EXHIBIT 10.20
**EXECUTION COPY**

AGREEMENT FOR THE SALE AND PURCHASE
OF
THE SHARES OF
LABORATOIRES EUROSILICONE SA

by and between
MR FRANCOIS TOURNIAIRE
MR JACQUES TOURNIAIRE
MR MICHEL TOURNIAIRE
MR OLIVIER TOURNIAIRE
And Others
(SELLERS)
AND
MEDICOR LTD.
(PURCHASER)
17 MAY 2004
 

 

CONTENTS       **ARTICLE** **PAGE**1. Definitions  2 2. Sale and Purchase  6 3. Purchase price  6 4. Payment  7 5. Conditions  8 6. Notices  9 7. Closing  9 8. Representations and Warranties of the Sellers  11 9. Representations and Warranties of the Purchaser  26 10. Covenants  27 11. Indemnification  28 12. Non-competition  35 13. Confidential Information  36 14. Announcements  37 15. Costs  37 16. Sellers’ Representative  37 17. Term and Termination  38 18. General  38 19. Notices  39 20. Governing Law - Jurisdiction  40 21. Dispute Resolution  40 
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This Agreement is made on 17 May 2004
BETWEEN:
(1) MediCor Ltd., a company existing and organized under the laws ofDelaware, having its registered office at 4560 S. Decatur Blvd, Ste 300,Las Vegas, Nevada, 89103-5253, duly represented for the purpose hereof byDonald K. McGhan (hereinafter referred to as the “Purchaser”), with aright to be substituted hereunder by any company under its control inaccordance with Clause 18.2 of this Agreement;
ON THE ONE HAND
AND
(2) François Tourniaire, born on * * * , residing at * * * , of Frenchnationality, (3) Michel Tourniaire, born on * * * , residing at * * * , of Frenchnationality, (4) Jacques Tourniaire, born on * * * , residing at * * * , of Frenchnationality, (5) Olivier Tourniaire, born on * * * , residing at * * * , of Frenchnationality, (6) Senaz Falquerho (née Namooya), born on * * * , residing at * * * , ofFrench nationality, (7) Françoise Tourniaire (née Pelissard) born on * * * , residing at * * * ,of French nationality, (8) Nadège Tourniaire born on * * * , residing at * * * , of Frenchnationality,
(The parties in (2) to (8) being referred to as the “Sellers” and individuallyas a “Seller”), acting severally (*de manière non-solidaire*) for the purposes ofthis Agreement.
ON THE OTHER HAND
WHEREAS:
(A) The Sellers collectively own 100% of the Shares of the Company in theproportions set out on Schedule A. (B) The Company is involved in the development, manufacture and distributionof silicone based products and other products derived therefrom for thepurpose of professional cosmetic and reconstructive surgery and externalcosmetic implants. (C) The Purchaser has conducted due diligence investigation of the prospects,business, assets, contracts, rights, liabilities and obligations of theCompany, including financial, marketing, employees, legal, regulatory andenvironmental matters, was given access to
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  data rooms in respect of the Company (the “**Data Rooms**”), and has had theopportunity to ask questions and receive answers during the due diligenceprocess. The documents provided in the Data Rooms and in the writtenquestions and answers from the due diligence process are listed inSchedule C.
(D) * * * (E) The Sellers wish to sell, and the Purchaser wishes to purchase, all ofthe Shares held on the terms and subject to the conditions contained inthis Agreement.
THE PARTIES AGREE as follows:
1. DEFINITIONS 1.1 In this Agreement:     “Accounting Principles” : means (i) the accounting principles applied by theCompany in the preparation of the 2003 FinancialStatements and (ii) French GAAP as at the date ofsignature of this Agreement to the extent not coveredin (i).     “Agreement” : means this agreement and the schedules hereto.     “Authorizations” : means authorizations, licenses, permits, certificatesor other approvals or consents delivered by anyGovernmental Authority established in one of thecountries where the Company carries out itsactivities.     “Business” : means the business of the development, manufacture anddistribution of a comprehensive line of siliconeimplants for cosmetic surgery and for reconstructivesurgery conducted by the Company as of the date ofthis Agreement.     “Business Day” : means a day other than a Saturday, Sunday or publicholiday in France or in the United States of America.     “Business IntellectualProperty” : has the meaning specified in Clause 8.12.1.     “Closing” : means the completion of the sale and purchase of theShares in accordance with this Agreement.     “Closing Date” : means the date on which Closing takes place inaccordance with Clause 7.1.     “Closing Date Account” : means the following account of Mr. François Tourniaireat Banque BNP Paribas, Apt:    * * *     “Closing Date Amount” : has the meaning specified in Clause 4.1.1.
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     “Company” : means Laboratoires Eurosilicone SA, a *société anonyme*existing and organized under the laws of France, witha share capital of Euro 2,000,000, having itsregistered office at Z.I. de la Peyrolière, 84400 Apt,France, registered with the Companies and CommercialRegistry under number RCS 347 535 296 Avignon.     “Confidential Information” : means all information which is used in or otherwiserelates to the Business and the Company’s customers orfinancial or other affairs including, withoutlimitation, information relating to:      (a) technical and/or business know-how or businessinformation acquired or developed or which the Sellershave been made aware of in connection with theiractivities or position as shareholder, director,officer or employee of the Company;  (b) the marketing of goods or services including,without limitation, customer names and lists and otherdetails of customers, sales targets, sales statistics,market share statistics, prices, market researchreports and surveys, and advertising or otherpromotional materials; or  (c) future projects, business development or planning,commercial relationships and negotiations;         but does not include information which is generallyavailable to or known by the public other than as aresult of improper disclosure under this Agreement. “Damages” : has the meaning specified in Clause 11.2.1.     “Data Rooms” : has the meaning specified in paragraph C of therecitals to this Agreement.     “Encumbrance” : has the meaning specified in Clause 8.2.2.     “Environment” : means ecological systems including living organisms(including the human being) and the following media(alone or in combination): air (including air withinbuildings and air within other natural manmadestructures above or below ground), water (includingterritorial and coastal and inland waters, groundwater and water in drains and sewers) and land(including surface land and sub-surface land and landunder any water).     “EnvironmentalLegislation” : means all applicable laws and regulations governingthe existence of or providing a remedy for the releaseof Hazardous Substances, the protection of persons,natural resources or the Environment, including thosegoverning occupational and healthand safety matters.
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     “2003 FinancialStatements” : has the meaning specified in Clause 8.5.1.     “Escrow Account” : means the account established by the Sellers and thePurchaser pursuant to the Escrow Agreement.     “Escrow Agent” : means BNP Paribas, or any other French subsidiary of afirst ranking bank.     “Escrow Agreement” : means the agreement substantially in the form ofSchedule 7.2.4 hereto, with such reasonablemodifications as the Escrow Agent may request.     “Escrow Amount” : has the meaning specified in Clause 11.2.2(a).     “French GAAP” : means French generally accepted accounting principles.     “Governmental Authority” : means (i) any European, national, regional, municipal,local or foreign government or any politicalsubdivision of the foregoing, (ii) any governmental,regulatory, taxing or administrative entity,authority, agency, commission, ministry or othersimilar body, including without limitation any publicutility control, professional entity or public servicecommission or similar regulatory body, or (iii) anycourt, tribunal or judicial or arbitral body.     “Hazardous Substances” : means any waste, pollutant, contaminant or otherhazardous, toxic, radioactive, noxious, flammable,corrosive or caustic matter which is capable ofcausing significant harm to the Environment or tohuman health; in each case, whether in the form ofsolids, gases, ions or noise.     “Initial Purchase Price” : has the meaning specified in Clause 3.1.     “Intellectual PropertyRights” : means trademarks, patents, service marks, registereddesigns and applications, trade, business and companynames, internet domain names and e-mail addresses,unregistered trademarks and service marks, copyrights,database rights, rights in software, know-how, rights in designs and inventions owned or used by the Companyin the carrying out of its activities.     “Party” : means the Sellers or the Purchaser and “Parties” meansboth of them.     “Performance Figure” : has the meaning specified in Clause 3.1(b).
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     “Person” : shall mean a natural person, partnership, corporation,limited liability company, business trust, joint stockcompany, trust, unincorporated association, jointventure, Governmental Authority or other entity ororganization.     * * * : * * *     “Pledge Agreement” : has the meaning specified in Clause 4.3.     “Premises” : means the land and buildings over which the Companyhas possession by virtue of leases.     “Prorata Proportion” : has the meaning specified in Clause 4.1.2.     “Purchase Price” : has the meaning specified in Clause 3.1.     “Purchaser’sRepresentations” : means the representations and warranties made by thePurchaser under Clause 9.     “Real Property” : means the land and buildings, structures and fixturesowned by the Company.     “Revenue” : means, for any fiscal year, the *chiffres d’affairesnets*of the Company as set out in its annual statementof income for such year.     “Right to Set- Off” : has the meaning specified in Clause 11.2.3.     “Sellers’ Account” : has the meaning specified in Clause 4.1.2.     “Sellers’ Representations” : means the representations and warranties made by theSellers under Clause 8.     “Sellers’ Representative” : means François Tourniaire, appointed by each Seller asits representative in accordance with Clause 16;     “Shares” : means 33,750 fully paid ordinary shares of the Companycomprising the whole of the allotted and issued sharecapital of the Company.     “Specific Indemnities” : has the meaning specified in Clause 11.2.1.     “Statement of Revenue” : has the meaning set out in Schedule 3.2.1     “Subsequent Payment” : has the meaning specified in Clause 3.1     “Targets” : Are set forth in Schedule 3.1
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     “Taxes” : means direct or indirect taxes, levies, imposts,duties or other charges including, without limitation,taxes on income or profits, withholding taxes,deductions (*précompte*), property taxes, value addedtaxes, stamp duty, registration duties, customs andexcise duties, sales taxes and social contributions,under any applicable laws or regulations and anypenalty, fine or interest payable in connection withany failure to pay or any delay in paying any of thesame.     “Tax Claim” : means a claim for indemnification or defense arisingout of Clause 11, including reasonable attorneys’ feesand expenses and reasonable accountants’ fees andexpenses incurred in the investigation or defense ofany of the same or in asserting, preserving orenforcing any of the rights of the Purchaser arisingunder Clause 11.     “Tax Regulations” : means any Tax or custom law as well as statute,decree, ordinances, rule, order, memorandum or othertexts of application or interpretation of the said lawapplicable in a given country as well as anyinternational treaty (including the derivative law -directives, regulations or others — of this treaty).     “Third Party” : means a Person other than the Sellers or the Purchaser.
2. SALE AND PURCHASE 2.1 Upon the terms and subject to the conditions set forth herein, theSellers agree to sell to the Purchaser, and the Purchaser agrees toacquire from the Sellers in exchange for the Purchase Price (as definedbelow), all the Shares and all rights attaching or accruing to the Shareson or after the date of this Agreement, free from all Encumbrances (asdefined below). 2.2 The Shares shall be sold to the Purchaser with coupon attached theretoentitling the Purchaser to any and all dividends, distribution of reserves(other than legal reserves) and advance payments payable in respect of theShares after the date hereof. 2.3 Notwithstanding Clause 2.2 above, the Company may pay to the Sellersprior to the Closing Date dividends in respect of the financial year 2003in an amount equal to * * * . 3. PURCHASE PRICE 3.1 Initial Purchase Price   The total consideration for the purchase of the Shares (the “**PurchasePrice**”) shall be a cash payment of up to * * * , consisting of:
 (a) an initial amount of * * * (the “**Initial Purchase Price**”), plus  (b) up to an amount of * * * in subsequent payments payable inthree annual installments of up to * * * each (the “**SubsequentPayments**” and individually, a “**Subsequent Payment**”), calculated onthe basis of the Revenue for the fiscal
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   years ending December 31, 2004, December 31, 2005 and December 31,2006, multiplied by * * * (the “**Performance Figure**”), as morefully set forth in Clause 3.2 below, and the Subsequent Paymentbeing subject to any Right to Set-Off.
