**Exhibit10.23**

 

**CONFORMED COPY**

 

**Loan Agreement**

 

 

September 10, 2004

 

 

for

 

 

**ES HOLDINGS S.A.S.**

 

 

Arranged by

 

 

**BNP PARIBAS**

 

 

**Concerning firstly, the partial refinancing of Receivablesand a Shareholders’ Loan granted by MEDICOR Ltd. to ES HOLDINGS S.A.S. withinthe scope of the latter’s acquisition of all the shares comprising the capitalof LABORATOIRES EUROSILICONE and secondly, to the financing of the AcquisitionSubsequent Payments connected to this Acquisition**

 

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#### **TABLE OF CONTENTS**

 
| 1      | DEFINITIONS – INTERPRETATION    | 6                                            |
|--------|--------------------------------------|----------------------------------------------|
|   |                                 |                                         |
|   | 1.1                                  | Definitions                                  | 6 |
|   | 1.2                                  | Principles of construction                   | 13 |
|   |                                 |                                         |   |
| 2      | PURPOSE                              | 13                                           |
|   |                                 |                                         |
| 3      | CONDITIONS PRECEDENT                 | 13                                           |
|   |                                 |                                         |   |
|   | 1.0                                  | Conditions precedent  specific to Tranche A1 | 14 |
|   | 3.1.1                                | Delivery of documents                        | 14 |
|   | 3.1.2                                | Other conditions                             | 16 |
|   | 2.0                                  | Conditions precedent  specific to Tranche A2 | 16 |
|   | 3.0                                  | Conditions precedent  specific to Tranche A3 | 16 |
|   | 4.0                                  | Conditions precedent  specific to Tranche A4 | 17 |
|   |                                 |                                         |   |
| 4      | UTILIZING THE LOAN                   | 17                                           |
|   |                                 |                                         |
|   | 4.1                                  | Purpose of the Loan                          | 17 |
|   | 4.2                                  | Term and conditions of  Drawdown             | 17 |
|   | 4.3                                  | Drawdown Requests                            | 18 |
|   | 4.4                                  | Paying the Loan                              | 18 |
|   |                                 |                                         |   |
| 5      | REPAYMENT                            | 18                                           |
|   |                                 |                                         |
|   | 5.1                                  | Terms and conditions of  repayment           | 18 |
|   | 5.1.1                                | Repayment of Tranche A1                      | 18 |
|   | 1.0.0                                | Repayment of Tranche A2                      | 18 |
|   | 2.0.0                                | Repayment of Tranche A3                      | 19 |
|   | 5.1.4                                | Repayment of Tranche A4                      | 19 |
|   | 5.2                                  | Voluntary prepayment                         | 19 |
|   | 5.3                                  | Mandatory prepayment                         | 19 |
|   |                                 |                                         |   |
| 6      | INTERESTS                            | 20                                           |
|   |                                 |                                         |   |
|   | 6.1                                  | Interest rate                                | 20 |
|   | 6.2                                  | Reference Index                              | 20 |
|   | 6.3                                  | Applicable Margin                            | 20 |
|   | 6.4                                  | Interest Periods                             | 21 |
|   | 6.5                                  | Calculation Rule                             | 21 |
|   | 6.6                                  | Payment of interest                          | 22 |
|   | 6.7                                  | Notification of the interest  rate           | 22 |
|   | 6.8                                  | Late interest                                | 22 |
|   |                                 |                                         |   |
| 7      | CHANGES TO THE INTEREST  CALCULATION | 22                                           |
|   |                                 |                                         |
|   | 7.1                                  | Market disruption                            | 22 |
|   | 7.2                                  | Lack of a quotation by a  Bank of Reference  | 23 |
|   |                                 |                                         |   |
| 8      | FEES                                 | 23                                           |
|   |                                 |                                         |
|   | 8.1                                  | Agent Fee                                    | 23 |
|   | 8.2                                  | Arrangement Fee                              | 23 |
|   | 8.3                                  | Underwriting Fee                             | 24 |
|   | 8.4                                  | Commitment Fee for Tranche  A2               | 24 |

 

2

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|   | 8.5                                           | Commitment Fee for Tranche  A3               | 24     |
|--------|-----------------------------------------------|----------------------------------------------|--------|
|   | 8.6                                           | Commitment Fee for Tranche  A4               | 24     |
|   | 8.7                                           | Participation Fee                            | 24     |
|   |                                          |                                         |   |
| 9      | SUPPLEMENTARY PAYMENT  OBLIGATIONS            | 24                                           |
|   |                                          |                                         |   |
|   | 9.1                                           | Additional Costs                             | 24     |
|   | 9.2                                           | Illegality                                   | 25     |
|   | 9.3                                           | Costs of execution                           | 26     |
|   |                                          |                                         |   |
| 10     | REPRESENTATIONS AND  WARANTEES                | 26                                           |
|   |                                          |                                         |
| 11     | SECURITIES                                    | 27                                           |
|   |                                          |                                         |   |
|   | 11.1                                          | Financial Instrument Account  Pledge         | 27     |
|   | 11.2                                          | ‘Key man’ insurance  delegation    | 27     |
|   |                                          |                                         |   |
| 12     | BORROWER’S UNDERTAKINGS                  | 28                                           |
|   |                                          |                                         |   |
|   | 12.1                                          | Commitment to securities                     | 28     |
|   | 12.2                                          | Commitment to interest rate  exposure hedges | 28     |
|   | 12.3                                          | Commitment to Financial  Ratios              | 28     |
|   | 12.4                                          | Commitment to limit  investments             | 29     |
|   | 12.5                                          | Commitment to limit  indebtedness            | 29     |
|   | 12.6                                          | Miscellaneous commitments                    | 30     |
|   |                                          |                                         |   |
| 13     | INFORMATION OBLIGATIONS                       | 31                                           |
|   |                                          |                                         |   |
| 14     | EVENT OF DEFAULT                              | 32                                           |
|   |                                          |                                         |   |
| 15     | RULES FOR THE PARTICIPATION  OF THE BANKS     | 34                                           |
|   |                                          |                                         |   |
| 16     | THE BANK’S DECLARATIONS AND  COMMITMENTS | 34                                           |
|   |                                          |                                         |   |
| 17     | AGENT’S ROLE AND POWERS                  | 34                                           |
|   |                                          |                                         |   |
| 1      | REPLACEMENT OF THE BORROWER                   | 36                                           |
|   |                                          |                                         |   |
| 19     | SUBSTITUTION OF THE BANKS                     | 36                                           |
|   |                                          |                                         |   |
| 20     | MISCELLANEOUS                                 | 36                                           |
|   |                                          |                                         |
|   | 20.1                                          | Terms of payment                             | 36     |
|   | 20.2                                          | Attributing payments                         | 37     |
|   | 20.3                                          | No setoff                                    | 37     |
|   | 20.4                                          | Currency                                     | 37     |
|   | 20.5                                          | Annualized percentage rate                   | 37     |
|   | 20.6                                          | Working Days                                 | 38     |
|   | 20.7                                          | Waiver of recourse                           | 38     |
|   | 1.0                                           | Notifications                                | 38     |
|   | 20.9                                          | Instruments – Languages                 | 39     |
|   |                                          |                                         |   |
| 21     | GOVERNING LAW                                 | 39                                           |
|   |                                          |                                         |   |
| 22     | JURISDICTION                                  | 39                                           |
|        |                                               |                                              |        |  |

