any person (including Aesthetics) that Biosil may nominate for such
purpose.  In the event that any such Registrations are transferred into the
Registered Name of III or Aesthetics, III and Aesthetics each acknowledge that
they will hold them in trust for the benefit of Biosil absolutely.

4.3                                 Biosil agrees that Aesthetics shall be
entitled to continue to apply for all Registrations on Biosil’s behalf, such
applications to be progressed in the Registered Name of Aesthetics or Hutchison
at the sole cost and expense of Aesthetics.

4.4                                 In the event that the Registrations are held
in the Registered Names of

4.4.1                                           Hutchison, Aesthetics or III
then Aesthetics and III each agree with Biosil that they will be responsible at
their own cost and expense for maintaining the Registrations and for complying
with all legal and regulatory requirements in the Territory in relation thereto;

4.4.2                                           Biosil (or any person nominated
by Biosil other than III or Aesthetics) then Biosil agrees with Aesthetics that
it will be responsible at its own cost and expense for maintaining the
Registrations and for complying with all legal and regulatory requirements in
the Territory in relation thereto;

and in either case, Biosil, Aesthetics and III agree that they will promptly
provide the other with such assistance at their own cost and expense as the
other may reasonably require in order to maintain the Registrations and for
complying with all such legal and regulatory requirements.

4.5                                 Biosil and Aesthetics agree that they will
comply with the Product Change Control Procedures set out in Schedule 7.

4.6                                 Biosil agrees with Aesthetics that, as
manufacturer of the Products, it shall be responsible for complying with all
regulatory requirements incumbent on such a manufacturer which pertain to the
Registrations and III and Aesthetics each agree that they will promptly provide
Biosil at their own cost and expense with such reasonable assistance as Biosil
may request for such purposes.

5                                         Communications

5.1                                 Aesthetics and III each acknowledge and
agree that Biosil, as legal and beneficial owner of the Registrations, shall be
entitled (acting through its employees and agents) to access, inspect and use
all information held by Aesthetics or III or their respective employees,
contractors or agents pertaining to the status of all Registrations including
the application(s) for PMA from the FDA.  Aesthetics and III each separately
undertake to Biosil that they will promptly provide Biosil with such of that
information as Biosil may request of III or Aesthetics from time to time.
Without prejudice to that general obligation, Aesthetics will provide Biosil
regular updates containing the information detailed in Schedule 5 in accordance
with the terms of that Schedule.

5.2                                 Aesthetics undertakes to give Biosil
reasonable prior advance notice of any scheduled meetings arranged between
Aesthetics and the FDA relating to the Products and/or the Registrations and
Biosil will, at its option, have the right to send a representative or
representatives from either its own personnel or personnel of its agents to
attend any such meetings with Aesthetics.  In determining what constitutes a
“reasonable” period of notice, regard shall be had to all the circumstances,
including the scheduling requirements of the FDA and the requirement for Biosil
to be able to send personnel from the Isle of Man or the United Kingdom to the
United States to attend such meetings and the travelling time that this will
take.

5.3                                 Aesthetics undertakes that it will ensure
that all data relevant to the Registrations will be stored at agreed location(s)
and that Biosil will have full unrestricted access to such information, through
its employees and/or agents.  The current location(s) for the storage of such
data, and the general nature of the data stored at each one, are set out in
Schedule 6.  Biosil agrees that Aesthetics may also store data relevant to the
Registrations at its principal executive offices at 6000 S. Eastern Avenue,
Suite 9D, Las Vegas, NV 89119 provided that Aesthetics complies with the
notification requirements laid down in the following provisions of this
paragraph.  Other storage location(s) may be agreed by Biosil and Aesthetics
from time to time.  A summary of all such data (together with details of where
and with whom it is stored) will be compiled and kept updated and sent to Biosil
either (i) as part of the regular update referred to in paragraph 5.1 (for so
long as such updates are to be produced in terms of Clause 6.1) or (ii) where
such updates no longer have to be produced, as and when any of the details
contained in the latest update change from time to time or, in the event, that
such details have not changed, confirmation in writing every three months that
this is the case.  The summary will contain sufficient detail to enable Biosil
to determine where and with whom any particular data relevant to the
Registrations is stored at any particular time and Biosil may require Aesthetics
to provide it at any time with such further information (in writing) that it may
reasonably request in relation to such summaries.

