**Exhibit 10.23**

 

***Confidential Treatment Requested

 

**CONFORMED COPY**

 

 

# **LoanAgreement**

 

 

September 10, 2004

 

 

for

 

 

## **ESHOLDINGS S.A.S.**

 

 

Arranged by

 

 

## **BNPPARIBAS**

 

 

**Concerning firstly, thepartial refinancing of Receivables and a Shareholders’ Loan granted by MEDICORLtd. to ES HOLDINGS S.A.S. within the scope of the latter’s acquisition of allthe shares comprising the capital of LABORATOIRES EUROSILICONE and secondly, tothe financing of the Acquisition Subsequent Payments connected to thisAcquisition**

 

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Confidential Treatment Requested

 

#### **TABLE OF CONTENTS**

 
| **1**      | **DEFINITIONS –  INTERPRETATION**   |                                             |
|------------|------------------------------------------|--------------------------------------------------|
|       |                                     |                                             |
|       | **1.1**                                  | **Definitions**                                  |   |
|       | **1.2**                                  | **Principles of  construction**                  |   |
|       |                                     |                                             |
| **2**      | **PURPOSE**                              |                                             |
|       |                                     |                                             |
| **3**      | **CONDITIONS PRECEDENT**                 |                                             |
|       |                                     |                                             |
| ** ** | **3.1**                                  | **Conditions  precedent specific to Tranche A1** |   |
| ** ** | **3.1.1**                                | **Delivery of documents**                        |   |
| ** ** | **3.1.2**                                | **Other conditions**                             |   |
| ** ** | **3.2**                                  | **Conditions  precedent specific to Tranche A2** |   |
| ** ** | **3.3**                                  | **Conditions  precedent specific to Tranche A3** |   |
| ** ** | **3.4**                                  | **Conditions  precedent specific to Tranche A4** |   |
|       |                                     |                                             |
| **4**      | **UTILIZING THE LOAN**                   |                                             |
|       |                                     |                                             |
|       | **4.1**                                  | **Purpose of the Loan**                          |   |
|       | **4.2**                                  | **Term and conditions  of Drawdown**             |   |
|       | **4.3**                                  | **Drawdown Requests**                            |   |
|       | **4.4**                                  | **Paying the Loan**                              |   |
|       |                                     |                                             |
| **5**      | **REPAYMENT**                            |                                             |
|       |                                     |                                             |
| ** ** | **5.1**                                  | **Terms and  conditions of repayment**           |   |
| ** ** | **5.1.1**                                | **Repayment of Tranche A1**                      |   |
| ** ** | **5.1.2**                                | **Repayment of Tranche A2**                      |   |
| ** ** | **5.1.3**                                | **Repayment of Tranche A3**                      |   |
| ** ** | **5.1.4**                                | **Repayment of Tranche A4**                      |   |
| ** ** | **5.2**                                  | **Voluntary prepayment**                         |   |
| ** ** | **5.3**                                  | **Mandatory prepayment**                         |   |
|       |                                     |                                             |
| **6**      | **INTERESTS**                            |                                             |
|       |                                     |                                             |
| ** ** | **6.1**                                  | **Interest rate**                                |   |
| ** ** | **6.2**                                  | **Reference Index**                              |   |
| ** ** | **6.3**                                  | **Applicable Margin**                            |   |
| ** ** | **6.4**                                  | **Interest Periods**                             |   |
| ** ** | **6.5**                                  | **Calculation Rule**                             |   |
| ** ** | **6.6**                                  | **Payment of interest**                          |   |
| ** ** | **6.7**                                  | **Notification of  the interest rate**           |   |
| ** ** | **6.8**                                  | **Late interest**                                |   |
|       |                                     |                                             |
| **7**      | **CHANGES TO THE  INTEREST CALCULATION** |                                             |
|       |                                     |                                             |
| ** ** | **7.1**                                  | **Market disruption**                            |   |
| ** ** | **7.2**                                  | **Lack of  a quotation by a Bank of Reference**  |   |
|       |                                     |                                             |
| **8**      | **FEES**                                 |                                             |
|       |                                     |                                             |
| ** ** | **8.1**                                  | **Agent  Fee**                                   |   |
| ** ** | **8.2**                                  | **Arrangement Fee**                              |   |
| ** ** | **8.3**                                  | **Underwriting Fee**                             |   |
| ** ** | **8.4**                                  | **Commitment Fee for  Tranche A2**               |   |

 

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Confidential TreatmentRequested

 
|       | **8.5**                                           | **Commitment Fee for  Tranche A3**               |   |
|------------|---------------------------------------------------|--------------------------------------------------|--------|
|       | **8.6**                                           | **Commitment Fee for  Tranche A4**               |   |
|       | **8.7**                                           | **Participation Fee**                            |   |
|       |                                              |                                             |
| **9**      | **SUPPLEMENTARY  PAYMENT OBLIGATIONS**            |                                             |
|       |                                              |                                             |
| ** ** | **9.1**                                           | **Additional Costs**                             |   |
| ** ** | **9.2**                                           | **Illegality**                                   |   |
| ** ** | **9.3**                                           | **Costs of execution**                           |   |
|       |                                              |                                             |
| **10**     | **REPRESENTATIONS AND  WARANTEES**                |                                             |
|       |                                              |                                             |
| **11**     | **SECURITIES**                                    |                                             |
|       |                                              |                                             |
| ** ** | **11.1**                                          | **Financial  Instrument Account Pledge**         |   |
| ** ** | **11.2**                                          | **‘Key man’ insurance  delegation**    |   |
|       |                                              |                                             |
| **12**     | **BORROWER’S UNDERTAKINGS**                  |                                             |
|       |                                              |                                             |
| ** ** | **12.1**                                          | **Commitment to securities**                     |   |
| ** ** | **12.2**                                          | **Commitment  to Interest rate exposure hedges** |   |
| ** ** | **12.3**                                          | **Commitment to  Financial Ratios**              |   |
| ** ** | **12.4**                                          | **Commitment to  limit investments**             |   |
| ** ** | **12.5**                                          | **Commitment to  limit indebtedness**            |   |
| ** ** | **12.6**                                          | **Miscellaneous  commitments**                   |   |
|       |                                              |                                             |
| **13**     | **INFORMATION OBLIGATIONS**                       |                                             |
|       |                                              |                                             |
| **14**     | **EVENT  OF DEFAULT**                             |                                             |
|       |                                              |                                             |
| **15**     | **RULES FOR  THE PARTICIPATION OF THE BANKS**     |                                             |
|       |                                              |                                             |
| **16**     | **THE BANK’S  DECLARATIONS AND COMMITMENTS** |                                             |
|       |                                              |                                             |
| **17**     | **AGENT’S ROLE AND POWERS**                  |                                             |
|       |                                              |                                             |
| **18**     | **REPLACEMENT OF THE  BORROWER**                  |                                             |
|       |                                              |                                             |
| **19**     | **SUBSTITUTION OF THE BANKS**                     |                                             |
|       |                                              |                                             |
| **20**     | **MISCELLANEOUS**                                 |                                             |
|       |                                              |                                             |
| ** ** | **20.1**                                          | **Terms of payment**                             |   |
| ** ** | **20.2**                                          | **Attributing payments**                         |   |
| ** ** | **20.3**                                          | **No  setoff**                                   |   |
| ** ** | **20.4**                                          | **Currency**                                     |   |
| ** ** | **20.5**                                          | **Annualized percentage  rate**                  |   |
| ** ** | **20.6**                                          | **Working Days**                                 |   |
| ** ** | **20.7**                                          | **Waiver of recourse**                           |   |
| ** ** | **20.8**                                          | **Notifications**                                |   |
| ** ** | **20.9**                                          | **Instruments – Languages**                 |   |
|       |                                              |                                             |
| **21**     | **GOVERNING  LAW**                                |                                             |
|       |                                              |                                             |
| **22**     | **JURISDICTION**                                  |                                             |

 

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Confidential Treatment Requested

 
| **SCHEDULE 1** | **REFERENCE BUSINESS PLAN**                       |   |
|---------------------|---------------------------------------------------|--------|
|                |                                              |   |
| **SCHEDULE 2** | **FORM OF DRAWDOWN REQUEST**                 |   |
|                |                                              |   |
| **SCHEDULE 3** | **FORM OF CONTRACTOR REPLACEMENT AGREEMENT** |   |
|                |                                              |   |
| **SCHEDULE 4** | **FORM OF FINANCIAL RATIOS CERTIFICATE**     |   |
|                |                                              |   |
| **SCHEDULE 5** | **FRENCH VERSION OF THE LOAN AGREEMENT**          |   |

 

4

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Confidential Treatment Requested

 

**BETWEEN THE UNDERSIGNED :**

 

**(1) ES HOLDINGS SAS**, a French company *(société par actionssimplifiée)*with capital of 37,000 Euros, the registered office ofwhich is at 112, avenue Kléber - 75116 Paris, registered on the Paris Trade andCompanies’ Register under the number 477 630 172,

 

Representedby Mr. Theodore MALONEY and Mr. Thomas MOYES, duly authorized to signthis Agreement,

 

Inthe capacity of borrower (hereafter called ‘**Borrower’**),

 

**(2) BNP PARIBAS**, a French company *(société anonyme)*with capital of 1,757,231,208 Euros, the registered office of which is at 16,boulevard des Italiens - 75009 Paris, registered on the Paris Trade andCompanies’ Register under the number 662 042 449,

 

Represented by Ms. Valérie BENQUET and Mr. Bertrand MONTFORT,duly authorized to sign this Agreement, and for BDDF - Financements Structurésby Ms. Géraldine SALOMON,

 

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Confidential TreatmentRequested

 

**RECITALS :**

 

(A) The Borrower acquired all the shares in LABORATOIRESEUROSILICONE’s capital, on July 5, 2004, for a maximum total AcquisitionPrice of 41,000,000 Euros including a maximum of 9,000,000 Euros as theAcquisition Subsequent Payments through Receivables and a Shareholders’ Loan.

 

(B) The Borrower asked the Arranger to set up a loan in its favorinitially intended to partially refinance the Receivables and the Shareholders’Loan which MEDICOR Ltd. had granted to it, and secondly to finance theAcquisition Subsequent Payments.

 

(C) The Arranger agreed to grant the Borrower this Loan, under theterms set out below.

 

**1****                                        DEFINITIONS - INTERPRETATION**

 

**1.1****                             ****Definitions**

 

The words and expressions below will have the following meaning for theapplication of this Agreement (including the recitals) and its Schedules :

 
| **‘Acquisition’**        |   | means the Borrower’s acquisition of all the shares in LABORATOIRES  EUROSILICONE’s capital.                                                                                          |
|------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                               |   |                                                                                                                                                                                           |
| **‘Acquisition  Price’** |   | means  the price for the Borrower acquiring all the shares in LABORATOIRES  EUROSILICONE’s share capital, i.e. 32,000,000 Euros increased by the  Acquisition Subsequent Payments.        |
|                               |   |                                                                                                                                                                                           |
| **‘Acquisition**              |   |                                                                                                                                                                                           |
| **Subsequent Payment 1’**     |   | means the Acquisition Subsequent Payment of a maximum amount of  3,000,000 Euros, connected to LABORATOIRES EUROSILICONE’s results for the  fiscal year closed on December 31, 2004. |
|                               |   |                                                                                                                                                                                           |
| **‘Acquisition**              |   |                                                                                                                                                                                           |
| **Subsequent Payment 2’**     |   | means the Acquisition Subsequent Payment of a maximum amount of  3,000,000 Euros, connected to LABORATOIRES EUROSILICONE’s results for the  fiscal year closed on December 31, 2005. |
|                               |   |                                                                                                                                                                                           |
| **‘Acquisition**              |   |                                                                                                                                                                                           |
| **Subsequent Payment 3’**     |   | means the Acquisition Subsequent Payment of a maximum amount of  3,000,000 Euros, connected to LABORATOIRES EUROSILICONE’s results for the  fiscal year closed on December 31, 2006. |
|                               |   |                                                                                                                                                                                           |
| **‘Acquisition**              |   |                                                                                                                                                                                           |
| **Subsequent  Payments’**     |   | means  Acquisition Subsequent Payment 1, Acquisition Subsequent Payment 2 and the  Acquisition Subsequent Payment 3 together.                                                                  |

 