 

3

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| 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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**BETWEEN THE UNDERSIGNED :**

 

**(1) ES HOLDINGS SAS**, a French company *(société par actions simplifiée)*withcapital of 37,000 Euros, the registered office of which is at 112, avenueKléber - 75116 Paris, registered on the Paris Trade and Companies’ Registerunder the number 477 630 172,

 

Represented by Mr.Theodore MALONEY and Mr. Thomas MOYES, duly authorized to sign this Agreement,

 

In the capacity ofborrower (hereafter called ‘**Borrower’**),

 

**(2) BNP PARIBAS**, a French company *(société anonyme)* with capital of 1,757,231,208 Euros, theregistered office of which is at 16, boulevard des Italiens - 75009 Paris,registered on the Paris Trade and Companies’ Register under the number 662 042449,

 

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

 

5

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**RECITALS :**

 

(A) The Borroweracquired all the shares in LABORATOIRES EUROSILICONE’s capital, on July 5,2004, for a maximum total Acquisition Price of 41,000,000 Euros including amaximum of 9,000,000 Euros as the Acquisition Subsequent Payments throughReceivables and a Shareholders’ Loan.

 

(B) The Borrower asked the Arranger to set up a loanin its favor initially intended to partially refinance the Receivables and theShareholders’ Loan which MEDICOR Ltd. had granted to it, and secondly tofinance the Acquisition Subsequent Payments.

 

(C) The Arrangeragreed to grant the Borrower this Loan, under the terms set out below.

 

 

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

 

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

 

The words andexpressions below will have the following meaning for the application of thisAgreement (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.                                                              |

 

6

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| **‘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 0.50% 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.                                                                                                                                                                                                                                                                                                                                                                                   |

 

7

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| **‘Commitment Fee**              |   |                                                                                                                                                                                                                                                                                                                                                                                      |
|---------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **for Tranche A3’**              |   | means  the fee calculated at the rate of 0.50% 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 0.50% 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).                                                                                                                                                                                             |

 

8

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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.                                                                                                                                                                                                                                                                                                                                                       |

 

9

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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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| **‘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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| **‘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 1,000,000 Euros, 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 30,000,000  Euros.                                                                                                                                                                          |
|                                         |   |                                                                                                                                                                                                                                                                      |
| **‘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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| **‘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) The headings ofthe Articles are for guidance only and will not affect the construction of thisAgreement in any way.

 

(B) Any definition inthe Agreement will have the same meaning, whether it is used in the singular orthe plural.

 

(C) If the Borrowermakes any request for any agreement, authorization, or approval of the Bank(s)under the Agreement, it must send a written request to the Agent [Centre d’AffairesEntreprises Méditerranée, Z 02478A, 5, boulevard de Dunkerque, Cap Joliette -13002 Marseille], by recorded delivery mail with notification of receipt. Ifthe Agent does not reply within ten (10) Working Days of the receiving therequest sent to it, the Borrower must repeat the request, by recorded deliverymail with notification of receipt, to the Arranger [BDDF - FinancementsStructurés, CLD 08B1, 9, boulevard des Italiens - 75450 Paris Cedex 09]. TheBank’s(s’) agreement, authorization, or approval will be deemed to have beentacitly given to the Borrower if it has not received a reply through theArranger within ten (10) Working Days of the Arranger receiving the request,including for any event which is likely to constitute a Event of Default.

 

(D) Unless otherwisestipulated, the accounting terms used in the Agreement have the meaning givento them in the Chart of Accounts.

 

(E) The Schedulesform an integral part of the Agreement and have the same legal force as theother provisions of the Agreement.

 

 

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

 

Subject to the termsand conditions of this Agreement, and the performance of the preliminary termsstipulated in Article 3, the Bank(s) grant(s) the Borrower, which accepts, aLoan of a maximum global amount of sixteen million four hundred thousand(16,400,000) Euros.

 

The Loan will bedivided into Tranche A1, of seven million four hundred thousand (7,400,000)Euros, to partially refinance the Receivables and the Shareholders’ Loan and aTranche A2, of a maximum sum of three million (3,000,000) Euros, a Tranche A3,of a maximum sum of three million (3,000,000) Euros and a Tranche A4, of amaximum sum of three million (3,000,000) Euros, all three intended to financethe payment of the Acquisition Subsequent Payments.

 

 

**3****                                       ****CONDITIONSPRECEDENT**

 

The Bank’s(s’)obligations under the Agreement will only take effect on the date that all ofthe conditions precedent referred to below are performed, or, if necessary, onthe date the conditions precedent are expressly waived by the Bank(s).