5.4                                 Aesthetics will provide Biosil with copies
of all non-disclosure agreements/confidentiality agreements that it enters into
with third parties (including, for example, consultants and associates) pursuant
to which Confidential Information of Biosil may be disclosed.  Aesthetics will
ensure that any such non-disclosure agreements/confidentiality agreements will
comply with the requirements for them set out in the 2001 Agreement in all
respects and, if requested to do so by Biosil, Aesthetics will provide Biosil
with a sworn affidavit by an appropriately authorised officer of Aesthetics
confirming that in relation to Biosil’s Confidential Information, Aesthetics has
complied in all respects with requirements of this Agreement and the 2001
Agreement.  In the event that Aesthetics wishes to disclose Confidential
Information of Biosil to its associates or consultants on terms that would
otherwise not comply with the requirements for non-disclosure
agreements/confidentiality agreements set out in the 2001 Agreement then
Aesthetics may apply to Biosil for consent to enter into such an agreement and
for dispensation from meeting the said requirements of the 2001 Agreement. 
Biosil may request that Aesthetics provide to it such further information as
Biosil reasonably requires to consider such application.  In determining whether
to give its consent, Biosil may have regard to all the circumstances including
the nature of the Confidential Information which would be disclosed and the
identity of the third party consultant or associate concerned.

5.5                                 Biosil agrees with Aesthetics that it will
provide Aesthetics with such information and assistance as Aesthetics reasonably
requires to assist it in progressing any applications for Registrations save
that Aesthetics acknowledges that Biosil shall not be obliged to provide
information and assistance to Aesthetics to the extent that Biosil considers (on
reasonable grounds) that the provision of such information and/or assistance
would, or would be likely to, give Aesthetics or any member of the Aesthetics
Group competitive advantage in connection with areas of its business, or
businesses of other members of the Aesthetics Group, which are competitive with
the business of Biosil or any of its associates.  In circumstances where Biosil
considers that it will not provide information and/or assistance to Aesthetics
or any member of the Aesthetics Group for the reasons set out in the foregoing
provisions of this paragraph then Biosil will provide such information and/or
assistance in such manner and to such person or persons as it determines is
required in order to progress the application for Registrations.  By way of
example, Biosil may determine to provide information directly to the relevant
Regulatory Body rather than to Aesthetics.

6                                         Branding

6.1                                 III and Aesthetics each agree that the
Products shall only be sold in the Territory under either the “Hutchison” brand
name or such other brand name as Biosil has previously approved in writing.  In
determining whether to grant such approval, Biosil may grant or withhold such
approval in its absolute discretion and may make the granting of such approval
subject to such conditions as Biosil thinks fit.

6.2                                 Notwithstanding paragraph 6.1, Biosil agrees
that Aesthetics shall be entitled to indicate on the Product packaging and
promotional material that the Products are being distributed in the Territory by
Aesthetics, a MediCor Group company, such indication to be in form, size,
location and context to be approved in advance by Biosil, such approval not to
be unreasonably withheld or delayed.

7                                         Grant of Security Interest

7.1                                 For the purposes of this paragraph 7, the
following terms have the following meanings:-

7.1.1                                           “Obligors” means Aesthetics and
III and a reference to an “Obligor” shall be construed accordingly;

7.1.2                                           “Uniform Commercial Code” means
the Uniform Commercial Code as in effect in the State of Nevada from time to
time or, by reason of mandatory application, any other applicable jurisdiction.

7.2                                 As collateral security for the due and
punctual observance and performance of all of the obligations of Aesthetics and
III under this Agreement (including, without limitation, prompt payment in full
of all sums when due (whether at stated maturity, by acceleration or
otherwise)), each Obligor hereby pledges and grants to Biosil a security
interest in all of such Obligor’s right, title and interest in and to the
following property, whether, at the date of this Agreement, owned or hereafter
acquired by such Obligor and whether existing at the date of this Agreement or
hereafter coming into existence (all such property being collectively, the
“Collateral”):

