**Exhibit 2.2**

 

**Confidential Treatment Requested**

 

**EXECUTIONCOPY**

 

 

AGREEMENT FOR THE SALE AND PURCHASEOFTHE SHARES OFLABORATOIRES 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

 

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**Confidential Treatment Requested**

 

CONTENTS

 
| ARTICLE |                                             |
|---------|--------------------------------------------------|
|    |                                             |   |
| 1.      | Definitions                                      |   |
|    |                                             |   |
| 2.      | Sale  and Purchase                               |   |
|    |                                             |   |
| 3.      | Purchase  price                                  |   |
|    |                                             |   |
| 4.      | Payment                                          |   |
|    |                                             |   |
| 5.      | Conditions                                       |   |
|    |                                             |   |
| 6.      | Notices                                          |   |
|    |                                             |   |
| 7.      | Closing                                          |   |
|    |                                             |   |
| 8.      | Representations  and Warranties of the Sellers   |   |
|    |                                             |   |
| 9.      | Representations  and Warranties of the Purchaser |   |
|    |                                             |   |
| 10.     | Covenants                                        |   |
|    |                                             |   |
| 11.     | Indemnification                                  |   |
|    |                                             |   |
| 12.     | Non-competition                                  |   |
|    |                                             |   |
| 13.     | Confidential Information                         |   |
|    |                                             |   |
| 14.     | Announcements                                    |   |
|    |                                             |   |
| 15.     | Costs                                            |   |
|    |                                             |   |
| 16.     | Sellers’ Representative                     |   |
|    |                                             |   |
| 17.     | Term  and Termination                            |   |
|    |                                             |   |
| 18.     | General                                          |   |
|    |                                             |   |
| 19.     | Notices                                          |   |
|    |                                             |   |
| 20.     | Governing Law  - Jurisdiction                    |   |
|    |                                             |   |
| 21.     | Dispute  Resolution                              |   |

 

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**Confidential Treatment Requested**

 

ThisAgreement is made on 17 May 2004

 

BETWEEN:

 

(1)         MediCorLtd., a company existing and organized under the laws of Delaware, having itsregistered office at 4560 S. Decatur Blvd, Ste 300, Las Vegas, Nevada, 89103-5253,duly represented for the purpose hereof by Donald K. McGhan (hereinafterreferred to as the “Purchaser”), with a right to be substituted hereunder byany company under its control in accordance with Clause 18.2 of thisAgreement;

 

ON THE ONE HAND

 

AND

 

(2)         FrançoisTourniaire, born on * * * , residing at * * * , of French nationality,

 

(3)         MichelTourniaire, born on * * * , residing at * * * , of French nationality,

 

(4)         JacquesTourniaire, born on * * * , residing at * * * , of French nationality,

 

(5)         OlivierTourniaire, born on * * * , residing at * * * , of French nationality,

 

(6)         SenazFalquerho (née Namooya), born on * * * , residing at * * * , of Frenchnationality,

 

(7)         FrançoiseTourniaire (née Pelissard) born on * * * , residing at * * * , of Frenchnationality,

 

(8)         NadègeTourniaire born on * * * , residing at * * * , of French nationality,

 

(Theparties in (2) to (8) being referred to as the “Sellers” andindividually as a “Seller”), acting severally (*demanière non-solidaire*) for the purposes of this Agreement.

 

ON THE OTHER HAND

 

WHEREAS:

 

(A)        The Sellers collectively own 100%of the Shares of the Company in the proportions set out on Schedule A.

 

(B)         The Company is involved in thedevelopment, manufacture and distribution of silicone based products and otherproducts derived therefrom for the purpose of professional cosmetic andreconstructive surgery and external cosmetic implants.

 

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**Confidential Treatment Requested**

 

(C)       ThePurchaser has conducted due diligence investigation of the prospects, business,assets, contracts, rights, liabilities and obligations of the Company,including financial, marketing, employees, legal, regulatory and environmentalmatters, was given access to data rooms in respect of the Company (the “**Data****Rooms**”),and has had the opportunity to ask questions and receive answers during the duediligence process. The documents provided in the Data Rooms and in the writtenquestions and answers from the due diligence process are listed in Schedule C.

 

(D)       * * *

 

(E)        The Sellers wish to sell, andthe Purchaser wishes to purchase, all of the Shares held on the terms andsubject to the conditions contained in this Agreement.

 

THE PARTIESAGREE as follows:

 

# **1.**           DEFINITIONS

# ** **

## 1.1         In thisAgreement:

 
| “Accounting  Principles”          |   | :      |   | means (i) the  accounting principles applied by the Company in the preparation of the 2003  Financial Statements and (ii) French GAAP as at the date of signature of  this Agreement to the extent not covered in (i).   |
|---------------------------------------------|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                        |   |   |   |                                                                                                                                                                                                                               |
| “Agreement”                       |   | :      |   | means this  agreement and the schedules hereto.                                                                                                                                                                                    |
|                                        |   |   |   |                                                                                                                                                                                                                               |
| “Authorizations”                  |   | :      |   | means  authorizations, licenses, permits, certificates or other approvals or  consents delivered by any Governmental Authority established in one of the  countries where the Company carries out its activities.                  |
|                                        |   |   |   |                                                                                                                                                                                                                               |
| “Business”                        |   | :      |   | means the  business of the development, manufacture and distribution of a comprehensive  line of silicone implants for cosmetic surgery and for reconstructive surgery  conducted by the Company as of the date of this Agreement. |
|                                        |   |   |   |                                                                                                                                                                                                                               |
| “Business  Day”                   |   | :      |   | means a day  other than a Saturday, Sunday or public holiday in France or in the United  States of America.                                                                                                                        |
|                                        |   |   |   |                                                                                                                                                                                                                               |
| “Business  Intellectual Property” |   | :      |   | has the  meaning specified in Clause 8.12.1.                                                                                                                                                                                  |
|                                        |   |   |   |                                                                                                                                                                                                                               |
| “Closing”                         |   | :      |   | means the  completion of the sale and purchase of the Shares in accordance with this  Agreement.                                                                                                                                   |
|                                        |   |   |   |                                                                                                                                                                                                                               |
| “Closing  Date”                   |   | :      |   | means the  date on which Closing takes place in accordance with Clause 7.1.                                                                                                                                                   |
|                                        |   |   |   |                                                                                                                                                                                                                               |
| “Closing  Date Account”           |   | :      |   | means the  following account of Mr. François Tourniaire at Banque BNP Paribas, Apt:                                                                                                                                      |

 

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**Confidential Treatment Requested**

 
|                                  |   |   |   | * * *                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|---------------------------------------|--------|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                  |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| “Closing  Date Amount”      |   | :      |   | has the  meaning specified in Clause 4.1.1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                                  |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| “Company”                   |   | :      |   | means  Laboratoires Eurosilicone SA, a *société  anonyme* existing and organized under the laws of France, with a  share capital of Euro 2,000,000, having its registered office at Z.I. de la  Peyrolière, 84400 Apt, France, registered with the Companies and Commercial  Registry under number RCS 347 535 296 Avignon.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                  |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| “Confidential  Information” |   | :      |   | means all  information which is used in or otherwise relates to the Business and the  Company’s customers or financial or other affairs including, without  limitation, information relating to:

 

(a)   technical and/or business  know-how or business information acquired or developed or which the Sellers  have been made aware of in connection with their activities 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 other  details of customers, sales targets, sales statistics, market share  statistics, prices, market research reports and surveys, and advertising or  other promotional materials; or

 

(c)   future projects, business  development or planning, commercial relationships and negotiations;

 

but does not include information which is generally  available to or known by the public other than as a result 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 the recitals 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 within  buildings and air within other natural manmade structures above or below  ground), water (including territorial and coastal and inland waters, ground  water and water in drains and sewers) and land (including surface land and  sub-surface land and land under                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

 

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|                                      |   |   |   | any water).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|-------------------------------------------|--------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                      |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| “Environmental  Legislation”    |   | :      |   | means all  applicable laws and regulations governing the existence of or providing a  remedy for the release of Hazardous Substances, the protection of persons,  natural resources or the Environment, including those governing occupational and  health and safety matters.                                                                                                                                                                                                              |
|                                      |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| “2003  Financial Statements”    |   | :      |   | has the  meaning specified in Clause 8.5.1.                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                      |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| “Escrow  Account”               |   | :      |   | means the  account established by the Sellers and the Purchaser pursuant to the Escrow  Agreement.                                                                                                                                                                                                                                                                                                                                                                                          |
|                                      |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| “Escrow Agent”                  |   | :      |   | means BNP  Paribas, or any other French subsidiary of a first ranking bank.                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                      |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| “Escrow  Agreement”             |   | :      |   | means the  agreement substantially in the form of Schedule 7.2.4 hereto,  with such reasonable modifications 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  political subdivision of the foregoing, (ii) any governmental,  regulatory, taxing or administrative entity, authority, agency, commission,  ministry or other similar body, including without limitation any public  utility control, professional entity or public service commission or similar  regulatory body, or (iii) any court, tribunal or judicial or arbitral  body. |
|                                      |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| “Hazardous  Substances”         |   | :      |   | means any  waste, pollutant, contaminant or other hazardous, toxic, radioactive,  noxious, flammable, corrosive or caustic matter which is capable of causing  significant harm to the Environment or to human health; in each case, whether  in the form of solids, gases, ions or noise.                                                                                                                                                                                                  |
|                                      |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| “Initial  Purchase Price”       |   | :      |   | has the  meaning specified in Clause 3.1.                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                      |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| “Intellectual  Property Rights” |   | :      |   | means  trademarks, patents, service marks, registered designs and applications,  trade, business and company names, 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 Company in the carrying out of its activities.                                                                                                               |

 

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| “Party”                             |   | :      |   | means the  Sellers or the Purchaser and “Parties” means both of them.                                                                                                                                                     |
|-----------------------------------------------|--------|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                          |   |   |   |                                                                                                                                                                                                                                |
| “Performance  Figure”               |   | :      |   | has the  meaning specified in Clause 3.1(b).                                                                                                                                                                                        |
|                                          |   |   |   |                                                                                                                                                                                                                                |
| “Person”                            |   | :      |   | shall mean  a natural person, partnership, corporation, limited liability company,  business trust, joint stock company, trust, unincorporated association, joint  venture, Governmental Authority or other entity or organization. |
|                                          |   |   |   |                                                                                                                                                                                                                                |
| * * *                                         |   | :      |   | * * *                                                                                                                                                                                                                               |
|                                          |   |   |   |                                                                                                                                                                                                                                |
| “Pledge  Agreement”                 |   | :      |   | has the  meaning specified in Clause 4.3.                                                                                                                                                                                      |
|                                          |   |   |   |                                                                                                                                                                                                                                |
| “Premises”                          |   | :      |   | means the  land and buildings over which the Company has 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’s  Representations” |   | :      |   | means the  representations and warranties made by the Purchaser under Clause 9.                                                                                                                                                |
|                                          |   |   |   |                                                                                                                                                                                                                                |
| “Real  Property”                    |   | :      |   | means the  land and buildings, structures and fixtures owned by the Company.                                                                                                                                                        |
|                                          |   |   |   |                                                                                                                                                                                                                                |
| “Revenue”                           |   | :      |   | means, for  any fiscal year, the *chiffres d’affaires  nets* of the Company as set out in its annual statement of 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 the Sellers under Clause 8.                                                                                                                                                       |
|                                          |   |   |   |                                                                                                                                                                                                                                |
| “Sellers’ Representative”      |   | :      |   | means François Tourniaire, appointed by each Seller as its  representative in accordance with Clause 16;                                                                                                                  |
|                                          |   |   |   |                                                                                                                                                                                                                                |
| “Shares”                            |   | :      |   | means  33,750 fully paid ordinary shares of the Company comprising the whole of the  allotted and issued share capital 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                                                                                                                                                                                       |

 

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| “Targets”          |   | :      |   | Are set  forth in Schedule 3.1                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|------------------------------|--------|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                         |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| “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  added taxes, stamp duty, registration duties, customs and excise duties,  sales taxes and social contributions, under any applicable laws or  regulations and any penalty, fine or interest payable in connection with any  failure to pay or any delay in paying any of the same. |
|                         |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| “Tax Claim”        |   | :      |   | means a  claim for indemnification or defense arising out of Clause 11, including  reasonable attorneys’ fees and expenses and reasonable accountants’ fees and  expenses incurred in the investigation or defense of any of the same or in  asserting, preserving or enforcing any of the rights of the Purchaser arising  under Clause 11.                                                                                                                                   |
|                         |   |   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| “Tax  Regulations” |   | :      |   | means  any Tax or custom law as well as statute, decree, ordinances, rule, order,  memorandum or other texts of application or interpretation of the said law  applicable in a given country as well as any international 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 theterms and subject to the conditions set forth herein, the Sellers agree to sellto the Purchaser, and the Purchaser agrees to acquire from the Sellers inexchange for the Purchase Price (as defined below), all the Shares and allrights attaching or accruing to the Shares on or after the date of thisAgreement, free from all Encumbrances (as defined below).

##  

## 2.2         TheShares shall be sold to the Purchaser with coupon attached thereto entitlingthe Purchaser to any and all dividends, distribution of reserves (other than legalreserves) and advance payments payable in respect of the Shares after the datehereof.