 

13

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**3.1****                             ****Conditionsprecedent specific to Tranche A1**

 

**3.1.1****                   ****Deliveryof 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 ;                                                                                                                                                                                                                                                                                                                                                                                                                         |

 

14

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| (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 :                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   | • the partial  repayment of up to 5,400,000 Euros of the Shareholder’s Loan, with the  Drawdown of Tranche A1 of the Loan,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |   | • the partial  repayment of a minimum amount of 6,400,000 Euros, 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, each one for  3,000,000 Euros if 20.5% of the sales revenue realized by LABORATOIRES  EUROSILICONE during the fiscal year preceding the year during which the  relevant Acquisition Subsequent Payment must be paid, equals or exceeds the  target value for the said fiscal year (i.e. 4.000.000 Euros for the fiscal  year closed on December 31 2004, 5,000,000 Euros for the fiscal year closed  on December 31 2005 and 6,000,000 Euros for the fiscal year closed on  December 31 2006). It is specified that if the sales revenue realized by  LABORATOIRES EUROSILICONE for a given fiscal year is less than the  aforementioned target value, the amount of the Acquisition Subsequent Payment  for the sales revenue realized by LABORATOIRES EUROSILICONE during the said  fiscal year, will be an amount equaling: |
|   |   | (3,000,000  Euros) – [(20.5% of the sales revenue realized by LABORATOIRES EUROSILICONE  during the fiscal year in question) / (the target value for the fiscal year  in question)],                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |   | • The  Indemnification Claim, with the specification, that any payment relating to  the Indemnification Claim will be partially or totally offset against the  sums owed by the Borrower for 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

----

 
| (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****                   ****Otherconditions**

 

(1)                        The simultaneousconstitution of the Financial Instruments Account Pledge over 66.65% of theshares comprising LABORATOIRES EUROSILICONE’s share capital, on behalf of theBanks in the Agent’s favor;

 

(2)                        No Event of Defaulthas occurred or will occur due to signing the Agreement and /or making thefunds for Tranche A1 available;

 

(3)                        Payment of the AgentFee, the Arrangement Fee, the Underwriting Fee as well as the ParticipationFee.

 

**1.0****                             ****Conditionsprecedent specific to Tranche A2**

 

(1)                        Drawdown of TrancheA1 ;

 

(2)                        Delivery of anydocument, duly signed by the Borrower’s legal representative, to certify theamount of the Acquisition Subsequent Payment 1 ;

 

(3)                        Delivery of anydocument to certify the Borrower’s payment of the said Acquisition SubsequentPayment 1 ;

 

(4)                        Delivery of a copy ofthe Borrower’s release of the pledge over 11.11% of the shares comprisingLABORATOIRES EUROSILICONE’s capital to the sellers of the shares ofLABORATOIRES EUROSILICONE to the Borrower ;

 

(5)                        Pledge to the Agent,on behalf of the Banks , of an additional 11.11% of the shares comprisingLABORATOIRES EUROSILICONE’s share capital increasing the percentage ofLABORATOIRES EUROSILICONE’s shares pledged to the Agent, on behalf of theBanks, to 77.76% of the shares comprising LABORATOIRES EUROSILICONE’s sharecapital ;

 

(6)                        No Event of Defaulthas occurred or will occur due to signing the Agreement and /or making thefunds for Tranche A2 available.

 

**2.0****                             ****Conditionsprecedent specific to Tranche A3**

 

(1)                        Drawdown of TrancheA1 ;

 

(2)                        Delivery of anydocument, duly signed by the Borrower’s legal representative, to certify theamount of the Acquisition Subsequent Payment 2 ;

 

(3)                        Delivery of anydocument to certify the Borrower’s payment of the said Acquisition SubsequentPayment 2 ;

 

(4)                        Delivery of a copy ofthe Borrower’s release of the pledge over 11.11% of the shares comprisingLABORATOIRES EUROSILICONE’s capital to the sellers of the shares ofLABORATOIRES EUROSILICONE to the Borrower;

 

16

----

 

(5)                        Pledge to the Agent,on behalf of the Banks, of an additional 11.11% of the shares comprisingLABORATOIRES EUROSILICONE’s share capital increasing the percentage ofLABORATOIRES EUROSILICONE’s shares pledged to the Agent, on behalf of theBanks, to 88.87% of the shares comprising LABORATOIRES EUROSILICONE’s sharecapital ;

 

(6)                        No Event of Defaulthas occurred or will occur due to signing the Agreement and /or making thefunds for Tranche A3 available.

 

**3.0****                             ****Conditionsprecedent specific to Tranche A4**

 

(1)                        Drawdown of TrancheA1 ;

 

(2)                        Delivery of anydocument, duly signed by the Borrower’s legal representative, to certify theamount of the Acquisition Subsequent Payment 3 ;

 

(3)                        Delivery of anydocument to certify the Borrower’s payment of the said Acquisition SubsequentPayment 3 ;

 

(4)                        Delivery of a copy ofthe Borrower’s release of the pledge over11.11% of the shares comprisingLABORATOIRES EUROSILICONE’s capital to the sellers of the shares ofLABORATOIRES EUROSILICONE to the Borrower;

 

(5)                        Pledge to the Agent,on behalf of the Banks, of an additional 11.11% of the shares comprisingLABORATOIRES EUROSILICONE’s share capital increasing the percentage ofLABORATOIRES EUROSILICONE’s shares pledged to the Agent, on behalf of theBanks, to 99.98% of the shares comprising LABORATOIRES EUROSILICONE’s sharecapital ;

 

(6)                        No Event of Defaulthas occurred or will occur due to signing the Agreement and /or making thefunds for Tranche A4 available.

 

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

 

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

 

(A) The Borrower willuse the Loan in accordance with its purpose to firstly partly refinance theShareholders’ Loan and the Receivables and secondly to finance the payment ofthe Acquisition Subsequent Payments.

 

(B) The Borrower isprohibited from using the Loan for any other purpose.

 

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

 

Subject to thefulfillment of the conditions precedent referred to in Article 3, each of theTranche A1, A2, A3 and A4 will be made available to the Borrower in one paymentwhich must occur no later than the Latest Drawdown Date for the Tranche inquestion for an amount of respectively:

 

•                  7,400,000 Euros, for Tranche A1,

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

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

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

 

17

----

 

It is expresslyagreed that, the Borrower may, if it gives the Agent five (5) Working Daysirrevocable 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 usethe Loan by delivering to the Agent Drawdown Requests : the first for TrancheA1, the second for Tranche A2, the third for Tranche A3 and the fourth forTranche A4.

 

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

 

Subject to thestipulation of Article 3, after receiving each Drawdown Request the Agent willcredit the amount stipulated in the said Drawdown Request on the Drawdown Dateappearing in it to the Borrower Bank Account opened in BNP PARIBAS books underthe following references:

 

Bank Code: 30004

Branch Code :02478

Account number :00010125902

RIB Key : 13

 

Each Bank will whenrequested by the Agent, credit the amount of this Participation on the correctvalue date by interbank transfer to the Agent’s account. The references of thisaccount will be previously communicated to it by the Agent.