7.2.1                                           all accounts and general
intangibles (each as defined in the Uniform Commercial Code) of such Obligor
constituting a right to the payment of money, whether or not earned by
performance, including all payment intangibles and moneys due and to become due
to such Obligor in repayment of any loans or advances, in payment for goods
(including Inventory and Equipment (each as defined below)) sold or leased or
for services rendered, in payment of tax refunds and in payment of any guarantee
of any of the foregoing (collectively, the “Accounts”);

7.2.2                                           all instruments, chattel paper
or letter-of-credit rights (each as defined in the Uniform Commercial Code) of
such Obligor evidencing, representing, arising from or existing in respect of,
relating to, securing or otherwise supporting the payment of, any of the
Accounts (collectively, the “Instruments”);

7.2.3                                           all inventory (as defined in the
Uniform Commercial Code) and all other goods of such Obligor (including, without
limitation, any Products acquired from Biosil under the 2001 Agreement and this
Agreement) that are held by such Obligor for sale, lease or furnishing under a
contract of service, that are so leased or furnished or that constitute raw
materials, work in process or material used or consumed in its business,
including all spare parts and related supplies, all goods obtained by such
Obligor in exchange for any such goods, all products made or processed from any
such goods and all substances, if any, co-mingled with or added to any such
goods (collectively, the “Inventory”);

7.2.4                                           all equipment (as defined in the
Uniform Commercial Code) and all other goods of such Obligor that are used or
bought for use primarily in its business, including all spare parts and related
supplies, all goods obtained by such Obligor in exchange for any such goods, all
substances, if any, co-mingled with or added to such goods and all upgrades and
other improvements to such goods, in each case to the extent not constituting
Inventory (collectively, the “Equipment”);

7.2.5                                           all documents (as defined in the
Uniform Commercial Code) or other receipts of such Obligor covering, evidencing
or representing Inventory or Equipment (collectively, the “Documents”);

7.2.6                                           all contracts and other
agreements of such Obligor relating to the sale or other disposition of all or
any part of the Inventory, Equipment or Documents and all rights, warranties,
claims and benefits of such Obligor against any Person arising out of, relating
to or in connection with all or any part of the Inventory, Equipment or
Documents of such Obligor, including any such rights, warranties, claims or
benefits against any Person storing or transporting any such Inventory or
Equipment or issuing any such Documents;

7.2.7                                           all other accounts or general
intangibles of such Obligor not constituting Accounts, including, to the extent
related to all or any part of the other Collateral, all books, correspondence,
credit files, records, invoices, tapes, cards, computer runs and other papers
and documents in the possession or under the control of such Obligor or any
computer bureau or service company from time to time acting for such Obligor;

7.2.8                                           all other tangible and
intangible property of such Obligor; and

7.2.9                                           all proceeds and products in
whatever form of all or any part of the other Collateral, including all proceeds
of insurance and all condemnation awards and all other compensation for any
casualty event with respect to all or any part of the other Collateral (together
with all rights to recover and proceed with respect to the same), and all
accessories to, substitutions for and replacements of all or any part of the
other Collateral.

7.3                                 Without prejudice to Biosil’s other rights
and remedies, the Obligors agree that:-

7.3.1                                           Biosil shall be entitled to
complete and file UCC financing statements (or other corresponding filings) in
the appropriate filing office and to take such other action as is required to
complete the perfection of Biosil’s security interests granted under this
Agreement; and

7.3.2                                           Biosil shall have all of the
default and enforcement rights and remedies provided under the Uniform
Commercial Code and the laws of the State of Nevada generally in respect of such
security interests.

8                                         Competitive Restrictions

8.1                                 Biosil and Aesthetics each represents and
warrants to the other that, as at the Effective Date, no Direct Competitor has
an interest in them, or is involved (directly or indirectly) in the control or
management of them, their business or assets (including, for the avoidance of
doubt, the Registrations).

 

Signed by:

JOHN A ALSOP       
                                                                                               
JOHN C HUTCHISON, PRESIDENT

DONALD K MCGHAN                   
                                                                               
T R MALONEY

 

SCHEDULE 4 — VOLUME CHANGE CONTROL PROCEDURES

1                                          The provisions of this Schedule 4
shall apply in the event that at any time during the period of the 2001
Agreement there shall occur a “Material Market Change” being an event (or series
of related events) which has or have the effect of increasing or decreasing the
size of the market in the Territory for saline inflatable mammary implants (such
as the Products) from time to time (the “Market”) by more than 30%.  In terms of
measuring the size of the Market for these purposes, Biosil and Aesthetics agree
that the appropriate measurement shall be the number of procedures carried out
over a continuous period of twelve months using saline inflatable mammary
implants.  As at the Effective Date, Aesthetics and Biosil agree that the size
of the Market is approximately 225,000 procedures which equates to 450,000 units
of saline inflatable mammary implants.

