**Exhibit 10.21**
EXECUTION COPY
**STOCK PURCHASE AGREEMENT**
     This Stock Purchase Agreement (the “Agreement”) is entered into onSeptember 7, 2004 (the “Execution Date”), by and among, Mr. Carlos FranciscoLazo de la Vega Jasso (“Mr. Carlos Lazo”), a Mexican individual with hisprincipal place of business located at Juárez No. 18 A, Tlacopac, 01040,Mexico, Federal District; Mr. Héctor Jesús Chuliá de la Torre (“Mr. HéctorChuliá” and, together with Mr. Carlos Lazo, the “Sellers”), a Mexicanindividual with his principal place of business located at Juárez No. 18 A,Tlacopac, 01040, Mexico, Federal District, and MediCor Latin America, S.A. deC.V. (“MediCor LA”), a company organized and existing under the laws of Mexico,with its principal place of business located at Juárez No. 18 A, Tlacopac,01040, Mexico, Federal District, and International Integrated Management, Inc.(“IIM” and, together with MediCor LA, the “Buyers”), a limited corporation dulyincorporated and validly existing under the laws of Delaware, United States ofAmerica, with its principal place of business located at 4560 South DecaturBoulevard, Suite 300, Las Vegas, Nevada, 89103-5253, United States of America,with the appearance of Dermatological Medical Products and Specialties, S.A. deC.V. (“Dermedics”), a company organized and existing under the laws of Mexico,with its principal place of business located at Juárez No. 18 A, Tlacopac,01040, Mexico City, Federal District, pursuant to the following recitals,representations, warranties and clauses.
**RECITALS**
     **WHEREAS**, on August 25, 2004, Sellers and MediCor, Ltd. (“MediCor”) enteredinto a promise of sale agreement (the “Promise of Sale Agreement”) by means ofwhich Sellers promised to sell to MediCor, or to the entity or entitiesdesignated in writing by MediCor, and MediCor promised to purchase from Sellers300,000 common, fully paid in shares representing the corporate capital ofDermedics, upon the occurrence of certain conditions to which such Promise ofSale was subject; and,
     **WHEREAS**, all conditions to which the Promise and Sale Agreement wassubject have occurred and/or occurrence thereof has been duly waived byMediCor.
**REPRESENTATIONS**
I. Buyers represent, through their legal representative, that:
     a) (i) MediCor LA is a Mexican *sociedad anónima de capital variable*(variable capital stock corporation) duly incorporated and validly existing inaccordance with the laws of Mexico, as evidenced in public instrument number531, dated August 31, 2004, granted before Mr. Guillermo Escamilla Narváez,Notary Public No. 243 of the Federal District, which first true copy is pendingregistration in the Public Registry of Commerce of Mexico, Federal District,due to its recent incorporation, and (ii) IIM is a limited corporation dulyincorporated, validly existing and in good standing under the laws of Delaware,United States of America.
 

 

     b) Each is duly authorized to enter into this Agreement and to assume theobligations contained herein, and that no corporate approval or authorizationis required for the execution and delivery of this Agreement, other than thoseapprovals or authorizations which have been previously obtained.
     c) Their legal representative, Mr. Theodore R. Maloney, has sufficientauthority to enter into this Agreement on their behalf, which authority has notbeen revoked, limited or modified in any manner whatsoever as of the date ofthis Agreement.
     d) It is their will and desire to enter into this Agreement with Sellers,in order to acquire from Sellers, in the proportions set out in Second Clauseof this Agreement, the Shares (as defined below), free and clear from any Lien(as defined below).
II. Sellers represent that:
     a) They are Mexican individuals with full capacity to enter into thisAgreement and assume the obligations contained herein, and that they do notneed authorization from their spouses to enter into this Agreement, since theyare married under separate assets regime.
     b) The execution and delivery of this Agreement do not contravene theprovisions, and do not and will not constitute a breach of any agreements,covenants or obligations to which any of them is a party or bound to comply.
     c) (i) Mr. Carlos Lazo is the owner of record of 150,000 (One HundredFifty Thousand) common, fully paid in shares representing the corporate capitalof Dermedics (“Mr. Lazo’s Shares”), and (ii) Mr. Héctor Chuliá is the owner ofrecord of 150,000 (One Hundred Fifty Thousand) common, fully paid in sharesrepresenting the corporate capital of Dermedics (“Mr. Chuliá’s Shares” and,together with Mr. Lazo’s Shares, the “Shares”), which Shares are free and clearfrom any Lien.
     d) Subject to the terms and conditions set forth in this Agreement, it istheir will and desire to enter into this Agreement with Buyers in order tosell, in the proportions set out in Second Clause of this Agreement, theShares.
III. Sellers jointly represent and warrant that:
     a) Dermedics is a Mexican *sociedad anónima de capital variable*(variablecapital stock company) duly incorporated and validly existing under the laws ofMexico, as evidenced in public instrument number 123,322 dated May 28, 2004,granted before Mr. Ignacio R. Morales Lechuga, Notary Public number 116 of theFederal District, which first true copy was duly registered on July 2nd, 2004before the Public Registry of Property and Commerce of Mexico, FederalDistrict, under Mercantile Folio No. 321005.
     b) The execution and delivery of this Agreement and the performance ofSellers’ obligations hereunder have been duly and validly authorized by allnecessary action, and no other proceedings are necessary to authorize suchexecution, delivery and performance. Furthermore, Sellers’ obligations underthis Agreement constitute valid and
- 2 -