 

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

 

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

 

**5.1.1****                   ****Repaymentof Tranche A1**

 

Tranche A1 of theLoan will be repayable in seven (7) consecutive installments, in accordancewith the following repayment rate and schedule:

 

Installment ofSeptember 15 2005: 1,060,000 Euros,

Installment ofSeptember 15 2006: 1,060,000 Euros,

Installment ofSeptember 15 2007: 1,060,000 Euros,

Installment ofSeptember 15 2008: 1,060,000 Euros,

Installment ofSeptember 15 2009: 1,060,000 Euros,

Installment ofSeptember 15 2010: 1,060,000 Euros,

Installment ofSeptember 15 2011: 1,040,000 Euros.

 

**5.1.2****                   ****Repaymentof Tranche A2**

 

Tranche A2 of theLoan will be repayable in six (6) consecutive installments, in accordance withthe following repayment rate and schedule:

 

Installment ofSeptember 15 2006: 1/6of the amount drawn under Tranche A2,

Installment ofSeptember 15 2007: 1/6 of the amount drawn under Tranche A2,

Installment ofSeptember 15 2008: 1/6 of the amount drawn under Tranche A2,

Installment ofSeptember 15 2009: 1/6 of the amount drawn under Tranche A2,

Installment ofSeptember 15 2010: 1/6 of the amount drawn under Tranche A2,

Installment ofSeptember 15 2011: 1/6 of the amount drawn under Tranche A2.

 

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

 

Tranche A3 of the Loan will be repayable infive (5) consecutive installments, in accordance with the following repaymentrate and schedule:

 

Installment of September 15 2007: 20% of theamount drawn under Tranche A3,

Installment of September 15 2008: 20% of theamount drawn under Tranche A3,

Installment of September 15 2009: 20% of theamount drawn under Tranche A3,

Installment of September 15 2010: 20% of theamount drawn under Tranche A3,

Installment of September 15 2011: 20% of theamount drawn under Tranche A3.

 

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

 

Tranche A4 of the Loan will be repayable infour (4) consecutive installments, in accordance with the following repaymentrate and schedule:

 

Installment of September 15 2008: 25% of theamount drawn under Tranche A4,

Installment of September 15 2009: 25% of theamount drawn under Tranche A4,

Installment of September 15 2010: 25% of theamount drawn under Tranche A4,

Installment of September 15 2011: 25% of theamount drawn under Tranche A4.

 

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

 

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

 

(B)The amount of each partial prepayment cannot be below a minimum amount of fivehundred thousand Euros (500.000) and above this, in multiples of hundredthousand Euros (100.000).

 

(C)If the 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 2% of the amountrepaid, if the repayments are made within three (3) years of the date theAgreement is signed and 1% of the amounts repaid if the repayment occurs morethan three years after the date that the Agreement is signed.

 

(D)Any sum, 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 ofdecreasing maturity, pro rata to the outstanding amount for each Tranchecompared to the total amount outstanding on the Loan.

 

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

 

TheBorrower must prepay all or part of Tranches A1 and/or A2 and/or A3 and/or A4of the Loan in the cases and under the terms and conditions stipulated in (1)and (2) below. It is specified that the amount of the sales of assets and theExcess Cash-Flow will be assessed on the basis of the Borrower’s consolidatedaccounts closed on June 30 of each fiscal year (“the Fiscal Year of Reference”).

 

Therepayment will be applied to reduce the outstanding installments in order ofdecreasing maturity of Tranches A1 and/or A2 and/or A3 and/or A4, pro rata tothe outstanding amount of each of the Tranches compared to the total amountoutstanding on the Loan.

 

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(1)           Excess Cash Flow:

 

OnDecember 15 of the fiscal year following each Fiscal Year of Reference and forthe first time on December 15 2005, on the basis of its consolidated accountsclosed on June 30 2005, the Borrower must annually repay, the sum set outbelow.

 

50%of the portion of Excess Cash Flow exceeding eight hundred thousand Euros(800,000)and below four million Euros (4,000,000)

 

it is specified for the avoidance of doubt thatno mandatory prepayment will be made on the amount of Excess Cash Flowexceeding four million Euros (4,000,000).

 

(2)           Sale of assets:

 

TheBorrower must pay annually an amount equal to the proceeds of the sale of theBorrower’s and its subsidiaries’ fixed assets, net of all tax, duties andexpenses connected to the sales, calculated on the basis of its consolidatedaccounts closed on June 30 of the Fiscal Year of Reference, on December 15 ofthe fiscal year following each Fiscal Year of Reference, for the first time onDecember 15 2005, on the basis of its consolidated accounts closed on June 302005, after deduction, where applicable, of any amounts reinvested no laterthan one hundred fifty (150) calendar days after the end of the Fiscal Year ofReference (being specified that the reinvestment can only be charged againstthe sale of assets from a single Fiscal Year of Reference). An allowance of twohundred thousand Euros (200,000) 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 two point twenty five (2,25)% per year will be revised yearly upwardsor downwards on sight of the Financial Ratios certificate referred to inArticle 13, based on the Borrower’s annual certified consolidated accounts.

 

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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| **Margin revised to:** | ** ** | **R2 below or   equal to:** | ** ** | **R3 higher or equal   to:** | ** ** |
|------------------------|------------|-----------------------------|------------|------------------------------|------------|
| 2% a year              |       | 1.2                         |       | 1.3                          |       |
| 1.75% a year           |       | 1                           |       | 1.4                          |       |
| 1.50% a year           |       | 0.8                         |       | 1.5                          |       |

 

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)Tranches A1, A2, A3 and A4 will be divided into Interest Periods to calculatethe interest.

 

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

 

(C)The first Interest Period for Tranche A2 will run from the Drawdown Date ofTranche A2 to September 15 2005. Subsequent Interest Periods for Tranche A2will have duration of six (6) months.

 

(D)The first Interest Period for Tranche A3 will run from the Drawdown Date ofTranche A3 to September 15 2006. Subsequent Interest Periods for Tranche A3will have duration of six (6) months.

 

(E)The first Interest Period for Tranche A4 will run from the Drawdown Date ofTranche A4 to September 15 2007. Subsequent Interest Periods for Tranche A4will have duration of six (6) months.

 

(F)Any interest 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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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 in question,

E= Outstanding amount for the Tranche concerned (A1 or 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)If any 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 two percent (2%).