2                                          In the event of a Material Market
Change, Aesthetics or Biosil may notify a request for a Change to the other,
giving details of the proposed Change together with an evaluation report on the
proposed Change which will cover:-

2.1                                 details of the event or events giving rise
to the Material Market Change;

2.2                                 details of the effect that the Material
Market Change has had, or is having, on the size of the Market together with
supporting evidence including, wherever possible, supporting independent
analysis or research from reputable industry analysts or bodies (including
relevant Regulatory Bodies).

2.3                                 the adjustment that it is proposed should be
made to the level of the Minimum Number of Products to be purchased by
Aesthetics from Biosil in accordance with the terms of this Agreement in
consequence of the change to the size of the Market resulting from the Material
Market Change and the proposed date on which such Change shall take effect. 
Such proposed date may be before the date of receipt of the notification of a
request for Change only if the following conditions are satisfied:

2.3.1                                           the proposed date on which any
Change would take effect must be in the same year of this Agreement in which the
notification of the request for Change is received by the Recipient; or

2.3.2                                           the proposed date on which any
Change would take effect may be in the year of this Agreement which immediately
precedes the year of this Agreement in which the notification of the request for
Change is received by the Recipient provided that the request for Change is
received by the Recipient within the first three months of that latter year of
this Agreement;

and (in either case) provided that the effect of such Change in the period prior
to receipt by the Recipient of notification of the request for Change is
restricted to adjusting the level of the Minimum Number of Products which were
to be purchased by Aesthetics from Biosil in such period in accordance with the
terms of the 2001 Agreement for the purposes of Clause 8(6) of the 2001
Agreement only and, to be clear, not for the purposes of calculating reductions
in prices which might otherwise have applied in terms of paragraph 3.2 of
Schedule 3.

2.4                                 any impact of the proposed Change on other
aspects of this Agreement or the 2001 Agreement.

In this Schedule, the party requesting the Change is termed the “Proposer” and
the party who receives the request is termed the “Recipient”.

3                                          The Recipient will consider the
Proposer’s evaluation report and will notify the Proposer within twenty (20)
Business Days of receipt of the complete report whether the Recipient accepts
the request for Change.  If the Recipient accepts in writing the request for
Change then the Change will be implemented and the terms of the Agreement and/or
the 2001 Agreement (as appropriate) will be amended in accordance with the terms
of the request by

3.1                                 adjusting the level of the Minimum Number of
Products;

3.2                                 amending any other terms of this Agreement
and/or the 2001 Agreement

as proposed in the request for Change and the terms of this Agreement and/or the
2001 Agreement will be modified accordingly.

4                                          In the event that the Recipient does
not accept the terms of the evaluation report and/or the nature or terms of any
proposed Change in consequence thereof then the Proposer and the Recipient will
enter into discussions in good faith with a view to resolving the matters in
dispute between them.  In the event that the Proposer and the Recipient have
been unable to agree on the terms of the evaluation report and/or the nature or
terms of any Change in consequence thereof within a further period of twenty
(20) Business Days following their rejection by the Recipient, the Proposer or
the Recipient may refer the dispute forthwith to the decision of an independent
expert (acting as an expert and not as an arbiter) mutually nominated by the
Proposer and the Recipient or, failing agreement as to nomination within ten
(10) Business Days, nominated by the President (or other appropriate officer)
for the time being of the American Society of Plastic Surgeons, whom failing the
President (or other appropriate officer) of the American Society for Aesthetic
Plastic Surgery, on the application of either the Proposer and the Recipient.
 In determining the dispute the expert shall be entitled to adopt such
procedures and to take such evidence (whether by way of written submissions or
by oral evidence from witnesses or howsoever) as he shall think fit and the
expert shall notify the Proposer and the Recipient of his decision as
expeditiously as possible and in any event within 20 Business Days of the
dispute being referred to him.