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Confidential TreatmentRequested

 
| **‘Agent’**                         |   | means BNP PARIBAS [Centre  d’Affaires Entreprises Méditerranée, Z 02478A, 5, boulevard de Dunkerque, Cap  Joliette - 13002 Marseille] and its beneficiaries, ex-officio as the Banks’  agent, under the provisions of Article 17 of this Agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|-----------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **‘Agent Fee’**                     |   | means the fee owed to the  Agent, covering the daily management of the Contractual Documents, excluding  any exceptionals, payable for the first time on the Drawdown Date of Tranche  A1, then on each anniversary date                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **‘Agreement’**                     |   | means this agreement  (including its Schedules).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **‘Arranger’**                      |   | means  BNP PARIBAS [BDDF - Financements Structurés, CLD 08B1, 9, boulevard des  Italiens - 75450 Paris Cedex 09].                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **‘Arrangement Fee’**               |   | means the management fee owed to the Arranger, payable when the  Agreement is signed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **‘Bank(s)’**                       |   | means,  on the date that this Agreement is signed, BNP PARIBAS and subsequently, any  other bank(s) which may totally or partially replace it in accordance with  Article 19.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **‘Banks of reference’**            |   | means the SOCIETE GENERALE and HSBC or any other Banks which are the  subject of an agreement between the Borrower and the Banks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **‘Chart  of Accounts’**            |   | means  the Chart of Accounts approved by the Order of June 22 1999 by the  Justice Ministry, the Economy, Finance and Industry Ministry and the  Secretary of State for the Budget approving Regulation n° 99-03 of  April 29 1999 of the Accounting Regulation Committee, as well as the  accounting practices and uses which are generally accepted in France for the  application and the interpretation of the Chart of Accounts and any  subsequent modification, and in particular, the accounting practices and uses  which are generally accepted to draw up the consolidated accounts, as  stipulated by the Regulation n° 99-02 of April 29 1999 by the  Accounting Regulation Committee approved by the Order of June 22 1999 by  the Justice Ministry. |
|                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| **‘Commitment Fee for Tranche A2’** |   | means the fee calculated at the rate of * * * per year on the  maximum amount of Tranche A2, payable quarterly in advance to the Agent from  the date that the Agreement is signed to the Drawdown Date of Tranche 2 (or  until the date that the Borrower totally surrenders its right to draw down  the Tranche A2), and paid by the Agent to each Bank pro rata to its  Participation.                                                                                                                                                                                                                                                                                                                                                                                              |

 

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| **‘Commitment Fee  for Tranche A3’** |   | means the fee calculated at the rate of * * * per year on the  maximum amount of Tranche A3, payable quarterly in advance to the Agent from  the date that the Agreement is signed to the Drawdown Date of Tranche 3 (or  until the date that the Borrower totally surrenders its right to draw down  the Tranche A3), and paid by the Agent to each Bank pro rata to its  Participation. |
|------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                |
| **‘Commitment Fee  for Tranche A4’** |   | means the fee calculated at the rate of * * * per year on the  maximum amount of Tranche A4, payable quarterly in advance to the Agent from  the date that the Agreement is signed to the Drawdown Date of Tranche 4 (or  until the date that the Borrower totally surrenders its right to draw down  the Tranche A4), and paid by the Agent to each Bank pro rata to its  Participation. |
|                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                |
| **‘Contractual Documents’**          |   | means the Agreement and the Securities and all documents relating to  it.                                                                                                                                                                                                                                                                                                                           |
|                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                |
| **‘Debt Service’**                   |   | means on the basis of the Borrower’s consolidated accounts :                                                                                                                                                                                                                                                                                                                              |
|                                           |   | (a) Net Financial Cash Expenses,                                                                                                                                                                                                                                                                                                                                                               |
|                                           |   | (b) Plus repayments of principal on Financial Debt (excluding fluctuations  in the operating overdraft) made over the period in question, excluding any  early repayment,                                                                                                                                                                                                                      |
|                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                |
| **‘Drawdown’**                       |   | means  the drawdown of the Loan by the Borrower through Drawdown Requests under  Article 4.                                                                                                                                                                                                                                                                                                    |
|                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                |
| **‘Drawdown Date(s)’**               |   | means each date that the funds are made available to the Borrower in  Tranches A1, A2, A3 and A4.                                                                                                                                                                                                                                                                                                   |
|                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                |
| **‘Drawdown Request(s)’**            |   | means each drawdown request for Tranches A1, A2, A3 and A4 of the  Loan, in accordance with the model in Schedule 2, and handed to the  Agent by the Borrower.                                                                                                                                                                                                                                 |
|                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                |
| **‘Economic Profit’**                |   | means, on the basis of the Borrower’s consolidated accounts :                                                                                                                                                                                                                                                                                                                             |
|                                           |   | (a) Group consolidated net profit,                                                                                                                                                                                                                                                                                                                                                             |
|                                           |   | (b) Less the proportional share of net profit corresponding to  the companies carried by the equity method,                                                                                                                                                                                                                                                                                    |
|                                           |   | (c) Plus amortization charges for goodwill arising on acquisition  and acquisition costs,                                                                                                                                                                                                                                                                                                      |
|                                           |   | (d) Plus companies tax (payable and deferred),                                                                                                                                                                                                                                                                                                                                                 |
|                                           |   | (e) Less exceptional income and plus exceptional expense  (including any capital gains or losses realized on asset disposals),                                                                                                                                                                                                                                                                 |
|                                           |   | (f) Less financial income and plus financial charges (including  notably interest charges arising from the restatement on consolidation of  finance lease agreements and financial rentals).                                                                                                                                                                                                   |

 

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| **‘EONIA’**            |   | means :                                                                                                                                                                                                                                                                                                                                                                                                                               |
|----------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                             |   | (A) the annual percentage rate fixed by the Federation of  European banks European Banking Federation from day to day published on  page 247 of the Telerate screen or, if it is unavailable, on the  corresponding page on the Reuters screen or any other page which  could be chosen by mutual agreement between the Agent, the Borrower and the  Banks ;                                                      |
|                             |   | or                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                             |   | (B) if none of these services is available, the arithmetic mean  (rounded up to the four highest decimal points) of the rates offered by the  Banks of Reference from day to day to the banks of first class credit  standing on the European interbank market in the Euro zone.                                                                                                                                                      |
|                             |   | The  EONIA rate used to calculate the EONIA rate on a date which is not a Working  Day, will be the rate published for the preceding Working Day.                                                                                                                                                                                                                                                                                          |
|                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **‘EURIBOR’**          |   | means :                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                             |   | (A) the annual percentage rate fixed by the Federation of  European Banks for the Interest Period concerned and published two Working  Days before the start of this Interest period on page 248 of the  Telerate screen, or, if it is unavailable, on the corresponding page on  the Reuters screen or any other page which could be chosen by mutual  agreement between the Agent, the Borrower and the Banks ; |
|                             |   | or                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                             |   | (B) if none of these services is available, the arithmetic mean  (rounded up to the four highest decimal points) of the rates offered by the  Banks of Reference to the banks of first class credit standing on the  European interbank market in the Euro zone, for deposits in Euros for a  period comparable to the Interest Period, two Working Days before the start  of this Interest Period.                                   |
|                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **‘Euro’**             |   | means at any time, the currency with legal tender on the territory of  the States in the European Economic and Monetary Union, having adopted the  single currency in accordance with the Treaty founding the European Community  signed in Rome on March 25, 1957, and subsequently amended.                                                                                                                                         |
|                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **‘Excess Cash-Flow’** |   | means, on the basis of the Borrower’s consolidated accounts :                                                                                                                                                                                                                                                                                                                                                                    |
|                             |   | (a) Free Cash Flow,                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                             |   | (b) Less Debt Service,                                                                                                                                                                                                                                                                                                                                                                                                                |
|                             |   | (c) Less any voluntary or mandatory prepayments of the Loan,                                                                                                                                                                                                                                                                                                                                                                          |
|                             |   | (d) Less any investment shortfall, if investment over the period  is less than the maximum investment permitted.                                                                                                                                                                                                                                                                                                                      |
|                             |   |                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| **‘Event of Default’** |   | means one of the cases of the events stipulated in Article 14.1.                                                                                                                                                                                                                                                                                                                                                                      |

 

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| **‘Financial Debt’**                      |   | means, on the basis of the Borrower’s consolidated accounts :                                                                                                                                                                                                                                                                          |
|-----------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                |   | (a) Total value of short-, medium-, and long-term financial debt,  (including debt from the restatement on consolidation of finance lease  agreements and financial rentals)                                                                                                                                                                |
|                                                |   | (b) Plus bond debt and/or shareholders’ current accounts where  these are not subordinated to the Loan,                                                                                                                                                                                                                                |
|                                                |   | (c) Plus off-balance sheet debt, proceeds from the sale of  “Dailly Law” loans or any other transfers from the debtors item of debts not  classed as non-recourse.                                                                                                                                                                |
|                                                |   | (For the avoidance of doubt, Financial Debt does not include any item  listed under the definition of Shareholders’ Funds.)                                                                                                                                                                                                                 |
|                                                |   |                                                                                                                                                                                                                                                                                                                                             |
| **‘Financial Instrument Account Pledge’** |   | means the financial instrument account pledge concluded between the Borrower  as constitutor and the Agent, as the beneficiary on behalf of the Banks, as a  security for the repayment of the Loan, and relating to a minimum of 66.65%  of the shares comprising LABORATOIRES EUROSILICONE’s capital on the Drawdown  Date of Tranche A1. |
|                                                |   |                                                                                                                                                                                                                                                                                                                                             |
| **‘Financial  Parties’**                  |   | means  all the Banks, the Arranger and the Agent.                                                                                                                                                                                                                                                                                                |
|                                                |   |                                                                                                                                                                                                                                                                                                                                             |
| **‘Financial ratios’**                    |   | means the following financial ratios :                                                                                                                                                                                                                                                                                                      |
|                                                |   | R2 = Net Financial Debt / Restated EBITDA,                                                                                                                                                                                                                                                                                                       |
|                                                |   | R3 = Free Cash Flow / Debt Service,                                                                                                                                                                                                                                                                                                              |
|                                                |   | R4 = Financial Debt / Shareholders’ Funds.                                                                                                                                                                                                                                                                                                  |
|                                                |   |                                                                                                                                                                                                                                                                                                                                             |
| **‘Free Cash Flow’**                      |   | means, on the basis of the Borrower’s consolidated accounts :                                                                                                                                                                                                                                                                          |
|                                                |   | (a) Restated EBITDA,                                                                                                                                                                                                                                                                                                                        |
|                                                |   | (b) Less companies tax payable,                                                                                                                                                                                                                                                                                                             |
|                                                |   | (c) Plus employee profit sharing charges and less employee  profit-sharing charges disbursed,                                                                                                                                                                                                                                               |
|                                                |   | (d) Plus (where positive) or less (where negative) exceptional  cash flows other than those from disposals of assets (exceptional items  excluding asset sales occasioning a cash inflow or outflow).                                                                                                                                       |
|                                                |   | (e) Plus (if negative) or less (if positive) the change in  operating or other working capital required, based on the gross change in the  relevant items,                                                                                                                                                                                  |
|                                                |   | (f) Less investment in tangible, intangible and financial fixed  assets (including own work capitalized and the Acquisition Subsequent  Payments),                                                                                                                                                                                          |
|                                                |   | (g) Plus proceeds from the disposal of fixed assets for cash  except where the sale forms part of an early repayment of the Loan,                                                                                                                                                                                                           |
|                                                |   | (h) Plus the principal value of any medium- and long-term finance  taken out over the period in question within the permissible limits (for the  avoidance of doubt, including any funds drawn under Tranche A2, A3 and A4),                                                                                                                |
|                                                |   | (k) Plus new cash inflows to Shareholders’ Funds and less dividends or  other distributions paid out by the Borrower.                                                                                                                                                                                                                       |
|                                                |   |                                                                                                                                                                                                                                                                                                                                             |
| **‘Group’**                               |   | means the Group formed by the Borrower and its Subsidiaries.                                                                                                                                                                                                                                                                                     |

 