 

(B)Any late 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)This late interest clause cannot adversely affect any payment, which has becomedue and consequently, is not a valid agreement for time to pay or a waiver bythe Bank(s) of any right under the Agreement

 

##### **7**             CHANGES TO THE INTEREST CALCULATION

 

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

 

(A)If the Agent establishes after consultation with the Banks of Reference thatdue to circumstances affecting the Euro Zone interbank market, it is notpossible to fix the 6 months EURIBOR for a given interest period in accordancewith the provisions of this Agreement, (this decision consequently binding theBorrower and the Banks), the Agent will immediately inform the Borrower ofthis.

 

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

 

(1)The Agent, acting on behalf of the Banks, and the Borrower will immediatelynegotiate for a period not exceeding one hundred twenty (120) calendar days toagree a basis for replacing the 6 months EURIBOR for calculating the interestrate applicable to Tranches A1 and/or A2 and/or A3 and/or A4;

 

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(2)Any substitution base agreed between the Agent and the Borrower will be addedto the applicable margin and will take effect immediately for the period duringwhich the Euro zone interbank market is disrupted.

 

(C)If the 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 before theend of Interest Period in question, and this substitution base must reflect thecosts of its refinancing. The said Bank will immediately inform the Borrowerand, if necessary, the Agent of this by recorded delivery mail, supplying themwith the substitution reference index.

 

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

 

(E)If the 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 the amountsowed to the Bank(s) under the Agreement in principal, late interest, fees,costs and incidental expenses, provided that it gives fifteen (15) calendardays written notice. The interest rate applicable to Tranches A1 and/or A2and/or A3 and/or A4 during the period that the Euro zone Interbank market isdisrupted will be calculated in all cases on the basis of the replacement indexfixed by the Bank (or each Bank) as stipulated in Article 7.1 (C). Thisrepayment will not give rise to the payment of any penalty, including if theLoan is refinanced by banks which are not Banks.

 

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

 

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

 

##### **8**             FEES

 

TheBorrower will pay the following fees under the Loan:

 

**8.1****         ****Agent Fee**

 

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**

 

TheArrangement Fee will be payable by the Borrower to the Arranger on the datethat the Agreement is signed. The amount of this fee is subject to a separateagreement between the Borrower and the Arranger.

 

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

 

The Borrower will pay the Arranger theUnderwriting Fee on the Drawdown Date of Tranche A1. The amount of this fee issubject to a separate agreement between the Borrower and the Arranger.

 

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

 

The Commitment Fee for Tranche A2, calculatedat the rate of 0.50% 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, calculatedat the rate of 0.50% 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, calculatedat the rate of 0.50% 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**

 

TheParticipation Fee will be payable by the Borrower to the Arranger on theDrawdown 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**             SUPPLEMENTARYPAYMENT OBLIGATIONS

 

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

 

(A)The Borrower acknowledges that the terms and conditions of the Agreement havebeen determined in accordance with the legal and tax data on the date that theAgreement is signed. Consequently, if the Bank(s) was (were) legally subject toa 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 ofany positive tax impact for the Bank(s) is called ‘the Supplementary Cost’) theBorrower undertakes, if requested by the Agent acting on behalf of the Banks,to firstly pay the whole of the Supplementary Costs which the Bank(s) will haveto support, providing that, the Borrower is provided with of the documents andelements 

 

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

 

(B)It is expressly agreed that any reasonably foreseeable change in thelegislation on the date of the signature of the Agreement, and any impact ofthe decision of the Basle Committee II, as described in the publications ofBale Committee II before the date that the Agreement is signed, will not giverise to the application of the provisions of Paragraph (A) above.

 

(C)The Agent will immediately inform the Borrower in writing of any event which toits knowledge, would permit the Bank(s) to benefit from the provisions ofParagraph 9.1 (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)If the Agent requests the Borrower to pay a Supplementary Cost under Paragraph9.1 (A), after the Agent has informed it that it is impossible to exempt itfrom this payment, the Borrower can repay the whole amount owed to the Bank(s)under the Agreement, in principal, interest, late interest, fee, costs andincidental expenses, to the exclusion of the Supplementary Cost. No penaltywill be applied to this type of prepayment, including if the Loan is refinancedby third party banks.

 

(E)If the 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 anagreement is 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 are stipulated inthe Agreement, apart from cases of voluntary or mandatory prepayment of theLoan under Articles 5.2, 5.3, 7.1 (E), 9.1 (D), 9.1 (E) and 9.2 (B), theBorrower will indemnify the Agent the resulting rollover losses, on behalf ofthe Banks, on ordinary request from it, providing that it is provided with alldocuments or elements enabling it to distinguish and to quantify the saidrollover losses.

 

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

 

(A)If the 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)If it transpires that this transfer is impossible, or results in significantcosts for the Bank(s) (unless these costs are paid for by the Borrower), and ifthe Bank(s) was (were) obliged to demand the prepayment of all or part of theLoan under the above provisions, the Borrower will reimburse and pay theBank(s) the whole of the amounts owed to it (them) under the Agreement, inprincipal, interest, late interest, fee, costs and incidental expenses bygiving thirty (30) Working Days notice (unless a legislative or regulatoryprovision stipulates another period) sent to the Agent by recorded deliverymail with notification of receipt. This repayment will not result in thepayment of any penalty, including if the Loan is refinanced by third partybanks.

 

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**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, theBorrower makes the following representations and warranties to theBank(s) :

 

(A)   The Borrower is a *société paractions simplifiée* validly incorporated and registered ;

 

(B)    The Borrower has the legal capacity to concludeand perform its obligations under each of the Contractual Documents to which itis a party. The corporate bodies have authorized the execution of each of theContractual Documents to which the Borrower is a party. The obligations arisingfrom the Contractual Documents to which the Borrower is a party are binding,and shall be performed in accordance with their terms;

 

(C)    The signature of the Contractual Documents towhich the Borrower is a party and the performance by the Borrower of theobligations resulting from it do not infringe any legal provision or by-lawapplicable to the Borrower, nor any contract or agreement to which the Borroweror its Subsidiaries are parties, or by which they are bound, nor any law, norany regulation binding on them, the breach or the non-respect of which would belikely to affect the validity of the Contractual Documents ;

 

(D)    The Borrower has provided the Agent with allthe material contractual documents relating to the Acquisition ;

 