5                                          The decision of the expert shall be
final and binding on the Proposer and the Recipient save in the case of manifest
error or a decision which no reasonable independent expert would have come to.

6                                          The costs of such independent expert
shall be payable as he shall direct.

7                                          Notwithstanding the other provisions
of this Agreement in the event that at any time the size of the Market is
reduced to a level at which Biosil or Aesthetics concludes (acting reasonably)
that it is no longer commercially viable for it to continue manufacturing or
distributing the Products, Biosil or Aesthetics

7.1                                 shall be entitled by not less than 6
months’, in the case of Biosil, or 12 months’, in the case of Aesthetics, prior
written notice to terminate the Agreement without fault being attributed to any
party and the provisions of the 2001 Agreement shall be applied accordingly and,
in particular, neither party shall have any liability arising out of such
termination; and

7.2                                 in the event of such termination by Biosil,
Biosil agrees that in the event Aesthetics wishes to continue selling the
Products in the Territory after the termination of this Agreement then, in the
period referred to in paragraph 2.9.1, it will enter into commercial discussions
in good faith with Aesthetics with a view to seeking to agree a commercial basis
on which Aesthetics might acquire the Registrations (on a “first refusal”
basis).

 

Signed by:

JOHN A ALSOP       
                                                                                               
JOHN C HUTCHISON, PRESIDENT

DONALD K MCGHAN                   
                                                                               
T R MALONEY

 

SCHEDULE 5 — PMA UPDATES

 

Biosil and Aesthetics shall provide the other with a written status summary of
activities every 10 Business Days until such time as the FDA provides notice of
“fileability” status of the Registrations.  The first such summaries will be
produced and provided within 10 Business Days of the Effective Date.

 

Signed by:

JOHN A ALSOP       
                                                                                               
JOHN C HUTCHISON, PRESIDENT

DONALD K MCGHAN                   
                                                                               
T R MALONEY

 

SCHEDULE 6 — DATA STORAGE AND ACCESS

 

Registrations Submission Modules

Nature of Data

Name of Person with Whom Held

Address (full postal address and ZIP code)

Contact Details

Mechanical Data

 

Chemistry Data

 

Clinical Data

 

Toxicology Data

 

Manufacturing Data

All data relevant to the Mechanical Data, Chemistry Data, Clinical Data,
Toxicology Data and Manufacturing Data modules

Hutchison International Inc.

7949 Jefferson Hwy, Suite E, Baton Rouge, Louisiana 70809, United States of
America

Name:  Larry Walsh

Phone: +1 927-6800

Fax: +1 (225) 927 6874

E-mail:  llwalsh1950@aol.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signed by:

JOHN A ALSOP       
                                                                                               
JOHN C HUTCHISON, PRESIDENT

DONALD K MCGHAN                   
                                                                               
T R MALONEY

SCHEDULE 7 — PRODUCT CHANGE CONTROL PROCEDURES

 

1                                          According to its documented quality
procedures, Biosil evaluates every proposed change to its processes used to
manufacture the Products or to the design of the Products.  Each such evaluation
shall be determined by Biosil to be a Type I or Type II change as defined
herein.

1.1                                 A Type I change is a change solely to the
manufacturing process and is determined by Biosil to have no affect on the
design, safety or effectiveness (as defined in 21 CFR 814.39) of the Products
and would not be apparent to the user of the Product.

1.2                                 A Type II change is a change to the
manufacturing process or design of the Product which is determined by Biosil to
affect the design, safety or effectiveness (as defined in 21 CFR 814.39) of the
Products or which may be apparent to the user of the Product.

For the purposes of this Schedule, a “user” of the Product is any person who is
involved in the implantation processing, excluding the patient.

1.3                                 Biosil shall ensure that its documented
quality procedures for such Type I changes meet all requirements for FDA
compliance, including ensuring that such changes are appropriately reflected in
its Master Access File or other documentation provided to the FDA as part of its
filings for the Registrations.

1.4                                 Biosil may, at its sole discretion, inquire
of Aesthetics concerning Aesthetics’ opinions concerning any such Type I change.

1.5                                 Prior to implementing a Type I change,
Biosil shall notify Aesthetics of its intent to implement a Type I change and,
if applicable, that it has elected not to disclose the nature of the process
change to Aesthetics.