3.2 Subsequent Payments
 3.2.1 The amount owing in respect of a particular Subsequent Paymentshall be determined in accordance with the procedure set out inSchedule 3.2.1 and this Clause 3.2.  3.2.2 Any annual installment of the Subsequent Payment shall beequal to * * * if the Performance Figure for the relevant fiscal yearequals or exceeds the Target for such fiscal year as set forth inSchedule 3.1. In the event that the Performance Figure in anyrelevant fiscal year is less than the respective Target set forth inSchedule 3.1 in respect of such fiscal year, then the amount of thecorresponding annual installment Subsequent Payment shall be reducedin direct proportion to the difference between the Performance Figurefor such year and the Target for such year as set forth in Schedule3.1.  3.2.3 By way of example, and subject to article 1164 of the FrenchCivil Code, if the Performance Figure for the fiscal year endingDecember 31, 2004 is * * *, then the Subsequent Payment payable withrespect to such year shall be reduced by * * * (* * * divided by * **) and shall therefore be equal to * * *.  3.2.4 Calculation of Revenue for the purpose of determining theamount of Subsequent Payments shall be based on the consistentapplication over the period of the Accounting Principles.
4. PAYMENT 4.1 Initial Purchase Price
 4.1.1 The Purchaser shall pay into the Closing Date Account anamount of * * *, of which (i) * * * is to be paid to Mr. FrançoisTourniaire, in the Closing Date Account, on or prior to 21 May 2004(the “**First Closing Date Installment Amount**”) as a non-refundableindemnity to Mr. François Tourniaire, which indemnity shall bededucted from the portion of the Initial Purchase Price owed to Mr.François Tournaire if the Agreement does not terminate in accordancewith Clause 17.1, and (ii) * * * is to be paid to Mr. FrançoisTourniaire, in the Closing Date Account, on or prior to 28 May 2004in the form of a loan to Mr. François Tourniaire (the “**Second ClosingDate Installment Amount**” and, together with the First Closing DateInstallment Amount, the “**Closing Date Amount**”). The Second ClosingDate Installment Amount shall be repaid in accordance with the termsof the loan agreement entered into between the Purchaser and Mr.François Tourniaire on the date hereof (the “**Loan Agreement**”).  4.1.2 On the Closing Date, the Purchaser shall (i) pay the InitialPurchase Price (less the Closing Date Amount) in full by bank wiretransfer of funds for same day
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   value to such account as shall be notified by the Sellers’Representative no later than four (4) Business Days before theClosing Date (the “**Sellers’ Account**”) and (ii) pay that portion ofthe Initial Purchase Price equal to the Second Closing DateInstallment Amount to Mr. François Tourniaire, which payment maybe made as a set-off against the amount owed by Mr. FrançoisTourniaire to the Purchaser pursuant to the Loan Agreement.  4.1.3 In accordance with Clause 16, subject to the occurrence of theClosing, the Sellers’ Representative shall (following a deduction forthose costs referred to in Clause 16.4) be responsible fordistributing the Initial Purchase Price (less the Closing DateAmount) between the Sellers so that each Seller receives that amountof the Initial Purchase Price which is proportionate to the number ofShares sold by that Seller to the Purchaser on the Closing Date outof the total number of Shares sold by the Sellers to the Purchaser onthe Closing Date as set forth in Schedule A (such proportion beingreferred to as the “**Prorata Proportion**”).
4.2  Subsequent Payments
 4.2.1 The Subsequent Payments (or part thereof as the case may be),if applicable, shall be determined in accordance with the proceduresset forth in Schedule 3.2.1 and the provisions of Clause 3.2 andshall be paid by the Purchaser to the Sellers’ Representative on thelater of (i) (a) 31 March 2005 in respect of the 2004 fiscal year,(b) 31 March 2006 in respect of the 2005 fiscal year, and (c) 31March 2007 in respect of the 2006 fiscal year or (ii) three (3)Business Days after the final determination of the amount of therelevant Subsequent Payment by the Parties or the Expert (inaccordance with Schedule 3.2.1).  4.2.2 In accordance with Clause 16, the Sellers’ Representativeshall be responsible for distributing the amount of the SubsequentPayments, if any, between the Sellers so that each Seller receivesthe Prorata Proportion less his/her Prorata Proportion of the costsas set forth in Clause 16.4.
4.3 Pledge Agreement   At Closing, in order to secure the obligation of the Purchaser to pay toeach Seller his/her Prorata Proportion of the Subsequent Payments, if any,the Purchaser shall grant at Closing to each such Seller a pledge over onethird of the Shares sold by such Seller, pursuant to the draft PledgeAgreement in the form set out in Schedule 4.3; the number of pledgedShares decreasing by one-third annually, following either (i) payment andreceipt of each Subsequent Payment (including any payments into the EscrowAccount which shall be deemed received for purposes hereof) or (ii) thedetermination that no Subsequent Payment is due for such year. 5. CONDITIONS   The sale and Purchase of the Shares is subject to the conditions set forthin Clauses 5.1 to 5.6 below being satisfied or waived in writing by thePurchaser on or before 30 June
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  2004, it being agreed that each Party shall exercise its best efforts tosatisfy the conditions set forth below on or prior to 30 June 2004. 5.1 No material adverse change in the Business, condition (financial orotherwise), operations or prospects of the Company, has occurred since 31December 2003. 5.2 Approval of the sale and transfer of the Shares by the board of directorsof the Company. 5.3 The delivery of a certificate signed by the Chairman of the Companystating that the Company has not made or committed to make anydistribution of profits or reserves by way of a dividend since 30 November2003, other than in accordance with Clause 2.3. 5.4 The Sellers’ representations and warranties in respect of thetransactions contemplated by this Agreement contained in Clause 8 shall betrue and correct in all material (this materiality test being assessed inrespect of the Business, condition (financial or otherwise), operations orprospects of the Company) respects as at the Closing Date as if made onthat date except for (i) those representations and warranties for which aspecific date (other than the Closing Date) has been set out in Clause 8and (ii) acts carried out or events occurring in the ordinary course ofbusiness. 5.5 The Purchaser having entered into a definitive financing agreement inconnection with the transactions contemplated herein, and having receivedthe proceeds of such financing in an amount sufficient to pay the PurchasePrice. 5.6 The Sellers shall procure that the Persons occupying the Premises and/orthe Real Property vacate such Premises and the Real Property and that suchPersons discontinue any direct or indirect employment, activities orrelationship with the Company. 6. NOTICES   The Sellers’ Representative shall give prompt notice to the Purchaser ofsatisfaction of the conditions set forth in Clauses 5.1 to 5.5 and 5.6,and the Purchaser shall do the same with respect to Clause 5.6. 7. CLOSING 7.1 Time and Place of Closing   The Closing shall take place at the offices of Clifford Chance, 112 avenueKléber, 75016 Paris within five (5) Business Days of the date of the lastcondition to be satisfied under Clause 5 or at another venue and atanother time to be mutually agreed upon by the Purchaser and the Sellers’Representative. 7.2 Deliveries and Actions at Closing
     7.2.1 At Closing, the Sellers shall deliver or cause to be delivered to the Purchaser:
 (a) the stock transfer forms (*ordres de mouvement*)recording the transfer of the Shares to the Purchaser, dulysigned by the Sellers;
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 (b) the up-to-date share transfer register of theCompany (comprising the *registre des mouvements de titres*andthe *comptes individuels d’actionnaires*);  (c) letters of resignation of the corporateofficers of the Company listed in Schedule 7.2.1(c) and theform of which is set forth in Schedule 7.2.1 (c);  (d) notices to the shareholders of the Companyconvening shareholders’ meetings to take place on or beforethe Closing Date: (i) replacing the directors and corporateofficers of the Company as specified by the Purchaser atleast fifteen (15) days prior to the Closing Date and (ii)canceling the right of pre-emption contained in Article 12 ofthe by-laws (*statuts*) of the Company;  (e) a certified copy of the minutes of the meetingof the Company’s board of directors (i) approving the sale ofthe Shares by each of the Sellers to the Purchaser and theexecution of the agreements referred to in sub-clause 7.2.1(g) and (ii) revoking and replacing all existing instructionsto the Company’s bankers, bank mandate forms and authorities,of which there is a full list at Schedule 7.2.1 (e);  (f) a certificate signed by the chief executiveofficer and chief financial officer of the Company, dated theClosing Date, stating that the representations and warrantiesset out in Clause 8 are true and accurate in all material(this materiality test being assessed in respect of theBusiness, condition (financial or otherwise), operations orprospects of the Company) respects as at the Closing Date asif made on that date except for (ii) those representationsand warranties for which a specific date (other than theClosing Date) has been set out in Clause 8 and (ii) actscarried out or events occurring in the ordinary course ofbusiness;  (g) agreements entered into between the Company andeach of Jacques and Olivier Tourniaire amending theirexisting employment agreements, substantially in the form setout in Schedule 7.2.1(g)(i) and agreements entered intobetween the Company and each of Michel Tourniaire and SenazFalquerho (née Namooya), substantially in the form set out inSchedule 7.2.1(g)(ii);  (h) an agreement between the Company and MrFrançois Tourniaire in relation to consultancy services to berendered by Mr François Tourniaire to the Companysubstantially in the form set out in Schedule 7.2.1(h);  (i) receipt of a release, in the form set forth inSchedule 7.2.1(i), by each director of the Company, to anyand all claims arising prior to the date of this Agreementthat such person may have against the Company or thePurchaser and their respective Affiliates arising from suchperson’s relationship with the Company or their status as adirector, officer or employee of the Company; and
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 (j) approval of the Pledge Agreement by the boardof directors of the Company.
 7.2.2 At Closing, the Purchaser shall deliver or cause to bedelivered to the Sellers’ Representative (i) evidence of credit tothe Sellers’ Account of a sum equal to the Initial Purchase Price(less the Closing Date Amount) and (ii) evidence of credit to theClosing Date Account of a sum equal to the Closing Date Amount inaccordance with Clause 4.1.1.  7.2.3 At Closing, each Seller and the Purchaser shall procure theexecution and delivery of a Pledge Agreement to each of them.  7.2.4 At Closing, the Sellers’ Representative and the Purchasershall procure the execution and delivery of an Escrow Agreement dulysigned by the Escrow Agent, substantially in the form set out inSchedule 7.2.4 to each of them.  7.2.5 All matters at the Closing will be considered to take placesimultaneously, and no delivery of any document will be deemedcomplete until all transactions and all deliveries of documentsrequired by this Agreement are completed and title to the Sharesshall not be transferred and the Purchaser shall have no propertyrights or interest in the Shares unless and until the Closingactually takes place and the payment of the Initial Purchase Pricehas been effectively received by the Sellers’ Representative.