(E)    The Borrower and its Subsidiaries will notbreach any of their legal obligations, the non-respect of which would have amaterial effect on the Borrower’s capacity to perform its obligations under theAgreement ;

 

(F)    No Material Adverse Effect affecting the Borrower orits subsidiaries has occurred since the latest audited financial statementswere published ;

 

(G)    There is no judicial, administrative orarbitration litigation proceedings either in progress, or imminent, (in thislast case, after the Borrower has received a first written notification) whichthe Borrower or its Subsidiaries could be a party to, and which to the Borrower’sknowledge, could affect the Borrower’s capacity to meet its obligations underthe Agreement ;

 

(H)    There are no collateral or third-partyguarantees securities existing over the assets of the Borrower and itsSubsidiaries other than those granted authorized or declared within theframework of the Agreement ;

 

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(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 certified companyaccounts for the fiscal year closed on December 31 2003, as well as theschedule referred to in Article 3.1 (8), and secondly, on the date of the closeof each fiscal year, other than those appearing in the Borrower’s certifiedconsolidated 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 thesubject of restructuring measures which could affect the Borrower’s ability tosatisfy its obligations under the Agreement ;

 

(N)    No Event of Default has occurred and iscontinuing.

 

**10.2**        Subject to the information which isexpressly contained in the due diligence reports and /or in the IndemnificationClaim, relating to the Acquisition, as disclosed to the Agent, and subject tothe operations, which although making one of the above representationsincorrect may have been previously authorized by the Agent under the Agreement,acting on behalf of the Banks, the above declarations will be deemed to becorrect until the Borrower has paid all sums owed under the loan in full, inprincipal, interest, late interest, fee, costs and incidental expenses. TheBorrower shall inform the Agent of the occurrence of an event calling theaccuracy of, these representation into question, as soon as its is aware of theoccurrence of a such an event.

 

##### **11**           SECURITIES

 

**11.1****       ****Financial Instrument Account Pledge**

 

TheBorrower will constitute the Financial Instrument Account Pledge over 66.65% ofthe shares comprising LABORATOIRES EUROSILICONE’s share capital (all the sharesowned 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.

 

Itis expressly agreed that the Borrower will pledge an additional 11.11% of theshares comprising LABORATOIRES EUROSILICONE’s share capital to the Agent, onbehalf of the Banks, when each of the Tranches A2, A3, and A4 is drawn down.

 

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

 

TheBorrower will enter into and delegate to the Agent, on behalf of the Banks, a ‘keyman’ insurance policy for Messrs. Olivier TOURNIAIRE and Patrick O’LEARY, orany other person agreed by the Agent and the Borrower in replacement of any ofthem, permitting the payment of a minimum of one million five hundred thousand(1,500,000) Euros per person to the Agent on the behalf of the Banks, up untilSeptember 15, 2008 inclusive. It is expressly agreed that the Agent willallocate any sum it receives for the said insurance delegations, on 

 

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behalfof the Banks, to the prepayment of the Loan, which will be applied to reducethe outstanding installments, for Tranches A1 and /or A2 and /or A3 and /or A4in order of decreasing maturity, pro rata to the amount outstanding for eachTranche compared to the total amount outstanding on the Loan.

 

Thisdelegation must be set up within a maximum of four (4) months from the datethat the Agreement is signed. If this deadline is exceeded, the marginapplicable to each Tranche will be immediately increased by 0,50% a year untilregularization, apart from the Agent’s prior agreement in writing acting onbehalf of the Banks ; this provision does not prevent Article 14 applying.

 

##### **12**           BORROWER’sUNDERTAKINGS

 

The Borrower undertakes to perform thefollowing obligations throughout the term of the 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 rate exposure 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 of arise in the 6 month EURIBOR of more than 2.50% compared to its value on thedate that the Agreement is signed, on at least 50% of the amount of each of thesaid 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** | ** ** | **R2**           | ** ** | **R3**            | ** ** | **R4**                | ** ** |
|----------------------|------------|------------------|------------|-------------------|------------|-----------------------|------------|
| **ending  on :**     | ** ** | **Lower than :** | ** ** | **Higher than :** | ** ** | **Lower than :** | ** ** |
| 30/06/2005  **       |       | 2.5              |       | 1                 |       | 0.7                   |       |
| 30/06/2006           |       | 1.6              |       | 1.2               |       | 0.7                   |       |
| 30/06/2007           |       | 1.3              |       | 1.2               |       | 0.7                   |       |
| 30/06/2008           |       | 1                |       | 1.2               |       | 0.7                   |       |
| 30/06/2009           |       | 1                |       | 1.2               |       | 0.7                   |       |
| 30/06/2010           |       | 1                |       | 1.2               |       | 0.7                   |       |

 

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***********it is stipulated that theFinancial ratios to June 30 2005 will be calculated on the basis of theBorrower’s pro forma consolidated accounts drawn up on this same date over arolling 12 month*

 

28

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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**

 

TheBorrower undertakes to ensure that the global amount of the consolidatedtangible and intangible investments net of tax (including own work capitalized)made by the Group during a given fiscal year is limited to an amount equal to110% of the amount stipulated in the Business Plan of Reference, i.e. thefollowing limit for each fiscal year :

 

Fiscalyear closed on June 30 2005 : 1,100,000 Euros,

Fiscalyear closed on June 30 2006 : 1,100,000 Euros,

Fiscalyear closed on June 30 2007 : 1,100,000 Euros,

Fiscalyear closed on June 30 2008 : 1,100,000 Euros,

Fiscalyear closed on June 30 2009 : 1,100,000 Euros,

Fiscalyear closed on June 30 2010 : 1,100,000 Euros.

 

Itis expressly agreed that if the amount of the investments made during a givenfiscal year is below the limit fixed above, the investment limit for the nextfiscal year only can be increased by the difference between the investmentlimit for the previous fiscal year and the amount of the investments actuallymade during the preceding fiscal year.

 

TheBorrower undertakes to make all the arrangements to ensure that the aboveundertaking is effective.