2                                          For changes classified by Biosil as
Type II

2.1                                 Biosil shall obtain the formal, written
approval of Aesthetics or its designated affiliate prior to implementing such
change, such approval not to be unreasonably withheld or delayed.  For the
purposes of this Schedule a “designated affiliate” means III or any member of
the Aesthetics Group which is a wholly owned subsidiary of Aesthetics and which
(in either case) has been engaged by Aesthetics pursuant to Clause 9.4 of this
Agreement to manage a Quality System for the Products which would be affected by
the change in question.

2.2                                 Biosil shall establish and maintain
documented quality procedures that include formal, written notification to
Aesthetics or its designated affiliate of such proposed Type II changes.  The
notification shall be in sufficient technical detail to allow Aesthetics or its
designated affiliate to fully evaluate the impact of the proposed Type II change
on the marketability of the Product.

2.3                                 Biosil shall use its best efforts to
determine the regulatory reporting requirements concerning such change, and
Biosil shall include its determination in its notification to Aesthetics of
proposed Type II changes.

2.4                                 Aesthetics or its designated affiliate shall
evaluate the proposed Type II change with regard to its market impact and shall
notify Biosil in writing of its approval or disapproval.

2.5                                 Biosil shall ensure that such changes are
appropriately reflected in its Master Access File or other documentation
provided to the FDA as part of its filings for the Registrations.

2.6                                 Biosil recognizes the value in notifying
Aesthetics of such change in the early stages of the change process, and
Aesthetics recognizes the value in a reasonable and timely response to the
notification.

2.7                                 Aesthetics and its designated affiliates
will not unreasonably withhold or delay giving its approval to proposed Type II
changes and if Aesthetics or any designated affiliate determines to withhold its
approval Aesthetics shall notify Biosil forthwith accordingly giving its reasons
(in reasonable detail) for withholding approval.

2.8                                 If Biosil is the Registered Name, Biosil
shall report changes to the FDA in compliance with FDA requirements.

2.9                                 If Aesthetics, its designated affiliate, or
Hutchison is the Registered Name, Aesthetics shall report changes to the FDA in
compliance with FDA requirements.  Biosil shall be responsible for any necessary
amendments to its Master Access File.

2.10                           In the event that the proposed Type II change
requires the submission of a Supplement to the PMA, the parties shall cooperate
in generating appropriate data and documentation, and the party with registered
responsibility for the PMA shall submit the required documentation, except that
Biosil shall be responsible for any necessary amendments to its Master Access
File.

3                                          Biosil shall make no changes to its
processes used to manufacture the Products or to the design of the Products that
do not comply with the procedures contained in this Schedule.

4                                          Aesthetics and III each acknowledge
that any information provided by Biosil to it (or any of its designated
affiliates) pursuant to the provisions of this Schedule 7 is Confidential
Information for the purposes of Clause 13 of the 2001 Agreement and that, in
particular, Aesthetics will comply with its obligations under that clause in
relation to such information accordingly.  In particular, Biosil shall not be
under any obligation to supply such information directly to a designated
affiliate unless the designated affiliate has entered into a non-disclosure
undertaking in favour of  Biosil beforehand in terms which are acceptable to
Biosil (acting reasonably).  Aesthetics, itself, may only disclose such
information to a designated affiliate where such disclosure is in accordance
with the provisions of clauses 13(5) and/or 13(6) of the 2001 Agreement.

Signed by:

JOHN A ALSOP       
                                                                                               
JOHN C HUTCHISON, PRESIDENT

DONALD K MCGHAN                   
                                                                               
T R MALONEY

 

SCHEDULE 8

GUARANTEE

 

Signed by:

JOHN A ALSOP       
                                                                                               
JOHN C HUTCHISON, PRESIDENT

DONALD K MCGHAN                   
                                                                               
T R MALONEY

 

 

 

 

 

GUARANTEE

between

MEDICOR LTD

and

BIOSIL LIMITED

 

 

 

 

 

 

 

2005

 

THIS IS AN IMPORTANT DOCUMENT WHICH CONFERS LEGAL RIGHTS AND OBLIGATIONS ON THE
PARTIES TO IT. YOU SHOULD TAKE INDEPENDENT LEGAL ADVICE BEFORE SIGNING THIS
DOCUMENT AND SIGN ONLY IF YOU WANT TO BE LEGALLY BOUND BY ITS TERMS.