##  

## 2.3         NotwithstandingClause 2.2 above, the Company may pay to the Sellers prior to the ClosingDate dividends in respect of the financial year 2003 in an amount equal to Euro675,000.

##  

# **3.**           PURCHASE PRICE

# ** **

## 3.1         InitialPurchase Price

##  

## The totalconsideration for the purchase of the Shares (the “**Purchase Price**”) shall be a cash payment of up to Euro41,000,000, consisting of:

 

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(a)             an initial amount of Euro32,000,000 (the “**Initial Purchase Price**”),plus

 

(b)            up to an amount of Euro9,000,000 in subsequent payments payable in three annual installments of up to Euro3,000,000 each (the “**Subsequent Payments**”and individually, a “**Subsequent Payment**”),calculated on the basis of the Revenue for the fiscal years ending December 31, 2004,December 31, 2005 and December 31, 2006, multiplied by 20.5%(the “**Performance Figure**”), asmore fully set forth in Clause 3.2 below, and the Subsequent Payment beingsubject to any Right to Set-Off.

 

## 3.2         SubsequentPayments

##  

### 3.2.1         The amountowing in respect of a particular Subsequent Payment shall be determined inaccordance with the procedure set out in Schedule 3.2.1 and thisClause 3.2.

###  

### 3.2.2         Any annualinstallment of the Subsequent Payment shall be equal to Euro 3,000,000 ifthe Performance Figure for the relevant fiscal year equals or exceeds theTarget for such fiscal year as set forth in Schedule 3.1.  In the event that the Performance Figure inany relevant fiscal year is less than the respective Target set forth in Schedule 3.1in respect of such fiscal year, then the amount of the corresponding annualinstallment Subsequent Payment shall be reduced in direct proportion to thedifference between the Performance Figure for such year and the Target for suchyear as set forth in Schedule 3.1.

###  

### 3.2.3         By way ofexample, and subject to article 1164 of the French Civil Code, if thePerformance Figure for the fiscal year ending December 31, 2004 isEUR 2,000,000, then the Subsequent Payment payable with respect to suchyear shall be reduced by 50% (2 million divided by 4 million) and shalltherefore be equal to EUR 1,500,000.

###  

### 3.2.4         Calculation of Revenue for thepurpose of determining the amount of Subsequent Payments shall be based on theconsistent application over the period of the Accounting Principles.

###  

# **4.**           PAYMENT

##  

## 4.1         InitialPurchase Price

##  

### 4.1.1         ThePurchaser shall pay into the Closing Date Account an amount of Euro 2 million,of which (i) Euro 1 million is to be paid to Mr. François Tourniaire,in the Closing Date Account, on or prior to 21 May 2004 (the “**First Closing Date Installment Amount**”) asa non-refundable indemnity to Mr. François Tourniaire, which indemnityshall be deducted from the portion of the Initial Purchase Price owed to Mr. FrançoisTournaire if the Agreement does not terminate in accordance with Clause 17.1,and (ii) Euro 1 million is to be paid to Mr. François Tourniaire, inthe Closing Date Account, on or prior to 28 May 2004 in the form of a loanto Mr. François Tourniaire (the “**SecondClosing Date Installment Amount**” and, together with the FirstClosing Date

 

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### Installment Amount, the “**Closing Date Amount**”). The Second ClosingDate Installment Amount shall be repaid in accordance with the terms of theloan agreement entered into between the Purchaser and Mr. FrançoisTourniaire on the date hereof (the “**LoanAgreement**”).

###  

### 4.1.2         On theClosing Date, the Purchaser shall (i) pay the Initial Purchase Price (lessthe Closing Date Amount) in full by bank wire transfer of funds for same dayvalue to such account as shall be notified by the Sellers’ Representative nolater than four (4) Business Days before the Closing Date (the “**Sellers’ Account**”) and (ii) pay thatportion of the Initial Purchase Price equal to the Second Closing DateInstallment Amount to Mr. François Tourniaire, which payment may be madeas a set-off against the amount owed by Mr. François Tourniaire to thePurchaser pursuant to the Loan Agreement.

###  

### 4.1.3         Inaccordance with Clause 16, subject to the occurrence of the Closing, theSellers’ Representative shall (following a deduction for those costs referredto in Clause 16.4) be responsible for distributing the Initial PurchasePrice (less the Closing Date Amount) between the Sellers so that each Sellerreceives that amount of the Initial Purchase Price which is proportionate tothe number of Shares sold by that Seller to the Purchaser on the Closing Dateout of the total number of Shares sold by the Sellers to the Purchaser on theClosing Date as set forth in Schedule A (such proportion beingreferred to as the “**Prorata Proportion**”).

###  

## 4.2         SubsequentPayments

##  

### 4.2.1         TheSubsequent Payments (or part thereof as the case may be), if applicable, shallbe determined in accordance with the procedures set forth in Schedule 3.2.1and the provisions of Clause 3.2 and shall be paid by the Purchaser to theSellers’ Representative on the later of (i) (a) 31 March 2005in respect of the 2004 fiscal year, (b) 31 March 2006 in respectof the 2005 fiscal year, and (c) 31 March 2007 in respect of the2006 fiscal year or (ii) three (3) Business Days after the final determinationof the amount of the relevant Subsequent Payment by the Parties or the Expert(in accordance with Schedule 3.2.1).

###  

### 4.2.2         Inaccordance with Clause 16, the Sellers’ Representative shall beresponsible for distributing the amount of the Subsequent Payments, if any,between the Sellers so that each Seller receives the Prorata Proportion lesshis/her Prorata Proportion of the costs as set forth in Clause 16.4.

###  

## 4.3         PledgeAgreement

##  

### At Closing, in order to secure theobligation of the Purchaser to pay to each Seller his/her Prorata Proportion ofthe Subsequent Payments, if any, the Purchaser shall grant at Closing to eachsuch Seller a pledge over one third of the Shares sold by such Seller, pursuantto the draft Pledge Agreement in the form set out in Schedule 4.3;the number of pledged Shares decreasing by one-third annually, following either(i)

 

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### payment and receipt of eachSubsequent Payment (including any payments into the Escrow Account which shallbe deemed received for purposes hereof) or (ii) the determination that noSubsequent Payment is due for such year.

###  

# **5.**           CONDITIONS

# ** **

The sale and Purchase of theShares is subject to the conditions set forth in Clauses 5.1 to 5.6 below beingsatisfied or waived in writing by the Purchaser on or before 30 June 2004,it being agreed that each Party shall exercise its best efforts to satisfy theconditions set forth below on or prior to 30 June 2004.

 

## 5.1         Nomaterial adverse change in the Business, condition (financial or otherwise),operations or prospects of the Company, has occurred since 31 December 2003.

##  

## 5.2         Approvalof the sale and transfer of the Shares by the board of directors of theCompany.

##  

## 5.3         Thedelivery of a certificate signed by the Chairman of the Company stating thatthe Company has not made or committed to make any distribution of profits orreserves by way of a dividend since 30 November 2003, other than inaccordance with Clause 2.3.

##  

## 5.4         TheSellers’ representations and warranties in respect of the transactionscontemplated by this Agreement contained in Clause 8 shall be true andcorrect in all material (this materiality test being assessed in respect of theBusiness, condition (financial or otherwise), operations or prospects of theCompany) respects as at the Closing Date as if made on that date except for (i) thoserepresentations and warranties for which a specific date (other than theClosing Date) has been set out in Clause 8 and (ii) acts carried outor events occurring in the ordinary course of business.

##  

## 5.5         ThePurchaser having entered into a definitive financing agreement in connectionwith the transactions contemplated herein, and having received the proceeds ofsuch financing in an amount sufficient to pay the Purchase Price.

##  

## 5.6         TheSellers shall procure that the Persons occupying the Premises and/or the RealProperty vacate such Premises and the Real Property and that such Personsdiscontinue any direct or indirect employment, activities or relationship withthe Company.

##  

# **6.**           NOTICES

# ** **

The Sellers’ Representative shall give prompt notice to the Purchaserof satisfaction of the conditions set forth in Clauses 5.1 to 5.5 and 5.6, andthe Purchaser shall do the same with respect to Clause 5.6.

 

# **7.**           CLOSING

# ** **

## 7.1         Time andPlace of Closing

##  

The Closing shall take placeat the offices of Clifford Chance, 112 avenue Kléber, 75016 Paris within five (5) BusinessDays of the date of the last condition to be

 

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satisfied under Clause 5or at another venue and at another time to be mutually agreed upon by thePurchaser and the Sellers’ Representative.

 

## 7.2         Deliveriesand Actions at Closing

##  

### 7.2.1         At Closing,the Sellers shall deliver or cause to be delivered to the Purchaser:

###  

#### (a)       the stocktransfer forms (*ordres de mouvement*)recording the transfer of the Shares to the Purchaser, duly signed by theSellers;

####  

#### (b)       theup-to-date share transfer register of the Company (comprising the *registre des mouvements de titres* and the *comptes individuels d’actionnaires*);

####  

#### (c)       letters ofresignation of the corporate officers of the Company listed in Schedule 7.2.1(c) andthe form of which is set forth in Schedule 7.2.1 (c);

####  

#### (d)       notices to theshareholders of the Company convening shareholders’ meetings to take place onor before the Closing Date: (i) replacing the directors and corporateofficers of the Company as specified by the Purchaser at least fifteen (15)days prior to the Closing Date and (ii) canceling the right of pre-emptioncontained in Article 12 of the by-laws (*statuts*)of the Company;

####  

#### (e)       a certifiedcopy of the minutes of the meeting of the Company’s board of directors (i) approvingthe sale of the 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) revokingand replacing all existing instructions to the Company’s bankers, bank mandateforms and authorities, of which there is a full list at Schedule 7.2.1(e);

####  

#### (f)        acertificate signed by the chief executive officer and chief financial officerof the Company, dated the Closing Date, stating that the representations andwarranties set out in Clause 8 are true and accurate in all material (thismateriality test being assessed in respect of the Business, condition(financial or otherwise), operations or prospects of the Company) respects asat the Closing Date as if made on that date except for (ii) thoserepresentations and warranties for which a specific date (other than theClosing Date) has been set out in Clause 8 and (ii) acts carried outor events occurring in the ordinary course of business;

####  

#### (g)       agreementsentered into between the Company and each of Jacques and Olivier Tourniaireamending their existing 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 Senaz Falquerho (néeNamooya), substantially in the form set out in Schedule 7.2.1(g)(ii);

 

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#### (h)       an agreementbetween the Company and Mr François Tourniaire in relation to consultancyservices to be rendered by Mr François Tourniaire to the Company substantiallyin the form set out in Schedule 7.2.1(h);

####  

#### (i)        receipt of arelease, in the form set forth in Schedule 7.2.1(i), by eachdirector of the Company, to any and all claims arising prior to the date ofthis Agreement that such person may have against the Company or the Purchaserand their respective Affiliates arising from such person’s relationship withthe Company or their status as a director, officer or employee of the Company;and

####  

#### (j)        approval ofthe Pledge Agreement by the board of directors of the Company.

####  

### 7.2.2         At Closing,the Purchaser shall deliver or cause to be delivered to the Sellers’Representative (i) evidence of credit to the Sellers’ Account of a sumequal to the Initial Purchase Price (less the Closing Date Amount) and (ii) evidenceof credit to the Closing Date Account of a sum equal to the Closing Date Amountin accordance with Clause 4.1.1.

###  

### 7.2.3         At Closing,each Seller and the Purchaser shall procure the execution and delivery of aPledge Agreement to each of them.

###  

### 7.2.4         At Closing,the Sellers’ Representative and the Purchaser shall procure the execution anddelivery of an Escrow Agreement duly signed by the Escrow Agent, substantiallyin the form set out in Schedule 7.2.4 to each of them.

###  

### 7.2.5         All mattersat the Closing will be considered to take place simultaneously, and no deliveryof any document will be deemed complete until all transactions and alldeliveries of documents required by this Agreement are completed and title tothe Shares shall not be transferred and the Purchaser shall have no propertyrights or interest in the Shares unless and until the Closing actually takesplace and the payment of the Initial Purchase Price has been effectivelyreceived by the Sellers’ Representative.

###  

# **8.**           REPRESENTATIONS AND WARRANTIES OF THE SELLERS

# ** **

Each of the Sellers representsand warrants to the Purchaser that the representations and warranties containedin this Clause 8 are true, complete and accurate and are not misleadingboth at the date of this Agreement and at the Closing Date (unless otherwisespecified). No specific representation and warranty in any way limits the scopeof the more general representations and warranties, unless expressly providedotherwise.

 

The representations andwarranties contained in this Clause 8 are made to the Purchaser subject to thedisclosures contained in the Schedule relating to the correspondingrepresentation and warranty.

 

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Inclusion of, or reference to,any matter in any schedule does not constitute an admission of themateriality of any such matter.

 

Any reference to “the Sellers’best knowledge” hereinafter shall be deemed a reference to the best actualknowledge and belief of such Seller.

 

Representations and warrantiesgiven by a Seller in Clauses 8.1 and 8.2 are limited to such Seller and to theShares owned by such Seller.