 

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

 

TheBorrower undertakes not to contract and to ensure that its Subsidiaries do notcontract, throughout the term of the Loan, except with the Agent’s priorwritten agreement acting on behalf of the Banks, additional indebtedness (i) tothe indebtedness which may already have been contracted prior to the DrawdownDate for Tranche A1, (ii) to the Loan and (iii) to the debt from the interestrate hedge for each of Tranche of the Loan, beyond a total amount of 2,000,000Euros for the term of the Loan for all of the Group’s companies. However, it isspecified that this additional indebtedness of 2,000,000 Euros can be increasedduring each of the fourth and fifth 12 month-periods after the date that theAgreement is signed, by 20% of the sums repaid for the Loan during such 12month-period, and secondly, during each of the sixth and seventh 12month-periods after the date that the Agreement is signed, by 50% of the sumsrepaid under the Loan during such 12 month-period.

 

TheBorrower undertakes to make all the arrangements to ensure that the aboveundertaking is effective.

 

29

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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 reasonableinformation relating 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 regardingits Subsidiaries is consistent with the constraints on repayment of the Loanand the payment of the interest relating to it, and to give priority to anydistribution of dividends to the repayment of the Loan and payment of theassociated 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 the formalitiesrequired to benefit under these tax provisions so that they apply to the fiscalyear starting on October 1 2004, to obtain the agreement of the FrenchSubsidiaries of which it directly or indirectly holds 95% of the capital andvoting rights to be included in the consolidation and to provide the Agent ondemand 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 

 

30

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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 on thedate that the Agreement is signed ;

 

17.    No later than 30 calendar daysfollowing the date that the Agreement is signed, to provide the Agent with acopy of the minutes of the Extraordinary General Meeting of Shareholders of theBorrower, at which a cash capital increase of a minimum amount of 6,400,000Euros 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**           INFORMATIONOBLIGATIONS

##### ** **

**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 certified by the StatutoryAuditors five (5) months at the latest after the close of each fiscal year,

 

(ii)its audited company accounts as well as the company accounts of itsSubsidiaries, if necessary certified, within the same time limit as (i) above,

 

itis specified that these accounts will notably include a balance sheet, anincome statement as well as their notes and will, if necessary, be accompaniedby the Statutory Auditors’ report(s) relating to them,

 

(iii)within the same time limit as (i) above, the net revenue of any sales of fixedassets net of any duly justified reinvestments,

 

(iv)within the same time limit as (i) above, the certificate relating to theFinancial Ratios in accordance with the model in Schedule 4, established on thebasis of its annual consolidated accounts certified and signed by the StatutoryAuditors,

 

(v)within the same time limit as (i) above a recapitulative list, certified to becorrect by the Borrower’s legal representative of the costs, commissions andfees paid by the Borrower during the past fiscal year for the servicesperformed directly or indirectly by its shareholders,

 

(vi)as soon as possible and at the latest three (3) months after the start of eachfiscal year, the Group’s annual consolidated provisional budget for the saidfiscal year,

 

31

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(vii)as soon as possible and at the latest four (4) months after the end of thefirst semester of each corporate fiscal year its non audited consolidatedmanagement accounts in a format to be determined with the Agent.

 

(B)To send to the Agent all information which it could reasonably demand on theGroup’s financial structure, or its business activity and its assets, as wellas all information enabling the Bank(s) to satisfy its (their) statutory orregulatory obligations 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 the Chart ofAccounts or restated in order to comply with the Chart of Accounts.

 

##### **14**           EVENTOF 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 Borrowerunder the Agreement on its due date unless this is remedied within five (5)Working Days at the latest after the due date ;

 

(B)   The material inaccuracy of any declarationreferred to in article 10 of the Agreement, apart from the case where suchinaccuracy results from operations which were previously authorized by theAgent acting on behalf of the Banks, under the Agreement ;

 

(C)   The failure to comply with any of thecommitments made in the Contractual Documents unless agreed by the Agent inwriting on behalf of the Banks ;

 

(D)  The failure by the Borrower or any of itsSubsidiaries to comply with any significant obligation undertaken towards theBank (or the Banks either jointly or individually), outside the terms of theAgreement, after taking into account any grace periods allowed for remedy ofsuch a failure ;

 

(E)   The failure by the Borrower or anyof its Subsidiaries to make any repayment of 100,000 Euros or more when due ona financial indebtedness other than the Loan, contracted with third partiesother than 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 Effectunless the Borrower can show the Agent its capacity to meet its commitments underthe Agreement despite the occurrence of the said Material Adverse Effect orthat it can resolve the problem which gave rise to the Material Adverse Effect;

 

(G)   The failure to constitute Securities securingthe repayment of the Loan within the contractually stipulated period or thenullity of any of the securities or the failure to comply with theseprovisions;

 

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

 

(I)    The distribution of dividends to the Borrower’sshareholders between thedate that the Agreement is signedand December 31, 2005 inclusive ;

 

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

 

•      Free cashFlow / (Debt Service + distribution of planned dividends) < 1.2, and /or

 

•      the paymentof the capital installments of Tranche A1 and, if necessary, Tranches A2, A3and A4 for the fiscal year in question has not yet occurred, and/or

 

•      an Event ofDefault occurred which is not waived or otherwise remedied ;

 

(K)  The reduction, without the prior writtenagreement of the Agent acting on behalf of the Banks, of the Borrower’s sharecapital, with the effect of paying the proceeds from all or part of the saidreduction of capital to its shareholders;

 

(L)   The performance of a merger, a split-up, of aspin-off affecting the Borrower or its Subsidiaries, without the prior writtenagreement of the Agent acting on behalf of the Banks, which cannot oppose thiswithout justified reasons;

 

(M)Any change to the Financial Instruments AccountPledge, resulting from the reorganization of LABORATOIRES EUROSILICONE, withoutthe prior written agreement of the Agent acting on behalf of the Banks, withthe effect of transferring all of LABORATOIRES EUROSILICONE’s own resources inparticular in terms of sales forces, of support functions, to a third company,and thereby compromises LABORATOIRES EUROSILICONE’s ability to conduct itsbusiness independently;

 

(N)  The modification, without the prior writtenagreement of the Agent acting on behalf of the Banks, of the Agreement for theShareholder’s Loan (as provided to the Agent at the Drawdown Date of TrancheA1) or the failure by the Borrower to comply with the provisions of thisAgreement;

 

(O)  Any insolvency proceedings (*procédure collective*)against the Borrower or anyone ofits Subsidiaries, 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/orLABORATOIRES EUROSILICONE with liquidation;

 

(Q)  The rejection of the Borrowers’ signature or ofanyone of its Subsidiaries by the BANQUE DE FRANCE which is not regularizedwithin a period of 15 calendar days ;

 

(R)   The Statutory Auditors issuing significantreserves on actions or facts relating to the Borrower and/or its Subsidiarieslikely to reduce the quality of the Bank’s(s’) receivable under the Loan, orthe refusal by the Statutory Auditors to certify the Borrower’s consolidatedand/or company accounts and/or of one of its Subsidiaries;

 

(S)   The change in the Borrower’s and/orLABORATOIRES EUROSILICONE’s core business activity as stated in their corporatepurpose on the date that the Agreement is signed ;

 

(T)   The modification of the date of the close ofthe Borrower’s fiscal year, from June 30 2005, without the prior writtenagreement of the Agent acting on behalf of the Banks.