8. REPRESENTATIONS AND WARRANTIES OF THE SELLERS   Each of the Sellers represents and warrants to the Purchaser that therepresentations and warranties contained in this Clause 8 are true,complete and accurate and are not misleading both at the date of thisAgreement and at the Closing Date (unless otherwise specified). Nospecific representation and warranty in any way limits the scope of themore general representations and warranties, unless expressly providedotherwise.   The representations and warranties contained in this Clause 8 are made tothe Purchaser subject to the disclosures contained in the Schedulerelating to the corresponding representation and warranty.   Inclusion of, or reference to, any matter in any schedule does notconstitute an admission of the materiality of any such matter.   Any reference to “the Sellers’ best knowledge” hereinafter shall be deemeda reference to the best actual knowledge and belief of such Seller.   Representations and warranties given by a Seller in Clauses 8.1 and 8.2are limited to such Seller and to the Shares owned by such Seller. 8.1 Authority of the Sellers
 8.1.1 Each of the Sellers has full power and authority to executeand perform this Agreement and its obligations hereunder and tobenefit from the rights provided for herein. Any Seller who issubject to legal restrictions as a result of either his
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   or her marital status or being a party to a *pacte civil desolidarité*, has obtained the necessary consent to sell his or her shares.  8.1.2 None of the Sellers is currently the subject of anyproceedings with a view to the prevention or resolution of businessdifficulties (or any similar actions), and there do not exist anyserious reasons justifying a judgment of declaration of bankruptcyconcerning such Seller.  8.1.3 There is no action, suit or proceeding pending or threatenedagainst or affecting him or her in any court or before anyGovernmental Authority which would materially affect the performanceof his or her obligations under this Agreement.  8.1.4 The performance by each of the Sellers of their respectiveobligations under this Agreement and the consummation of thetransactions contemplated herein will not:
 (i) violate, conflict with or result in the breachof any contract to which such Seller is a party, or  (ii) constitute a violation by such Seller of anyjudgment, order, decree, law or regulation applicable to himor her.
 8.1.5 Except as set forth in Clause 5, all prior formalities andauthorizations to be obtained by the Sellers for the transactionscontemplated herein have been completed or obtained. No authorizationis required to be obtained by any of the Sellers in connection withthe valid execution of this Agreement and the performance of thetransactions hereby contemplated.  8.1.6 This Agreement has been duly executed by each of the Sellersand constitutes a legal, valid and binding obligation of each of theSellers enforceable against him or her in accordance with its terms.
8.2 Shares
 8.2.1 Each of the Sellers is the sole owner of the number of Sharesset forth opposite its name in Schedule A.  8.2.2 Subject to the provisions of the by-laws (*statuts*) of theCompany that have been provided to the Purchaser, all the Shares heldby each Seller are free and clear of all encumbrances, liens,security interests, charges, mortgages, pledges, guarantees,*usufruits*, subscription rights, options, restrictions on transfer,rights of first refusal or buy-out, rights of pre-emption, votingagreements, other third-party right or interest, or another type ofpreferential arrangement (including, without limitation, a titletransfer or retention arrangement) having similar effect(“**Encumbrances**”) and there is no agreement, arrangement or obligationto create or give an Encumbrance in relation to any of the Shares,and no Person has claimed to be entitled to an Encumbrance inrelation to any of the Shares.
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8.3 Organization
 8.3.1 The Company is duly organized and validly existing under thelaws of France. The copies of the by-laws (*statuts*) of the Companythat have been provided to the Purchaser reflect all amendments madeto date and are correct and complete.  8.3.2 The Company has the right, power and authority to carry on itsrespective Business as currently conducted, and to own and operatethe properties and assets owned and operated by it.  8.3.3 The Company has properly kept in all material respects allregisters, minute books and other books (including account books andledgers) required by law and such registers, minute books and otherbooks contain a complete and accurate record of the matters requiredto be recorded.  8.3.4 All resolutions and other documents required to be delivered,filed or recorded at the Commercial Court or other GovernmentalAuthority in relation to the Company have been properly prepared andtimely delivered, filed or recorded.
8.4 Share Capital
 8.4.1 The Shares comprise the whole of the Company’s share capital.The Shares have been properly issued and allocated and fully paid.None of the Shares have been listed or traded on a stock exchange.  8.4.2 The Company has, at the date hereof, the capital stock, thenumber of Shares and the shareholding structure set forth in ScheduleA. The Company does not have any subsidiaries nor does the Companyown, directly or indirectly, any capital stock of or other equityinterests in any corporation, partnership, or other Person. TheCompany is not a member of, or participant in, any partnership, jointventure, *Groupement d’Intérêt Economique*or similar enterprise. Allof the voting rights of the Company are vested exclusively in the shares constituting their share capital.  8.4.3 The Company has not issued any equity or debt security of anykind (other than the Shares) and there are no resolutions or othercorporate actions that would require or permit the Company to issuesuch other securities including without limitation convertible bonds,options, warrants, reserved or authorized shares.  8.4.4 There are no agreements or arrangements of any kind providingfor the purchase, issuance, sale, extension or restriction on thetransfer of any interest in the capital stock of the Company, exceptfor the provisions of the by-laws of the Company (*statuts*) that havebeen provided to the Purchaser.  8.4.5 The Company does not have nor has had in the past, a branch,agency, place of business or establishment outside of France.
8.5 Accounts
 8.5.1 The Sellers have heretofore furnished the Purchaser with theaudited accounts of the Company at 31 December 2003, set out inSchedule 8.5.1 (the “**2003**
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   **Financial Statements**”). The 2003 Financial Statements, includingthe footnotes thereto, have been prepared and audited inaccordance with the Accounting Principles, applied on a consistentbasis, and show a true, fair and accurate view of the financialcondition, results of operations and cash flows of the Company atthe date thereof.
 8.5.2 Except as set forth in Schedule 8.5.2, the Company does not haveany outstanding financial indebtedness (i.e., debt to credit orfinancial institutions) to any Person. Except as set forth in Schedule8.5.2, no document evidencing, or agreement with respect to, financialindebtedness of the Company, contains any restriction upon (i)prepayment of any financial indebtedness, (ii) the incurrence ofadditional financial indebtedness or (iii) the ability to grant anyEncumbrance on any properties or assets of the Company. Schedule 8.5.2sets forth the amount of principal and unpaid interest outstandingunder each document evidencing financial indebtedness of the Company,if any, that will accelerate or become due or result in a right on thepart of the holder of such financial indebtedness (with or without duenotice or lapse of time) to require prepayment, redemption orrepurchase as a result of the execution of this Agreement or thecompletion of the transactions contemplated hereby.  8.5.3 The Company is not a party to, or obligated under, any option,swap or other derivatives contract other than such a contract thatdirectly links to and hedges the performance of a specificcontractual obligation of the Company.  8.5.4 There are no liabilities, whether actual or contingent,relating to the Company, except for (a) liabilities that are requiredto be reflected in the 2003 Financial Statements and have beensufficiently provided for therein and (b) liabilities that wereincurred after 31 December 2003 in the ordinary and usual course ofbusiness, consistent with past practice.  8.5.5 The Company is not insolvent and has not suspended itspayments, (b) is not in judicial liquidation, receivership ormoratorium, (c) is subject to any proceedings relating to theprevention or settlement of insolvency claims, (d) is not in judicialreorganization (*redressement judiciaire*), (e) has not been the objectof any proceedings for the reorganization or collective discharge ofits liabilities, or (f) to the Sellers’ best knowledge, is not underthe threat of any such proceedings.  8.5.6 Since 31 December 2003 until the date hereof, no event hasoccurred, that has had or could reasonably be expected to have amaterial adverse effect on the Company or the Business. Withoutlimiting the generality of the foregoing, (A) the Business has beenconducted in the usual, regular and ordinary course, consistent withpast practice, and (B) the Company has not engaged in practices,taken any action or participated in any transaction the purpose ofwhich would have been different from securing and facilitating thebusiness development of the Company as a going concern on a long termbasis.
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8.6 Accounts Receivable and Payable
 8.6.1 Except as set forth in Schedule 8.6.1, since 31 December 2003,the amounts of all work-in-process, accounts receivable and unbilledinvoices (including, without limitation, unbilled invoices forservices and out-of-pocket expenses) and other debts due or recordedin the records and books of account of the Business were incurred inthe ordinary course of business, and will be current and collectible,net of any reserves shown in the 2003 Financial Statements or anyreserves made in the ordinary course of business thereafter whoseamount is consistent with past practices (and in any case are payableno later than sixty (60) days from the relevant due date).  8.6.2 Except for fluctuations in the ordinary course of business,there has been no material change since 31 December 2003 in theamount of the work-in-process, accounts receivable or other debts dueto the Company or the reserves with respect thereto, or the accountspayable or other payables of the Company from that reflected in the2003 Financial Statements.  8.6.3 There are no unpaid invoices, bills or other amounts due andpayable representing amounts in excess of Euro 15,000 in aggregatealleged to be owed by the Company or other alleged obligations of theCompany which it has disputed or determined to dispute or refuse topay.
8.7 Inventory   All inventory consists of a quality and a quantity usable and saleable inthe ordinary course of business. Any inventory that is written off is doneso in accordance with the ordinary course of business. There has been nomaterial change since 31 December 2003 in the amount of inventory andreserves with respect thereto. The quantities of each type of inventory(whether work-in-process or finished goods) are not excessive but arereasonable in the present circumstances of the Company. Except as setforth in Schedule 8.7, all inventory is free and clear of allEncumbrances. 8.8 Personnel and Corporate Officers of the Company
 8.8.1 The list of salaried employees of the Company as at the dateof this Agreement appears as Schedule 8.8.1.  8.8.2 Schedule 8.8.2 sets out the collective agreements applicableto the various categories of employee working for the Company.  8.8.3 Except as indicated in Schedule 8.8.3, there is no contract oragreement with (i) those salaried employees with an annualremuneration exceeding Euro 30,000 or (ii) directors, corporateofficers or managers of the Company which allows for a notice periodand/or a redundancy payment greater than those appearing in thecollective agreements mentioned in Clause 8.8.2 above.  8.8.4 No employee of the Company has been granted terms ofemployment which are triggered as a consequence of the sale of theShares, nor have any employees been granted special protection suchas golden parachutes or similar benefits.
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 8.8.5 Save as set out in Schedule 8.8.5, no directors of the Companybenefit from any employment contract or service contract with theCompany and, except as set out in Schedule 8.9 no corporate officerhas received any remuneration from the Company.  8.8.6 Save as indicated in Schedule 8.8.6, the Company does notparticipate in or contribute to any retirement plans, investment orprofit sharing schemes, premiums or commission or other optionalemployee plans, other than those required by applicable legislation,regulations and collective bargaining agreements.  8.8.7 Except as otherwise disclosed in Schedule 8.8.7, the Companyhas not granted any loans to any person employed by the Company.  8.8.8 Except as otherwise disclosed in Schedule 8.8.8, for each ofits employees (and where appropriate its former employees), theCompany complies in all material respects and has no liability(whether accrued or otherwise) for past non-compliance withapplicable laws and regulations as well as the provisions of thecollective bargaining agreements, collective agreements, commonpractices, decisions of the court and employment contract Clausesconcerning employment conditions in its respective jurisdictions.  8.8.9 The collective agreements applied within the Company arevalid, and comply in all material respects with applicable laws andregulations. Save as set out in Schedule 8.8.9, the Company is not inbreach of the legal and regulatory provisions applicable in itsrespective jurisdictions of incorporation or operation relating tothe personnel representative bodies and the exercise of trade unionrights.  8.8.10 All legal obligations to inform and consult the personnelrepresentative bodies of the Company in respect of the sale andpurchase of the Shares in accordance with the terms of the Agreementhave been fulfilled and no specific undertaking has been given inthis respect, it being specified that the *note d’information*given tothe workers’ committee of the Company was provided beforehand to thePurchaser.  8.8.11 All employment declarations, Taxes and any other materialformalities or documents imposed by employment legislation, have beentimely completed, paid, submitted, lodged or teletransmitted by theCompany in the required form and within the required deadlinesapplicable in its respective jurisdictions of incorporation oroperation.  8.8.12 There is no collective redundancy or social plan in the Company andthere have been no collective redundancies during the previous twelve(12) months.