 

 

Brodies

15 Atholl Crescent

Edinburgh EH3 8HA

T: 0131 228 3777

F: 0131 228 3878

Ref: GSC.BIO2.22

 

10 February 2005

GUARANTEE

between

5                                          MEDICOR LTD., a corporation
incorporated under the laws of the State of Delaware (corporation number
3327048) and having its principal executive offices at 4560 S.Decatur Blvd, Las
Vegas, Nevada 89103-5253, United States of America (“the Guarantor”); and

6                                          BIOSIL LIMITED (registered in the
Isle of Man under number 50222) whose registered office is at Global House, Isle
of Man Business Park, Douglas, Isle of Man, British Isles (“Biosil”).

NOW IT IS HEREBY AGREED as follows:-

7                                          In this Agreement

7.1                                 capitalised terms not otherwise defined
herein have the meanings ascribed to them in the Agreement.

7.2                                 Unless the context otherwise requires, the
following terms have the following meanings:

7.2.1                                           “the Agreement” means the
Supplier Novation and Amendment Agreement among Biosil, III, Aesthetics and
Hutchison dated of even date herewith;

7.2.2                                           “Guarantor’s Group” means the
Guarantor and any company (including, without limitation, Aesthetics or III)
that is from time to time (i) a holding company, (ii) a subsidiary, or (iii) a
subsidiary of a holding company, of the Guarantor and for these purposes the
expressions “holding company” and “subsidiary” have the meanings given to them
in the United Kingdom Companies Act 1985 (as amended);

7.2.3                                           “Guarantee Limitation Date”
means the date which falls immediately after the expiry of a period of 12
calendar months after the occurrence of the Approval Date;

7.2.4                                           “Hutchison” means Hutchison
International Inc., a corporation incorporated under the laws of the State of
Louisiana (corporation number 72-1324212) and having its principal place of
business at 7949 Jefferson Hwy, Suite E, Baton Rouge, Louisiana 70809, United
States of America;

7.2.5                                           “Aesthetics” means a corporation
incorporated under the laws of the Nevada (corporation number E0016512005-8) and
having its principal executive offices at 6000 S. Eastern Avenue, Suite 9D, Las
Vegas, Nevada 89119, United States of America; and

7.2.6                                           “III” means International
Integrated Incorporated, a corporation incorporated under the laws of the
British Virgin Islands and having its principal executive offices at 4560
S.Decatur Blvd, Las Vegas, Nevada 89103-5253, United States of America.

8                                          In consideration of Biosil agreeing
to enter into the Agreement with Aesthetics and III, the Guarantor hereby
guarantees to Biosil for itself on demand (and subject only as herein provided,
undertakes as its direct and unconditional primary obligation), but, in so far
as it is applicable, subject to the provisions of Clause 4 hereof, in so far as
it is applicable, the due and punctual observance and performance of all the
obligations of Aesthetics and III arising under or pursuant to the Agreement
including, without prejudice to the foregoing generality, all payment
obligations.

9                                          The obligations of the Guarantor
hereunder shall not be discharged or affected in any way by any lack of, or
limit on, the power or authority of Aesthetics or III or any irregularity,
unenforceability or invalidity of any of the obligations of Aesthetics or III
hereby guaranteed, or by any time or other indulgence or concession being
granted to Aesthetics or III in respect of such guaranteed obligations (whether
or not the Guarantor has knowledge thereof or consents thereto) or any other
act, deed or matter of any description.

10                                    The guarantee obligations contained in
Clause 2 shall not apply to any obligations of Aesthetics and III arising under
or pursuant to the Agreement on or after the Guarantee Limitation Date but the
Guarantee shall remain in full force and effect as regards all obligations of
Aesthetics or III arising under or pursuant to the Agreement prior to the
Guarantee Limitation Date including, without prejudice to the foregoing
generality, all payment obligations.  The guarantee is in addition to and shall
not prejudice nor be prejudiced by any other guarantee, indemnity or other
security or right against the Guarantor or any third party which Biosil may have
for the due performance of such guaranteed obligations.