10

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Confidential TreatmentRequested

 
| **‘Indemnification Claim’**       |   | means the indemnification claim granted to the Borrower, for the  Acquisition.                                                                                                                                                                                                                                                              |
|---------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                        |   |                                                                                                                                                                                                                                                                                                                                        |
| **‘Interest  Period’**            |   | means  each Interest Period determined in accordance with Article 6.4 for each  of the Tranches A1, A2, A3 and A4.                                                                                                                                                                                                                     |
|                                        |   |                                                                                                                                                                                                                                                                                                                                        |
| **‘LABORATOIRES EUROSILICONE’**   |   | means LABORATOIRES EUROSILICONE, a French *Société Anonyme*  with capital of 2,000,000 Euros, the registered office of which is at Chemin  de Peyrolière - 84400 Apt, registered with the Avignon Trade and Companies’  Register under the number 347 535 296.                                                          |
|                                        |   |                                                                                                                                                                                                                                                                                                                                        |
| **‘Latest  Drawdown Date’**       |   | means  September 15 2004 for Tranche A1, June 30 2005 for Tranche A2,  June 30 2006 for Tranche A3, and June 30 2007 for Tranche A4.                                                                                                                                                                                    |
|                                        |   |                                                                                                                                                                                                                                                                                                                                        |
| **‘Loan’**                        |   | means  the loan granted by the Banks to the Borrower, as referred to in  Article 2.                                                                                                                                                                                                                                                    |
|                                        |   |                                                                                                                                                                                                                                                                                                                                        |
| **‘Majority of the Banks’**       |   | means the Banks with cumulated Participations of more than sixty-six  point sixty-six percent (66.66%) of the total amount of the Loan.                                                                                                                                                                                                     |
|                                        |   |                                                                                                                                                                                                                                                                                                                                        |
| **‘Material Adverse Effect’**     |   | means an event or circumstance of combination thereof which is  materially adverse to (i) the business, financial conditions or  operations of the Borrower or its Subsidiaries (taken as a whole) and  (ii) the ability of the Borrower to perform its payment obligations or  comply with its undertakings under the Agreement. |
|                                        |   |                                                                                                                                                                                                                                                                                                                                        |
| **‘MEDICOR LTD.’**                |   | means MEDICOR Ltd., a corporation governed by the Laws of the State of  Delaware, the registered office of which is at 4560 S. Decatur Boulevard, Las  Vegas, Nevada 89103.                                                                                                                                                                 |
|                                        |   |                                                                                                                                                                                                                                                                                                                                        |
| **‘Net Financial Cash Expenses’** |   | means, on the basis of the Borrower’s consolidated accounts :                                                                                                                                                                                                                                                                     |
|                                        |   | (a) Interest and associated charges payable on the whole of the  Financial Debt, including interest charges arising from the restatement on  consolidation of finance lease agreements and financial rentals) but  excluding a proportional share of any capitalized interest payments and  associated charges,                        |
|                                        |   | (b) Plus interest charges payable on bond loans and/or  shareholder current accounts, excluding any capitalized interest payments and  associated charges,                                                                                                                                                                             |
|                                        |   | (c) Less interest and other similar income (net proceeds on sale  of investment securities) generated by management of the company’s treasury,                                                                                                                                                                                    |
|                                        |   | (d) Less net proceeds and plus net charges on rate hedging  instruments.                                                                                                                                                                                                                                                               |
|                                        |   |                                                                                                                                                                                                                                                                                                                                        |
| **‘Net Financial Debt’**          |   | means, on the basis of the Borrower’s consolidated accounts :                                                                                                                                                                                                                                                                     |
|                                        |   | (a) Financial Debt,                                                                                                                                                                                                                                                                                                                    |
|                                        |   | (b) Less cash, cash equivalents, and investment securities that  may be used or realized within not more than 30 business days.                                                                                                                                                                                                        |

 

11

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Confidential TreatmentRequested

 
| **‘Participation’**                |   | means  the amount of each Bank’s Participation in the Loan.                                                                                                                                                                                                          |
|----------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                         |   |                                                                                                                                                                                                                                                                      |
| **‘Participation Fee’**            |   | means the fee payable to the Arranger on the Drawdown Date of Tranche  A1, and paid by the Arranger to each Bank pro rata to its Participation in  the Loan.                                                                                                              |
|                                         |   |                                                                                                                                                                                                                                                                      |
| **‘Receivables’**                  |   | means  the two shareholder receivables for a unit amount of * * *, granted  by MEDICOR Ltd. to the Borrower.                                                                                                                                                    |
|                                         |   |                                                                                                                                                                                                                                                                      |
| **‘Reference Business Plan’**      |   | means the Business Plan  prepared in USD and according to US GAAP communicated to the Arranger which  was used as the base for structuring the Loan, as appears in Schedule 1.                                                                                       |
|                                         |   |                                                                                                                                                                                                                                                                      |
| **‘Restated EBITDA’**              |   | means, on the basis of the Borrowers’ consolidated accounts :                                                                                                                                                                                                   |
|                                         |   | (a) Economic Profit,                                                                                                                                                                                                                                                 |
|                                         |   | (b) Plus allocations (net of writebacks) to operating provisions  in respect of assets and in respect of provisions for risk and charges,                                                                                                                            |
|                                         |   | (c) Plus allocations (net of writebacks) made for depreciation  and amortization on tangible and intangible assets (including notably  amortization charges for the restatement on consolidation of finance lease  agreements and financial rentals),                |
|                                         |   |                                                                                                                                                                                                                                                                      |
| **‘Schedule, Article, Paragraph’** |   | means a schedule, an,  article or a paragraph of the Agreement.                                                                                                                                                                                                      |
|                                         |   |                                                                                                                                                                                                                                                                      |
| **‘Securities’**                   |   | means  the Financial Instruments Account Pledge and the delegation of the ‘key man’  insurance and the guarantees which may be added to it or replace it, by  mutual agreement between the Borrower and the Banks after the date that the  Agreement is signed. |
|                                         |   |                                                                                                                                                                                                                                                                      |
| **‘Shareholders’  Loan’**     |   | means  the shareholders’ loan granted by MEDICOR Ltd. to the Borrower of  * * *.                                                                                                                                                                           |
|                                         |   |                                                                                                                                                                                                                                                                      |
| **‘Shareholder’s Funds’**     |   | means, on the basis of the Borrower’s consolidated accounts :                                                                                                                                                                                                   |
|                                         |   | (a) Share capital,                                                                                                                                                                                                                                                   |
|                                         |   | (b) Plus premiums, reserves, profits brought forward and net  profit for the year,                                                                                                                                                                                   |
|                                         |   | (c) Plus minority interests,                                                                                                                                                                                                                                         |
|                                         |   | (d) Plus bonds issued by the Borrower and/or current accounts of  partners where these are subordinated to the Loan.                                                                                                                                                 |
|                                         |   |                                                                                                                                                                                                                                                                      |
| **‘Subsidiaries’**                 |   | means all companies controlled within the meaning of paragraphs I and  II of Article L 233-3 of the French Commercial Code.                                                                                                                                          |
|                                         |   |                                                                                                                                                                                                                                                                      |
| **‘Tax’**                          |   | means  any tax, charge, withholding at source, registration or stamp duty or tax or  parafiscal charge of the same kind.                                                                                                                                                  |
|                                         |   |                                                                                                                                                                                                                                                                      |
| **‘Tranche(s)’**                   |   | means tranches A1, A2, A3 and A4 of the Loan, determined in accordance  with ‘Article 2.                                                                                                                                                                        |

 

12

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Confidential TreatmentRequested

 
| **‘Underwriting Fee’** |   | means the fee remunerating BNP PARIBAS’s commitment to pay, firm, 100%  of the global maximum amount of the Loan.                                                                                                                    |
|----------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                             |   |                                                                                                                                                                                                                                      |
| **‘Working Day’**      |   | means any day when an interest rate must be calculated or a payment  made under the Agreement, and day when the global clearing system known as *Automated Real-time*  *Gross settlement Express  Transfer System*(TARGET) operates. |

 

**1.2****                             ****Principles of construction**

 

(A) Theheadings of the Articles are for guidance only and will not affect theconstruction of this Agreement in any way.

 

(B) Anydefinition in the Agreement will have the same meaning, whether it is used inthe singular or the plural.

 

(C) If the Borrower makes any request for any agreement,authorization, or approval of the Bank(s) under the Agreement, it must send awritten request to the Agent [Centre d’Affaires Entreprises Méditerranée, Z02478A, 5, boulevard de Dunkerque, Cap Joliette - 13002 Marseille], by recordeddelivery mail with notification of receipt. If the Agent does not reply withinten (10) Working Days of the receiving the request sent to it, theBorrower must repeat the request, by recorded delivery mail with notificationof receipt, to the Arranger [BDDF - Financements Structurés, CLD 08B1, 9,boulevard des Italiens - 75450 Paris Cedex 09]. The Bank’s(s’) agreement,authorization, or approval will be deemed to have been tacitly given to theBorrower if it has not received a reply through the Arranger within ten (10) WorkingDays of the Arranger receiving the request, including for any event which islikely to constitute a Event of Default.

 

(D) Unlessotherwise stipulated, the accounting terms used in the Agreement have themeaning given to them in the Chart of Accounts.

 

(E) TheSchedules form an integral part of the Agreement and have the same legal forceas the other provisions of the Agreement.

 

**2****                                       ****PURPOSE**

 

Subject to the terms and conditions of this Agreement, and theperformance of the preliminary terms stipulated in Article 3, the Bank(s)grant(s) the Borrower, which accepts, a Loan of a maximum global amount of * * *.

 

The Loan will be divided into Tranche A1, of * * *, topartially refinance the Receivables and the Shareholders’ Loan and a TrancheA2, of a maximum sum of three million (3,000,000) Euros, a Tranche A3, of amaximum sum of three million (3,000,000) Euros and a Tranche A4, of a maximumsum of three million (3,000,000) Euros, all three intended to finance thepayment of the Acquisition Subsequent Payments.

 

**3****                                       ****CONDITIONS PRECEDENT**

 

TheBank’s(s’) obligations under the Agreement will only take effect on the datethat all of the conditions precedent referred to below are performed, or, ifnecessary, on the date the conditions precedent are expressly waived by theBank(s).

 

13

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Confidential TreatmentRequested

 

**3.1****                             ****Conditions precedent specific toTranche A1**

 

**3.1.1****                   ****Delivery of documents**

 
| (1)    | A copy of the Borrower’s  updated *statuts*, certified to be a true copy  by its legal representative ;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (2)    | A copy of the updated *statuts*of LABORATOIRES EUROSILICONE, certified to be a  true copy by its legal representative ;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (3)    | An original copy of the  Borrower’s and the LABORATOIRES EUROSILICONE’s, k-bis (business register  extract) from the relevant Trade and Companies’ Register, dated less than  three months ;                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (4)    | If necessary, a copy of the  partners and /or shareholders agreements binding the Borrower’s and  LABORATOIRES EUROSILICONE’s partners and /or shareholders ;                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (5)    | A copy of the minutes of the  decisions of the Borrower’s competent corporate bodies, certified by the  Borrower’s legal representative :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   | (i) Authorizing the  entry into to the Loan, and certifying that the repayment of the Loan is not  contractually subordinated to the prior repayment of any other debt,                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   | (ii) the constitution  of the Securities,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   | (iii) the signature of  the Contractual Documents ;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (6)    | If LABORATOIRES EUROSILICONE’s  *statuts*include an approval clause (*clause d’agrément*), a copy, certified to conform by  LABORATOIRES EUROSILICONE’s legal representative, of the minutes of the  decision of LABORATOIRES EUROSILICONE’s competent corporate bodies  authorizing the constitution of the Financial Instruments Account Pledge, and  approving the Agent, on behalf of the Banks, or any other purchaser of the  pledged shares as a new shareholder if the Financial Instrument Account  Pledge is enforced ;                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (7)    | A copy, certified to be a  true copy by LABORATOIRES EUROSILICONE’s legal representative, of  LABORATOIRES EUROSILICONE’s certified company accounts for the fiscal year  closing December 31 2003, as well as the Statutory Auditors report  relating to it ;                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (8)    | A list, certified to be  correct by LABORATOIRES EUROSILICONE’s legal representative, of LABORATOIRES  EUROSILICONE’s off balance sheet new commitments made during the period from December 31  2003 to the Drawdown Date of Tranche A1 ;                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (9)    | A recapitulative list, drawn  up to the Drawdown Date of Tranche A1 and certified to be correct by LABORATOIRES  EUROSILICONE’s legal representative, of the short, medium and long term bank  debts (including any capital lease agreement) set up for LABORATOIRES  EUROSILICONE, detailing the outstanding amount for the medium and long term  bank debts, and the amount of the authorizations and the utilizations with  each bank concerned, for the short term bank debt and including any  operations concerning the transfer and /or the assignment of all or part of  LABORATOIRES EUROSILICONE’s customer receivables ; |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (10)   | A copy, certified to be a  true copy by the Borrower’s legal representative, of the due diligence  reports relating to the Acquisition ;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (11)   | The list of the Borrower’s  shareholders certified to be correct by its legal representative, showing  that MEDICOR Ltd. directly or indirectly controls 100% of the Borrower’s  capital and voting rights ;                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| (12)   | A copy, certified to be a  true copy by the Borrower’s legal representative, of an amendment to the  agreement for the Shareholder’s Loan, concluded between MEDICOR Ltd. and the  Borrower, stipulating :                                                                                                                                                                                                                                                                                                                                                                                                                               |

 

14

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Confidential TreatmentRequested

 
|   | • the partial  repayment of up to * * * of the Shareholder’s Loan, with the  Drawdown of Tranche A1 of the Loan,                                                                                                                                                                                                                                                                |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | • the partial  repayment of a minimum amount of * * *, of the Shareholder’s Loan,  simultaneously with the performance of a capital increase for the Borrower,  which must occur between now and October 11, 2004, the said partial  repayment being equal to the amount of the capital increase,                                                                          |
|   | • the  subordination of the repayment of the balance of the Shareholder’s Loan prior  to the complete repayment of the Loan,                                                                                                                                                                                                                                                              |
|   | • the  capitalization of the interest relating to the Shareholders’ Loan ;                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                |
| (13)   | A copy, certified to be a true copy by the Borrower’s legal  representative, of the contract(s) relating to the Shareholders’ Loan ;                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                |
| (14)   | A certificate by the Borrower’s representative certifying that the  Receivables have been repaid simultaneously with the Drawdown of Tranche A1 ;                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                |
| (15)   | A copy, certified to be a true copy by the Borrower’s representative,  of the contract relating to the Acquisition stipulating  :                                                                                                                                                                                                                                                         |
|   | • an Acquisition  Price of a maximum amount of 41,000,000 Euros, including a maximum of  9,000,000 Euros Acquisition Subsequent Payments,                                                                                                                                                                                                                                                      |
|   | • the terms and  conditions for paying the said Acquisition Subsequent Payments,  * * * ;                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                |
| (16)   | A copy, certified to be a true copy by the Borrower’s legal  representative, of the transfer order(s) relating to the Acquisition ;                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                |
| (17)   | The list of the Borrower’s subsidiaries, certified to be correct by  the Borrower’s representative, showing the percentages of holding capital and  the voting rights ;                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                |
| (18)   | A list, certified to be correct by the Borrower’s representative of  all collateral and third-party guarantees granted by the Borrower including  the maximum pledge of 33.33% of LABORATOIRES EUROSILICONE’s share capital in  favor of the sellers of the shares of LABORATOIRES EUROSILICONE to the  Borrower, to guarantee the payment of the Acquisition Subsequent  Payments ; |