8.9 Directors’ Fees   Since 31 December 2003 and except as provided for in Schedule 8.9, theCompany has not distributed any directors’ attendance fees or othersimilar distributions and have not
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  taken any decision as regards such distribution. Except as set out inSchedule 8.9, no remuneration has been paid or remains payable to anydirectors of the Company. 8.10 Real Property
 8.10.1 The Company has full and complete ownership of the Real Propertylisted in Schedule 8.10.1 free from Encumbrances.  8.10.2 The Company holds good and valid title of occupation for thePremises described in Schedule 8.10.2. The Company has not concludedany agreement that has not yet been performed with a view to buyingor selling the Real Property or the Premises or any other form ofreal property or rights thereto except for options to buy grantedunder the financial leases (“*crédit baux*”) referred to in Clause8.10.3 below. Each lease in respect of the Premises is valid, legallybinding, in full force and effect and enforceable in accordance withits terms by the Company, and not subject to any challenge, refusalof renewal or other claim.  8.10.3 Schedule 8.10.3 sets out the entire list of contracts or agreementswith any Third Party with regard to the Premises and Real Propertydescribed in Schedule 8.10.2. The Company has all easements andrights of ingress and egress necessary for utilities and services forall operations conducted on the Real Property or on the Premises.  8.10.4 The Company is up to date with the payment of the usual local Taxeswhich have to be paid by the Company in the localities where the RealProperty and the Premises are situated, and with the rents, chargesand insurance premiums due, as the case may be, in respect of theconstruction and the use of the Real Property and the Premises.  8.10.5 The Real Property and the Premises are adapted to the purposes forwhich they are used and, except as mentioned in Schedule 8.10.5, arenot the subject of any material default under applicable laws andregulations, including Environmental Legislation. Neither the RealProperty nor the Premises are subject to any expropriation orrequisition measures or any other administrative measure that mayadversely affect in a significant way their current use (or, inrespect of the Real Property, their book value).  8.10.6 The Company has filed and obtained all planning authorizationswhich were required under the applicable town planning regulationsfor the construction and/or the fitting out of the Real Property andthe Premises. These planning authorizations are now definitive andnot subject to any withdrawal, challenge or other claim. The RealProperty and the Premises were built in compliance with theseplanning authorizations.
8.11 Assets
 8.11.1 Except as mentioned in Schedule 8.11.1, the Company is the absoluteowner and is in actual possession of its fixed assets used or usefulfor carrying out its Business, including those fixed assets listed inthe 2003 Financial Statements.
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   Except as mentioned in Schedule 8.11.1, no person has the right tocall for any payment in respect of any of these assets, or toclaim ownership of these fixed assets (including by virtue of anagreement) and, except as mentioned in Schedule 8.11.1, theCompany has not created or agreed to create any Encumbrance overany part of its undertaking or these fixed assets (other thanarising by the operation of law). As regards the fixed assets notowned by the Company of a value exceeding Euro 15,000, the Companyis up to date with all payments due in relation to these fixedassets and observes the provisions of the agreements under whichthey hold and use these fixed assets.  8.11.2 The Company’s material fixed assets are in good working order andrepair and can be used normally for the activities for which they areintended.
8.12 Intellectual Property and Software Rights
 8.12.1 The list of the Intellectual Property Rights owned and/or used bythe Company in carrying out its activities (the “**BusinessIntellectual Property**”) is set out in Schedule 8.12.1.  8.12.2 Except as otherwise disclosed in Schedule 8.12.2, all IntellectualProperty Rights owned by the Company, are valid and in full force andeffect.  8.12.3 Save as set out in Schedule 8.12.3, the Intellectual PropertyRights owned by the Company are held exclusively (free and clear ofany Encumbrance) by the Company.  8.12.4 Except as otherwise disclosed in Schedule 8.12.4, all employees,agents, consultants or contractors who have contributed to, orparticipated in, the creation or development of any copyrightable,patentable or otherwise protectable material under intellectualproperty laws, or manufacturing or trade secret material on behalf ofthe Company either: (i) is a party to a valid written agreement underwhich the Company is deemed to be the original owner/author of allthe property rights therein; or (ii) has executed, or is obligedpursuant to en existing agreement to execute, a valid agreementassigning to the Company all right title and interest in suchmaterial.  8.12.5 Except as otherwise disclosed in Schedule 8.12.5, the Company isnot a party to any written or oral cooperative research anddevelopment agreement or similar arrangement with a Third Party withrespect to the Intellectual Property Rights.  8.12.6 The consummation of the transactions contemplated by this Agreementwill not alter or impair the rights to own or use any of the BusinessIntellectual Property.
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 8.12.7 Except as otherwise disclosed in Schedule 8.12.7, no claims havebeen asserted against the Company relating to the use of the BusinessIntellectual Property or challenging the ownership, validity orenforceability thereof. The use of the Business IntellectualProperty by the Company does not infringe or misappropriate anyintellectual property rights of a Third Party and no Third Party is,to the Sellers’ best knowledge, infringing or misappropriating anyIntellectual Property Rights. Notwithstanding the outcome of thelitigation proceedings brought by * * * against the Company (whichare disclosed in Schedule 8.12.7) the Company shall be able to fullyoperate the Business as it is conducted at the date of thisAgreement.
8.13 Contracts
 8.13.1 Schedule 8.13.1 contains the list of the distribution, commercialagency and representation agreements entered into by the Company,whether in writing or otherwise or by which it is bound which requirepayments exceeding Euro 50,000 per annum.  8.13.2 Schedule 8.13.2 contains a list of the supply agreements enteredinto by the Company, whether in writing or otherwise or by which itis bound, which require payments exceeding Euro 50,000 per annum.  8.13.3 Schedule 8.13.3 comprises a list of current contracts entered intoby the Company (other than employment contracts, commercial leasesand contracts specifically referred to or listed in the otherSchedules) with a duration of more than twelve (12) months and/orinvolving an annual sum, VAT excluded, which require paymentsexceeding Euro 50,000 per annum.  8.13.4 All contracts binding on the Company are in full force and effect,have been entered into and are performed in compliance withapplicable laws and regulations, in particular with regard tohygiene, clinical and health and safety regulations applicable to theBusiness except when failure to so comply would not individually orin the aggregate have a material adverse effect on the Company or theBusiness. Neither the Company nor any other party to a contract is indefault of its obligations arising under any contract listed inSchedules 8.13.1 to 8.13.3 (or under any commercial lease or contractspecifically referred to or listed in other Schedules) in such a wayas to incur any liability or justify the termination of the contractor undertaking or its non-performance by the other party. The Companyhas not been and is not infringing any Third Party’s rights, inparticular any exclusivity rights granted by the Company.  8.13.5 Save as indicated in Schedule 8.13.5 (i), the Company has notentered into any contract which includes a change of control Clauseor which contains a Clause expressly stating that it has been enteredinto on an *intuitu personae*basis. Save as indicated in Schedule8.13.5 (ii), the Company has not been informed by any Third Party ofthe Third Party’s intention to end or reduce their business relationswith the Company.
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 8.13.6 Save as indicated in Schedule 8.13.6, the Company has not given anycovenants still in force, limiting or excluding its right to carry onthe Business or compete in any area or field (whether limited orexcluded by reference to a geographical area or type of business) toany other person.
8.14 Product Liability
 8.14.1 The products supplied by the Company up and until the Closing Datedo not contain any design or manufacturing defects (whether affectingall products of a particular type or “one off” defects affectingspecific individual products or batches of products) that cause themnot to comply with their specification in a manner that could resultin damages, liability whether civil or criminal or a general recallof the type of product concerned except for the recall of products inthe ordinary course of business and consistent with past practice (atotal of approximately * * * returns per year). Except as set forthin Schedule 8.14.1, as of the date of signature of this Agreement,the Company, in either the 2003 fiscal year or the period startingfrom January 1, 2004, has not taken back products as defective.Except as set forth in Schedule 8.14.1 and as of the date of thesignature of this Agreement, there are no statements, citations ordecisions by any governmental, administrative, judicial, arbitral orregulatory body that any product of the Company is defective or failsto meet standards promulgated by any such body. To the Sellers’ bestknowledge, except as set forth in Schedule 8.14.1, there is no defectrelating to any product of the Company that may impose upon theCompany a duty to recall any product of the Company.  8.14.2 Except as set forth in Schedule 8.14.2, claims (actual orthreatened) relating to defective or allegedly defective productsthat have been received by the Company have been fully provided forin the 2003 Financial Statements.  8.14.3 The Company has not provided services or sold, distributed orbrought into circulation products which do not comply with the laws,regulations (in particular, but without limitation, hygiene, clinicaland health and safety regulations applicable to the Business) andspecific instructions from the relevant authorities to which they aresubject. The representation set out in the previous sentence alsoapplies to the packaging, labeling and storage of the productsmanufactured, sold or distributed by the Company.  8.14.4 Schedule 8.14.4 sets out the list of certifications (including allthose certifications for its facilities and equipment) and CEmarkings granted to the Company as at the date of this Agreement. TheCompany has all the CE markings required by applicable law for itsBusiness.
8.15 Insurance
 8.15.1 Schedule 8.15.1 contains a list of each of the material insurancepolicies entered into by the Company. Except in the case of productliability insurance which has not yet been subscribed by the Company,the Company has taken out all insurance policies necessary for theconduct of the Business and such insurance
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   policies provide sufficient cover and protection in regard toapplicable laws and regulations.  8.15.2 The insurance policies listed in Schedule 8.15.1 are in force andno outstanding notification of termination of any such policy hasbeen received by the Company from any insurer or served by theCompany. Save as set out in Schedule 8.15.2, the Company has not beeninformed in writing by any of its insurers of the intention of suchinsurers to refuse a claim submitted by the Company, increasepremiums or reduce the amount of cover under the policies listed inSchedule 8.15.1.  8.15.3 The Company is in compliance with the terms of its insurancepolicies listed in Schedule 8.15.1 and all corresponding premiumshave been paid on time. There is no claim outstanding under any suchpolicy and, so far as the Sellers are aware, there are nocircumstances likely to give rise to such a claim.
8.16 Loans   Except as indicated in Schedule 8.16, the Company has not granted anyoutstanding loans to any Person other than (i) credits granted to itscustomers in the normal course of business or amounts due from customerswhich the Company seeks to retrieve in accordance with past practice or(ii) credits granted to its employees. 8.17 Authorizations
 8.17.1 All of the material Authorizations and application thereforenecessary for or used by the Company for the exercise of itsactivities as they are currently conducted are set out in Schedule8.17.1. The Company has always had and has such materialAuthorizations necessary to operate its activities, it beingspecified that the Company made a classified installation declarationto the Préfet on February 17, 2004 as disclosed in Schedule 8.17.1.  8.17.2 The Authorizations listed in Schedule 8.17.1 are in full force andare and have always been complied with in all material respect. Tothe Sellers’ knowledge, there are no circumstances which indicatethat the Authorizations or applications therefore mentioned inSchedule 8.17.1 are likely to be revoked, not renewed or not granted,in whole or in part. None of the Authorizations mentioned in Schedule8.17.1 will be affected by the sale of the Shares under thisAgreement.