 

**14.2**        The Agent will inform theBorrower of the occurrence of an Event of Default, by recorded delivery mailwith notification of receipt. The Borrower will have fifteen (15) Working Daysfrom the above mentioned notification to remedy any Event of Default where thisis possible, and provided that the said Event of Default is occurring for thefirst time (this Event of Default has, not been the subject of a previousnotification by the Agent).

 

For any Event of Default where which cannot beremedied, the Borrower and the Bank(s) will meet on the initiative of one ofthem, within a maximum period of fifteen (15) Working Days 

 

33

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from the above mentioned notification, todecide on the possible methods for remedying the Event of Default and tocontinue the Loan.

 

Dependingon the nature of the Event of Default which has occurred, if it is not remediedwithin the prescribed time limit (apart from express written derogation fromthe Agent acting on behalf of the Banks) or in the absence of agreement betweenthe Borrower and the Bank(s) after they have consulted, the Loan will by repaidin advance, on simple notification by the Agent, by recorded delivery mail withnotification of receipt, without the Bank(s) having to carry out any otherformality nor have the forfeiture of the term pronounced by a Court. TheBorrower will then be obliged to pay all of the sums in principal, interest,late interests, costs, commission and incidental expenses, owed to the Bank(s)under the Agreement.

 

##### **15**           RULESFOR THE PARTICIPATION OF THE 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**           THEBANKS’ DECLARATIONS AND COMMITMENTS

##### ** **

**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’SROLE AND POWERS

##### ** **

**17.1**        Each Bank appoints the Agent as its representative in order toregularize the Securities and to execute the legal instruments and materials whichare expressly entrusted to it under the terms of the Agreement and the otherContractual Documents, in its name and on its behalf. The Banks therefore givethe Agent authority to conserve all of the original instruments and documentsrelating to all of the Securities. The Agent is therefore a sequestratordepository which it expressly accepts.

 

It is specified that in the event of the Loan’saccelerated maturity, under Article 14, as far as is necessary, the Agent willrealize the Financial Instruments Account Pledge on behalf of the 

 

34

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Banks and divide the sale price of the pledgedshares between the Banks, pro rata to their Participation

 

**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 must obtain the unanimousagreement of the Banks for any modification of the Borrower’s undertakings, andfor any agreement, authorization, or approval by the Banks which the Borrowerclaims under the Agreement.

 

Ifthere are more than two (2) Banks, the Agent must obtain the agreement :

 

(A) of all of the Banks for the followingdecisions :

 

(1)   The grant of time to pay for the Loan exceedingfive (5) Working Days ;

 

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

 

(3)   Modifying or abandoning any of the Securitiesguaranteeing the Loan ;

 

(4)   Reducing the margin applicable to any of TranchesA1, A2, A3 and A4, apart from any reduction in the margin in accordance withthe provisions of Article 6.3 ;

 

(5)   Modifying the method of calculating interestscompared to the provisions of Article 6.5 ;

 

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

 

(7)   Modifying one of the provisions of this Article17.2 ;

 

(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 Article1.2 Paragraph (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 any actionsperformed 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 

 

35

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the share of their costs pro rata theirParticipation, without prejudice to the Agent’s rights and recourse against theBorrower.

 

**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**     The Majority of the Banks, to the exclusion of the Agent, can designatea Bank in France to succeed the resigning the Agent, providing that it makesthis appointment 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**     The cessation of the functions of the resigning the Agent will only beeffective after the Agent has received the written acceptance of the designatedsuccessor, which the Agent will inform the Borrower and the Banks of.

 

##### **18**           REPLACEMENTOF 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**           SUBSTITUTIONOF 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 Schedule3 which 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 concludesecuritization contracts throughout 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 :

 

36

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Bank Code: 30004

Branch Code : 02478

Accountnumber : 00010125902

RIBKey : 13

 

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 anykind,

 

(B)secondly, to late interest ,

 

(C)thirdly, to interest,

 

(D)fourthly, to the principal.

 

**20.3****       ****No setoff**

 

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)It is 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 Monetary Code onthe date that the Agreement is signed.

 

(B)However, in order to meet legal requirements, it is nevertheless indicated asan example that the annualized percentage rate for each of the Tranches of theLoan (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 :

 

•5,25 % per year, for Tranche A1, on the basis of a 6-month EURIBOR 2,21 % peryear in force on September 9, 2004, the period rate on a semestrial basisworking out at 2,62 %,

 

•5,32 % per year, for Tranche A2, on the basis of a 6-month EURIBOR 2,21 % peryear in force on September 9, 2004, the period rate on a semestrial basisworking out at 2,66 %,

 

•5,38 % per year, for Tranche A3, on the basis of a 6-month EURIBOR 2,21 % peryear in force on September 9, 2004, the period rate on a semestrial basisworking out at 2,69 %,

 

•5,43 % per year, for Tranche A4, on the basis of a 6-month EURIBOR 2,21 % peryear in force on September 9, 2004, the period rate on a semestrial basisworking 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)All the notifications concerning this Agreement must be made by fax and willtake effect from receipt of transmission of the fax apart from notification ofan Event of Default or of any agreement authorization or approval request fromthe Bank(s) as referred to in Article 1.2 (C) which must be sent by recordeddelivery mail with notification of receipt.

 

(B)The notifications which are made under this Agreement must be sent to theparties as 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**           GOVERNINGLAW

 

ThisAgreement 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                                     |       |                                 |
|                                                           |       |                                 |
|                                                           |       |                                 |
| **BNP PARIBAS**                                                |       |                                 |
| **BDDF - Financements  Structurés**                       |       |                                 |
| In  the capacity of Arranger,                                  |       |                                 |
| Represented  by :                                         |       |                                 |
| Ms.  Géraldine SALOMON                                    |       |                                 |

 

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