 

15

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Confidential TreatmentRequested

 
| (19)   | A list, certified to be correct by LABORATOIRES EUROSILICONE’s legal  representative of all collateral and third-party guarantees granted by  LABORATOIRES EUROSILICONE, that LABORATOIRES EUROSILICONE’s business  undertaking  (*fonds de  commerce*) has not been pledged, or a certificate from LABORATOIRES  EUROSILICONE’s legal representative certifying the absence of securities and  guarantees granted by LABORATOIRES EUROSILICONE ; |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (20)   | A list, signed by the Borrower’s legal representative, of the persons  authorized to sign the Contractual Documents and to give opinions, or  instructions to the Agent in relation to the Contractual Documents as well as  the specimen signatures of the said persons.                                                                                                                                                                                             |

 

**3.1.2****                   ****Other conditions**

 
| (1)    | The simultaneous constitution of the Financial Instruments Account  Pledge over 66.65% of the shares comprising LABORATOIRES EUROSILICONE’s share  capital, on behalf of the Banks in the Agent’s favor; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                               |
| (2)    | No Event of Default has occurred or will occur due to signing the  Agreement and /or making the funds for Tranche A1 available;                                                                               |
|   |                                                                                                                                                                                                               |
| (3)    | Payment of the Agent Fee, the Arrangement Fee, the Underwriting Fee as  well as the Participation Fee.                                                                                                             |

 

**3.2****                             ****Conditions precedent specific toTranche A2**

 
| (1)    | Drawdown of Tranche A1 ;                                                                                                                                                                                                                                                                                                                                |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                         |
| (2)    | Delivery of any document, duly signed by the Borrower’s legal  representative, to certify the amount of the Acquisition Subsequent Payment  1 ;                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                         |
| (3)    | Delivery of any document to certify the Borrower’s payment of the said  Acquisition Subsequent Payment 1 ;                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                         |
| (4)    | Delivery of a copy of the Borrower’s release of the pledge over 11.11%  of the shares comprising LABORATOIRES EUROSILICONE’s capital to the sellers of the shares of  LABORATOIRES EUROSILICONE to the Borrower ;                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                         |
| (5)    | Pledge to the Agent, on behalf of the Banks, of an additional 11.11%  of the shares comprising LABORATOIRES EUROSILICONE’s share capital increasing  the percentage of LABORATOIRES EUROSILICONE’s shares pledged to the Agent, on  behalf of the Banks, to 77.76% of the shares comprising LABORATOIRES  EUROSILICONE’s share capital ; |
|   |                                                                                                                                                                                                                                                                                                                                                         |
| (6)    | No Event of Default has occurred or will occur due to signing the  Agreement and /or making the funds for Tranche A2 available.                                                                                                                                                                                                                         |

 

**3.3****                             ****Conditions precedent specific toTranche A3**

 
| (1)    | Drawdown of Tranche A1 ;                                                                                                                                                                                              |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                       |
| (2)    | Delivery of any document, duly signed by the Borrower’s legal  representative, to certify the amount of the Acquisition Subsequent Payment  2 ;                                                                  |
|   |                                                                                                                                                                                                                       |
| (3)    | Delivery of any document to certify the Borrower’s payment of the said  Acquisition Subsequent Payment 2 ;                                                                                                       |
|   |                                                                                                                                                                                                                       |
| (4)    | Delivery of a copy of the Borrower’s release of the pledge over 11.11%  of the shares comprising LABORATOIRES EUROSILICONE’s capital to the sellers of the shares of  LABORATOIRES EUROSILICONE to the Borrower; |

 

16

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Confidential Treatment Requested

 
| (5)    | Pledge to the Agent, on behalf of the Banks, of an additional 11.11%  of the shares comprising LABORATOIRES EUROSILICONE’s share capital increasing  the percentage of LABORATOIRES EUROSILICONE’s shares pledged to the Agent, on  behalf of the Banks, to 88.87% of the shares comprising LABORATOIRES  EUROSILICONE’s share capital ; |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                         |
| (6)    | No Event of Default has occurred or will occur due to signing the  Agreement and /or making the funds for Tranche A3 available.                                                                                                                                                                                                                         |

 

**3.4****                             ****Conditions precedent specific toTranche A4**

 
| (1)    | Drawdown of Tranche A1 ;                                                                                                                                                                                                                                                                                                                                |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                         |
| (2)    | Delivery of any document, duly signed by the Borrower’s legal  representative, to certify the amount of the Acquisition Subsequent Payment  3 ;                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                         |
| (3)    | Delivery of any document to certify the Borrower’s payment of the said  Acquisition Subsequent Payment 3 ;                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                         |
| (4)    | Delivery of a copy of the Borrower’s release of the pledge over11.11%  of the shares comprising LABORATOIRES EUROSILICONE’s capital to the sellers of the shares of  LABORATOIRES EUROSILICONE to the Borrower;                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                         |
| (5)    | Pledge to the Agent, on behalf of the Banks, of an additional 11.11%  of the shares comprising LABORATOIRES EUROSILICONE’s share capital increasing  the percentage of LABORATOIRES EUROSILICONE’s shares pledged to the Agent, on  behalf of the Banks, to 99.98% of the shares comprising LABORATOIRES  EUROSILICONE’s share capital ; |
|   |                                                                                                                                                                                                                                                                                                                                                         |
| (6)    | No Event of Default has occurred or will occur due to signing the  Agreement and /or making the funds for Tranche A4 available.                                                                                                                                                                                                                         |

 

**4****                                       ****UTILIZING THE LOAN**

 

**4.1****                             ****Purpose of the Loan**

 

(A) The Borrower will use the Loan in accordance with its purposeto firstly partly refinance the Shareholders’ Loan and the Receivables andsecondly to finance the payment of the Acquisition Subsequent Payments.

 

(B) TheBorrower is prohibited from using the Loan for any other purpose.

 

**4.2****                             ****Term and conditions of Drawdown**

 

Subjectto the fulfillment of the conditions precedent referred to in Article 3,each of the Tranche A1, A2, A3 and A4 will be made available to the Borrower inone payment which must occur no later than the Latest Drawdown Date for theTranche in question for an amount of respectively:

 

•                  * * *, for Tranche A1,

•                  the amount of Acquisition Subsequent Payment 1up to a maximum of 3,000,000 Euros for Tranche A2,

•                  the amount of Acquisition Subsequent Payment 2up to a maximum of 3,000,000 Euros for Tranche A3,

•                  the amount of Acquisition Subsequent Payment 3up to a maximum of 3,000,000 Euros for Tranche A4.

 

17

----

 

Confidential TreatmentRequested

 

Itis expressly agreed that, the Borrower may, if it gives the Agent five (5) WorkingDays irrevocable written notice cancel, at any time, the whole or any part ofTranches A2 and/or A3 and/or A4.

 

**4.3****                             ****Drawdown Requests**

 

The Borrower will use the Loan by delivering to the Agent DrawdownRequests: the first for Tranche A1, the second for Tranche A2, the third forTranche A3 and the fourth for Tranche A4.

 

**4.4****                             ****Paying the Loan**

 

Subject to the stipulation of Article 3, after receiving eachDrawdown Request the Agent will credit the amount stipulated in the saidDrawdown Request on the Drawdown Date appearing in it to the Borrower BankAccount opened in BNP PARIBAS books under the following references:

 

Bank Code: * * *

Branch Code : * * *

Accountnumber : * * *

RIBKey : * * *

 

EachBank will when requested by the Agent, credit the amount of this Participationon the correct value date by interbank transfer to the Agent’s account. Thereferences of this account will be previously communicated to it by the Agent.

 

**5****                                       ****REPAYMENT**

 

**5.1****                             ****Terms and Conditions of repayment**

 

**5.1.1****                   ****Repayment of Tranche A1**

 

Tranche A1 of the Loan will be repayable in seven (7) consecutiveinstallments, in accordance with the following repayment rate and schedule:

 

Installment of September 15 2005: * * *,

Installment of September 15 2006: * * *,

Installment of September 15 2007: * * *,

Installment of September 15 2008: * * *,

Installment of September 15 2009: * * *,

Installment of September 15 2010: * * *,

Installment of September 15 2011: * * *.

 

**5.1.2****                   ****Repayment of Tranche A2**

 

Tranche A2 of the Loan will be repayable in six (6) consecutiveinstallments, in accordance with the following repayment rate and schedule:

 

Installment of September 15 2006: * * *,

Installment of September 15 2007: * * *,

Installment of September 15 2008: * * *,

Installment of September 15 2009: * * *,

Installment of September 15 2010: * * *,

Installment of September 15 2011: * * *.

 

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Confidential TreatmentRequested

 

**5.1.3****                   ****Repayment of Tranche A3**

 

Tranche A3 of the Loan will be repayable in five (5) consecutiveinstallments, in accordance with the following repayment rate and schedule:

 

Installment of September 15 2007: * * *,

Installment of September 15 2008: * * *,

Installment of September 15 2009: * * *,

Installment of September 15 2010: * * *,

Installment of September 15 2011: * * *.

 

**5.1.4****                   ****Repayment of Tranche A4**

 

Tranche A4 of the Loan will be repayable in four (4) consecutiveinstallments, in accordance with the following repayment rate and schedule:

 

Installment of September 15 2008: * * *,

Installment of September 15 2009: * * *,

Installment of September 15 2010: * * *,

Installment of September 15 2011: * * *.

 

**5.2****                             ****Voluntary prepayment**

 

(A) TheBorrower will be entitled to prepay all or part of the Loan without a penaltyon an Interest Payment Date provided that it sends the Agent thirty (30)calendar days irrevocable written notice of this.

 

(B) Theamount of each partial prepayment cannot be below a minimum amount of * * *andabove this, in multiples of * * *.

 

(C) Ifthe Loan is refinanced by a bank other than one of the Banks by way of abanking debt (*dette bancaire*) granted at thelevel of the Borrower, the prepayments will result in the payment of a singlepenalty, provided that such penalty may not be requested by the Banks if theprepayment results from Clause 7.1 (E), 9.1 (D), 9.1 (E), 9.2 (B) or isotherwise permitted hereunder. This penalty will be equal to * * * ofthe amount repaid, if the repayments are made within three (3) years ofthe date the Agreement is signed and * * * of the amounts repaid ifthe repayment occurs more than three years after the date that the Agreement issigned.

 

(D) Anysum, which the Borrower prepays, will be applied to reduce the outstandinginstallment of Tranches A1 and/or A2 and/or A3 and/or A4, in order of decreasingmaturity, pro rata to the outstanding amount for each Tranche compared to thetotal amount outstanding on the Loan.

 

**5.3****                             ****Mandatory prepayment**

 

The Borrower must prepay all or part of Tranches A1 and/or A2 and/or A3and/or A4 of the Loan in the cases and under the terms and conditionsstipulated in (1) and (2) below. It is specified that the amount ofthe sales of assets and the Excess Cash-Flow will be assessed on the basis ofthe Borrower’s consolidated accounts closed on June 30 of each fiscal year(“the Fiscal Year of Reference”).

 

The repayment will be applied to reduce the outstanding installments inorder of decreasing maturity of Tranches A1 and/or A2 and/or A3 and/or A4, prorata to the outstanding amount of each of the Tranches compared to the totalamount outstanding on the Loan.

 

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Confidential TreatmentRequested

 

(1)                                 Excess Cash Flow:

 

On December 15 of the fiscal year following each Fiscal Year ofReference and for the first time on December 15 2005, on the basis of itsconsolidated accounts closed on June 30 2005, the Borrower must annuallyrepay, the sum set out below.

 

* * * of the portion of Excess CashFlow exceeding * * * and below * * *

 

it is specified for the avoidance of doubt that no mandatory prepaymentwill be made on the amount of Excess Cash Flow exceeding * * *.

 

(2)                                 Sale of assets:

 

The Borrower must pay annually an amount equal to the proceeds of thesale of the Borrower’s and its subsidiaries’ fixed assets, net of all tax,duties and expenses connected to the sales, calculated on the basis of itsconsolidated accounts closed on June 30 of the Fiscal Year of Reference,on December 15 of the fiscal year following each Fiscal Year of Reference,for the first time on December 15 2005, on the basis of its consolidatedaccounts closed on June 30 2005, after deduction, where applicable, of anyamounts reinvested no later than one hundred fifty (150) calendar days afterthe end of the Fiscal Year of Reference (being specified that the reinvestmentcan only be charged against the sale of assets from a single Fiscal Year ofReference). An allowance of * * * per year will be applied.