 

## 8.1         Authorityof the Sellers

##  

### 8.1.1         Each of theSellers has full power and authority to execute and perform this Agreement andits obligations hereunder and to benefit from the rights provided for herein.Any Seller who is subject to legal restrictions as a result of either his orher marital status or being a party to a *pactecivil de solidarité*, has obtained the necessary consent to sell hisor her shares.

###  

### 8.1.2         None of theSellers is currently the subject of any proceedings with a view to theprevention or resolution of business difficulties (or any similar actions), andthere do not exist any serious reasons justifying a judgment of declaration ofbankruptcy concerning such Seller.

###  

### 8.1.3         There is noaction, suit or proceeding pending or threatened against or affecting him orher in any court or before any Governmental Authority which would materiallyaffect the performance of his or her obligations under this Agreement.

###  

### 8.1.4         Theperformance by each of the Sellers of their respective obligations under thisAgreement and the consummation of the transactions contemplated herein willnot:

###  

(i)         violate,conflict with or result in the breach of any contract to which such Seller is aparty, or

 

(ii)        constitute aviolation by such Seller of any judgment, order, decree, law or regulationapplicable to him or her.

 

### 8.1.5         Except asset forth in Clause 5, all prior formalities and authorizations to beobtained by the Sellers for the transactions contemplated herein have beencompleted or obtained. No authorization is required to be obtained by any ofthe Sellers in connection with the valid execution of this Agreement and theperformance of the transactions hereby contemplated.

###  

### 8.1.6         ThisAgreement has been duly executed by each of the Sellers and constitutes alegal, valid and binding obligation of each of the Sellers enforceable againsthim or her in accordance with its terms.

 

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## 8.2         Shares

 

### 8.2.1         Each of theSellers is the sole owner of the number of Shares set forth opposite its namein Schedule A.

###  

### 8.2.2         Subject tothe provisions of the by-laws (*statuts*)of the Company that have been provided to the Purchaser, all the Shares held byeach 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 refusalor buy-out, rights of pre-emption, voting agreements, other third-party rightor interest, or another type of preferential arrangement (including, withoutlimitation, a title transfer or retention arrangement) having similar effect (“**Encumbrances**”) and there is no agreement,arrangement or obligation to create or give an Encumbrance in relation to anyof the Shares, and no Person has claimed to be entitled to an Encumbrance inrelation to any of the Shares.

###  

## 8.3         Organization

##  

### 8.3.1         The Companyis duly organized and validly existing under the laws of France.  The copies of the by-laws (*statuts*) of the Company that have beenprovided to the Purchaser reflect all amendments made to date and are correctand complete.

###  

### 8.3.2         The Companyhas the right, power and authority to carry on its respective Business ascurrently conducted, and to own and operate the properties and assets owned andoperated by it.

###  

### 8.3.3         The Companyhas properly kept in all material respects all registers, minute books andother books (including account books and ledgers) required by law and suchregisters, minute books and other books contain a complete and accurate recordof the matters required to be recorded.

###  

### 8.3.4         Allresolutions and other documents required to be delivered, filed or recorded atthe Commercial Court or other Governmental Authority in relation to the Companyhave been properly prepared and timely delivered, filed or recorded.

###  

## 8.4         ShareCapital

##  

### 8.4.1         The Sharescomprise the whole of the Company’s share capital.  The Shares have been properly issued andallocated and fully paid.  None of theShares have been listed or traded on a stock exchange.

###  

### 8.4.2         The Companyhas, at the date hereof, the capital stock, the number of Shares and theshareholding structure set forth in Schedule A. The Company doesnot have any subsidiaries nor does the Company own, directly or indirectly, anycapital stock of or other equity interests in any corporation, partnership, orother Person. The Company is not a member of, or participant in, any

 

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### partnership, joint venture, *Groupement d’Intérêt Economique* or similarenterprise.  All of the voting rights ofthe Company are vested exclusively in the shares constituting their sharecapital.

###  

### 8.4.3         The Companyhas not issued any equity or debt security of any kind (other than the Shares)and there are no resolutions or other corporate actions that would require orpermit the Company to issue such other securities including without limitationconvertible bonds, options, warrants, reserved or authorized shares.

###  

### 8.4.4         There are noagreements or arrangements of any kind providing for the purchase, issuance,sale, extension or restriction on the transfer of any interest in the capitalstock of the Company, except for the provisions of the by-laws of the Company (*statuts*) that have been provided to thePurchaser.

###  

### 8.4.5         The Companydoes not have nor has had in the past, a branch, agency, place of business orestablishment outside of France.

###  

## 8.5         Accounts

##  

### 8.5.1         The Sellershave heretofore furnished the Purchaser with the audited accounts of theCompany at 31 December 2003, set out in Schedule 8.5.1(the “**2003 Financial Statements**”).  The 2003 Financial Statements, including thefootnotes thereto, have been prepared and audited in accordance with theAccounting Principles, applied on a consistent basis, and show a true, fair andaccurate view of the financial condition, results of operations and cash flowsof the Company at the date thereof.

###  

### 8.5.2                Except asset forth in Schedule 8.5.2, the Company does not have anyoutstanding financial indebtedness (i.e., debt to credit or financialinstitutions) to any Person.  Except asset forth in Schedule 8.5.2, no document evidencing, or agreementwith respect to, financial indebtedness of the Company, contains anyrestriction upon (i) prepayment of any financial indebtedness, (ii) theincurrence of additional financial indebtedness or (iii) the ability togrant any Encumbrance on any properties or assets of the Company.  Schedule 8.5.2 sets forth theamount of principal and unpaid interest outstanding under each documentevidencing financial indebtedness of the Company, if any, that will accelerateor become due or result in a right on the part of the holder of such financialindebtedness (with or without due notice or lapse of time) to requireprepayment, redemption or repurchase as a result of the execution of thisAgreement or the completion of the transactions contemplated hereby.

###  

### 8.5.3          The Companyis not a party to, or obligated under, any option, swap or other derivativescontract other than such a contract that directly links to and hedges theperformance of a specific contractual obligation of the Company.

 

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### 8.5.4          There are noliabilities, whether actual or contingent, relating to the Company, except for (a) liabilitiesthat are required to be reflected in the 2003 Financial Statements and havebeen sufficiently 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 Companyis not insolvent and has not suspended its payments, (b) is not injudicial liquidation, receivership or moratorium, (c) is subject to anyproceedings relating to the prevention or settlement of insolvency claims, (d) isnot in judicial reorganization (*redressementjudiciaire*), (e) has not been the object of any proceedings forthe reorganization or collective discharge of its liabilities, or (f) tothe Sellers’ best knowledge, is not under the threat of any such proceedings.

###  

### 8.5.6         Since31 December 2003 until the date hereof, no event has occurred, thathas had or could reasonably be expected to have a material adverse effect onthe Company or the Business. Without limiting the generality of the foregoing, (A) theBusiness has been conducted in the usual, regular and ordinary course, consistentwith past practice, and (B) the Company has not engaged in practices,taken any action or participated in any transaction the purpose of which wouldhave been different from securing and facilitating the business development ofthe Company as a going concern on a long term basis.

###  

## 8.6         AccountsReceivable and Payable

##  

### 8.6.1         Except asset forth in Schedule 8.6.1, since 31 December 2003, theamounts of all work-in-process, accounts receivable and unbilled invoices(including, without limitation, unbilled invoices for services and out-of-pocketexpenses) and other debts due or recorded in the records and books of accountof the Business were incurred in the ordinary course of business, and will becurrent and collectible, net of any reserves shown in the 2003 FinancialStatements or any reserves made in the ordinary course of business thereafterwhose amount is consistent with past practices (and in any case are payable nolater than sixty (60) days from the relevant due date).

###  

### 8.6.2         Except forfluctuations in the ordinary course of business, there has been no materialchange since 31 December 2003 in the amount of the work-in-process,accounts receivable or other debts due to the Company or the reserves withrespect thereto, or the accounts payable or other payables of the Company fromthat reflected in the 2003 Financial Statements.

###  

### 8.6.3         There are nounpaid invoices, bills or other amounts due and payable representing amounts inexcess of Euro 15,000 in aggregate alleged to be owed by the Company orother alleged obligations of the Company which it has disputed or determined todispute or refuse to pay.

 

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## 8.7         Inventory

 

All inventory consists of aquality and a quantity usable and saleable in the ordinary course of business.Any inventory that is written off is done so in accordance with the ordinarycourse of business. There has been no material change since 31 December 2003in the amount of inventory and reserves 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 set forth in Schedule 8.7,all inventory is free and clear of all Encumbrances.

 

## 8.8         Personneland Corporate Officers of the Company

##  

### 8.8.1         The list ofsalaried employees of the Company as at the date of this Agreement appears as Schedule 8.8.1.

###  

### 8.8.2         Schedule 8.8.2 sets outthe collective agreements applicable to the various categories of employeeworking for the Company.

###  

### 8.8.3         Except asindicated in Schedule 8.8.3, there is no contract or agreement with(i) those salaried employees with an annual remuneration exceedingEuro 30,000 or (ii) directors, corporate officers or managers of theCompany which allows for a notice period and/or a redundancy payment greaterthan those appearing in the collective agreements mentioned in Clause 8.8.2above.

###  

### 8.8.4         No employeeof the Company has been granted terms of employment which are triggered as aconsequence of the sale of the Shares, nor have any employees been grantedspecial protection such as golden parachutes or similar benefits.

###  

### 8.8.5         Save as setout in Schedule 8.8.5, no directors of the Company benefit from anyemployment contract or service contract with the Company and, except as set outin Schedule 8.9 no corporate officer has received any remunerationfrom the Company.

###  

### 8.8.6         Save asindicated in Schedule 8.8.6, the Company does not participate in orcontribute to any retirement plans, investment or profit sharing schemes,premiums or commission or other optional employee plans, other than thoserequired by applicable legislation, regulations and collective bargainingagreements.

###  

### 8.8.7         Except asotherwise disclosed in Schedule 8.8.7, the Company has not grantedany loans to any person employed by the Company.

###  

### 8.8.8         Except asotherwise disclosed in Schedule 8.8.8, for each of its employees(and where appropriate its former employees), the Company complies in all materialrespects and has no liability (whether accrued or otherwise) for pastnon-compliance with applicable laws and regulations as well as the provisionsof the collective bargaining agreements, collective agreements, commonpractices, decisions of the court and employment contract Clauses concerningemployment conditions in its respective jurisdictions.

 

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### 8.8.9         Thecollective agreements applied within the Company are valid, and comply in allmaterial respects with applicable laws and regulations. Save as set out in Schedule 8.8.9,the Company is not in breach of the legal and regulatory provisions applicablein its respective jurisdictions of incorporation or operation relating to thepersonnel representative bodies and the exercise of trade union rights.

###  

### 8.8.10       All legalobligations to inform and consult the personnel representative bodies of theCompany in respect of the sale and purchase of the Shares in accordance withthe terms of the Agreement have been fulfilled and no specific undertaking hasbeen given in this respect, it being specified that the *note d’information* given to the workers’committee of the Company was provided beforehand to the Purchaser.

###  

### 8.8.11       Allemployment declarations, Taxes and any other material formalities or documentsimposed by employment legislation, have been timely completed, paid, submitted,lodged or teletransmitted by the Company in the required form and within therequired deadlines applicable in its respective jurisdictions of incorporationor operation.

###  

### 8.8.12       There is nocollective redundancy or social plan in the Company and there have been nocollective redundancies during the previous twelve (12) months.

###  

## 8.9         Directors’Fees

##  

Since 31 December 2003and except as provided for in Schedule 8.9, the Company has notdistributed any directors’ attendance fees or other similar distributions andhave not taken any decision as regards such distribution. Except as set out in Schedule 8.9,no remuneration has been paid or remains payable to any directors of theCompany.

 

## 8.10       RealProperty

##  

### 8.10.1       The Companyhas full and complete ownership of the Real Property listed in Schedule 8.10.1free from Encumbrances.

###  

### 8.10.2       The Companyholds good and valid title of occupation for the Premises described in Schedule 8.10.2.  The Company has not concluded any agreementthat has not yet been performed with a view to buying or selling the RealProperty or the Premises or any other form of real property or rights theretoexcept for options to buy granted under the financial leases (“*crédit baux*”) referred to inClause 8.10.3 below. Each lease in respect of the Premises is valid,legally binding, in full force and effect and enforceable in accordance withits terms by the Company, and not subject to any challenge, refusal of renewalor other claim.

###  

### 8.10.3       Schedule 8.10.3sets out the entire list of contracts or agreements with any Third Partywith regard to the Premises and Real Property described in Schedule 8.10.2.The Company has all easements and rights of ingress and

 

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### egress necessary for utilities andservices for all operations conducted on the Real Property or on the Premises.

###  

### 8.10.4       The Companyis up to date with the payment of the usual local Taxes which have to be paidby the Company in the localities where the Real Property and the Premises aresituated, and with the rents, charges and insurance premiums due, as the casemay be, in respect of the construction and the use of the Real Property and thePremises.