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8.18 Environment
 8.18.1 The Company has obtained all material Authorizations required underapplicable Environmental Legislation for the performance of itsactivities as they are currently conducted and such Authorizationsare in good standing order. The Company has timely filed all materialnotices, certificates or declarations required to be filed by itunder applicable Environmental Legislation in relation to itsBusiness, operations and assets.  8.18.2 The Company has not been and is not in material breach of anyapplicable Environmental Legislation. The Company has timely takenall remedial actions required to be taken by it by a relevantauthority under applicable Environmental Legislation and has noliabilities for any remedial actions outstanding on the date hereofwhich is not reserved for in its financial statements.  8.18.3 The activity conducted by the Company on the Premises and the RealProperty has not generated pollution or contamination to theEnvironment that could result in liability under applicableEnvironmental Legislation.  8.18.4 The Company has not received any written notice to the effect thatit is or may be liable to any person for a breach of applicableEnvironmental Legislation or as a result of the release or threatenedrelease of a Hazardous Substance arising from the operations of theCompany, including sales of any products.  8.18.5 The Company has not released any Hazardous Substances into theEnvironment in connection with * * *.
8.19 Tax Regulations
 8.19.1 The Company has always complied with the Tax Regulations.  8.19.2 The Company has correctly made and lodged in time all necessary taxdeclarations and other documents used as the basis for calculatingTaxes in accordance with applicable Tax Regulations. Those taxdeclarations have always been true and complete.  8.19.3 The Company has paid at the due date, or made provision for thepayment of, all Taxes that have or may have become due in accordancewith applicable Tax Regulations. The basis and the amount of Tax thatthe Company has owed or still owes have always been properlydetermined in compliance with the Tax Regulations.  8.19.4 The Company has all the documents required to justify theinformation set out in the declarations or documents in thisrepresentation as well as the implemented tax, customs or socialsecurity rules. More generally, the Company fulfills its obligationsin respect of the periods for conserving
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   documents as provided by applicable laws and regulations, whetherthey be in paper or computer form.  8.19.5 The Company does not benefit from any particular Tax or socialsecurity regime, which could terminate or be materially and adverselyaffected by the sale of the Shares, or due to any act or omissionwhich occurred before the date of this Agreement.  8.19.6 The Company is and always has been resident for the purposes of Taxin the jurisdiction in France and has never been resident in anyother jurisdiction or traded through a branch or permanentestablishment situated outside such jurisdiction.  8.19.7 The Company is not nor will be liable to pay any Tax or be deprivedof any relief available to it, or to make reimbursement or indemnityin respect of any Tax, for which some other company or Person is orwas primarily liable.  8.19.8 The Company is not nor has ever been the tax representative for thepurposes of value added tax, for a business resident outside thejurisdiction in which it is incorporated. The Company has not madeany unusual election under applicable Tax regulations.  8.19.9 Except as provided for in Schedule 8.19.9, the Company has not beenand is not the subject of any ongoing Tax audit in relation to Taxesand the Company has not been notified in writing by an administrativeauthority of the implementation in the near future of an audit orenquiry likely to lead to the payment of Taxes or a reassessment ofthe basis of collection of Taxes; to the Sellers’ knowledge, thereare no circumstances which make it likely that the Company will beliable to such payment or reassessment.
8.20 Compliance and Litigation
 8.20.1 To the Sellers’ best knowledge, the Company and its Business areconducted in accordance with applicable laws and regulations (inparticular, but without limitation, hygiene, clinical and health andsafety regulations applicable to the Business) except when failure tocomply would not individually or in the aggregate have a materialadverse effect on the Company or its Business and there is no order,decree or judgment of any court or any governmental agency of anyapplicable jurisdiction outstanding against the Company.  8.20.2 Neither the Company nor any agreement, arrangement or practice towhich the Company is a party, is at the date of this Agreement thesubject of any material investigation or inquiry by any GovernmentalAuthority. No material contracts or agreements to which the Companyis a party contain any provision or omission that is liable to resultin a civil or criminal sentence, fine or penalty against the Company,or any of its directors.  8.20.3 Except for those matters set out in Schedule 8.20.3, the Companyhas not been notified of a claim and is not involved in anylitigation, judicial procedure,
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   enquiry or administrative proceedings or arbitration for a claimin excess of Euro 5,000.
8.21 Relations with Sellers
 8.21.1 The Company is not a party to any agreement or arrangement with orin relation to any Seller other than the legal relationship of acompany with its shareholders, directors, or through an employmentcontract.  8.21.2 Except as disclosed in Schedule 8.21.2, there is no outstandingindebtedness from the Company to any of the Sellers.
8.22 Actions since 31 December 2003   Since 31 December 2003 and through the date hereof, the activities of theCompany have been conducted in accordance with the ordinary and usualcourse of business, consistent with past practice, and except as disclosedin Schedule 8.22, the Company has not:
 (a) created, incurred or assumed any long-term indebtedness; orincurred, assumed, or permitted to exist any short-term indebtednessother than in the ordinary and usual course of business, consistentwith past practice; or permitted any change in the credit practicesof the Business;  (b) assumed, guaranteed, or otherwise become liable or responsible(whether directly or otherwise) for the obligations of any Person,other than in the ordinary and usual course of business, consistentwith past practice;  (c) except as permitted pursuant to Clause 2.3 above, paid, loanedor advanced any amount to, or transferred or leased any fixed assetsto, paid or made any dividend or other distribution to, or enteredinto any transaction with, any of the Sellers, any affiliate of anyof the Sellers, any officers or directors of the Company, or anyaffiliate of any of them;  (d) made or committed to make any capital expenditures in an amountgreater than Euro 100,000 in aggregate for all items;  (e) permitted any material insurance policy to be cancelled,terminated or materially changed;  (f) suffered any material damage or destruction, whether or notcovered by insurance, materially and adversely affecting theBusiness;  (g) incurred any material liability, whether actual or contingent,except items incurred in the ordinary and usual course of businessand consistent with past practice;  (h) changed the Accounting Principles or the methods of maintainingits books, accounts or business records;  (i) experienced any event as a result of which it has, or shouldhave, written down the value of any inventory (including write-downsby reason of shrinkage or
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   mark-down); written off as uncollectible any notes or accountsreceivable, except for write-downs and write-offs in the ordinaryand usual course of business, consistent with past practice; orincreased, or experienced any change in any assumptions underlyingor methods of calculating, any bad debt, contingency or otherreserves;  (j) other than in the ordinary and usual course of business,consistent with past practice, permitted or allowed any Encumbranceon any fixed asset, satisfied or discharged any Encumbrance or paid,discharged or satisfied any claim, obligation or liability;  (k) disposed of or permitted to lapse any rights to the use of anymaterial Intellectual Property Right, or disposed of or disclosed toany Person other than representatives of the Purchaser any tradesecret, formula, process, know-how or other intellectual property ofthe Company not theretofore a matter of public knowledge, except inthe ordinary and usual courses of business, consistent with pastpractices;  (l) except in the usual and ordinary course of business andconsistent with past practice, knowingly waived any rights, settledany disputes or amended or terminated any agreements of materialvalue, or entered into any non-compete or non-solicitation agreementsor agreements having a similar effect;  (m) made any change in the compensation payable or to becomepayable to any of the employees, agents or consultants of the Company(other than normal recurring increases, in the ordinary course ofbusiness and consistent with past practice, of wages payable toemployees who are not officers (*cadres*)); or amended any employeebenefit plan of the Company or any employment, severance ortermination agreement with any employee of the Company; or enteredinto any employment agreement; or made any termination of employmentof any officers (*cadres*) of the Company, or received notice of anyexpression or intention by any of them to terminate his or heremployment;  (n) become involved or threatened in writing with any labor disputewhich has had or could have a material adverse effect on thefinancial condition, results of operations or prospects of theCompany;  (o) acquired any other business, entered into any licensingarrangement or joint venture pertaining to the operation of theCompany or made any investments in any other Person (except for cashmanaged purposes);  (p) acquired any fixed asset or transferred or otherwise disposedof any of its fixed assets, except in the ordinary and usual courseof business, consistent with past practice;  (q) granted any discount for prompt payment or any incentive, orentered into any factoring or similar arrangement, outside theordinary course of business, in order to materially reduce the levelof current assets of the Company;
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 (r) agreed to any material change to any material agreement for anysupply or to any service contract outside the ordinary and usualcourse of business, consistent with past practices;  (s) entered into other agreements or commitments, except agreementsor commitments made in the ordinary and usual course of business,consistent with past practice;  (t) purchased, redeemed or issued any shares or other securities,or entered into any commitments or arrangements for the purchase,redemption or issuance of shares of capital stock or othersecurities; made any change in the number of issued shares of capitalstock of the Company; granted any right or option or make anycommitment or agreement relating to such capital stock; acquired orcreated any subsidiary;  (u) commenced litigation, arbitration or other contentiousproceedings, settled any material litigation, or had any judgment orarbitral award entered against it;  (v) agreed, whether in writing or otherwise, to take any actiondescribed in this Clause; or  (w) suffered any material adverse change.
8.23 No other Representation or Warranty   The Sellers make no representation or warranty to the Purchaser otherthan as expressly and specifically set forth in this Agreement.
9. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER   The Purchaser represents and warrants to the Seller as of the date of thisAgreement that the statements contained in this Article 9 are true andaccurate, such representations and warranties shall survive the Closing. 9.1 Organization, Legal Power, Enforceability
 9.1.1 The Purchaser is duly organized and validly existing under thelaws of its jurisdiction of incorporation. The copy of thePurchaser’s certificate of incorporation that has been provided tothe Sellers reflects all amendments made to date and are correct andcomplete.  9.1.2 The Purchaser has taken all action necessary and has allrequisite corporate power and authority to enter into, and toexercise its rights and perform its obligations under, this Agreementand the other documents contemplated hereby to which the Purchaser isa party.  9.1.3 This Agreement and the other documents contemplated hereby towhich the Purchaser is a party constitute valid and bindingobligations of the Purchaser, enforceable against the Purchaser inaccordance with their terms.
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 9.1.4 The Purchaser has executed on or prior to the date ofsignature of this Agreement all financing documents to secure allfinancing necessary to ensure that on the Closing Date it will havesufficient resources to pay the Purchase Price.
10. COVENANTS 10.1 Pre-Closing Covenants 10.2 Between the date of this Agreement and the Closing, the Sellers shall:
 10.2.1 procure that the Company does not make or commit to make any of theactions or steps listed in paragraphs (a) to (v) of Clause 8.22;  10.2.2 procure that the activities of the Company will be conducted inaccordance with the ordinary and usual course of business, consistentwith past practice;  10.2.3 make any notifications to financial institutions or GovernmentalAuthorities which are necessary to be made prior to the Closing inaccordance with the terms of the relevant agreements;  10.2.4 procure the registration of the sale and transfer agreementrelating to the acquisition by the Company of the trademark * * * andthe payment by the Company of all stamp duties and any penaltieswhich may be levied thereon; and  10.2.5 provide the Purchaser and its professional advisers with reasonableaccess, during normal business hours, to the Company, its keyemployees, the Premises and the Real Property; it being specifiedthat the Purchaser shall keep confidential the information disclosedto it and use such information only for the purpose of closing thetransactions contemplated hereby.
10.3 Post-Closing Covenants
 10.3.1 The Purchaser will arrange for the Sellers to be fully and finallyreleased from all obligations or liabilities arising from anysecurity, guarantees, comfort letters, joint undertakings or othersimilar undertakings given for the benefit of or on account of theCompany up to and as at the Closing Date which are listed in Schedule10.3.1 as soon as possible after the Closing and not later than six(6) months after the Closing Date.  10.3.2 If at any time after the Closing Date any further action isnecessary, proper or advisable to carry out the purposes of thisAgreement, as soon as reasonably practicable, each Party shall take,or cause its proper officers and directors to take, all suchnecessary, proper or advisable actions.  10.3.3 From the Closing Date until 31 December 2006, the Purchaser shall,*inter alia*, retain and conduct the Business (as it may evolve afterthe Closing Date) so as to maintain the generation of Revenue withinthe Company and generally in a manner consistent with past practiceand the Company’s long-term corporate interest.