 

**6****                                       ****INTEREST**

 

**6.1****                             ****Interest rate**

 

Theinterest rate for each of Tranches A1, A2, A3 and A4 of the Loan for anyinterest period, determined under Article 6.4, is equal to the annual rateresulting from the sum of the margin and the reference index for the saidinterest period.

 

**6.2****                             ****Reference Index**

 

6months EURIBOR.

 

**6.3****                             ****Applicable Margin**

 

Themargin applicable to Tranches A1, A2, A3 and A4, initially calculated at therate of of two point twenty five (2,25)%% per year will be revised yearlyupwards or downwards on sight of the Financial Ratios certificate referred toin Article 13, based on the Borrower’s annual certified consolidatedaccounts.

 

Themargin applicable to Tranches A1, A2, A3 and A4 will be reduced as follows ifno Event of Default has occurred and is continuing and if the two conditionsconcerning financial ratios below are simultaneously met.

 

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Confidential Treatment Requested

 

| **Margin  revised to:** | ** ** | **R2 below or  equal to:** | ** ** | **R3 higher or equal  to:** |
|-------------------------|------------|----------------------------|------------|-----------------------------|
| * * *% a year |       | * * *            |       | * * *             |
| * * *% a year |       | * * *            |       | * * *             |
| * * *% a year |       | * * *            |       | * * *             |

 

Themargin applicable to each of Tranches A1, A2, A3 and A4 will be revised upwardsonce the above conditions relating to any one of the applicable margin levelare no longer satisfied and revised downwards again as soon as the aboveconditions are again simultaneously satisfied, if no Event of Default hasoccurred and is continuing.

 

Anyadjustment of the margin will apply to the Interest Period which immediatelyfollows the period during which the Financial Ratios certificate was deliveredto the Agent. If one (or several) Events of Default occur after a reduction ofmargin, the applicable margin will be immediately increased to its initialvalue of two point twenty five (2.25)% a year. If the said (or all the said)Event(s) of Default are regularized the applicable margin will be lowered forthe regularized Interest Period to the last value which applied before theEvent(s) of Default occurred.

 

Themargin will be adjusted to any relevant level depending on the fulfillment ofthe corresponding ratios.

 

**6.4****                             ****Interest Periods**

 

(A) TranchesA1, A2, A3 and A4 will be divided into Interest Periods to calculate theinterest.

 

(B) Thefirst Interest Period for Tranche A1 will start on the Drawdown Date of TrancheA1 and will expire on March 15 2005. Subsequent Interest Periods for TrancheA1 will have duration of six (6) months.

 

(C) Thefirst Interest Period for Tranche A2 will run from the Drawdown Date of TrancheA2 to September 15 2005. Subsequent Interest Periods for Tranche A2 willhave duration of six (6) months.

 

(D) Thefirst Interest Period for Tranche A3 will run from the Drawdown Date of TrancheA3 to September 15 2006. Subsequent Interest Periods for Tranche A3 willhave duration of six (6) months.

 

(E) Thefirst Interest Period for Tranche A4 will run from the Drawdown Date of TrancheA4 to September 15 2007. Subsequent Interest Periods for Tranche A4 willhave duration of six (6) months.

 

(F) Anyinterest Period that finishes on a day, which is not a Working Day, will bedeemed on the next Working Day.

 

**6.5****                             ****Calculation Rule**

 

Theinterest, fees and other amounts drawn up annually, payable under the Agreementwill be calculated on the actual number of calendar days in the period inquestion on the basis of three hundred and sixty (360) days.

 

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Confidential TreatmentRequested

 

Theinterest on each Loan Tranche will calculated using the following formula:

 

I = E * (Reference Index + Margin) * J / 360

 

Formula in which:

I = Amount of interest for the Interest Period inquestion,

E = Outstanding amount for the Tranche concerned (A1or A2 or A3 or A4),

J = Actual Number of days in the period in question.

 

**6.6****                             ****Payment of interest**

 

TheBorrower will pay the Agent the interest on each of the Tranches of the Loan onthe last day of each Interest Period, on behalf of the Banks.

 

**6.7****                             ****Notification of the interest rate**

 

TheAgent will inform the Borrower and the Banks of the interest rates applicableto each Interest Period, as soon as possible and 120 calendar days before theend of the Interest Period at the latest.

 

**6.8****                             ****Late Interest**

 

(A) Ifany sum whatsoever which is owed under the Agreement is not paid on its duedate, the Borrower will pay the Agent late interest calculated on the unpaidsum from the due date concerned up until the date of actual payment (whetherthis is before or after the pronouncement of a judgment) at the EONIA rateincreased by the applicable margin if the delay of payment involves interestplus * * *.

 

(B) Anylate interest will be immediately payable by the Borrower, on the Agent’srequest. If it remains unpaid the late interest will be capitalized in everyway authorized by law but will remain immediately due and payable.

 

(C) Thislate interest clause cannot adversely affect any payment, which has become dueand consequently, is not a valid agreement for time to pay or a waiver by theBank(s) of any right under the Agreement

 

**7****                                       ****CHANGES TO THE INTERESTCALCULATION**

 

**7.1****                             ****Market disruption**

 

(A) Ifthe Agent establishes after consultation with the Banks of Reference that dueto circumstances affecting the Euro Zone interbank market, it is not possibleto fix the 6 months EURIBOR for a given interest period in accordance with theprovisions of this Agreement, (this decision consequently binding the Borrowerand the Banks), the Agent will immediately inform the Borrower of this.

 

(B) Ifthe Agent sends the Borrower a notice in accordance with Paragraph 7.1 (A), itwill proceed as follows:

 

(1) The Agent, acting on behalf of the Banks, andthe Borrower will immediately negotiate for a period not exceeding one hundredtwenty (120) calendar days to agree a basis for replacing the 6 months EURIBORfor calculating the interest rate applicable to Tranches A1 and/or A2 and/or A3and/or A4;

 

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Confidential TreatmentRequested

 

(2) Any substitution base agreed between theAgent and the Borrower will be added to the applicable margin and will takeeffect immediately for the period during which the Euro zone interbank marketis disrupted.

 

(C) Ifthe Agent and the Borrower do not succeed in agreeing on a substitution baseunder Paragraph 7.1 (B), the Bank (or each Bank) will fix a substitution rateto maintain its Participation five (5) Working Days at the latest beforethe end of Interest Period in question, and this substitution base must reflectthe costs of its refinancing. The said Bank will immediately inform theBorrower and, if necessary, the Agent of this by recorded delivery mail,supplying them with the substitution reference index.

 

(D) Eachsubstitution base, which is fixed, will bind the Borrower and the Bank inquestion for the time that the Euro zone interbank market is disrupted.

 

(E) Ifthe Borrower does not agree to the replacement base set by the Bank (or eachBank) in accordance with Paragraph 7.1 (C), the Borrower can repay all theamounts owed to the Bank(s) under the Agreement in principal, late interest,fees, costs and incidental expenses, provided that it gives fifteen (15)calendar days written notice. The interest rate applicable to Tranches A1and/or A2 and/or A3 and/or A4 during the period that the Euro zone Interbankmarket is disrupted will be calculated in all cases on the basis of thereplacement index fixed by the Bank (or each Bank) as stipulated in Article 7.1(C). This repayment will not give rise to the payment of any penalty, includingif the Loan is refinanced by banks which are not Banks.

 

**7.2****                             ****Lack of a quotation by a Bank ofReference**

 

Subjectto the provisions of Article 7.1, if the 6 months EURIBOR which must befixed by the Banks of Reference and a Bank of Reference cannot give aquotation, the six months EURIBOR will be determined by the Bank of Reference(or the Banks of Reference) which are able to make a quotation.

 

**8****                                       ****FEES**

 

TheBorrower will pay the following fees under the Loan:

 

**8.1****                             ****AgentFee**

 

TheAgent Fee, covering the normal management of the Contractual Documentsexcluding exception circumstances will be payable by the Borrower to the Agent,for the first time on the Drawdown Date of Tranche A1, and then, annually oneach anniversary date. The amount of this fee is the subject of a separateagreement between the Borrower and the Agent.

 

**8.2****                             ****Arrangement Fee**

 

The Arrangement Fee will be payable by the Borrower to the Arranger onthe date that the Agreement is signed. The amount of this fee is subject to aseparate agreement between the Borrower and the Arranger.

 

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Confidential TreatmentRequested

 

**8.3****                             ****Underwriting Fee**

 

The Borrower will pay the Arranger the UnderwritingFee on the Drawdown Date of Tranche A1. The amount of this fee is subject to aseparate agreement between the Borrower and the Arranger.

 

**8.4****                             ****Commitment Fee for Tranche A2**

 

The Commitment Fee for Tranche A2, calculated at therate of * * *% a year on the maximum amount of Tranche A2, will bepayable quarterly in advance to the Agent from the date that the Agreement issigned to the Drawdown Date of Tranche A2 (or up until the date that theBorrower fully surrenders its rights to draw down the Tranche A2). The Agentwill pay each Bank its share in pro rata to its Participation.

 

**8.5****                             ****Commitment Fee for Tranche A3**

 

The Commitment Fee for Tranche A3, calculated at therate of * * *% a year on the maximum amount of Tranche A3, will bepayable quarterly in advance to the Agent from the date that the Agreement issigned to the Drawdown Date of Tranche A3 (or up until the date that theBorrower fully surrenders its rights to draw down the Tranche A3). The Agentwill pay each Bank its share in pro rata to its Participation.

 

**8.6****                             ****Commitment Fee for Tranche A4**

 

The Commitment Fee for Tranche A4, calculated at therate of * * *% a year on the maximum amount of Tranche A4, will bepayable quarterly in advance to the Agent from the date that the Agreement issigned to the Drawdown Date of Tranche A4 (or up until the date that theBorrower fully surrenders its rights to draw down the Tranche A4). The Agentwill pay each Bank its share in pro rata to its Participation.

 

**8.7****                             ****Participation Fee**

 

The Participation Fee will be payable by the Borrower to the Arranger onthe Drawdown Date of Tranche A1. The Arranger will pay part of this fee to eachBank, pro rata to its Participation. The amount of this fee is the subject of aseparate agreement between the Borrower and the Arranger.

 

**9****                                       ****SUPPLEMENTARY PAYMENT OBLIGATIONS**

 

**9.1****                             ****Additional costs**

 

(A) TheBorrower acknowledges that the terms and conditions of the Agreement have beendetermined in accordance with the legal and tax data on the date that the Agreementis signed. Consequently, if the Bank(s) was (were) legally subject to a tax(other than income tax and additional contributions) or regulatory, orprudential measure or any other measure resulting in a significant increase inthe cost of their interests or their obligations under the Loan, following anew legislative or regulatory provisions another administrative measure, or anynew construction of a legislative or regulatory provision by any competentauthority, of an obligatory nature, or any other measure of an obligatorynature which has the effect of significantly reducing the net revenue from its(their) Participation (this increase in cost or any other reduction in revenue,net of any positive tax impact for the Bank(s) is called ‘the SupplementaryCost’) the Borrower undertakes, if requested by the Agent acting on behalf ofthe Banks, to firstly pay the whole of the Supplementary Costs which theBank(s) will have to support, providing that, the Borrower is provided with ofthe documents and elements

 

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Confidential TreatmentRequested

 

enablingit to differentiate and to quantify the said Supplementary Cost, and secondly,the provisions of Paragraphs (B), (C), (D) and (E) below.

 

(B) Itis expressly agreed that any reasonably foreseeable change in the legislationon the date of the signature of the Agreement, and any impact of the decisionof the Basle Committee II, as described in the publications of Bale CommitteeII before the date that the Agreement is signed, will not give rise to theapplication of the provisions of Paragraph (A) above.

 

(C) TheAgent will immediately inform the Borrower in writing of any event which to itsknowledge, would permit the Bank(s) to benefit from the provisions of Paragraph9.1 (A) and will endeavor to exempt the Borrower from paying such aSupplementary Cost, in particular by transferring the Bank’s(s’) rights andobligations under this Agreement to one or more of its (their) branches and toother banks which may not be affected by this event.

 

(D) Ifthe Agent requests the Borrower to pay a Supplementary Cost under Paragraph 9.1(A), after the Agent has informed it that it is impossible to exempt it fromthis payment, the Borrower can repay the whole amount owed to the Bank(s) underthe Agreement, in principal, interest, late interest, fee, costs and incidentalexpenses, to the exclusion of the Supplementary Cost. No penalty will beapplied to this type of prepayment, including if the Loan is refinanced by thirdparty banks.