###  

### 8.10.5       The RealProperty and the Premises are adapted to the purposes for which they are usedand, except as mentioned in Schedule 8.10.5, are not the subject ofany material default under applicable laws and regulations, includingEnvironmental Legislation. Neither the Real Property nor the Premises aresubject to any expropriation or requisition measures or any otheradministrative measure that may adversely affect in a significant way theircurrent use (or, in respect of the Real Property, their book value).

###  

### 8.10.6       The Companyhas filed and obtained all planning authorizations which were required underthe applicable town planning regulations for the construction and/or thefitting out of the Real Property and the Premises. These planningauthorizations are now definitive and not subject to any withdrawal, challengeor other claim. The Real Property and the Premises were built in compliancewith these planning authorizations.

###  

## 8.11       Assets

##  

### 8.11.1       Except asmentioned in Schedule 8.11.1, the Company is the absolute owner andis in actual possession of its fixed assets used or useful for carrying out itsBusiness, including those fixed assets listed in the 2003 Financial Statements.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 to claim ownershipof these fixed assets (including by virtue of an agreement) and, except asmentioned in Schedule 8.11.1, the Company has not created or agreedto create any Encumbrance over any part of its undertaking or these fixedassets (other than arising by the operation of law). As regards the fixedassets not owned by the Company of a value exceeding Euro 15,000, the Companyis up to date with all payments due in relation to these fixed assets andobserves the provisions of the agreements under which they hold and use thesefixed assets.

###  

### 8.11.2       The Company’smaterial fixed assets are in good working order and repair and can be usednormally for the activities for which they are intended.

###  

## 8.12       IntellectualProperty and Software Rights

##  

### 8.12.1       The list ofthe Intellectual Property Rights owned and/or used by the Company in carryingout its activities (the “**BusinessIntellectual Property**”) is set out in Schedule 8.12.1.

 

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### 8.12.2       Except asotherwise disclosed in Schedule 8.12.2, all Intellectual PropertyRights owned by the Company, are valid and in full force and effect.

###  

### 8.12.3       Save as setout in Schedule 8.12.3, the Intellectual Property Rights owned bythe Company are held exclusively (free and clear of any Encumbrance) by theCompany.

###  

### 8.12.4        Except asotherwise disclosed in Schedule 8.12.4, all employees, agents,consultants or contractors who have contributed to, or participated in, thecreation or development of any copyrightable, patentable or otherwiseprotectable material under intellectual property laws, or manufacturing ortrade secret material on behalf of the Company either: (i) is a party to avalid written agreement under which the Company is deemed to be the originalowner/author of all the property rights therein; or (ii) has executed, oris obliged pursuant to en existing agreement to execute, a valid agreementassigning to the Company all right title and interest in such material.

###  

### 8.12.5        Except asotherwise disclosed in Schedule 8.12.5, the Company is not a partyto any written or oral cooperative research and development agreement orsimilar arrangement with a Third Party with respect to the IntellectualProperty Rights.

###  

### 8.12.6        Theconsummation of the transactions contemplated by this Agreement will not alteror impair the rights to own or use any of the Business Intellectual Property.

###  

### 8.12.7        Except asotherwise disclosed in Schedule 8.12.7, no claims have beenasserted against the Company relating to the use of the Business IntellectualProperty or challenging the ownership, validity or enforceability thereof.  The use of the Business Intellectual Propertyby the Company does not infringe or misappropriate any intellectual propertyrights of a Third Party and no Third Party is, to the Sellers’ best knowledge,infringing or misappropriating any Intellectual Property Rights.Notwithstanding the outcome of the litigation proceedings brought by * * *against the Company (which are disclosed in Schedule 8.12.7) theCompany shall be able to fully operate the Business as it is conducted at thedate of this Agreement.

###  

## 8.13       Contracts

##  

### 8.13.1       Schedule 8.13.1 containsthe list of the distribution, commercial agency and representation agreementsentered into by the Company, whether in writing or otherwise or by which it isbound which require payments exceeding Euro 50,000 per annum.

###  

### 8.13.2       Schedule 8.13.2 contains alist of the supply agreements entered into by the Company, whether in writingor otherwise or by which it is bound, which require payments exceeding Euro50,000 per annum.

 

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### 8.13.3       Schedule 8.13.3 comprises alist of current contracts entered into by the Company (other than employmentcontracts, commercial leases and contracts specifically referred to or listedin the other Schedules) with a duration of more than twelve (12) months and/orinvolving an annual sum, VAT excluded, which require payments exceeding Euro50,000 per annum.

###  

### 8.13.4       Allcontracts binding on the Company are in full force and effect, have been enteredinto and are performed in compliance with applicable laws and regulations, inparticular with regard to hygiene, clinical and health and safety regulationsapplicable to the Business except when failure to so comply would notindividually or in the aggregate have a material adverse effect on the Companyor the Business. Neither the Company nor any other party to a contract is indefault of its obligations arising under any contract listed in Schedules 8.13.1to 8.13.3 (or under any commercial lease or contract specificallyreferred to or listed in other Schedules) in such a way as to incur anyliability or justify the termination of the contract or undertaking or itsnon-performance by the other party. The Company has not been and is notinfringing any Third Party’s rights, in particular any exclusivity rightsgranted by the Company.

###  

### 8.13.5       Save asindicated in Schedule 8.13.5 (i), the Company has not entered intoany contract which includes a change of control Clause or which contains aClause expressly stating that it has been entered into on an *intuitu personae*basis. Save as indicated in Schedule 8.13.5 (ii), the Company hasnot been informed by any Third Party of the Third Party’s intention to end orreduce their business relations with the Company.

###  

### 8.13.6       Save asindicated in Schedule 8.13.6, the Company has not given anycovenants still in force, limiting or excluding its right to carry on theBusiness or compete in any area or field (whether limited or excluded byreference to a geographical area or type of business) to any other person.

###  

## 8.14       ProductLiability

##  

### 8.14.1       The productssupplied by the Company up and until the Closing Date do not contain any designor manufacturing defects (whether affecting all products of a particular typeor “one off” defects affecting specific individual products or batches ofproducts) that cause them not to comply with their specification in a mannerthat could result in damages, liability whether civil or criminal or a generalrecall of the type of product concerned except for the recall of products inthe ordinary course of business and consistent with past practice (a total ofapproximately * * * returns per year). Except as set forth in Schedule 8.14.1,as of the date of signature of this Agreement, the Company, in either the 2003fiscal year or the period starting from January 1, 2004, has not takenback products as defective.  Except asset forth in Schedule 8.14.1 and as of the date of the signature ofthis Agreement, there are no statements, citations or decisions by anygovernmental, administrative, judicial, arbitral

 

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### or regulatory body that any productof the Company is defective or fails to meet standards promulgated by any suchbody.  To the Sellers’ best knowledge,except as set forth in Schedule 8.14.1, there is no defect relatingto any product of the Company that may impose upon the Company a duty to recallany product of the Company.

###  

### 8.14.2       Except asset forth in Schedule 8.14.2, claims (actual or threatened)relating to defective or allegedly defective products that have been receivedby the Company have been fully provided for in the 2003 Financial Statements.

###  

### 8.14.3       The Companyhas not provided services or sold, distributed or brought into circulationproducts which do not comply with the laws, regulations (in particular, butwithout limitation, hygiene, clinical and health and safety regulationsapplicable to the Business)****andspecific instructions from the relevant authorities to which they are subject.The representation set out in the previous sentence also applies to thepackaging, labeling and storage of the products manufactured, sold ordistributed by the Company.

###  

### 8.14.4       Schedule 8.14.4sets out the list of certifications (including all those certificationsfor its facilities and equipment) and CE markings granted to the Company as atthe date of this Agreement. The Company has all the CE markings required byapplicable law for its Business.

###  

## 8.15       Insurance

##  

### 8.15.1       Schedule 8.15.1 contains alist of each of the material insurance policies entered into by the Company.Except in the case of product liability insurance which has not yet beensubscribed by the Company, the Company has taken out all insurance policiesnecessary for the conduct of the Business and such insurance policies providesufficient cover and protection in regard to applicable laws and regulations.

###  

### 8.15.2       Theinsurance policies listed in Schedule 8.15.1 are in force and nooutstanding notification of termination of any such policy has been received bythe Company from any insurer or served by the Company. Save as set out in Schedule 8.15.2,the Company has not been informed in writing by any of its insurers of theintention of such insurers to refuse a claim submitted by the Company, increasepremiums or reduce the amount of cover under the policies listed in Schedule 8.15.1.

###  

### 8.15.3        The Companyis in compliance with the terms of its insurance policies listed in Schedule 8.15.1and all corresponding premiums have been paid on time. There is no claimoutstanding under any such policy and, so far as the Sellers are aware, thereare no circumstances likely to give rise to such a claim.

###  

## 8.16       Loans

##  

Except as indicated in Schedule 8.16, the Company has notgranted any outstanding loans to any Person other than (i) credits grantedto its customers in the normal course

 

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**Confidential Treatment Requested**

 

of business or amounts due from customers which the Company seeks toretrieve in accordance with past practice or (ii) credits granted to itsemployees.

 

## 8.17       Authorizations

##  

### 8.17.1       All of thematerial Authorizations and application therefore necessary for or used by theCompany for the exercise of its activities as they are currently conducted areset out in Schedule 8.17.1. The Company has always had and has suchmaterial Authorizations necessary to operate its activities, it being specifiedthat the Company made a classified installation declaration to the Préfet on February 17,2004 as disclosed in Schedule 8.17.1.

###  

### 8.17.2       TheAuthorizations listed in Schedule 8.17.1 are in full force and areand have always been complied with in all material respect.  To the Sellers’ knowledge, there are nocircumstances which indicate that the Authorizations or applications thereforementioned in Schedule 8.17.1 are likely to be revoked, not renewedor not granted, in whole or in part. None of the Authorizations mentioned in Schedule 8.17.1will be affected by the sale of the Shares under this Agreement.

###  

## 8.18       Environment

##  

### 8.18.1       The Companyhas obtained all material Authorizations required under applicableEnvironmental Legislation for the performance of its activities as they arecurrently conducted and such Authorizations are in good standing order. TheCompany has timely filed all material notices, certificates or declarationsrequired to be filed by it under applicable Environmental Legislation inrelation to its Business, operations and assets.

###  

### 8.18.2       TheCompany has notbeen and is not in material breach of any applicable EnvironmentalLegislation. The Company has timely taken all remedial actions required to be taken by it by arelevant authority under applicable Environmental Legislation and has no liabilities for any remedial actions outstanding on the datehereof which is not reserved for in its financial statements.

###  

### 8.18.3       The activityconducted by the Company on the Premises and the Real Property has notgenerated pollution or contamination to the Environment that could result inliability under applicable Environmental Legislation.

###  

### 8.18.4       The Companyhas not received any written notice to the effect that it is or may be liableto any person for a breach of applicable Environmental Legislation or as a resultof the release or threatened release of a Hazardous Substance arising from theoperations of the Company, including sales of any products.

###  

### 8.18.5       The Companyhas not released any Hazardous Substances into the Environment in connectionwith * * *.

 

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**Confidential Treatment Requested**

 

## 8.19       TaxRegulations

##  

### 8.19.1       TheCompany has always complied with the Tax Regulations.

###  

### 8.19.2       The Companyhas correctly made and lodged in time all necessary tax declarations and otherdocuments used as the basis for calculating Taxes in accordance with applicableTax Regulations.  Those tax declarationshave always been true and complete.

###  

### 8.19.3       TheCompany has paid at the due date, or made provision for the payment of, allTaxes that have or may have become due in accordance with applicable TaxRegulations. The basis and the amount of Tax that the Company has owed or stillowes have always been properly determined in compliance with the TaxRegulations.

###  

### 8.19.4       The Companyhas all the documents required to justify the information set out in thedeclarations or documents in this representation as well as the implementedtax, customs or social security rules. More generally, the Company fulfills itsobligations in respect of the periods for conserving documents as provided byapplicable laws and regulations, whether they be in paper or computer form.

###  

### 8.19.5       The Companydoes not benefit from any particular Tax or social security regime, which couldterminate or be materially and adversely affected by the sale of the Shares, ordue to any act or omission which occurred before the date of this Agreement.

###  

### 8.19.6       The Companyis and always has been resident for the purposes of Tax in the jurisdiction inFrance and has never been resident in any other jurisdiction or traded througha branch or permanent establishment situated outside such jurisdiction.

###  

### 8.19.7        The Companyis not nor will be liable to pay any Tax or be deprived of any relief availableto it, or to make reimbursement or indemnity in respect of any Tax, for whichsome other company or Person is or was primarily liable.

###  

### 8.19.8       The Companyis not nor has ever been the tax representative for the purposes of value addedtax, for a business resident outside the jurisdiction in which it isincorporated. The Company has not made any unusual election under applicableTax regulations.

###  

### 8.19.9       Except asprovided for in Schedule 8.19.9, the Company has not been and isnot the subject of any ongoing Tax audit in relation to Taxes and the Companyhas not been notified in writing by an administrative authority of theimplementation in the near future of an audit or enquiry likely to lead to thepayment of Taxes or a reassessment of the basis of collection of Taxes; to the

 

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**Confidential Treatment Requested**

 

### Sellers’ knowledge, there are nocircumstances which make it likely that the Company will be liable to suchpayment or reassessment.