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 10.3.4 The Purchaser shall conduct the * * * after the date of thisAgreement and shall take all necessary steps so the * * * becompleted and the report related thereto be remitted to the Partieson or prior to the thirtieth (30th) day following the Closing Date.  10.3.5 The Purchaser shall pay all reasonable attorney fees and costs ofthe lawyer of Mr. François Tourniaire (plus one additional lawyer)incurred after the Closing Date in connection with * * *.
11. INDEMNIFICATION 11.1 Survival   The representations and warranties of the Sellers contained in Clause 8shall survive until 31 March 2007 except for those representations andwarranties relating to (i) Tax (Clause 8.19) and Employment (Clause 8)which shall survive until two (2) months after the expiration ofapplicable statute of limitations and (ii) existing litigation identifiedin Schedule 8.20.3 which shall survive until the final outcome of suchlitigation (either through an award or judgment which cannot be appealedor challenged, or a final settlement). Notwithstanding the foregoing, anyrepresentation or warranty which is falsely and intentionally made shallsurvive for a period of ten (10) years after the Closing; the SpecificIndemnities arising in connection with the facts set forth in paragraphs(a) and (b) of Schedule 11.2.1 shall survive for a period of five (5)years after the Closing, and the Specific Indemnities arising inconnection with the facts set forth in paragraphs (c), (d) and (e) ofSchedule 11.2.1 shall survive for a period of ten (10) years after theClosing. Furthermore, all covenants and agreements contained in thisAgreement shall survive in accordance with the specific terms of thisAgreement and any claim in relation thereto may be made until the end ofthe term specified in the Agreement. No indemnification claim may beasserted by the Purchaser after the expiration of the applicableindemnification period as stated above; provided, however, thatindemnification in relation with Claim Notice sent by the Purchaser priorto the expiration of the applicable indemnification periods shall notthereafter be barred by the expiration of the applicable indemnificationperiods. 11.2 Indemnification
 11.2.1 Subject to the provisions of Clause 11.3 below, the Sellers(severally but not jointly, and each on the basis of their respectiveProrata Proportion) hereby agree to indemnify, defend and holdharmless the Purchaser (or the Company and/or all officers,affiliates or agents and representatives of the Purchaser and of theCompany, if so requested by the Purchaser (collectively “**IndemnifiedPersons**”)) from and against and in respect of any and allliabilities, damages, penalties (including without limitation,criminal and administrative sanctions), judgments, settlements, costsand expenses (including interest and penalties and reasonableattorneys’ and accountants’ fees) incurred (“**Loss**” or “**Losses**”) thatarise directly out of:
 (a) any breach by the Sellers of any of therepresentations and warranties contained in or made by orpursuant to this Agreement; or
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 (b) any breach by the Sellers of any of theircovenants or agreements in this Agreement; or  (c) the matters identified in Schedule 11.2.1 (the“**Specific Indemnities**”), notwithstanding any other provisionsof this Agreement (except for the provisions of this Clause11, which shall apply) or disclosure in any Schedule hereto.    (hereafter the “Damages”)
 11.2.2 Payment in Escrow
 (a) In the event that on or before the date fallingtwo (2) Business Days prior to the payment date of aSubsequent Payment, the Purchaser has notified the Sellers ofone or more claims pursuant to Clause 11.5 of this Agreement(each a “Claim”), the Purchaser shall be entitled to pay, onor before the date of the payment date of a SubsequentPayment, an amount (not to exceed the amount of theSubsequent Payment) equal to the Sellers’ potential liabilityunder Clause 11 of this Agreement for such Claim to theEscrow Agent for deposit in the Escrow Account (the “**EscrowAmount**”). Such Escrow Amount shall be determined by thePurchaser in good faith. Such Escrow Amount shall be deductedfrom the amount of the Subsequent Payment to be paid to theSellers at the payment date of such Subsequent Payment.  (b) On the payment date of the Subsequent Payment,and for a period of thirty (30) days thereafter, the Sellersshall be entitled to notify the Purchaser that they contestthe relevant Escrow Amount and wish to refer thedetermination of the Escrow Amount to an independent auditor(the “**Auditor**”); provided, however, that * * *, the Sellersshall not be entitled to contest (and shall be deemed toaccept) any Escrow Amount of less than * * * in respect of aClaim by the Purchaser relating to * * *. Upon receipt ofsuch notice from the Sellers, the Purchaser and the Sellersshall refer the matter to the Auditor. The Auditor shalldetermine such Escrow Amount by determining whether and towhat extent the amount paid by the Purchaser to the EscrowAgent represents a good faith, *prima facie*estimate of theamount to which the Purchaser may be entitled toindemnification under this Agreement.  (c) The Auditor shall be Mazard & Guerard or ifMazard & Guerard shall not accept such appointment, anyinternationally recognized independent accounting firm withoffices in Paris mutually acceptable to the Sellers and thePurchaser. If the Auditor shall be either unwilling orunable to accept such appointment and the Parties are unableto agree upon the appointment of another Expert, the mattershall be referred by either Party to the Rules for Expertiseof the International Chamber of Commerce (the “**ExpertiseRules**”) who shall be requested to make a further selection or(as the case may be) a further appointment, pursuant toClause II or Clause III of the Expertise Rules, asappropriate. The Auditor shall act
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   under the rules of the International Center for Expertise ofthe International Chamber of Commerce. The Auditor shall useits best efforts to make its determination in accordance withClauses 11.2.2 (a) and (b) within thirty (30) days after itsappointment, such determination being made in writing anddelivered to the Purchaser, and the Sellers as promptly aspracticable within such time period.  (d) In the event the Auditor determines that theEscrow Amount for any particular Claim should be less thanthe amount deposited by the Purchaser as Escrow Amount inrespect to such Claim (including a determination by theAuditor that such Escrow Amount should be zero), thePurchaser and the Sellers shall immediately jointly instructthe Escrow Agent to release from the Escrow Account in favorof the Sellers an amount equal to the difference between theEscrow Amount deposited by the Purchaser, and the definitiveEscrow Amount determined by the Auditor.  (e) The Auditor’s determination shall be used onlyfor the purpose of determining an Escrow Amount and shallhave no bearing whatsoever upon the merits of the disputebetween the parties as to the existence or the amount of theClaim of the Purchaser or the Sellers’ liability therefore.Fees and expenses of the Auditor shall be equally sharedbetween the Sellers on the basis of their Prorata Proportion,on the one hand, and the Purchaser, on the other hand.  (f) In the event that it is determined, either byagreement of the Parties or by a final arbitration award,that the Sellers are liable to the Purchaser for any Claim inconnection with which an Escrow Amount has been established,then the Escrow Amount (or relevant part thereof) shall bereturned by the Escrow Agent to the Purchaser in accordancewith the terms of the Escrow Agreement for the amount due tothe Purchaser in respect of such Claim and shall constitute areduction of the Subsequent Payment.  (g) In the event that it is determined, either byagreement of the parties or by a final arbitration award,that the Sellers are not liable to the Purchaser for anyClaim in connection with which an Escrow Amount has beenestablished or that such liability is less than such EscrowAmount, the relevant part of the Escrow Amount related tosuch claim shall be paid by the Escrow Agent to the Sellers.  (h) The Sellers and the Purchaser agree to givepromptly to the Escrow Agent all instructions necessary forthe release of funds from the Escrow Account in accordancewith this Section 11.2.2 and the Escrow Agreement.
 11.2.3 Right to Set Off    It is expressly provided that the Purchaser shall be entitled toset off from any Prorata Proportion of the Subsequent Payment dueand payable to a Seller any
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   amount of indemnification agreed upon under this Agreement ordecided by a final arbitration award and due to the Purchaser bysuch Seller under Clause 11 (the “**Right to Set-Off**”) and eachSeller shall be entitled to set off from any amount ofindemnification agreed upon under this Agreement or decided by afinal arbitration award and due by such Seller to the Purchaserthe amount of the Prorata Proportion of the Subsequent Payment dueto such Seller and not otherwise paid to such Seller pursuant tothe provisions of the Agreement or of the Escrow Agreement.
11.3 Limitations
 11.3.1 With respect to the determination of the amount which shall bepayable by the Sellers in case of a claim for Damages, it is agreedthat:
 (a) no individual claim for Damages may be made, oraggregated in accordance with Clause 11.3.1(b) below for thecalculation of the applicable threshold, unless theindividual amount thereof shall exceed three thousand euros(Euro 3,000) or the counter-value thereof on the date of theclaim in the relevant currency (the “**De Minimis Amount**”);provided that if the aggregate amount of individual claimsarising from the same set of related circumstances exceedsthe De Minimis Amount all such individual claims may be madepursuant to this section and aggregated in accordance withClause 11.3.1(b) below;  (b) the Sellers shall have no obligation toindemnify the Indemnified Person until and unless theaggregated amount of all Damages for which indemnificationmay be sought under this Agreement exceeds four hundredthousand euros (Euro 400,000) or the counter-value thereof onthe date of the claim in the relevant currency (the“**Threshold Amount**”); provided, however, that the ThresholdAmount shall be reduced by any amounts (up to a maximumaggregate amount of Euro 100,000) paid by the Company tofully implement the measures set out in Schedule 11.3.1(b)and to conduct the * * *. In the event such aggregate amountexceeds the Threshold Amount, the Sellers shall indemnify theIndemnified Person for the whole of the aggregated amount ofthe Damages, subject to the limitations set forth in thisClause 11.3;  (c) notwithstanding any other provision of thisAgreement, the maximum aggregate amount of indemnificationwhich the Indemnified Person shall be entitled to recover inrespect of all Damages and for which Sellers may be liable topay under this Agreement shall be capped at all times to theaggregate of the Subsequent Payments actually due (whetherpaid or payable) (the “**Cap**”). However if at any time themaximum aggregate amount of indemnification (whether paid ornot) exceeds the amount of the Subsequent Payment due at suchtime (whether paid or payable at such time), the IndemnifiedPerson shall be entitled to recover the difference to theextent of the amount of Subsequent Payments actually due andpayable after such time.
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 (d) the amount to which the Indemnified Personmight otherwise be entitled for a Damage shall be reduced bythe value of any benefit received or realised by theIndemnified Persons including the Company on account of theDamage giving rise to the Claim and resulting directly fromany reduction, savings or recovery of debts and duties, anypayment under any insurance policy or any recovery as aresult of any litigation brought by the Company or thePurchaser on account of the Damages giving rise to the Claim;  (e) the amount to which the Indemnified Personmight otherwise be entitled for a Damage shall be reduced byany provisions made in the 2003 Financial Statements onaccount of the Damage giving rise to the Claim, or therelease of such provisions as a result of the redundancy ofsuch provisions in respect of a specific Damage;  (f) the amount to which the Indemnified Personmight otherwise be entitled for any Damage shall be reducedwhere and to the extent that such Damage results solely fromany change in accounting or taxation policy or practice ofthe Purchaser or the Company (including the method ofsubmission of taxation returns ) introduced after the ClosingDate.  (g) any amount to which the Indemnified Personmight otherwise be entitled for any Damage shall be reducedwhere and to the extent that such Damage would have beencovered by any Company’s insurance policy existing at theClosing Date, but for a reduction by such Company after theClosing Date of the scope or amount of coverage under suchinsurance policy below that existing on the Closing Date.  (h) any amount to which Indemnified Person mightotherwise be entitled for any Damage shall be reduced whereand to the extent that the Indemnified Person may effectivelybenefit from a tax saving (including any Tax reduction,credit, or Loss carry-back or carry-forward) computed at thethen current tax rate in relation to such Damage.  (i) any amount to which the Indemnified Personmight otherwise be entitled for any Damage shall be reducedwhere and to the extend that such Damage was increased (fromthat which it otherwise would have been) as a result of thepassing of implementation, or any change in, after theClosing Date, any directive, law, decree or regulations.  (j) Neither the De Minimis Amount, nor theThreshold Amount, nor the Cap shall be applicable with regardto the Specific Indemnity arising in connection with thefacts set forth in paragraph (c) of Schedule 11.2.1.