 

(E) Ifthe Borrower agrees to pay a Supplementary Cost, the Agent and the Borrowerwill meet as quickly as possible to decide whether it is necessary to take thisSupplementary Cost into account when calculating the Financial ratios. If an agreementis not reached, the Borrower can revoke on its agreement to pay theSupplementary Cost and pay all the sums owed to the Bank(s) under theAgreement, in principal, late interest, fee, costs and incidental expenses. Nopenalty will be applied to this type of prepayment, including if the Loan isrefinanced by third party banks.

 

(F) If the Borrower pays a sum on dates other than those which arestipulated in the Agreement, apart from cases of voluntary or mandatoryprepayment of the Loan under Articles 5.2, 5.3, 7.1 (E), 9.1(D), 9.1 (E) and 9.2 (B), the Borrower will indemnify the Agent theresulting rollover losses, on behalf of the Banks, on ordinary request from it,providing that it is provided with all documents or elements enabling it todistinguish and to quantify the said rollover losses.

 

**9.2****                             ****Illegality**

 

(A) Ifthe Bank(s) is (are) prevented from maintaining or performing its (their)obligations stipulated in the Agreement for all or part of the Loan, by a newlegislative or regulatory provision, the Agent will endeavor to find a solutionwhich is acceptable to all of the parties to continue the Loan. If an agreementcannot be reached, the Bank(s) will endeavor to transfer the rights andobligations under the Agreement to other Banks which are not affected by thisnew provision.

 

(B) Ifit transpires that this transfer is impossible, or results in significant costsfor the Bank(s) (unless these costs are paid for by the Borrower), and if theBank(s) was (were) obliged to demand the prepayment of all or part of the Loanunder the above provisions, the Borrower will reimburse and pay the Bank(s) thewhole of the amounts owed to it (them) under the Agreement, in principal,interest, late interest, fee, costs and incidental expenses by giving thirty(30) Working Days notice (unless a legislative or regulatory provisionstipulates another period) sent to the Agent by recorded delivery mail withnotification of receipt. This repayment will not result in the payment of anypenalty, including if the Loan is refinanced by third party banks.

 

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Confidential TreatmentRequested

 

**9.3****                             ****Costs of execution**

 

Ifthe Borrower does not reimburse or pay any sum owed under the Agreement on itsdue date, all the costs and expenses which are reasonably incurred by the Agent(including the reasonable fees and disbursements of its advisers) connectedwith performing the Agreement or the exercise of the Bank’s(s’) rights underthe Agreement will be paid for exclusively by the Borrower, providing that theAgent supplies all of the substantiating documents relating to this, unless thefailure to repay and/or payment is the result of a breach which is nonexclusively attributable to the Borrower.

 

**10****                                ****REPRESENTATIONS AND WARRANTIES**

 

**10.1****                      **Subject to the provisions of Article 10.2, the Borrower makes thefollowing representations and warranties to the Bank(s) :

 

(A)       The Borrower is a *société par actionssimplifiée* validly incorporated and registered ;

 

(B)         The Borrower has the legal capacity to conclude and perform itsobligations under each of the Contractual Documents to which it is a party. Thecorporate bodies have authorized the execution of each of the ContractualDocuments to which the Borrower is a party. The obligations arising  from the Contractual Documents to which theBorrower is a party are binding, and shall be performed in accordance withtheir terms;

 

(C)         The signature of the Contractual Documents to which the Borrower is aparty and the performance by the Borrower of the obligations resulting from itdo not infringe any legal provision or by-law applicable to the Borrower, norany contract or agreement to which the Borrower or its Subsidiaries areparties, or by which they are bound, nor any law, nor any regulation binding onthem, the breach or the non-respect of which would be likely to affect thevalidity of the Contractual Documents ;

 

(D)        The Borrower has provided the Agent with all the material contractualdocuments relating to the Acquisition ;

 

(E)          The Borrower and its Subsidiaries will not breach any of their legalobligations, the non-respect of which would have a material effect on theBorrower’s capacity to perform its obligations under the Agreement ;

 

(F)          No MaterialAdverse Effect affecting the Borrower or its subsidiaries has occurred sincethe latest audited financial statements were published ;

 

(G)         There is no judicial, administrative or arbitration litigationproceedings either in progress, or imminent, (in this last case, after theBorrower has received a first written notification) which the Borrower or itsSubsidiaries could be a party to, and which to the Borrower’s knowledge, couldaffect the Borrower’s capacity to meet its obligations under theAgreement ;

 

(H)        There are no collateral or third-party guarantees securities existingover the assets of the Borrower and its Subsidiaries other than those grantedauthorized or declared within the framework of the Agreement ;

 

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Confidential Treatment Requested

 

(I)               The Borrower and /or its Subsidiaries do nothave any off balance sheet commitments, other than these, on the Drawdown Dateof Tranche A1 concerning LABORATOIRES EUROSILICONE as appear in its certifiedcompany accounts for the fiscal year closed on December 31 2003, as wellas the schedule referred to in Article 3.1 (8), and secondly, on thedate of the close of each fiscal year, other than those appearing in theBorrower’s certified consolidated accounts for the said fiscal year ;

 

(J)              The Borrower and its Subsidiaries havesubscribed to all of the damage and civil liability policies to cover the riskswhich are generally required in their business sector ;

 

(K)          The obligations made by the Borrower to theBank(s) under the Agreement are not subordinated to any undertaking made by itto other banks and/or lenders;

 

(L)            None of the companies in the Group hassuspended its payments, nor been the subject of voluntary winding upproceedings, or bankruptcy proceedings ;

 

(M)        None of the companies in the Group has been the subject of restructuringmeasures which could affect the Borrower’s ability to satisfy its obligationsunder the Agreement ;

 

(N)           No Event of Default has occurred and is continuing.

 

**10.2**                       Subject to the information which is expressly containedin the due diligence reports and /or in the Indemnification Claim, relating tothe Acquisition, as disclosed to the Agent, and subject to the operations,which although making one of the above representations incorrect may have beenpreviously authorized by the Agent under the Agreement, acting on behalf of theBanks, the above declarations will be deemed to be correct until the Borrowerhas paid all sums owed under the loan in full, in principal, interest, lateinterest, fee, costs and incidental expenses. The Borrower shall inform theAgent of the occurrence of an event calling the accuracy of, theserepresentation into question, as soon as its is aware of the occurrence of asuch an event.

 

**11****                                ****SECURITIES**

 

**11.1****                      ****Financial Instrument AccountPledge**

 

The Borrower will constitute the Financial Instrument Account Pledgeover 66.65% of the shares comprising LABORATOIRES EUROSILICONE’s share capital(all the shares owned by the Borrower less the shares pledged in favor of the sellersof the shares of LABORATOIRES EUROSILICONE to the Borrower less 6 shares),in the Agent’s favor, on behalf of the Banks, simultaneously with the Drawdownof Tranche A1.

 

It is expressly agreed that the Borrower will pledge an additional11.11% of the shares comprising LABORATOIRES EUROSILICONE’s share capital tothe Agent, on behalf of the Banks, when each of the Tranches A2, A3, and A4 isdrawn down.

 

**11.2****                      ****‘Key men’ insurance delegation**

 

The Borrower will enter into and delegate to the Agent, on behalf of theBanks, a ‘key man’ insurance policy for Messrs. Olivier TOURNIAIRE andPatrick O’LEARY, or any other person agreed by the Agent and the Borrower inreplacement of any of them, permitting the payment of a minimum of * * *per person to the Agent on the behalf of the Banks, up until September 15,2008 inclusive. It is expressly agreed that the Agent will allocate any sum itreceives for the said insurance delegations, on behalf of the Banks, to theprepayment of the Loan, which

 

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Confidential TreatmentRequested

 

will be applied to reduce the outstanding installments, for Tranches A1and /or A2 and /or A3 and /or A4 in order of decreasing maturity, pro rata tothe amount outstanding for each Tranche compared to the total amount outstandingon the Loan.

 

This delegation must be set up within a maximum of four (4) monthsfrom the date that the Agreement is signed. If this deadline is exceeded, themargin applicable to each Tranche will be immediately increased by * * *%a year until regularization, apart from the Agent’s prior agreement in writingacting on behalf of the Banks ; this provision does not prevent Article 14applying.

 

**12****                                ****BORROWER’s UNDERTAKINGS**

 

TheBorrower undertakes to perform the following obligations throughout the term ofthe Agreement :

 

**12.1****                      ****Commitment to securities**

 

TheBorrower undertakes not to grant and to ensure that its Subsidiaries do notgrant collateral or third-party guarantees other than those which may havealready been granted on the Drawdown Date of Tranche A1, or those granted tosecure the Loan, except with the Agent’s prior written agreement acting onbehalf of the Banks, except for the securities granted by the Borrower or itssubsidiaries exclusively within the scope of their normal business.

 

TheBorrower undertakes to make all the necessary arrangements to make the abovecommitment effective.

 

**12.2****                      ****Commitment to interest rateexposure hedges**

 

TheBorrower undertakes to hedge against interest rate exposure within 5 months atmost following the Drawdown Date of Tranches A1, A2, A3 and A4, so that it isprotected, until September 15 2008, inclusive, against the consequences ofa rise in the 6 month EURIBOR of more than * * *% compared to itsvalue on the date that the Agreement is signed, on at least * * *% ofthe amount of each of the said Tranches.

 

**12.3****                      ****Commitment to Financial Ratios**

 

TheBorrower undertakes to comply with the following Financial Ratio levels R2, R3and R4, which are calculated on the basis of the Borrower’s consolidatedaccounts certified by the Statutory Auditors on the date of the close of eachfiscal year (i.e. June 30 of each year) :

 
| **12 month-period  ending on :** | ** ** | **R2  Lower than :** | ** ** | **R3  Higher than :** | ** ** | **R4  Lower than :** |
|----------------------------------|------------|----------------------|------------|-----------------------|------------|---------------------------|
| 30/06/2005 **               |       | * * *      |       | * * *       |       | * * *           |
| 30/06/2006                  |       | * * *      |       | * * *       |       | * * *           |
| 30/06/2007                  |       | * * *      |       | * * *       |       | * * *           |
| 30/06/2008                       |       | * * *      |       | * * *       |       | * * *           |
| 30/06/2009                       |       | * * *      |       | * * *       |       | * * *           |
| 30/06/2010                       |       | * * *      |       | * * *       |       | * * *           |

 

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***it is stipulated that the Financialratios to June 30 2005 will be calculated on the basis of the Borrower’spro forma consolidated accounts drawn up on this same date over a rolling 12month*

 

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Confidential TreatmentRequested

 

Ifthe said Financial ratios are disputed, the Bank (or the Banks ruling on theMajority of the Banks pro rata to their respective Participation) and theBorrower will discuss during 30 calendar days. If they fail to reach anagreement, the Bank(s) may request the appointment of an expert to verify thecalculations. This expert must be approved by the Borrower. Failing this, hewill be appointed by an Order of the Presiding Judge of the Paris CommercialCourt ruling on the application of one of the Parties. The Expert’s decisionswill not be open to appeal.

 

Itis expressly agreed that the costs of the Expert’s appraisal will be paid halfeach by the Borrower and the Bank(s).

 

**12.4****                      ****Commitment to limit investments**

 

The Borrower undertakes to ensure that the global amount of theconsolidated tangible and intangible investments net of tax (including own workcapitalized) made by the Group during a given fiscal year is limited to anamount equal to 110% of the amount stipulated in the Business Plan ofReference, i.e. the following limit for each fiscal year :

 

Fiscal year closed on June 30 2005 : * * *,

Fiscal year closed on June 30 2006 : * * *,

Fiscal year closed on June 30 2007 : * * *,

Fiscal year closed on June 30 2008 : * * *,

Fiscal year closed on June 30 2009 : * * *,

Fiscal year closed on June 30 2010 : * * *.

 

It is expressly agreed that if the amount of the investments made duringa given fiscal year is below the limit fixed above, the investment limit forthe next fiscal year only can be increased by the difference between theinvestment limit for the previous fiscal year and the amount of the investmentsactually made during the preceding fiscal year.

 

The Borrower undertakes to make all the arrangements to ensure that theabove undertaking is effective.

 

**12.5****                      ****Commitment to limit indebtedness**

 

The Borrower undertakes not to contract and to ensure that itsSubsidiaries do not contract, throughout the term of the Loan, except with theAgent’s prior written agreement acting on behalf of the Banks, additionalindebtedness (i) to the indebtedness which may already have beencontracted prior to the Drawdown Date for Tranche A1, (ii) to the Loan and(iii) to the debt from the interest rate hedge for each of Tranche of theLoan, beyond a total amount of * * * for the term of the Loan for allof the Group’s companies. However, it is specified that this additionalindebtedness of * * * can be increased during each of the fourth andfifth 12 month-periods after the date that the Agreement is signed, by * * *%of the sums repaid for the Loan during such 12 month-period, and secondly,during each of the sixth and seventh 12 month-periods after the date that theAgreement is signed, by * * *% of the sums repaid under the Loanduring such 12 month-period.

 

The Borrower undertakes to make all the arrangements to ensure that theabove undertaking is effective.