###  

## 8.20       Complianceand Litigation

##  

### 8.20.1       **To the Sellers’ best knowledge, the**Company andits **Business are conducted in accordancewith applicable laws**and regulations (in particular, butwithout limitation, hygiene, clinical and health and safety regulationsapplicable to the Business)**exceptwhen failure to comply would not individually or in the aggregate have amaterial adverse effect on the Company or its Business and there is no order,decree or judgment of any court or any governmental agency of any applicablejurisdiction outstanding against the Company.**

###  

### 8.20.2       Neither theCompany n**or any agreement,arrangement or practice to which the Company is a party, is at the date of thisAgreement the subject of any material investigation or inquiry by anyGovernmental Authority. No material**contracts or agreements**to which the Company is a party**contain any provision or omission that is liable to result in a civil orcriminal sentence, fine or penalty against the Company, or any of itsdirectors.

###  

### 8.20.3       Except forthose matters set out in Schedule 8.20.3, the Company has not beennotified of a claim and is not involved in any litigation, judicial procedure,enquiry or administrative proceedings or arbitration for a claim in excess ofEuro 5,000.

###  

## 8.21       Relationswith Sellers

##  

### 8.21.1       The Companyis not a party to any agreement or arrangement with or in relation to anySeller other than the legal relationship of a company with its shareholders,directors, or through an employment contract.

###  

### 8.21.2       Except asdisclosed in Schedule 8.21.2, there is no outstanding indebtednessfrom the Company to any of the Sellers.

###  

## 8.22       Actionssince 31 December 2003

##  

Since 31 December 2003and through the date hereof, the activities of the Company have been conductedin accordance with the ordinary and usual course of business, consistent withpast practice, and except as disclosed in Schedule 8.22, theCompany has not:

 

(a)             created, incurred or assumedany long-term indebtedness; or incurred, assumed, or permitted to exist anyshort-term indebtedness other than in the ordinary and usual course ofbusiness, consistent with past practice; or permitted any change in the creditpractices of the Business;

 

(b)            assumed, guaranteed, orotherwise become liable or responsible (whether directly or otherwise) for theobligations of any Person, other than in the ordinary and usual course ofbusiness, consistent with past practice;

 

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**Confidential Treatment Requested**

 

(c)             except as permitted pursuantto Clause 2.3 above, paid, loaned or advanced any amount to, or transferred orleased any fixed assets to, paid or made any dividend or other distribution to,or entered into any transaction with, any of the Sellers, any affiliate of anyof the Sellers, any officers or directors of the Company, or any affiliate ofany of them;

 

(d)            made or committed to make anycapital expenditures in an amount greater than Euro 100,000 in aggregate forall items;

 

(e)             permitted any materialinsurance policy to be cancelled, terminated or materially changed;

 

(f)             suffered any material damageor destruction, whether or not covered by insurance, materially and adverselyaffecting the Business;

 

(g)             incurred any materialliability, whether actual or contingent, except items incurred in the ordinaryand usual course of business and consistent with past practice;

 

(h)            changed the AccountingPrinciples or the methods of maintaining its books, accounts or businessrecords;

 

(i)              experienced any event as aresult of which it has, or should have, written down the value of any inventory(including write-downs by reason of shrinkage or mark-down); written off asuncollectible any notes or accounts receivable, except for write-downs andwrite-offs in the ordinary and usual course of business, consistent with pastpractice; or increased, or experienced any change in any assumptions underlyingor methods of calculating, any bad debt, contingency or other reserves;

 

(j)              other than in the ordinary andusual course of business, consistent with past practice, permitted or allowedany Encumbrance on any fixed asset, satisfied or discharged any Encumbrance orpaid, discharged or satisfied any claim, obligation or liability;

 

(k)             disposed of or permitted tolapse any rights to the use of any material Intellectual Property Right, ordisposed of or disclosed to any Person other than representatives of thePurchaser any trade secret, formula, process, know-how or other intellectualproperty of the Company not theretofore a matter of public knowledge, except inthe ordinary and usual courses of business, consistent with past practices;

 

(l)              except in the usual andordinary course of business and consistent with past practice, knowingly waivedany rights, settled any disputes or amended or terminated any agreements ofmaterial value, or entered into any non-compete or non-solicitation agreementsor agreements having a similar effect;

 

(m)            made any change in thecompensation payable or to become payable to any of the employees, agents orconsultants of the Company (other than normal

 

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**Confidential Treatment Requested**

 

recurringincreases, in the ordinary course of business and consistent with pastpractice, of wages payable to employees who are not officers (*cadres*)); or amended any employee benefitplan of the Company or any employment, severance or termination agreement withany employee of the Company; or entered into any employment agreement; or madeany termination of employment of any officers (*cadres*)of the Company, or received notice of any expression or intention by any ofthem to terminate his or her employment;

 

(n)            become involved or threatenedin writing with any labor dispute which has had or could have a materialadverse effect on the financial condition, results of operations or prospects ofthe Company;

 

(o)            acquired any other business,entered into any licensing arrangement or joint venture pertaining to theoperation of the Company or made any investments in any other Person (exceptfor cash managed purposes);

 

(p)             acquired any fixed asset ortransferred or otherwise disposed of any of its fixed assets, except in theordinary and usual course of business, consistent with past practice;

 

(q)            granted any discount forprompt payment or any incentive, or entered into any factoring or similar arrangement,outside the ordinary course of business, in order to materially reduce thelevel of current assets of the Company;

 

(r)             agreed to any material changeto any material agreement for any supply or to any service contract outside theordinary and usual course of business, consistent with past practices;

 

(s)             entered into other agreementsor commitments, except agreements or commitments made in the ordinary and usualcourse of business, consistent with past practice;

 

(t)             purchased, redeemed or issuedany shares or other securities, or entered into any commitments or arrangementsfor the purchase, redemption or issuance of shares of capital stock or othersecurities; made any change in the number of issued shares of capital stock ofthe Company; granted any right or option or make any commitment or agreementrelating to such capital stock; acquired or created any subsidiary;

 

(u)            commenced litigation,arbitration or other contentious proceedings, settled any material litigation,or had any judgment or arbitral award entered against it;

 

(v)            agreed, whether in writing orotherwise, to take any action described in this Clause; or

 

(w)            suffered any material adversechange.

 

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**Confidential Treatment Requested**

 

## 8.23       No otherRepresentation or Warranty

##  

## The Sellers makeno representation or warranty to the Purchaser other than as expressly andspecifically set forth in this Agreement.

##  

# **9.**           REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

# ** **

The Purchaser represents andwarrants to the Seller as of the date of this Agreement that the statementscontained in this Article 9 are true and accurate, such representationsand warranties shall survive the Closing.

 

## 9.1         Organization,Legal Power, Enforceability

##  

### 9.1.1         The Purchaseris duly organized and validly existing under the laws of its jurisdiction ofincorporation.  The copy of the Purchaser’scertificate of incorporation that has been provided to the Sellers reflects allamendments made to date and are correct and complete.

###  

### 9.1.2         ThePurchaser has taken all action necessary and has all requisite corporate powerand authority to enter into, and to exercise its rights and perform itsobligations under, this Agreement and the other documents contemplated herebyto which the Purchaser is a party.

###  

### 9.1.3         ThisAgreement and the other documents contemplated hereby to which the Purchaser isa party constitute valid and binding obligations of the Purchaser, enforceableagainst the Purchaser in accordance with their terms.

###  

### 9.1.4         ThePurchaser has executed on or prior to the date of signature of this Agreementall financing documents to secure all financing necessary to ensure that on theClosing Date it will have sufficient resources to pay the Purchase Price.

###  

# **10.**         COVENANTS

# ** **

## 10.1       Pre-ClosingCovenants

##  

## 10.2       Betweenthe date of this Agreement and the Closing, the Sellers shall:

##  

### 10.2.1       procure thatthe Company does not make or commit to make any of the actions or steps listedin paragraphs (a) to (v) of Clause 8.22;

###  

### 10.2.2       procure thatthe activities of the Company will be conducted in accordance with the ordinaryand usual course of business, consistent with past practice;

###  

### 10.2.3       make anynotifications to financial institutions or Governmental Authorities which arenecessary to be made prior to the Closing in accordance with the terms of therelevant agreements;

###  

### 10.2.4       procure theregistration of the sale and transfer agreement relating to the acquisition bythe Company of the trademark * * * and the payment by the

 

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**Confidential Treatment Requested**

 

### Company of all stamp duties and anypenalties which may be levied thereon; and

###  

### 10.2.5       provide thePurchaser and its professional advisers with reasonable access, during normalbusiness hours, to the Company, its key employees, the Premises and the RealProperty; it being specified that the Purchaser shall keep confidential theinformation disclosed to it and use such information only for the purpose ofclosing the transactions contemplated hereby.

###  

## 10.3       Post-ClosingCovenants

##  

### 10.3.1       ThePurchaser will arrange for the Sellers to be fully and finally released fromall obligations or liabilities arising from any security, guarantees, comfortletters, joint undertakings or other similar undertakings given for the benefitof or on account of the Company up to and as at the Closing Date which arelisted in Schedule 10.3.1 as soon as possible after the Closing andnot later than six (6) months after the Closing Date.

###  

### 10.3.2       If at anytime after the Closing Date any further action is necessary, proper oradvisable to carry out the purposes of this Agreement, as soon as reasonablypracticable, each Party shall take, or cause its proper officers and directorsto take, all such necessary, proper or advisable actions.

###  

### 10.3.3       From theClosing Date until 31 December 2006, the Purchaser shall, *inter alia*, retain and conduct theBusiness (as it may evolve after the Closing Date) so as to maintain thegeneration of Revenue within the Company and generally in a manner consistentwith past practice and the Company’s long-term corporate interest.

###  

### 10.3.4       ThePurchaser shall conduct the * * *  afterthe date of this Agreement and shall take all necessary steps so the * * *  be completed and the report related thereto beremitted to the Parties on or prior to the thirtieth (30th) dayfollowing the Closing Date.

###  

### 10.3.5       ThePurchaser shall pay all reasonable attorney fees and costs of the lawyer of Mr. FrançoisTourniaire (plus one additional lawyer) incurred after the Closing Date inconnection with * * *.

###  

# **11.**         INDEMNIFICATION

# ** **

## 11.1       Survival

##  

The representations andwarranties of the Sellers contained in Clause 8 shall survive until31 March 2007 except for those representations and warrantiesrelating 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 ofsuch litigation (either through an award or judgment which cannot be appealedor challenged, or a final settlement). Notwithstanding the foregoing, anyrepresentation or

 

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**Confidential Treatment Requested**

 

warranty which is falsely andintentionally made shall survive for a period of ten (10) years after theClosing; the Specific Indemnities arising in connection with the facts setforth in paragraphs (a) and (b) of Schedule 11.2.1 shallsurvive for a period of five (5) years after the Closing, and the SpecificIndemnities arising in connection with the facts set forth in paragraphs (c), (d) and(e) of Schedule 11.2.1 shall survive for a period of ten (10) yearsafter the Closing. Furthermore, all covenants and agreements contained in thisAgreement shall survive in accordance with the specific terms of this Agreementand any claim in relation thereto may be made until the end of the termspecified in the Agreement. No indemnification claim may be asserted by the Purchaserafter the expiration of the applicable indemnification period as stated above; provided,however, that indemnification in relation with Claim Notice sent by thePurchaser prior to the expiration of the applicable indemnification periodsshall not thereafter be barred by the expiration of the applicableindemnification periods.

 

## 11.2       Indemnification

##  

### 11.2.1       Subject tothe provisions of Clause 11.3 below, the Sellers (severally but notjointly, and each on the basis of their respective Prorata Proportion) herebyagree to indemnify, defend and hold harmless the Purchaser (or the Companyand/or all officers, affiliates or agents and representatives of the Purchaserand of the Company, if so requested by the Purchaser (collectively “**Indemnified Persons**”)) from and against andin respect of any and all liabilities, damages, penalties (including withoutlimitation, criminal and administrative sanctions), judgments, settlements,costs and expenses (including interest and penalties and reasonable attorneys’ andaccountants’ fees) incurred (“**Loss**”or “**Losses**”) that arise directlyout of:

###  

#### (a)       any breachby the Sellers of any of the representations and warranties contained in ormade by or pursuant to this Agreement; or

####  

#### (b)       any breachby the Sellers of any of their covenants or agreements in this Agreement; or

####  

#### (c)       the mattersidentified in Schedule 11.2.1 (the “**Specific Indemnities**”), notwithstanding any other provisionsof this Agreement (except for the provisions of this Clause 11, which shallapply) or disclosure in any Schedule hereto.

####  

(hereafterthe “Damages”)

 

### 11.2.2       Payment inEscrow

###  

#### (a)       In the eventthat on or before the date falling two (2) Business Days prior to thepayment date of a Subsequent 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, on or before the date of the paymentdate of a Subsequent Payment, an amount (not to exceed the amount of theSubsequent Payment) equal to

 

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**Confidential Treatment Requested**

 

#### the Sellers’ potential liabilityunder Clause 11 of this Agreement for such Claim to the Escrow Agent fordeposit in the Escrow Account (the “**EscrowAmount**”).  Such Escrow Amountshall be determined by the Purchaser in good faith. Such Escrow Amount shall bededucted from the amount of the Subsequent Payment to be paid to the Sellers atthe payment date of such Subsequent Payment.