 11.3.2 Exclusion
 (a) The Purchaser shall not be entitled to make aclaim for indemnification for Damages against the Sellers inrespect of any Tax audit or claim which merely modified theTax period during which a deductible charge or
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   amortization may be taken or in respect of any VAT assessment(except if the amount of such VAT assessment cannot beeffectively recovered), except for any interest or penaltiesresulting therefrom.  (b) The Sellers shall not be liable to indemnifythe Purchaser or the Company for that part of any Damagesresulting from the Purchaser’s acts or omissions which hascontributed to or aggravated such Damages.  (c) Any Claim shall (if it has not been previouslysatisfied, settled or withdrawn) be deemed to have beenwithdrawn when the legal proceeding against the Sellers inrespect of it have not been commenced within six (6) month ofnotification to the Sellers of the Claim Notice.
 11.3.3 No Multiplier    For purposes of computing the amount of any Damages, only theDamages actually sustained by the Purchaser or the Company shallbe taken into account, to the exclusion of any price / earnings orother multiplier or valuation factor (whether or not implicit inthe Purchase Price).
11.4 Payment
 11.4.1 The Sellers will pay to the Indemnified Persons the amount of anyClaim under this Clause 11 (or instruct the Escrow Agent to thiseffect) in accordance with the written instructions of the Purchaserwithin ten (10) Business Days of agreement between the Sellers andthe Purchaser or final determination of the amount due in accordancewith the provisions of Clause 21.  11.4.2 If the Sellers pay to the Indemnified Persons an amount in respectof a Claim and the Indemnified Persons subsequently recovers from aThird Party an amount which relates directly to the matter givingrise to the Claim:
 (a) if the amount paid by the Sellers in respect ofthe Claim is more than the Sum Recovered (as defined in thisClause 11.4.2), the Purchaser will promptly pay to theSellers the Sum Recovered; and  (b) if the amount paid by the Sellers in respect ofthe Claim is less than or equal to the Sum Recovered, thePurchaser will promptly pay to the Sellers an amount equal tothe amount paid by the Sellers.  (c) For the purposes of this Clause 11.4, “SumRecovered” means an amount equal to the total of the amountrecovered from the Third Party plus any interest in respectof the amount recovered from the Third Party to the extentsuch interest was effectively received from such Third Party,but after deduction of any cost incurred by the Purchaser orthe Company in collecting such an amount.
11.5 Notification procedure and conduct of Claims
 11.5.1 If an event occurs which might give rise to a Claim, the Purchaserwill notify the Sellers’ Representative of the matter in accordancewith Clause 19 (a
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   "**Claim Notice**”) stating in reasonable detail the nature of theClaim and, if practicable, the amount claimed promptly, and in anyevent no later than 30 days upon the Company on the Purchaserbecoming aware of the facts causing such Damage, provided howeverthat failure to give timely such notice will not effect the rightsof the Purchaser to indemnification hereunder except to the extentthat the rights of the Sellers are actually prejudiced. If it isnot practicable to state the amount claimed in the Claim Notice,the Purchaser undertakes as soon as practicable after the date ofthe Claim Notice to provide the Sellers with a reasonable estimateof the amount claimed.  11.5.2 The Sellers will have a period of thirty (30) days from receivingthe Claim Notice to notify the Purchaser of any preliminary remarksor points they wishes to contest (a “**Dispute Notice**”).  11.5.3 Within fifteen (15) Business Days of receipt by the Purchaser ofthe Dispute Notice, the Purchaser and the Sellers will endeavour toagree the existence and/or amount of the Claim, failing which, thedispute will be settled in accordance with Clause 21.            11.5.4  (a) In the event that the Purchaser sends a Claim Notice, theSellers shall have the right, both themselves and through theiragents and advisors, to investigate the matters set forth therein.      (b) In such connection, the Purchaser shall, andshall cause the Company to give reasonable access to theSellers and their agents and advisors to their books,records, documents and employees and the Sellers shall beallowed to take copies of all such books records anddocuments. The Sellers shall keep and books recordeddocuments confidential and use them only for the purpose ofanalysing the Claim and defending their rights under thisAgreement.
 11.5.5 In the event of any Third Party claim or legal or administrativeaction against the Company or any proceedings with respect to a Taxmatter which could give rise to a Claim (the “**Third-Party Claim**”),the Purchaser will give written notice in accordance with Clause11.5.1 and the Purchaser will be entitled to elect to have theconduct of the Third-Party Claim. In this event:
 (a) the Sellers’ Representative will be entitled toparticipate in any proceedings, together with the advisers ofits choice; and  (b) any reasonable recommendation made by theSellers’ Representative in the course of the proceedings willbe duly considered and taken into account by the Purchaser.
 11.5.6 If the Purchaser does not wish to have exclusive conduct of theThird-Party Claim, it shall be entitled to request that the Sellers’Representative take charge of the Third-Party Claim. In this event:
 (a) the Purchaser will be entitled to participatein any proceedings, together with the advisers of its choice;
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 (b) any reasonable recommendation made by thePurchaser in the course of the proceedings will be dulyconsidered and taken into account by the Sellers’Representative;  (c) if the Purchaser disputes the litigationstrategy adopted by the Sellers’ Representative, it will beentitled to take back the conduct of the Third-Party Claim(in accordance with Clause 11.5.4).
 11.5.7 Whether the Sellers’ Representative conducts or assists in theconduct of a Third-Party Claim, the Sellers will be responsible forthe cost and expenses of their own advisors.
11.6 Several Liability of Sellers / Prorata Proportion   Except as otherwise explicitly set out herein, each Seller shall be liablevis-à-vis the Purchaser on a several but not joint basis and on the basisof his/her Prorata Proportion. 11.7 The Purchaser shall and shall cause the Company to take all reasonablemeasures to mitigate any Damages. 11.8 Exclusive Remedy   The indemnification provided for in this Clause 11 shall be the exclusiveremedy of the Purchaser against the Sellers in respect of any breach ofany representation or warranty or covenant set out in this Agreement. 12. NON-COMPETITION 12.1 None of the Sellers will, until five (5) years after the Closing:
 (i) have any ownership interest (of record or beneficial) in orhave any interest as a director, officer, employee, manager orconsultant in, or otherwise aid or assist in any manner, anycorporation, partnership or other business that engages in productsand services competes with the Business, including products andservices in development or products developed but not yet marketed bythe Company, unless the ownership interest is for investment purposesonly, and, if in a company whose shares are listed on a recognizedstock exchange, does not grant the Seller directly or indirectlymanagement functions or material influence in competing with theCompany and the Subsidiary;  (ii) do or say anything which might be harmful to the Business, orwhich may lead a person who has dealt with the Company or theBusiness to cease to deal with the Company or the Business (ormaterially reduce its relations) on substantially equivalent terms tothose previously offered or at all;  (iii) on its own account or in conjunction with or on behalf of anyother person in respect of the products or services of the Business,either seek to obtain orders or do business with a customer of theBusiness, or encourage directly or indirectly another person toobtain orders from or do business with, a person who has been acustomer of that Business, in all instances with regard to theproducts or services of the Business in its territory of operation;
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 (iv) directly or indirectly solicit or contact with a view to hisengagement or employment a director, officer, employee or managerwhose services are substantially devoted to the Business;  (v) engage or employ a director, officer, employee or manager ofthe Company whose services are substantially devoted to the Businessor a person who was a director, officer, employee or manager whoseservices were substantially devoted to the Business; or  (vi) seek to contract with or engage (in such a way as to affectadversely the Business as carried on at the date of this Agreement) aPerson with whom the Company has contracted with or has engaged tomanufacture, assemble, supply or deliver goods or services to theBusiness.
12.2 The above non-competition undertakings granted by each of Sellers inClause 12.1 above shall be valid in the jurisdictions where the Businessis active which are set forth in Schedule 12.2. 13. CONFIDENTIAL INFORMATION 13.1 Each Seller undertakes to the Purchaser and the Purchaser undertakes toeach of the Sellers, before and after the Closing, that it will:
 (a) Not use or disclose to any Person, with the exception ofpotential financial investors (subject to the obtention ofappropriate confidentiality agreements) in any way the ConfidentialInformation it has or acquires, and  (b) Not make any know-how available that it may have to anyindividual, company or business of any kind, whether or not existingat the date hereof.
  The Sellers will make every effort to prevent the use or disclosure ofConfidential Information.
13.2 Clause 13.1 does not apply to disclosure of Confidential Information:
 (a) to a director, officer or employee of the Purchaser whosefunction requires him to have access to the Confidential Information;  (b) required to be disclosed by law, by a rule of a stock exchangeor by a Governmental Authority to which a Party is subject orsubmits, whether or not the requirement has the force of law providedthat the disclosure will so far as is practicable be made afterconsultation with the other Party and after taking into account theother Parties’ reasonable requirements as to its timing, content andmanner of making or dispatch; or  (c) to an adviser for the purpose of advising a Party in connectionwith the transactions contemplated by this Agreement provided thatsuch disclosure is essential for these purposes and is on the basisthat this Clause 13 applies to the disclosure by the adviser.