 

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**12.6****                      ****Miscellaneous commitments**

 

TheBorrower undertakes, during the term of the Agreement :

 

1.                         To immediately inform the Agent in writing ofthe occurrence of any Event of Default as soon as it is aware of it;

 

2.                         To organize all information meetings, within areasonable period and at the Agent’s reasonable request ;

 

3.                         To immediately inform the Agent, in writing, assoon as it is aware of any Material Adverse Effect ;

 

4.                         To enter into and /or to have its subsidiariesenter into the damage and legal liability insurance policies necessary to coverthe risks in the Group’s business sector, to ensure that they remain in forcethroughout the term of the Loan, and to make all necessary agreements in orderto ensure that this commitment is effective;

 

5.                         To ensure that the Group’s plant and assets arekept in a condition which complies with the industry standards in force whichare applicable to it, and to take all the necessary measures to make thisundertaking effective ;

 

6.                         To pay all of the taxes due on the correctdate, unless the Borrower and /or the Subsidiaries disputes these sums in goodfaith, and in this last case provided the Agent is provided with reasonable informationrelating to the said dispute, on behalf of the Banks ;

 

7.                         To conduct all business in compliance with thelaws and regulations in force applying to it, where non-compliance would have aMateriel Adverse Effect ;

 

8.                         To ensure that its  dividend policy regarding its Subsidiaries isconsistent with the constraints on repayment of the Loan and the payment of theinterest relating to it, and to give priority to any distribution of dividendsto the repayment of  the Loan and paymentof the associated interests ;

 

9.                         To obtain and to renew or to have renewed, asfar as is required any authorization required for the signature, the validity,the performance or the renewal of any documents relating to the Acquisition aswell as any Contractual Document renewed ;

 

10.                   To opt for the Group’s tax provisions definedin article 223 A of the French General Tax Code, to perform all theformalities required to benefit under these tax provisions so that they applyto the fiscal year starting on October 1 2004, to obtain the agreement ofthe French Subsidiaries of which it directly or indirectly holds 95% of thecapital and voting rights to be included in the consolidation and to providethe Agent on demand with all substantiating documents relating to thereto ;

 

11.                   To ensure that the above Group tax provisionsremain in force during the term of the Loan, and to make all the arrangementsrequired to ensure that this undertaking is effective ;

 

12.                   To inform the Agent as soon as reasonably ifthe Indemnification Claim is made, as well as any payment made in relation tothis claim, and to supply the Agent with related documents evidencing suchclaim ;

 

13.                   To refrain from, and to ensure itsSubsidiaries refrain from, any mergers or acquisitions without prior agreementof the Agent acting on behalf of the Banks, and to take all necessary steps toensure this undertaking is complied with;

 

14.                   At all times to retain 100% directcontrol of the capital and voting rights of LABORATOIRES EUROSILICONE (exceptfor 6 (six) shares) unless otherwise agreed in advance with the Agent acting onbehalf of the Banks, except in the case of the

 

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enforcement of the pledge in favour of thesellers of the shares of LABORATOIRES EUROSILICONE to the Borrower ;

 

15.                   To formalise the payment of any feesand commissions for services provided either directly or indirectly by theBorrower’s shareholders in a contractual arrangement approved in advance by theAgent acting on behalf of the Banks, and to respect the terms of suchcontractual arrangements ;

 

16.                   To make no changes to the closingdates of the fiscal years applying to each Group company except to harmonisethem with the closing date of the Borrower’s fiscal year, that’s to say the endof June, commencing on June 30 2005, except as disclosed to the Agent onthe date that the Agreement is signed ;

 

17.                   No later than 30 calendar daysfollowing the date that the Agreement is signed, to provide the Agent with a copyof the minutes of the Extraordinary General Meeting of Shareholders of theBorrower, at which a cash capital increase of a minimum amount of * * * was approved****andexclusively done by MEDICOR Ltd. or one of its Subsidiary and a documentationcertifying that the aforesaid capital has been subscribed and paid in full,provided that if the capital increase has been made through by one of MEDICORLtd.’s Subsidiaries, to provide the Agent with a certified copy of the *statuts*of the aforementioned Subsidiary, a “*certificat d’immatriculation*” and the list of theshareholders showing that MEDICOR Ltd. owns directly or indirectly 100% of thecapital and voting rights of the Subsidiary;

 

18.                   To immediately inform the Agent of any changeto the Borrower’s shareholding as referred to in Article 14 Paragraph (H) ;

 

19.                   Not to agree to any contractual subordinationof the repayment of the Loan in any way.

 

**13****                                ****INFORMATION OBLIGATIONS**

 

**13.1**                       The Borrower undertakes to perform the following information obligationsthroughout the term of the Agreement :

 

(A) To send the Agent the following documents annually :

 

(i) its consolidated audited accounts certifiedby the Statutory Auditors five (5) months at the latest after the close ofeach fiscal year,

 

(ii) its audited company accounts as well as thecompany accounts of its Subsidiaries, if necessary certified, within the sametime limit as (i) above,

 

it is specified that these accounts will notablyinclude a balance sheet, an income statement as well as their notes and will,if necessary, be accompanied by the Statutory Auditors’ report(s) relating tothem,

 

(iii) within the same time limit as (i) above,the net revenue of any sales of fixed assets net of any duly justifiedreinvestments,

 

(iv) within the same time limit as (i) above,the certificate relating to the Financial Ratios in accordance with the modelin Schedule 4, established on the basis of its annual consolidatedaccounts certified and signed by the Statutory Auditors,

 

(v) within the same time limit as (i) abovea recapitulative list, certified to be correct by the Borrower’s legalrepresentative of the costs, commissions and fees paid by the Borrower duringthe past fiscal year for the services performed directly or indirectly by itsshareholders,

 

(vi) as soon as possible and at the latest three (3) monthsafter the start of each fiscal year, the Group’s annual consolidatedprovisional budget for the said fiscal year,

 

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(vii) as soon as possible and at the latest four (4) monthsafter the end of the first semester of each corporate fiscal year its nonaudited consolidated management accounts in a format to be determined with theAgent.

 

(B) Tosend to the Agent all information which it could reasonably demand on the Group’sfinancial structure, or its business activity and its assets, as well as allinformation enabling the Bank(s) to satisfy its (their) statutory or regulatoryobligations with respect to the Loan.

 

TheAgent and the Banks will be bound to respect the confidentiality of theinformation disclosed by the Borrower. If the Banks need to be provided withpart or all of the information disclosed, the Agent will ensure, within thescope of its duty of information to the Banks, that the Banks will, as far asthey are concerned, respect its confidentiality.

 

**13.2**                       It is expressly agreed that all the information and documents referredto in Article 13.1 (A) must be established in accordance with theChart of Accounts or restated in order to comply with the Chart of Accounts.

 

**14****                                ****EVENT OF DEFAULT**

 

**14.1**                       Each of the following events will constitute an Event of Default,namely :

 

(A)     The failure to pay any sum owed by the Borrower under the Agreement onits due date unless this is remedied within five (5) Working Days at thelatest after the due date ;

 

(B)       The material inaccuracy of any declaration referred to in article 10of the Agreement, apart from the case where such inaccuracy results fromoperations which were previously authorized by the Agent acting on behalf ofthe Banks, under the Agreement ;

 

(C)       The failure to comply with any of the commitments made in theContractual Documents unless agreed by the Agent in writing on behalf of the Banks ;

 

(D)      The failure by the Borrower or any of its Subsidiaries to comply withany significant obligation undertaken towards the Bank (or the Banks eitherjointly or individually), outside the terms of the Agreement, after taking intoaccount any grace periods allowed for remedy of such a failure ;

 

(E)        The failure by the Borrower or any of itsSubsidiaries to make any repayment of 100,000 Euros or more when due on afinancial indebtedness other than the Loan, contracted with third parties otherthan the Bank(s), without prior agreement with the creditor concerned (aftertaking into account any grace periods) except where the Borrower has lodged abona fide objection to the payment in question ;

 

(F)        The occurrence of a Material Adverse Effect unless the Borrower can showthe Agent its capacity to meet its commitments under the Agreement despite theoccurrence of the said Material Adverse Effect or that it can resolve theproblem which gave rise to the Material Adverse Effect ;

 

(G)       The failure to constitute Securities securing the repayment of the Loanwithin the contractually stipulated period or the nullity of any of thesecurities or the failure to comply with these provisions;

 

(H)      The reduction of MEDICOR Ltd.’s interests (directly and indirectly) inthe Borrower’s capital and below a minimum percentage of 67 % of the capitaland voting rights ;

 

(I)           The distribution of dividends to the Borrower’s shareholders between the date that the Agreement issigned and December 31, 2005inclusive ;

 

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(J)            From January 1st, 2006, thedistribution of dividends to the Borrower’s shareholders, when :

 

•                  * * *, and /or

 

•                  the payment of the capital installments ofTranche A1 and, if necessary, Tranches A2, A3 and A4 for the fiscal year inquestion has not yet occurred, and/or

 

•                  an Event of Default occurred which is notwaived or otherwise remedied ;

 

(K)        The reduction, without the prior written agreement of the Agent actingon behalf of the Banks, of the Borrower’s share capital, with the effect ofpaying the proceeds from all or part of the said reduction of capital to itsshareholders;

 

(L)          The performance of a merger, a split-up, of a spin-off affecting theBorrower or its Subsidiaries, without the prior written agreement of the Agentacting on behalf of the Banks, which cannot oppose this without justifiedreasons;

 

(M)     Any change to the Financial Instruments Account Pledge, resulting fromthe reorganization of LABORATOIRES EUROSILICONE, without the prior writtenagreement of the Agent acting on behalf of the Banks, with the effect oftransferring all of LABORATOIRES EUROSILICONE’s own resources in particular interms of sales forces, of support functions, to a third company, and therebycompromises LABORATOIRES EUROSILICONE’s ability to conduct its businessindependently;

 

(N)        The modification, without the prior written agreement of the Agentacting on behalf of the Banks, of the Agreement for the Shareholder’s Loan (asprovided to the Agent at the Drawdown Date of Tranche A1) or the failure by theBorrower to comply with the provisions of this Agreement;

 

(O)        Any insolvency proceedings (*procédure collective*) against the Borrower or anyone of itsSubsidiaries, subject however, to the powers which the law expressly attributesby law to the official receiver or to the representative;

 

(P)          The dissolution of the Borrower and/or LABORATOIRES EUROSILICONE withliquidation;

 

(Q)        The rejection of the Borrowers’ signature or of anyone of itsSubsidiaries by the BANQUE DE FRANCE which is not regularized within a periodof 15 calendar days ;

 

(R)         The Statutory Auditors issuing significant reserves on actions or factsrelating to the Borrower and/or its Subsidiaries likely to reduce the qualityof the Bank’s(s’) receivable under the Loan, or the refusal by the StatutoryAuditors to certify the Borrower’s consolidated and/or company accounts and/orof one of its Subsidiaries;

 

(S)          The change in the Borrower’s and/or LABORATOIRES EUROSILICONE’s corebusiness activity as stated in their corporate purpose  on the date that the Agreement issigned ;

 

(T)         The modification of the date of the close of the Borrower’s fiscal year,from June 30 2005, without the prior written agreement of the Agent actingon behalf of the Banks.

 

**14.2**                       The Agent willinform the Borrower of the occurrence of an Event of Default, by recordeddelivery mail with notification of receipt. The Borrower will have fifteen (15)Working Days from the above mentioned notification to remedy any Event ofDefault where this is possible, and provided that the said Event of Default isoccurring for the first time (this Event of Default has, not been the subjectof a previous notification by the Agent).

Forany Event of Default where which cannot be remedied, the Borrower and the Bank(s)will meet on the initiative of one of them, within a maximum period of fifteen(15) Working Days from the above mentioned notification, to decide on thepossible methods for remedying the Event of Default and to continue the Loan.

 

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Depending on the nature of the Event of Default which has occurred, ifit is not remedied within the prescribed time limit (apart from express writtenderogation from the Agent acting on behalf of the Banks) or in the absence ofagreement between the Borrower and the Bank(s) after they have consulted, theLoan will by repaid in advance, on simple notification by the Agent, byrecorded delivery mail with notification of receipt, without the Bank(s) havingto carry out any other formality nor have the forfeiture of the term pronouncedby a Court. The Borrower will then be obliged to pay all of the sums inprincipal, interest, late interests, costs, commission and incidental expenses,owed to the Bank(s) under the Agreement.

 

**15****                                ****RULES FOR THE PARTICIPATION OFTHE BANKS**

 

**15.1**                       The Banks’ obligations to the Borrower will comprise separate anddistinct legal rights and will not create any link of solidarity between them.

 

**15.2**                       Each Bank will be personally liable for the non performance of itsobligations under the Agreement. The failure by one or more Banks to performits obligations under the Agreement will not affect the Borrower’s rights andobligations with respect to the other Banks, nor will it release the otherBanks from their own obligations under the Agreement.

 

**15.3**                       Any information which the Borrower informs the Agent of, will be deemedto be made to each of the Banks, under the responsibility of the Agent towardsthe Borrower.