####  

#### (b)       On thepayment date of the Subsequent Payment, and for a period of thirty (30) daysthereafter, the Sellers shall be entitled to notify the Purchaser that theycontest the relevant Escrow Amount and wish to refer the determination of theEscrow Amount to an independent auditor (the “**Auditor**”);provided, however, that in the event a final decision on the Cergy Litigationhas not been rendered by 27 December 2007, the Sellers shall not beentitled to contest (and shall be deemed to accept) any Escrow Amount of lessthan Euro 400,000 in respect of a Claim by the Purchaser relating to the CergyLitigation.  Upon receipt of such noticefrom the Sellers, the Purchaser and the Sellers shall refer the matter to theAuditor.  The Auditor shall determinesuch Escrow Amount by determining whether and to what extent the amount paid bythe Purchaser to the Escrow Agent represents a good faith, *prima facie* estimate of the amount towhich the Purchaser may be entitled to indemnification under this Agreement.

####  

#### (c)       TheAuditor shall be Mazard & Guerard or if Mazard & Guerardshall not accept such appointment, any internationally recognized independentaccounting firm with offices in Paris mutually acceptable to the Sellers andthe Purchaser.  If the Auditor shall beeither unwilling or unable to accept such appointment and the Parties areunable to agree upon the appointment of another Expert, the matter shall bereferred by either Party to the Rules for Expertise of the InternationalChamber of Commerce (the “**Expertise Rules**”)who shall be requested to make a further selection or (as the case may be) afurther appointment, pursuant to Clause II or Clause III of theExpertise Rules, as appropriate. The Auditor shall act under the rules ofthe International Center for Expertise of the International Chamber of Commerce.  The Auditor shall use its best efforts tomake its determination in accordance with Clauses 11.2.2 (a) and (b) withinthirty (30) days after its appointment, such determination being made inwriting and delivered to the Purchaser, and the Sellers as promptly aspracticable within such time period.

####  

#### (d)       In the eventthe Auditor determines that the Escrow Amount for any particular Claim shouldbe less than the amount deposited by the Purchaser as Escrow Amount in respectto such Claim (including a determination by the Auditor that such Escrow Amountshould be zero), the Purchaser and the Sellers shall immediately jointlyinstruct the

 

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#### Escrow Agent to release from the EscrowAccount in favor of the Sellers an amount equal to the difference between theEscrow Amount deposited by the Purchaser, and the definitive Escrow Amountdetermined by the Auditor.

####  

#### (e)       The Auditor’sdetermination shall be used only for the purpose of determining an EscrowAmount and shall have no bearing whatsoever upon the merits of the disputebetween the parties as to the existence or the amount of the Claim of thePurchaser or the Sellers’ liability therefore. Fees and expenses of the Auditor shall be equally shared between theSellers on the basis of their Prorata Proportion, on the one hand, and thePurchaser, on the other hand.

####  

#### (f)        In the eventthat it is determined, either by agreement of the Parties or by a finalarbitration award, that the Sellers are liable to the Purchaser for any Claimin connection with which an Escrow Amount has been established, then the EscrowAmount (or relevant part thereof) shall be returned by the Escrow Agent to thePurchaser in accordance with the terms of the Escrow Agreement for the amountdue to the Purchaser in respect of such Claim and shall constitute a reductionof the Subsequent Payment.

####  

#### (g)       In the eventthat it is determined, either by agreement of the parties or by a finalarbitration award, that the Sellers are not liable to the Purchaser for anyClaim in connection with which an Escrow Amount has been established or thatsuch liability is less than such Escrow Amount, the relevant part of the EscrowAmount related to such claim shall be paid by the Escrow Agent to the Sellers.

####  

#### (h)       TheSellers and the Purchaser agree to give promptly to the Escrow Agent allinstructions necessary for the release of funds from the Escrow Account inaccordance with this Section 11.2.2 and the Escrow Agreement.

####  

### 11.2.3       Right to SetOff

###  

It is expressly provided thatthe Purchaser shall be entitled to set off from any Prorata Proportion of theSubsequent Payment due and payable to a Seller any amount of indemnificationagreed upon under this Agreement or decided by a final arbitration award anddue to the Purchaser by such Seller under Clause 11 (the “**Right to Set-Off**”) and each Seller shall beentitled to set off from any amount of indemnification agreed upon under thisAgreement or decided by a final arbitration award and due by such Seller to thePurchaser the amount of the Prorata Proportion of the Subsequent Payment due tosuch Seller and not otherwise paid to such Seller pursuant to the provisions ofthe Agreement or of the Escrow Agreement.

 

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## 11.3       Limitations

 

### 11.3.1       Withrespect to the determination of the amount which shall be payable by theSellers in case of a claim for Damages, it is agreed that:

###  

#### (a)       noindividual claim for Damages may be made, or aggregated in accordance withClause 11.3.1(b) below for the calculation of the applicablethreshold, unless the individual amount thereof shall exceed three thousandeuros (Euro 3,000) or the counter-value thereof on the date of the claim inthe relevant currency (the “**De Minimis Amount**”);provided that if the aggregate amount of individual claims arising fromthe same set of related circumstances exceeds the De Minimis Amount all suchindividual claims may be made pursuant to this section and aggregated inaccordance with Clause 11.3.1(b) below;

####  

#### (b)       theSellers shall have no obligation to indemnify the Indemnified Person until andunless the aggregated amount of all Damages for which indemnification may besought under this Agreement exceeds four hundred thousand euros(Euro 400,000) or the counter-value thereof on the date of the claim inthe relevant currency (the “**Threshold Amount**”);provided, however, that the Threshold Amount shall be reduced by anyamounts (up to a maximum aggregate amount of Euro 100,000) paid by the Companyto fully implement the measures set out in Schedule 11.3.1(b) andto conduct the * * *. In the event such aggregateamount exceeds the Threshold Amount, the Sellers shall indemnify theIndemnified Person for the whole of the aggregated amount of the Damages,subject to the limitations set forth in this Clause 11.3;

####  

#### (c)       notwithstandingany other provision of this Agreement, the maximum aggregate amount ofindemnification which the Indemnified Person shall be entitled to recover inrespect of all Damages and for which Sellers may be liable to pay under thisAgreement shall be capped at all times to the aggregate of the SubsequentPayments actually due (whether paid or payable) (the “**Cap**”). However if at any time the maximum aggregate amount of indemnification(whether paid or not) exceeds the amount of the Subsequent Payment due at suchtime (whether paid or payable at such time), the Indemnified Person shall beentitled to recover the difference to the extent of the amount of SubsequentPayments actually due and payable after such time.

####  

#### (d)       theamount to which the Indemnified Person might otherwise be entitled for a Damageshall be reduced by the value of any benefit received or realised by the IndemnifiedPersons including the Company on account of theDamage giving rise to the Claim and resulting directly from any reduction,savings or recovery of debts and duties, any payment under any insurance policyor any recovery as a result of any litigation brought by the Company or thePurchaser on account of the Damages giving rise to the Claim;

 

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#### (e)       theamount to which the Indemnified Person might otherwise be entitled for a Damageshall be reduced by any provisions made in the 2003 Financial Statements onaccount of the Damage giving rise to the Claim, or the release of suchprovisions as a result of the redundancy of such provisions in respect of aspecific Damage;

####  

#### (f)        theamount to which the Indemnified Person might otherwise be entitled for anyDamage shall be reduced where and to the extent that such Damage results solelyfrom any change in accounting or taxation policy or practice of the Purchaseror the Company (including the method of submission of taxation returns )introduced after the Closing Date.

####  

#### (g)       anyamount to which the Indemnified Person might otherwise be entitled for anyDamage shall be reduced where and to the extent that such Damage would havebeen covered by any Company’s insurance policy existing at the Closing Date,but for a reduction by such Company after the Closing Date of the scope oramount of coverage under such insurance policy below that existing on theClosing Date.

####  

#### (h)       anyamount to which Indemnified Person might otherwise be entitled for any Damageshall be reduced where and to the extent that the Indemnified Person mayeffectively benefit from a tax saving (including any Tax reduction, credit, orLoss carry-back or carry-forward) computed at the then current tax rate inrelation to such Damage.

####  

#### (i)        anyamount to which the Indemnified Person might otherwise be entitled for anyDamage shall be reduced where and to the extend that such Damage was increased(from that which it otherwise would have been) as a result of the passing ofimplementation, or any change in, after the Closing Date, any directive, law,decree or regulations.

####  

#### (j)        Neitherthe De Minimis Amount, nor the Threshold Amount, nor the Cap shall beapplicable with regard to the Specific Indemnity arising inconnection with the facts set forth in paragraph (c) of Schedule 11.2.1.

####  

### 11.3.2       Exclusion

###  

#### (a)       ThePurchaser shall not be entitled to make a claim for indemnification for Damagesagainst the Sellers in respect of any Tax audit or claim which merely modifiedthe Tax period during which a deductible charge or amortization may be taken orin respect of any VAT assessment (except if the amount of such VAT assessmentcannot be effectively recovered), except for any interest or penalties resultingtherefrom.

####  

#### (b)       TheSellers shall not be liable to indemnify the Purchaser or the Company for thatpart of any Damages resulting from the Purchaser’s acts or omissions which hascontributed to or aggravated such Damages.

 

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#### (c)       AnyClaim shall (if it has not been previously satisfied, settled or withdrawn) bedeemed to have been withdrawn when the legal proceeding against the Sellers inrespect of it have not been commenced within six (6) month of notificationto the Sellers of the Claim Notice.

####  

### 11.3.3       NoMultiplier

###  

### For purposes of computing theamount of any Damages, only the Damages actually sustained by the Purchaser orthe Company shall be taken into account, to the exclusion of any price /earnings or other multiplier or valuation factor (whether or not implicit inthe Purchase Price).

###  

## 11.4       Payment

##  

### 11.4.1       TheSellers will pay to the Indemnified Persons theamount of any Claim under this Clause 11 (or instruct the Escrow Agentto this effect) in accordance with the writteninstructions of the Purchaser within ten (10) Business Days ofagreement between the Sellers and the Purchaser or final determination of theamount due in accordance with the provisions of Clause 21.

###  

### 11.4.2        Ifthe Sellers pay to the Indemnified Persons anamount in respect of a Claim and the Indemnified Persons subsequentlyrecovers from a Third Party an amount which relates directly to the mattergiving rise to the Claim:

###  

#### (a)       ifthe amount paid by the Sellers in respect of the Claim is more than the SumRecovered (as defined in this Clause 11.4.2), the Purchaser will promptlypay to the Sellers the Sum Recovered; and

####  

#### (b)       ifthe amount paid by the Sellers in respect of the Claim is less than or equal tothe Sum Recovered, the Purchaser will promptly pay to the Sellers an amountequal to the amount paid by the Sellers.

####  

#### (c)       Forthe purposes of this Clause 11.4, “Sum Recovered” means an amount equal tothe total of the amount recovered from the Third Party plus any interest inrespect of the amount recovered from the Third Party to the extent suchinterest was effectively received from such Third Party, but after deduction ofany cost incurred by the Purchaser or the Company in collecting such an amount.

####  

## 11.5       Notification procedure and conduct of Claims

##  

### 11.5.1       Ifan event occurs which might give rise to a Claim, the Purchaser will notify theSellers’ Representative of the matter in accordance with Clause 19 (a “**Claim Notice**”) stating in reasonable detailthe nature of the Claim and, if practicable, the amount claimed promptly, andin any event no later than 30 days upon the Company on the Purchaser becomingaware of the facts causing such Damage, provided however that failure to givetimely such notice will not effect the rights of the Purchaser toindemnification hereunder except to

 

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### the extent that the rights ofthe Sellers are actually prejudiced.  Ifit is not practicable to state the amount claimed in the Claim Notice, thePurchaser undertakes as soon as practicable after the date of the Claim Noticeto provide the Sellers with a reasonable estimate of the amount claimed.

###  

### 11.5.2       TheSellers will have a period of thirty (30) days from receiving the Claim Noticeto notify the Purchaser of any preliminary remarks or points they wishes tocontest (a “**Dispute Notice**”).

###  

### 11.5.3       Withinfifteen (15) Business Days of receipt by the Purchaser of the DisputeNotice, the Purchaser and the Sellers will endeavour to agree the existenceand/or amount of the Claim, failing which, the dispute will be settled inaccordance with Clause 21.

###  

#### 11.5.4       (a)     Inthe event that the Purchaser sends a Claim Notice, the Sellers shall have the right,both themselves and through their agents and advisors, to investigate thematters set forth therein.

###  

#### (b)       Insuch connection, the Purchaser shall, and shall cause the Company to givereasonable access to the Sellers and their agents and advisors to their books,records, documents and employees and the Sellers shall be allowed to takecopies of all such books records and documents. The Sellers shall keep and books recorded documents confidential and usethem only for the purpose of analysing the Claim and defending their rightsunder this Agreement.