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13.3 Nothing in this Clause 13 will be construed, interpreted or applied asrestricting the right of the Purchaser from benefiting from, using ordisposing of any rights and assets pertaining to the Business afterClosing. 13.4 Notwithstanding any provision herein to the contrary, Sellers orPurchaser may use Confidential Information to exercise their rights underthis Agreement. 14. ANNOUNCEMENTS   Neither Party shall issue or permit to be made any press releases orpublic announcements concerning this Agreement or its subject matter orany ancillary matter without the prior written consent of the other Party,except as may be required by law, any stock exchange or other competentregulatory body (provided that the Party required to make the announcementwill consult with the other as to the content of such announcement andwill ensure, if requested by the other Party, and if reasonablypracticable, that such announcement is made simultaneously with anyannouncement by the other Party). In addition, any such press release orannouncement shall only contain the same content as any press release orpublic announcement made by the other. Each Party will coordinate withthe other any such press release or public announcement that it makes. 15. COSTS 15.1 A Party will be solely responsible for any brokerage commissions,finders’ fees or similar compensation in connection with the transactionscontemplated by this Agreement based on any arrangement or agreemententered into by that Party. For the avoidance of doubt, no fees incurredby the Sellers in connection with the transaction contemplated in thisAgreement shall be imputed on the Company. 15.2 Each Party will bear the costs of its own legal and financial advisers inconnection with the preparation of this Agreement. Any registrationduties in connection with the sale and purchase of the Shares will beborne exclusively by the Purchaser. 16. SELLERS’ REPRESENTATIVE 16.1 The Sellers hereby irrevocably appoint François Tourniaire as their agent(the “**Sellers’ Representative**”) for all purposes of this Agreement. Forthis purpose, the Sellers have an irrevocable power of attorney to Mr.François Tourniaire empowering Mr. François Tourniaire to (a) negotiateand enter into any amendments to or alterations of the Agreement, (b) takeany action required of the Sellers pursuant to this Agreement, (c) receivethe Initial Purchase Price and the Subsequent Payments, if any, anddistribute such amounts among the Sellers in the Prorata Proportionsubject to clause 16.4 below, (d) send and receive all notificationscontemplated to be given or received under the Agreement (including butnot limited to payment instructions), (e) give bank instructions to thebank in respect of the allocation of the payments in respect of theInitial Purchase Price and the Subsequent Payments (as the case may be) asbetween the Sellers, (f) agree
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  on the Statement of Revenue of the Company in respect of the relevantfinancial year with the Purchaser for the purposes of determining whetherthe Targets referred to in Schedule 3.1 have been attained, (g) tonegotiate, accept, defend against or settle any claim that the Purchasermay have against any one Seller or against all Sellers, (h) represent eachof the Sellers in the conduct of any litigation or court proceedings inconnection with any claim referred to in (g) above, (i) receive or releaseany amount placed in the Escrow Account, accept the appointment of theAuditor and take any action required under the Escrow Agreement and (j)exercise such rights and perform such obligations as have beenspecifically entrusted to him under this Agreement. 16.2 The Parties acknowledge that the appointment and the granting of a powerof attorney pursuant to Clause 16.1 is in the common interest of allParties. Accordingly, none of the Sellers shall have the right to revokeor limit the appointment or the power of attorney of Mr. FrançoisTourniaire until consummation of the Agreement in full and agreement orsettlement (by settlement agreement, judgment, arbitral award orotherwise) of all claims arising hereunder. 16.3 Should François Tourniaire hereby appointed, be unable to perform hisduties or be unwilling to remain as the Sellers’ Representative, for anyreason whatsoever, he shall so notify the Purchaser and the Sellers andthe Sellers shall appoint one of themselves at the latest within ten (10)Business Days following the date on which notice of the inability or therefusal of François Tourniaire to perform his duties is sent to thePurchaser and the Sellers. The name and details of such representativeshall be notified to the Purchaser in accordance with the provisions ofClause 19. 16.4 The Sellers hereby expressly authorize the Sellers’ Representative towithhold from that part of the Initial Purchase Price or subsequentpayments to be received by each of them their Prorata Proportion of thefees and expenses incurred by the Sellers’ Representative in connectionwith the preparation, execution and performance of this Agreement,including the fees and expenses of legal and financial advisors to theSellers. 17. TERM AND TERMINATION 17.1 This Agreement will automatically terminate in the event that (i) theconditions referred to in Clause 5 are not satisfied or waived in writingin accordance with Clause 5 at the date set out in Clause 5 or (ii) theClosing Date Account is not fully funded in accordance with the provisionsof Clause 4.1.1. 17.2 In the event that this Agreement terminates under Clause 17.1, all rightsand obligations arising out of or in connection with this Agreement willalso automatically terminate without any indemnification in whole or inpart due to or by either Party provided that:
 17.2.1 such termination will not affect any claims between the Partiesbased on any breach arising prior to the date at which this Agreementis terminated; and  17.2.2 the provisions of Clauses 4.1.1, 13,14,15,16,19, 20 and 21 willremain in full force and effect.
18. GENERAL
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18.1 This Agreement constitutes the entire and only agreement between theParties with respect to the sale of the Shares and supersedes and replacesany prior commitments, understandings or written or verbal agreements(including the Memorandum of Understanding and Summary of Proposed Termssigned by the Parties on 5 January 2004), that the Parties may have had inconnection with the sale of the Shares. 18.2 This Agreement has been entered into between the Parties on the basis oftheir identity and of their respective shareholders and activities. ThisAgreement is therefore of a personal nature and neither Party will assignor transfer or purport to assign or transfer any of its rights orobligations under this Agreement, except as otherwise provided in thisAgreement or with the express consent of the other Party. Notwithstandingthe foregoing, the Purchaser shall be entitled to assign the right toacquire the Shares to any of its wholly-owned subsidiaries; *provided,however*, that the Purchaser shall provide written notice to the Seller ofany such assignment prior to any such assignment being made and shallremain jointly liable (*solidaire*) for the performance by the assignee ofall obligations undertaken by the Purchaser under this Agreement. 18.3 No amendment modification, alteration or variation of the Agreement shallbe valid unless it is in writing and signed by or on behalf of each of theParties to it. 18.4 The provisions of this Agreement shall be deemed severable and theinvalidity or unenforceability of any provision shall not affect thevalidity or enforceability of the other provisions. If any provisions ofthis Agreement, or the application thereof to any Person or anycircumstance, is invalid or unenforceable, (A) a suitable and equitableprovision shall be substituted therefore in order to carry out, so far asmay be valid and enforceable, the intent and purpose of such invalid orunenforceable provision and (B) the remainder of this Agreement and theapplication of such provision to other Persons, or circumstances shall notbe affected by such invalidity or unenforceability, nor shall suchinvalidity or unenforceability affect the validity or enforceability ofsuch provision, or the application thereof, in any other jurisdiction. 18.5 Interpretation
 18.5.1 A reference to any Party to this Agreement or any agreement ordocument shall include such Party’s successors and permitted assigns.  18.5.2 A reference to any legislation or to any provision of anylegislation shall include any amendment to, and any modification orre-enactment thereof, any legislative provision substituted thereforeand all regulations and statutory instruments issued thereunder orpursuant thereto, provided the above are in effect on the ClosingDate.  18.5.3 In this Agreement, the headings to Clauses are inserted forconvenience only and shall be given no substantive or interpretativeeffect whatsoever.
19. NOTICES   Any notice or other communication required or permitted hereunder shall besufficiently given to a person if in writing and will become effectivewhen delivered by hand, by an overnight courier service which requires adelivery receipt therefore (such as DHL), by
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  registered or certified mail, return receipt requested, postage prepaid,at such person’s address set forth below or such other address as suchperson may designate by notice in accordance with the foregoing provision:       To the Sellers: M. François Tourniaire   * * *   * * *      To the Purchaser: MediCor Ltd.   4560 Decatur Boulevard, Suite 300   Las Vegas, Nevada 89103-5253   USA       Attn. Mr. Donald K. McGhan
20. GOVERNING LAW — JURISDICTION   This Agreement is governed by, and will be construed in accordance with,the laws of France. 21. DISPUTE RESOLUTION 21.1 Any dispute, difference, controversy or claim arising out of or inconnection with this Agreement (a “Dispute”), shall be referred to anddetermined by arbitration according to the provisions set out below. Theseat of arbitration shall be Paris (France). 21.2 The party, or parties, initiating recourse to arbitration (hereinaftercalled the “claimant(s)”) shall give to the other party, or parties(hereinafter called the “respondent(s)”) a Notice of Arbitration. Thearbitration shall be deemed to commence on the date on which the Notice ofArbitration is received by the respondent(s). 21.3 The Notice of Arbitration shall contain a brief description of the natureof the claim and an indication of the amount involved, if any, and therelief or remedy sought. 21.4 The Arbitral Tribunal shall be composed of three (3) Arbitrators whoshall be appointed by the International Court of Arbitration of theInternational Chamber of Commerce (the “**ICC**”), acting as the appointingauthority. The Arbitrators shall be fluent in both English and French. 21.5 As soon as practicable after the appointment of the Arbitrators, and inany event no later than 15 days after the Arbitrators ‘ appointment, theclaimant(s) shall deliver to the respondent(s) (with a copy to theArbitrators) a statement of case, containing particulars of its/theirclaims and written submissions in support thereof, together with anydocuments relied on. 21.6 Within 15 days of the receipt of the claimant’s(s) statement of case, therespondent(s) shall deliver to the claimant(s) (with a copy to theArbitrators) a statement of case in answer, together with any counterclaimand any documents relied on.
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21.7 Within 15 days of the receipt by the claimant(s) of any statement ofcounterclaim by the respondent(s), the claimant(s) may deliver to therespondent(s) (with a copy to the Arbitrators) a reply to counterclaimtogether with any additional documents relied upon. 21.8 As soon as practicable after delivery to the Respondent(s) of anystatement of counterclaim, or if no counterclaim is made, then as soon aspracticable after delivery to the Claimant(s) of the statement of case inanswer, the Arbitral Tribunal shall convene a meeting (the “**FirstProcedural Meeting**”) with the parties or their representatives todetermine the procedure to be followed in the arbitration. 21.9 The procedure shall be as agreed by the parties or, in default ofagreement, as determined by the Arbitral Tribunal. However, the followingprocedural matters shall in any event be taken as agreed:
 (a) the language of the arbitration shall be French and English anddocumentary exhibits may be admissible in French and English;  (b) the Arbitral Tribunal shall issue its final award in Englishwithin 30 days of the last hearing or written submission of thesubstantive issues in dispute between the parties.
21.10 In the event of default by either party in respect of any proceduralorder made by the Arbitral Tribunal, the Arbitral Tribunal shall havepower to proceed with the arbitration and to make its award. 21.11 If a Dispute raises issues substantially the same as, or connected with,issues raised in an existing Dispute the Arbitral Tribunal appointed or tobe appointed in respect of any such existing Dispute shall also beappointed as the Arbitral Tribunal in respect of the Dispute (in whichcase it shall be called a “Related Dispute”). For the purposes of thisAgreement an existing Dispute means any Dispute between the Parties or anynumber of them in respect of which a Notice of Arbitration has alreadybeen served. 21.12 In the event that an arbitrator dies or is or becomes unable to act, areplacement arbitrator shall be appointed by the ICC. 21.13 Where, pursuant to Clause 21.11 above, the same Arbitrators have beenappointed in relation to two or more Disputes, the Arbitral Tribunal mayorder that the whole or part of the matters at issue shall be heardtogether upon such terms and conditions as the Arbitral Tribunal thinksfit. The Arbitral Tribunal shall have power to make such directions as itconsiders just and desirable for the proper conduct of any suchconsolidated proceeding. 21.14 The Arbitral Tribunal, upon the request of a party to a Dispute or aParty to this Agreement which itself wishes to be joined in proceedings inrelation to a Dispute, shall join any party to this Agreement toproceedings in relation to that Dispute and may make a single, final awarddetermining all Disputes between them. Each of the Parties to thisAgreement hereby consents to be joined to proceedings in relation to anyDispute at the request of a party to that Dispute. Any such request mustbe received by the Arbitral Tribunal before the First Procedural Meetingis convened.
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21.15 The parties hereby waive any rights of application or appeal to thecourts of France to the fullest extent permitted by law in connection withany question of law arising in the course of the arbitration or withrespect to any award made, except for actions to enforce an arbitral awardand actions seeking interim, interlocutory or other provisional relief inany court of competent jurisdiction. 21.16 The award shall be final and binding upon the parties from the day it ismade, and shall be the sole and exclusive remedy between the partiesregarding any claims, counterclaims, issues, or accounting presented tothe Arbitral Tribunal. Judgment upon any award may be entered in anycourt having jurisdiction. 21.17 Any monetary award shall be made and promptly payable in Euro and theArbitral Tribunal shall be authorized in its discretion to grant pre-awardand post-award interest at commercial rates. Any costs, fees, or taxesincident to enforcing the award shall, to the maximum extent permitted bylaw, be charged against the Party resisting such enforcement. 21.18 Any Seller commencing an arbitration under this Agreement shall, inwriting, inform all other Sellers to the Agreement whether or not they area party to the Dispute. 21.19 All notices by one party to another party in connection with thearbitration shall be in accordance with the provisions of Clause 19. 21.20 This agreement to arbitrate shall be binding upon the successors andassigns of each party.
IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement, as ofthe day and year first above written, in eight (8) original copies and two (2)sets of Schedules, one set for the Purchaser and one set for the Sellers (eachof the Sellers accepting to refer to one common set of Schedules).
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      MediCor Ltd. François TourniaireRepresented by Donald K. McGhan        Michel Tourniaire Jacques Tourniaire      Olivier Tourniaire Senaz Falquerho (née Namooya)      Françoise Pelissard Nadège Tourniaire
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