 

**15.4**                       If a Bank receives a payment from the Borrower under the Loan, in anyway whatsoever, this Bank will inform the Agent and will retrocede the amountreceived to the Agent. The Agent will distribute the amount of this paymentbetween the Banks pro rata to their participation and up to the amounts oftheir payable receivables, as quickly as possible.

 

**16****                                ****THE BANKS’ DECLARATIONS ANDCOMMITMENTS**

 

**16.1**                       Each Bank declares that its decision to participate in the Agreement wastaken on the basis of its own appraisal, and that in taking this decision, ithas not based itself on the declarations or information supplied by the Agentor by the Arranger, or by any Bank, in particular on the validity of thefinancing schema or the Borrower’s financial position.

 

**16.2**                       If the Borrower does not perform its obligations under this Agreement,each Bank undertakes to indemnify the Agent, on production of substantiatingdocuments, and in proportion to its Participation, for all the losses and costsborne by the Agent following this non performance, without however thisindemnification of the Agent exonerating the Borrower from its own liability.

 

**17****                                ****AGENT’S ROLE AND POWERS**

 

**17.1**                       Each Bank appoints the Agent as its representative in order toregularize the Securities and to execute the legal instruments and materialswhich are expressly entrusted to it under the terms of the Agreement and theother Contractual Documents, in its name and on its behalf. The Banks thereforegive the Agent authority to conserve all of the original instruments anddocuments relating to all of the Securities. The Agent is therefore asequestrator depository which it expressly accepts.

Itis specified that in the event of the Loan’s accelerated maturity, under Article 14,as far as is necessary, the Agent will realize the Financial InstrumentsAccount Pledge on behalf of the Banks and divide the sale price of the pledgedshares between the Banks, pro rata to their Participation

 

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**17.2**                       The Agent can freely exercise its rights under the Agreement and theother Contractual Documents, with the obligation to report the performance tothe Banks.

 

However, if there are two (2) Banks in number, the Agent mustobtain the unanimous agreement of the Banks for any modification of theBorrower’s undertakings, and for any agreement, authorization, or approval bythe Banks which the Borrower claims under the Agreement.

 

If there are more than two (2) Banks, the Agent must obtain theagreement :

 

(A) of all of the Banksfor the following decisions :

 

(1)          The grant of time to pay for the Loan exceeding five (5) WorkingDays ;

 

(2)          Prolonging the duration of any of Tranches A1, A2, A3 or A4 ;

 

(3)          Modifying or abandoning any of the Securities guaranteeing theLoan ;

 

(4)          Reducing the margin applicable to any of Tranches A1, A2, A3 and A4,apart from any reduction in the margin in accordance with the provisions of Article 6.3 ;

 

(5)          Modifying the method of calculating interests compared to the provisionsof Article 6.5 ;

 

(6)          Abandoning a debt against the Borrower under the Loan ;

 

(7)          Modifying one of the provisions of this Article 17.2 ;

 

(B) of the Majority of the Banks for all otherdecisions by the Banks, and in particular any authorization given to theBorrower to temporarily waive respecting the Financial ratios or the method ofcalculating the Financial Ratios.

 

**17.3**                       The Agent cannot be held liable on the basis of the actions committed,whether under this Agreement or not, apart from gross negligence, or fraud.

 

**17.4**                       The Agent can rely on any document signed by the person(s) authorized totake the decisions in question, and can follow its Counsel’s advice on anylegal questions.

 

**17.5**                       Apart from gross negligence or fraud, neither the Agent nor the Arrangerwill be liable to the other Banks for the inaccuracy of the Borrower’sdeclarations, contained in the Agreement, nor the Contractual Documents, norfor the Borrower’s or its Subsidiaries’ performance of the provisions of theAgreement or the Contractual Documents. The Agent or the Arranger will also notbe liable to the Borrower for the non performance by the other Banks of theirobligations under this Agreement. It is expressly agreed that the failure bythe Agent or the Arranger to reply within the deadlines stipulated in Article 1.2Paragraph (C) to any request for agreement, authorization or approval ofthe Banks under the Agreement made by the Borrower, can constitute grossnegligence.

 

**17.6**                       The Agent will communicate all notifications received by the Borrower inperformance of the Agreement to the Banks as quickly as possible (other thanpurely administrative) and will also communicate any decision taken by theMajority of the Banks as quickly as possible.

 

**17.7**                       The Agent cannot be liable on the basis of the Agent’s actions under theprovisions of Article 17.2 ; all the Banks will be bound by anyactions performed in these circumstances.

 

**17.8**                       If the Borrower does not reimburse the Agent all its costs incurredunder this Agreement, including the fees and costs of its counsel, the Bankswill reimburse the Agent the share of their costs pro rata their Participation,without prejudice to the Agent’s rights and recourse against the Borrower.

 

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**17.9**                       The Agent is free to terminate the mandate which binds it to the Banksproviding that it gives the Borrower and the Banks at least thirty (30)calendar days notice.

 

**17.10**                TheMajority of the Banks, to the exclusion of the Agent, can designate a Bank inFrance to succeed the resigning the Agent, providing that it makes thisappointment within twenty (20) calendar days from the Agent’s resignation,notified by notice. Failing this, the Agent will appoint its successor itself,by choosing a bank, which is reputedly solvent and established in Paris. Theprovisions of this paragraph also presuppose the Borrower’s prior agreement.

 

**17.11**                Thecessation of the functions of the resigning the Agent will only be effectiveafter the Agent has received the written acceptance of the designatedsuccessor, which the Agent will inform the Borrower and the Banks of.

 

**18****                                ****REPLACEMENT OF THE BORROWER**

 

TheBorrower cannot assign its rights or delegate its obligations under theAgreement to a third party nor replace itself with a third party to perform itsobligations under this Agreement.

 

**19****                                ****SUBSTITUTION OF THE BANKS**

 

**19.1**                       Each Bank can freely assign or transfer all or part of its rights andobligations under the Agreement providing it obtains the Borrower’s priorwritten agreement which cannot be unreasonably withheld or delayed.

 

**19.2**                       Such an assignment or transfer by a Bank of its rights and obligationsunder the Agreement to a third party will be done through an instrument whichsubstantially conforms to the model Replacement Agreement appearing in Schedule 3which the Agent will inform the Borrower of. It is specified that any serviceof such an instrument on the Borrower will be made by the Assigning Bank at itscosts.

 

**19.3****                      **Each Bank is therefore free to conclude securitization contractsthroughout the term of the Agreement.

 

**19.4**                       Each Bank can disclose a copy of any contractual document or anyinformation which this Bank may have acquired under a Contractual Document orin relation to it to any Bank with which it is proposing to conclude asubstitution contract by respecting the terms of confidentiality stipulated inthe last paragraph of Article 13.1.

 

**20****                                ****MISCELLANEOUS**

 

**20.1****                      ****Terms of payment**

 

Allthe payments owed by the Borrower under this Agreement will be debited by theAgent, which the Borrower expressly accepts on the due date of value for fundsimmediately available on the Borrower’s account opened in the books of BNPPARIBAS under the following references :

 

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Bank Code: * * *

Branch Code : * * *

Accountnumber : * * *

RIBKey : * * *

 

TheAgent will pay each Bank on the right value date any amount received from theBorrower and which is owed to the Bank pro rata to its Participation withrespect to repaying the principal as well as the payment of interests, intereston arrears, commissions, costs and incidental expenses.

 

**20.2****                      ****Attributing payments**

 

Thepayments made by the Borrower under this Agreement will be attributed in thefollowing order pro rata to the respective amounts owed to each Financial Party:

 

(A) firstly,to the indemnities, commissions, costs and incidental costs of any kind,

 

(B) secondly,to late interest,

 

(C) thirdly,to interest,

 

(D) fourthly,to the principal.

 

**20.3****                      ****Nosetoff**

 

TheBorrower is expressly prohibited from making any setoff between its debts whichare payable under the Agreement and any receivable which it may hold againstthe Financial Parties.

 

**20.4****                      ****Currency**

 

Allpayments made by the Borrower will be made in Euros.

 

**20.5****                      ****Annualized percentage rate**

 

(A) Itis specified that due to the specificity of the provisions of the Agreement,notably the variability in the interest rate, it is impossible to irrevocablyfix the annualized percentage rate applicable in accordance with the provisionsof articles L 313-4 and following of the French Financial and MonetaryCode on the date that the Agreement is signed.

 

(B) However,in order to meet legal requirements, it is nevertheless indicated as an examplethat the annualized percentage rate for each of the Tranches of the Loan(notably taking all of the costs and fees into account) on September 9,2004, for a Drawdown of the latter on this same date, respectfully total :

• * * * % per year, for Tranche A1, onthe basis of a 6-month EURIBOR 2,21 % per year in force on September 9,2004, the period rate on a semestrial basis working out at 2,62 %,

• * * * % per year, for Tranche A2, onthe basis of a 6-month EURIBOR 2,21 % per year in force on September 9,2004, the period rate on a semestrial basis working out at 2,66 %,

• * * * % per year, for Tranche A3, onthe basis of a 6-month EURIBOR 2,21 % per year in force on September 9,2004, the period rate on a semestrial basis working out at 2,69 %,

• * * * % per year, for Tranche A4, onthe basis of a 6-month EURIBOR 2,21 % per year in force on September 9,2004, the period rate on a semestrial basis working out at 2,71 %.

 

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**20.6****                      ****Working Days**

 

Ifa payment has to be made on a day which is not a Working Day, the payment inquestion must be made on the next Working Day.

 

**20.7****                      ****Waiver of recourse**

 

Ifone of the parties to this Agreement fails to exercise a right resulting underthis Agreement or any Contractual Document or exercises the said right late,this will not constitute a waiver of the exercise of this right and will notprevent the party concerned from exercising this right in the future.

 

**20.8****                      ****Notifications**

 

(A) Allthe notifications concerning this Agreement must be made by fax and will takeeffect from receipt of transmission of the fax apart from notification of anEvent of Default or of any agreement authorization or approval request from theBank(s) as referred to in Article 1.2 (C) which must be sent byrecorded delivery mail with notification of receipt.

 

(B) Thenotifications which are made under this Agreement must be sent to the partiesas follows :

 
| Borrower : |   | ES HOLDINGS S.A.S.                                                                     |
|-----------------|--------|----------------------------------------------------------------------------------------|
|            |   | 112, avenue Kléber                                                                |
|            |   | 75116 Paris                                                                            |
|            |   | For the attention of : Mr. Thomas MOYES and Mr. Jean-Claude  VECCHIATTO |
|            |   | Fax :  01.44.05.52.00                                                             |
|            |   |                                                                                   |
| Agent :    |   | BNP  PARIBAS                                                                           |
|            |   | Z 02478A                                                                               |
|            |   | Centre d’Affaires  Entreprises Méditerranée                             |
|            |   | 5,  boulevard de Dunkerque                                                             |
|            |   | Cap  Joliette                                                                          |
|            |   | 13002 Marseille                                                                        |
|            |   | For the attention of : Mr. Dominique BOUYX                                   |
|            |   | Fax : 04 95 09 43 29                                                              |
|            |   | For the current operations                                                             |
|            |   |                                                                                   |
| Arranger : |   | BNP  PARIBAS - BDDF Financements Structurés                                       |
|            |   | CLD 08B1                                                                               |
|            |   | 9,  boulevard des Italiens                                                             |
|            |   | 75450  Paris Cedex 09                                                                  |
|            |   | Fax :  01.55.77.64.80                                                             |
|            |   | For any question concerning the construction of this document                          |

 

Orto any other address which the parties may have indicated under this Article.

 

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**20.9****                      ****Instruments - Languages**

 

ThisAgreement sets forth the entire agreement between the parties hereto withrespect to the Loan. It replaces any previous instrument, including the termsheet signed on July 30 2004. A French version of the Agreement has beenprepared, but is not binding. This French version shall not be used ininterpreting this Agreement in case of litigation; it may be used for theinformation of the banks during the syndication process, with the agreement ofthe Borrower.

 

**21****                                ****GOVERNING LAW**

 

This Agreement is governed by French law.

 

**22****                                ****JURISDICTION**

 

Anydispute concerning the construction or the performance of the Agreement will befor the exclusive competence of the Paris Commercial Court.

 
| ** **                                                    | ** ** | Signed at Paris, September 10, 2004  In two (2) original copies. |
|---------------------------------------------------------------|------------|----------------------------------------------------------------------------|
| ** **                                                    | ** ** | ** **                                                                 |
| ** **                                                    | ** ** | ** **                                                                 |
| **BNP PARIBAS**                                               | ** ** | **ES HOLDINGS S.A.S.**                                                     |
| **Centre d’Affaires Méditerranée Entreprises** |       | In the capacity of the Borrower,                                           |
| In the capacity of Bank and Agent,                            |       | Represented by :                                                      |
| Represented by :                                         |       | Mr. Theodore MALONEY                                                  |
| Ms. Valérie BENQUET                                 |       | and Mr. Thomas MOYES                                                  |
| and Mr. Bertrand MONTFORT                                |       |                                                                       |

 

 

# **BNPPARIBAS**

**BDDF- Financements Structurés**

In the capacity of Arranger,

Representedby :

Ms. GéraldineSALOMON

 

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