###  

### 11.5.5       Inthe event of any Third Party claim or legal or administrative action againstthe Company or any proceedings with respect to a Tax matter which could giverise to a Claim (the “**Third-Party Claim**”),the Purchaser will give written notice in accordance with Clause 11.5.1and the Purchaser will be entitled to elect to have the conduct of theThird-Party Claim.  In this event:

###  

#### (a)       theSellers’ Representative will be entitled to participate in any proceedings,together with the advisers of its choice; and

####  

#### (b)       anyreasonable recommendation made by the Sellers’ Representative in the course ofthe proceedings will be duly considered and taken into account by thePurchaser.

####  

### 11.5.6       Ifthe Purchaser does not wish to have exclusive conduct of the Third-Party Claim,it shall be entitled to request that the Sellers’ Representative take charge ofthe Third-Party Claim. In this event:

###  

#### (a)       thePurchaser will be entitled to participate in any proceedings, together with theadvisers of its choice;

####  

#### (b)       anyreasonable recommendation made by the Purchaser in the course of theproceedings will be duly considered and taken into account by the Sellers’Representative;

 

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#### (c)       ifthe Purchaser disputes the litigation strategy adopted by the Sellers’Representative, it will be entitled to take back the conduct of the Third-PartyClaim (in accordance with Clause 11.5.4).

####  

### 11.5.7       Whetherthe Sellers’ Representative conducts or assists in the conduct of a Third-PartyClaim, the Sellers will be responsible for the cost and expenses of their ownadvisors.

###  

## 11.6       Several Liability of Sellers / Prorata Proportion

##  

Except asotherwise explicitly set out herein, each Seller shall be liable vis-à-vis thePurchaser on a several but not joint basis and on the basis of his/her ProrataProportion.

 

## 11.7       ThePurchaser shall and shall cause the Company to take all reasonable measures tomitigate any Damages.

##  

## 11.8       ExclusiveRemedy

##  

The indemnification provided for in this Clause 11 shall be theexclusive remedy of the Purchaser against the Sellers in respect of any breachof any representation or warranty or covenant set out in this Agreement.

 

# **12.**         NON-COMPETITION

# ** **

## 12.1       None ofthe Sellers will, until five (5) years after the Closing:

##  

(i)              have any ownership interest(of record or beneficial) in or have any interest as a director, officer,employee, manager or consultant in, or otherwise aid or assist in any manner,any corporation, partnership or other business that engages in products andservices competes with the Business, including products and services indevelopment or products developed but not yet marketed by the Company, unlessthe ownership interest is for investment purposes only, and, if in a companywhose shares are listed on a recognized stock exchange, does not grant theSeller directly or indirectly management functions or material influence incompeting with the Company and the Subsidiary;

 

(ii)             do or say anything which mightbe harmful to the Business, or which may lead a person who has dealt with theCompany or the Business to cease to deal with the Company or the Business (ormaterially reduce its relations) on substantially equivalent terms to thosepreviously offered or at all;

 

(iii)            on its own account or inconjunction with or on behalf of any other person in respect of the products orservices of the Business, either seek to obtain orders or do business with acustomer of the Business, or encourage directly or indirectly another person toobtain orders from or do business with, a person who has been a customer ofthat Business, in all instances with regard to the products or services of theBusiness in its territory of operation;

 

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(iv)           directly or indirectly solicitor contact with a view to his engagement or employment a director, officer,employee or manager whose services are substantially devoted to the Business;

 

(v)            engage or employ a director,officer, employee or manager of the Company whose services are substantiallydevoted to the Business or a person who was a director, officer, employee ormanager whose services were substantially devoted to the Business; or

 

(vi)           seek to contract with orengage (in such a way as to affect adversely the Business as carried on at thedate of this Agreement) a Person with whom the Company has contracted with orhas engaged to manufacture, assemble, supply or deliver goods or services tothe Business.

 

## 12.2       The abovenon-competition undertakings granted by each of Sellers in Clause 12.1above shall be valid in the jurisdictions where the Business is active whichare 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 of potentialfinancial investors (subject to the obtention of appropriate confidentialityagreements) in any way the Confidential Information it has or acquires, and

 

(b)             Not make any know-how available that it may have to any individual,company or business of any kind, whether or not existing at the date hereof.

 

The Sellerswill make every effort to prevent the use or disclosure of ConfidentialInformation.

 

## 13.2       Clause 13.1does not apply to disclosure of Confidential Information:

##  

(a)             to a director, officer oremployee of the Purchaser whose function requires him to have access to theConfidential Information;

 

(b)            required to be disclosed bylaw, by a rule of a stock exchange or by a Governmental Authority to whicha Party is subject or submits, whether or not the requirement has the force oflaw provided that the disclosure will so far as is practicable be made afterconsultation with the other Party and after taking into account the otherParties’ reasonable requirements as to its timing, content and manner of makingor dispatch; or

 

(c)             to an adviser for the purposeof advising a Party in connection with the transactions contemplated by thisAgreement provided that such disclosure is essential for these purposes and ison the basis that this Clause 13 applies to the disclosure by the adviser.

 

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## 13.3       Nothingin this Clause 13 will be construed, interpreted or applied as restrictingthe right of the Purchaser from benefiting from, using or disposing of anyrights and assets pertaining to the Business after Closing.

##  

## 13.4       Notwithstandingany provision herein to the contrary, Sellers or Purchaser may use ConfidentialInformation to exercise their rights under this Agreement.

##  

# **14.**         ANNOUNCEMENTS

# ** **

Neither Party shall issue orpermit to be made any press releases or public announcements concerning thisAgreement or its subject matter or any ancillary matter without the priorwritten consent of the other Party, except as may be required by law, any stockexchange or other competent regulatory body (provided that the Party requiredto make the announcement will consult with the other as to the content of suchannouncement and will ensure, if requested by the other Party, and ifreasonably practicable, that such announcement is made simultaneously with anyannouncement by the other Party).  Inaddition, any such press release or announcement shall only contain the samecontent as any press release or public announcement made by the other.  Each Party will coordinate with the other anysuch press release or public announcement that it makes.

 

# **15.**         COSTS

# ** **

## 15.1       A Partywill be solely responsible for any brokerage commissions, finders’ fees orsimilar compensation in connection with the transactions contemplated by thisAgreement based on any arrangement or agreement entered into by that Party. Forthe avoidance of doubt, no fees incurred by the Sellers in connection with thetransaction contemplated in this Agreement shall be imputed on the Company.

##  

## 15.2       EachParty will bear the costs of its own legal and financial advisers in connectionwith the preparation of this Agreement. Any registration duties in connection with the sale and purchase of theShares will be borne exclusively by the Purchaser.

 

# **16.**         SELLERS’ REPRESENTATIVE

# ** **

## 16.1       The Sellershereby irrevocably appoint François Tourniaire as their agent (the “**Sellers**’ **Representative**”)for all purposes of this Agreement. For this purpose, the Sellers have anirrevocable power of attorney to Mr. François Tourniaire empowering Mr. FrançoisTourniaire to (a) negotiate and enter into any amendments to oralterations of the Agreement, (b) take any action required of the Sellerspursuant to this Agreement, (c) receive the Initial Purchase Price and theSubsequent Payments, if any, and distribute such amounts among the Sellers inthe Prorata Proportion subject to clause 16.4 below, (d) send and receiveall notifications contemplated to be given or received under the Agreement(including but not limited to payment instructions), (e) give bank instructionsto the bank in respect of the allocation of the payments in

 

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## respect of theInitial Purchase Price and the Subsequent Payments (as the case may be) asbetween the Sellers, (f) agree on the Statement of Revenue of the Companyin respect of the relevant financial year with the Purchaser for the purposesof determining whether the Targets referred to in Schedule 3.1 havebeen attained, (g) to negotiate, accept, defend against or settle anyclaim that the Purchaser may have against any one Seller or against allSellers, (h) represent each of the Sellers in the conduct of anylitigation or court proceedings in connection with any claim referred to in (g) above,(i) receive or release any amount placed in the Escrow Account, accept theappointment of the Auditor and take any action required under the EscrowAgreement and (j) exercise such rights and perform such obligations as havebeen specifically entrusted to him under this Agreement.

##  

## 16.2       TheParties acknowledge that the appointment and the granting of a power of attorneypursuant to Clause 16.1 is in the common interest of all Parties. Accordingly,none of the Sellers shall have the right to revoke or limit the appointment orthe power of attorney of Mr. François Tourniaire until consummation of theAgreement in full and agreement or settlement (by settlement agreement,judgment, arbitral award or otherwise) of all claims arising hereunder.

##  

## 16.3       ShouldFrançois Tourniaire hereby appointed, be unable to perform his duties or beunwilling to remain as the Sellers’ Representative, for any reason whatsoever,he shall so notify the Purchaser and the Sellers and the Sellers shall appointone of themselves at the latest within ten (10) Business Days followingthe date on which notice of the inability or the refusal of François Tourniaireto perform his duties is sent to the Purchaser and the Sellers. The name anddetails of such representative shall be notified to the Purchaser in accordancewith the provisions of Clause 19.

##  

## 16.4       TheSellers hereby expressly authorize the Sellers’ Representative to withhold fromthat part of the Initial Purchase Price or subsequent payments to be receivedby each of them their Prorata Proportion of the fees and expenses incurred bythe Sellers’ Representative in connection with the preparation, execution andperformance of this Agreement, including the fees and expenses of legal andfinancial advisors to the Sellers.

##  

# **17.**         TERM AND TERMINATION

# ** **

## 17.1       This Agreement will automatically terminate in theevent that (i) the conditions referred to in Clause 5 are notsatisfied or waived in writing in accordance with Clause 5 at the date setout in Clause 5 or (ii) the Closing Date Account is not fully fundedin accordance with the provisions of Clause 4.1.1.

##  

## 17.2       In the event that this Agreement terminates underClause 17.1, all rights and obligations arising out of or in connectionwith this Agreement will also automatically terminate without any indemnificationin whole or in part due to or by either Party provided that:

##  

### 17.2.1       suchtermination will not affect any claims between the Parties based on any breacharising prior to the date at which this Agreement is terminated; and

 

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### 17.2.2       the provisions ofClauses 4.1.1, 13,14,15,16,19, 20 and 21 will remain in full force andeffect.

###  

# **18.**         GENERAL

# ** **

## 18.1       ThisAgreement constitutes the entire and only agreement between the Parties withrespect to the sale of the Shares and supersedes and replaces any priorcommitments, understandings or written or verbal agreements (including theMemorandum of Understanding and Summary of Proposed Terms signed by the Partieson 5 January 2004), that the Parties may have had in connection withthe sale of the Shares.

##  

## 18.2       ThisAgreement has been entered into between the Parties on the basis of theiridentity and of their respective shareholders and activities.  This Agreement is therefore of a personalnature and neither Party will assign or transfer or purport to assign ortransfer any of its rights or obligations under this Agreement, except asotherwise provided in this Agreement or with the express consent of the otherParty.  Notwithstanding the foregoing,the Purchaser shall be entitled to assign the right to acquire the Shares toany of its wholly-owned subsidiaries; *provided,however*, that the Purchaser shall provide written notice to theSeller of any such assignment prior to any such assignment being made and shallremain jointly liable (*solidaire*)for the performance by the assignee of all obligations undertaken by thePurchaser under this Agreement.

##  

## 18.3       Noamendment modification, alteration or variation of the Agreement shall be validunless it is in writing and signed by or on behalf of each of the Parties toit.

##  

## 18.4       Theprovisions of this Agreement shall be deemed severable and the invalidity orunenforceability of any provision shall not affect the validity orenforceability of the other provisions. If any provisions of this Agreement, orthe application thereof to any Person or any circumstance, is invalid orunenforceable, (A) a suitable and equitable provision shall be substitutedtherefore in order to carry out, so far as may be valid and enforceable, theintent and purpose of such invalid or unenforceable provision and (B) theremainder of this Agreement and the application of such provision to otherPersons, or circumstances shall not be affected by such invalidity or unenforceability,nor shall such invalidity or unenforceability affect the validity orenforceability of such provision, or the application thereof, in any otherjurisdiction.

##  

## 18.5       Interpretation

##  

### 18.5.1       A referenceto any Party to this Agreement or any agreement or document shall include suchParty’s successors and permitted assigns.

###  

### 18.5.2       A referenceto any legislation or to any provision of any legislation shall include anyamendment to, and any modification or re-enactment thereof, any legislativeprovision substituted therefore and all regulations and statutory instrumentsissued thereunder or pursuant thereto, provided the above are in effect on theClosing Date.

 

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### 18.5.3        In thisAgreement, the headings to Clauses are inserted for convenience only and shallbe given no substantive or interpretative effect whatsoever.

###  

# **19.**         NOTICES

# ** **

Any notice or othercommunication required or permitted hereunder shall be sufficiently given to aperson if in writing and will become effective when delivered by hand, by anovernight courier service which requires a delivery receipt therefore (such asDHL), by registered or certified mail, return receipt requested, postageprepaid, 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 thePurchaser:                              MediCor Ltd.

4560 Decatur Boulevard, Suite 300

LasVegas, Nevada 89103-5253

USA

 

Attn. Mr. DonaldK. McGhan

 

# **20.**         GOVERNING LAW - JURISDICTION

# ** **

This Agreement is governed by, and will be construed in accordancewith, the laws of France.