11                                    Biosil may without any consent from the
Guarantor and without affecting the liability of the Guarantor hereby hold over,
renew, modify or release any security or guarantee now or hereafter held from or
obligation of Aesthetics or III or any other person in respect of the
liabilities hereby guaranteed and compound with or alter, replace, extend or
renew the Agreement and the liability of the Guarantor hereunder shall continue
in full force and effect notwithstanding such act or event.

12                                    The Guarantor waives any right it may have
of requiring Biosil to proceed first against Aesthetics or III under the
Agreement.

13                                    Any settlement or discharge between the
Guarantor and Biosil shall be conditional upon any security or payment to Biosil
by Aesthetics or III or any other person not being invalidated, voided or
reduced (in whole or in part) by virtue of any provisions or enactments relating
to bankruptcy, insolvency, administration, moratorium periods, receivership or
liquidation for the time being in force and Biosil shall be entitled to recover
the value or amount of any such security or payment from the Guarantor
subsequently as if such settlement or discharge had not occurred.

14                                    If any obligations under this Guarantee
become due for performance by the Guarantor under this Guarantee (including
without prejudice to the foregoing generality all payment obligations), the
Guarantor shall not, so long as performance remains outstanding by Aesthetics or
III under the Agreement with respect to such obligation, without Biosil’ prior
written consent:

14.1.1                                     in respect of any obligation
performed by it under this Guarantee (including, without limitation, any amount
paid by it under this Guarantee) seek to exercise any legal right or remedy
against Aesthetics or III including, without limitation, repayment by
subrogation, indemnity or otherwise; nor

14.1.2                                     claim payment of any other moneys for
the time being due to it by Aesthetics or III on any account whatsoever or
exercise any other right or remedy which it may have in respect thereof; nor

14.1.3                                     in the event of the liquidation or
insolvency of Aesthetics or III, prove in competition with Biosil in respect of
any moneys owing to it by Aesthetics or III on any account whatsoever (but, if
so instructed by Biosil, the Guarantor shall so prove in accordance with such
instructions).

15                                    The Guarantor represents and warrants to
Biosil that it has the capacity, power and authority to enter into this
Guarantee and to perform its obligations thereunder and that the obligations of
the Guarantor under this Guarantee represent obligations on the Guarantor which
are legally binding and enforceable against the Guarantor in accordance with
their terms.

16                                    Biosil and the Guarantor each irrevocably
agree to submit to the non-exclusive jurisdiction of the Isle of Man courts over
any claim or matter arising under or in connection with this Agreement or the
legal relationships established by this Agreement.

17                                    Biosil and the Guarantor each irrevocably
consent to any process in any legal action or proceedings arising out of or in
connection with this Guarantee being served on it in accordance with the
provisions of the Agreement relating to service of notices.  The address and fax
number for the Guarantor for the purposes of applying the provisions of the
Agreement are as follows:

Address:  4560 South Decatur Boulevard, Suite 300, Las Vegas, Nevada 89013-5253
USA

For the attention of:  Chief Operating Officer/ Chief Executive Officer

Fax number:  +1 (702) 932 4561

or such other address or facsimile number as may be notified in writing from
time to time by the Guarantor to Biosil.

Nothing contained in this Guarantee shall affect the right to serve process in
any other manner permitted by law:  IN WITNESS WHEREOF these presents have been
executed by the parties the day, month and year first before written:

EXECUTED AND DELIVERED by MEDICOR LTD acting by Theodore Robert Maloney, its
president and chief executive officer, and who subscribed this Agreement in the
presence of:

 

 

DONALD K MCGHAN

Witness signature

DONALD K
MCGHAN                                                                                                                                  
T R MALONEY

Witness
name                                                                                                                                             
President and CEO

4560 SO. DECATUR BLVD.

Witness address

SUITE 300

LAS VEGAS, NV. 89103

 

 

 

EXECUTED AND DELIVERED by BIOSIL LIMITED acting by John Alan Alsop, one of its
directors, and who subscribed this Agreement in the presence of:

 

 

JEAN BELL

Witness signature

JEAN
BELL                                                                                                                                                              
J A ALSOP

Witness
name                                                                                                                                                                
Director

1 GREENFIELD COTTAGE

Witness address

MAIN ROAD, ONCHAN, ISLE OF MAN