 

# **21.**         DISPUTE RESOLUTION

# ** **

## 21.1       Anydispute, difference, controversy or claim arising out of or in connection withthis Agreement (a “Dispute”), shall be referred to and determined byarbitration according to the provisions set out below.  The seat of arbitration shall be Paris(France).

##  

## 21.2       Theparty, or parties, initiating recourse to arbitration (hereinafter called the “claimant(s)”)shall give to the other party, or parties (hereinafter called the “respondent(s)”)a Notice of Arbitration.  The arbitrationshall be deemed to commence on the date on which the Notice of Arbitration isreceived by the respondent(s).

##  

## 21.3       TheNotice of Arbitration shall contain a brief description of the nature of theclaim and an indication of the amount involved, if any, and the relief orremedy sought.

##  

## 21.4       TheArbitral Tribunal shall be composed of three (3) Arbitrators who shall beappointed by the International Court of Arbitration of the InternationalChamber of Commerce (the “**ICC**”),acting as the appointing authority.  TheArbitrators shall be fluent in both English and French.

##  

## 21.5       As soonas practicable after the appointment of the Arbitrators, and in any event nolater than 15 days after the Arbitrators ‘ appointment, the claimant(s) shalldeliver to

 

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## therespondent(s) (with a copy to the Arbitrators) a statement of case, containingparticulars of its/their claims and written submissions in support thereof,together with any documents relied on.

##  

## 21.6       Within 15days of the receipt of the claimant’s(s) statement of case, the respondent(s)shall deliver to the claimant(s) (with a copy to the Arbitrators) a statementof case in answer, together with any counterclaim and any documents relied on.

##  

## 21.7       Within 15days of the receipt by the claimant(s) of any statement of counterclaim by therespondent(s), the claimant(s) may deliver to the respondent(s) (with a copy tothe Arbitrators) a reply to counterclaim together with any additional documentsrelied upon.

##  

## 21.8       As soonas practicable after delivery to the Respondent(s) of any statement ofcounterclaim, or if no counterclaim is made, then as soon as practicable afterdelivery to the Claimant(s) of the statement of case in answer, the ArbitralTribunal shall convene a meeting (the “**FirstProcedural Meeting**”) with the parties or their representatives todetermine the procedure to be followed in the arbitration.

##  

## 21.9       Theprocedure shall be as agreed by the parties or, in default of agreement, asdetermined by the Arbitral Tribunal. However, the following procedural matters shall in any event be taken asagreed:

##  

(a)             the language of thearbitration shall be French and English and documentary exhibits may beadmissible in French and English;

 

(b)            the Arbitral Tribunal shallissue its final award in English within 30 days of the last hearing or writtensubmission of the substantive issues in dispute between the parties.

 

## 21.10     In theevent of default by either party in respect of any procedural order made by theArbitral Tribunal, the Arbitral Tribunal shall have power to proceed with thearbitration and to make its award.

##  

## 21.11     If aDispute raises issues substantially the same as, or connected with, issuesraised in an existing Dispute the Arbitral Tribunal appointed or to beappointed in respect of any such existing Dispute shall also be appointed asthe Arbitral Tribunal in respect of the Dispute (in which case it shall becalled a “Related Dispute”).  For thepurposes of this Agreement an existing Dispute means any Dispute between theParties or any number of them in respect of which a Notice of Arbitration hasalready been served.

##  

## 21.12     In theevent that an arbitrator dies or is or becomes unable to act, a replacementarbitrator shall be appointed by the ICC.

##  

## 21.13     Where,pursuant to Clause 21.11 above, the same Arbitrators have been appointedin relation to two or more Disputes, the Arbitral Tribunal may order that thewhole or part of the matters at issue shall be heard together upon such termsand conditions as the Arbitral Tribunal thinks fit.  The Arbitral Tribunal shall have power tomake such

 

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## directions as itconsiders just and desirable for the proper conduct of any such consolidatedproceeding.

##  

## 21.14     TheArbitral Tribunal, upon the request of a party to a Dispute or a Party to thisAgreement which itself wishes to be joined in proceedings in relation to aDispute, shall join any party to this Agreement to proceedings in relation tothat Dispute and may make a single, final award determining all Disputesbetween them.  Each of the Parties tothis Agreement hereby consents to be joined to proceedings in relation to anyDispute at the request of a party to that Dispute. Any such request must bereceived by the Arbitral Tribunal before the First Procedural Meeting isconvened.

##  

## 21.15     Theparties hereby waive any rights of application or appeal to the courts ofFrance to the fullest extent permitted by law in connection with any questionof law arising in the course of the arbitration or with respect to any awardmade, except for actions to enforce an arbitral award and actions seekinginterim, interlocutory or other provisional relief in any court of competentjurisdiction.

##  

## 21.16     The awardshall be final and binding upon the parties from the day it is made, and shallbe the sole and exclusive remedy between the parties regarding any claims,counterclaims, issues, or accounting presented to the Arbitral Tribunal.  Judgment upon any award may be entered in anycourt having jurisdiction.

##  

## 21.17     Anymonetary award shall be made and promptly payable in Euro and the ArbitralTribunal shall be authorized in its discretion to grant pre-award and post-awardinterest at commercial rates. Any costs, fees, or taxes incident to enforcingthe award shall, to the maximum extent permitted by law, be charged against theParty resisting such enforcement.

##  

## 21.18     AnySeller commencing an arbitration under this Agreement shall, in writing, informall other Sellers to the Agreement whether or not they are a party to theDispute.

##  

## 21.19     Allnotices by one party to another party in connection with the arbitration shallbe in accordance with the provisions of Clause 19.

##  

## 21.20     Thisagreement to arbitrate shall be binding upon the successors and assigns of eachparty.

##  

INWITNESS 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 theSellers (each of the Sellers accepting to refer to one common set ofSchedules).

 

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|                                          |   |                               |   |
|-----------------------------------------------|--------|------------------------------------|--------|
| MediCor Ltd.  Represented by Donald K. McGhan |   | François Tourniaire           |   |
|                                          |   |                               |   |
|                                          |   |                               |   |
|                                          |   |                               |   |
| Michel Tourniaire                             |   | Jacques Tourniaire                 |   |
|                                          |   |                               |   |
|                                          |   |                               |   |
|                                          |   |                               |   |
| Olivier Tourniaire                            |   | Senaz Falquerho (née Namooya) |   |
|                                          |   |                               |   |
|                                          |   |                               |   |
|                                          |   |                               |   |
| Françoise Pelissard                      |   | Nadège Tourniaire             |   |

 

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**LIST OF SCHEDULES**

 
| **SCHEDULE A**                      | Shareholding structure                                                                                                                                                                                                                                                                            |
|------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **SCHEDULE C**                      | List of the documents provided by the Company in the Data Rooms and  questions and answers in relation thereto                                                                                                                                                                                    |
| **SCHEDULE D**                      | ***                                                                                                                                                                                                                                                                                               |
| **SCHEDULE 3.1**                    | Targets                                                                                                                                                                                                                                                                                           |
| **SCHEDULE 3.2.1**                  | Methodology for determining Subsequent  Payment Amounts                                                                                                                                                                                                                                           |
| **SCHEDULE 4.3**                    | Form of Pledge Agreement                                                                                                                                                                                                                                                                     |
| **SCHEDULE 7.2.1****(c)**           | Resignation of  the corporate officers of the Company                                                                                                                                                                                                                                             |
| **SCHEDULE 7.2.1****(e)**           | List of all  banks mandate forms and authorities                                                                                                                                                                                                                                                  |
| **SCHEDULE ****7.1.1 (g)(i)**       | Form of amendment employment agreements to be entered into between  the Company and each of ***                                                                                                                                                                                              |
| **SCHEDULE 7.2.1****(g) (ii)** | Form of  employment agreements to be entered into between the Company and each of ***                                                                                                                                                                                                        |
| **SCHEDULE 7.2.1 (h)**              | Form of consultancy agreement between the Company and ***                                                                                                                                                                                                                                    |
| **SCHEDULE 7.2.1 (i)**              | Form of Release                                                                                                                                                                                                                                                                              |
| **SCHEDULE 7.2.4**                  | Form of Escrow Agreement                                                                                                                                                                                                                                                                     |
| **SCHEDULE 8.5.1**                  | 2003 Financial Statements                                                                                                                                                                                                                                                                         |
| **SCHEDULE 8.5.2**                  | Outstanding Financial Indebtedness                                                                                                                                                                                                                                                                |
| **SCHEDULE 8.6.1**                  | Accounts receivable                                                                                                                                                                                                                                                                               |
| **SCHEDULE 8.7**                    | Encumbrances on Inventory                                                                                                                                                                                                                                                                         |
| **SCHEDULE 8.8.1**                  | List of employees as of April 6, 2004                                                                                                                                                                                                                                                        |
| **SCHEDULE 8.8.2**                  | Collective bargaining agreements                                                                                                                                                                                                                                                                  |
| **SCHEDULE 8.8.3**                  | Employment agreements which have annual remuneration exceeding Euro  30,000 or directors, corporate officers or managers of the Company which  allows for notice period and/or redundancy payment greater than those  appearing in the collective bargaining agreements mentioned in Clause 8.8.2 |
| **SCHEDULE 8.8.5**                  | Agreements with directors                                                                                                                                                                                                                                                                         |
| **SCHEDULE 8.8.6**                  | Retirement plans, investment or profit sharing scheme, premiums, commissions  or other optional employee plans                                                                                                                                                                                    |
| **SCHEDULE 8.8.7**                  | Loans granted to any person employed by the Company                                                                                                                                                                                                                                               |
| **SCHEDULE 8.8.8**                  | Labor disputes                                                                                                                                                                                                                                                                                    |
| **SCHEDULE 8.8.9**                  | Breach of the  statutory and regulatory provisions applicable to the personnel  representative bodies                                                                                                                                                                                             |
| **SCHEDULE 8.9**                    | Directors’ fees  which have been distributed since 31 December 2003                                                                                                                                                                                                                     |

 

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***Confidential Treatment Requested

 
| **SCHEDULE 8.10.1** | Ownership of  Real property                                                                                                                                             |
|--------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **SCHEDULE 8.10.2** | Premises  occupied by the Company                                                                                                                                       |
| **SCHEDULE 8.10.3** | Agreements with  Third Parties with regard to the Premises                                                                                                              |
| **SCHEDULE 8.10.5** | Compliance of  Premises with applicable laws and regulations                                                                                                            |
| **SCHEDULE 8.11.1** | Assets not  owned by the Company                                                                                                                                        |
| **SCHEDULE 8.12.1** | Intellectual  Property Rights owned and/or used by the Company                                                                                                          |
| **SCHEDULE 8.12.2** | Validity of  patent and trademark registration                                                                                                                          |
| **SCHEDULE 8.12.3** | Encumbrances on  Intellectual Property Rights owned by the Company                                                                                                      |
| **SCHEDULE 8.12.4** | Relations with  third parties in respect of Intellectual Property Rights                                                                                                |
| **SCHEDULE 8.12.5** | Cooperative research  and development agreements                                                                                                                        |
| **SCHEDULE 8.12.7** | Intellectual  property disputes                                                                                                                                         |
| **SCHEDULE 8.13.1** | List of  distribution, commercial agency and representation agreements                                                                                                  |
| **SCHEDULE 8.13.2** | List of supply  agreements which require payments exceeding 50,000 euros per annum                                                                                      |
| **SCHEDULE 8.13.3** | Other contracts  entered into by the Company having a duration of more than twelve months                                                                               |
| **SCHEDULE 8.13.5** | (i) Contracts  with change of control clause or *intuitu personae*AND (ii) Third Party’s Intention to End or reduce business  relations with the Company |
| **SCHEDULE 8.13.6** | Agreements  limiting or excluding the right to carry on business or compete in any area                                                                                 |
| **SCHEDULE 8.14.1** | Defective  products                                                                                                                                                     |
| **SCHEDULE 8.14.2** | Claims relating  to defective products                                                                                                                                  |
| **SCHEDULE 8.14.4** | Certifications                                                                                                                                                          |
| **SCHEDULE 8.15.1** | List of  material insurance policies                                                                                                                                    |
| **SCHEDULE 8.15.2** | Insurance  increase of premiums                                                                                                                                         |
| **SCHEDULE 8.16**   | Outstanding  loans granted by the Company                                                                                                                               |
| **SCHEDULE 8.17.1** | Business  authorizations                                                                                                                                                |
| **SCHEDULE 8.19.9** | Non-Compliance  with tax regulations                                                                                                                                    |
| **SCHEDULE 8.20.3** | Claims in  excess of EUR 5,000                                                                                                                                          |
| **SCHEDULE 8.21.2** | Outstanding  indebtedness from the Company to the Sellers                                                                                                               |
| **SCHEDULE 8.22**   | Actions taken  by Company since December 31, 2003                                                                                                                  |
| **SCHEDULE 10.3.1** | Release from  obligations or liabilities arising from any Undertakings                                                                                                  |
| **SCHEDULE 11.2.1** | Matters Giving  Rise to Specific Indemnities                                                                                                                            |
| **SCHEDULE 11.3.1** | ***                                                                                                                                                                     |
| **SCHEDULE 12.2**   | Jurisdictions  where the Business is active                                                                                                                             |

 

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