 

binding obligations of each Seller, enforceable against them in accordance withtheir respective terms.
     c) As of the date of execution hereof, the corporate capital of Dermedicsequals the amount of Mx.Cy.$300,000.00 (Three Hundred Thousand Pesos 00/100,Mexican Currency), which amount has been totally contributed and is dulyrepresented by the Shares.
     d) The Shares are free and clear of any Lien, and all Shares have beenduly authorized and issued by Dermedics and are fully subscribed and have beenpaid in by Sellers. For purposes of this Agreement the term “Lien” means anylien, mortgage, pledge, assignment, security interest, charge or encumbrance ofany kind (including any conditional sale or other title retention agreement,any lease in the nature thereof, and any agreement to give any securityinterest) and any option, trust or other preferential arrangement having thepractical effect of any of the foregoing.
     e) Dermedics does not own, directly or indirectly, any shares,participation interests or securities of other companies, whether civil orcommercial, nor does it have any right or option to acquire any shares,participation interests or securities issued by any such companies.
     f) Neither Sellers nor Dermedics have entered into any agreements by meansof which they granted to a third party a right or option to acquire any sharesissued by Dermedics or other securities convertible into shares of Dermedics,and Dermedics has not registered in its accounting records any contributionsmade by its shareholders which in the future may be subject of a capitalincrease.
     g) Except for the Shares, there are no other shares issued by Dermedicspending subscription and/or payment.
     h) Dermedics is not a trustee or beneficiary under any trust agreement.
     i) Dermedics is not subject of any dissolution, liquidation, bankruptcy,payment suspension and/or reorganization proceeding or event, and Sellers arenot knowledgeable that a third party intends to commence a proceeding seekingDermedic’s dissolution, liquidation, bankruptcy, payment suspension and/orreorganization according to the Mexican General Law of Business Organizationsor the Reorganizations Law.
     j) There are no claims, actions, suits, proceedings, labor disputes orinvestigations pending resolution or, to the knowledge of Sellers, threatenedbefore any domestic (either federal or state, wherever applicable), local orforeign court or governmental, administrative or regulatory authority or beforeany arbitrator of any nature, brought by or against Dermedics, any Seller, orany of their Affiliates, which involve, affect or relate to any assets,properties or operations of Dermedics or the transactions contemplated herein.
     k) Since the date of its incorporation and as of the Execution Date,Dermedics has not had, nor does it have any employees. Therefore:
- 3 -

 

     (i) Dermedics has not entered into any collective bargainingagreements with any union;
     (ii) There are no suits, claims, demands, litigations and/orarbitrations of a labor nature commenced by Dermedics against an employeeor by an employee against Dermedics, and Sellers are not knowledgeable ofany possible suit, claim, demand, litigation and/or arbitration of alabor nature which could be commenced against Dermedics;
     (iii) There is no threatening or pending labor conflict, strike,work stoppage or premises’ obstruction derived from employees’ claims orcommenced by third parties rendering services to Dermedics, and, toSellers’ knowledge, there are no events which could cause in any of theforegoing to occur;
     (iv) Dermedics is not obliged to comply with any labor obligations,including, without limitation, payment of contributions to the MexicanInstitute of Social Security, to the Retirement Savings System or to theNational Institute of the Housing Fund;
     (v) Dermedics has not established fringe benefits for any employee;and,
     (vi) Dermedics is not obliged to pay any salaries, labor benefits,additional compensations, incentives, Christmas bonuses, vacations and/or othercompensations derived from the Mexican labor legislation.
     l) **Exhibit “A”**of this Agreement contains a list of all First LevelOfficers (as defined below) of Dermedics, its attorneys in fact, and any andall compensations, additional compensations, incentives and/or benefitsreceived by such First Level Officers and attorneys in fact from Dermedics. Forpurposes of this Agreement, the term “First Level Officers” means the solemanager or the members of the Board of Directors of Dermedics, as the case maybe, the chief executive officer, the chief financial officer, the chiefoperating officer, the managing directors of Dermedics, and any other personsperforming managerial activities in Dermedics.
     m) Dermedics has not entered into any written or oral agreement with anyFirst Level Officer by means of which Dermedics has agreed to pay to any suchFirst Level Officer any indemnities or severance payments in excess of theamounts set forth in the Mexican Federal Labor Law, or connected to any othercircumstances such as change in control or target compliance or achievement inthe performance of their duties.
     n) In performing its commercial activities, Dermedics has timely andproperly complied with any and all health and/or environmental relatedobligations, whether municipal, local or federal, and its business premises orfacilities, whether owned or leased, comply in all material respects with anyand all applicable legal requirements and, therefore, as of the Execution Date,there are no contingencies derived from any investigations, audits,inspections, fines or requirements commenced or imposed against
- 4 -

 

Dermedics by any federal, local and/or municipal environmental and/orhealth Mexican authorities.
     o) Dermedics has not released or caused the release of any solid, liquidor toxic hazardous substances to the environment or soil and, therefore, nosuch hazardous substances exist in, on or about the business premises andfacilities owned or leased by Dermedics. Sellers further represent thatDermedics has not entered into any settlement agreements derived from a breachof any federal, local and/or municipal health and/or environmental legalprovision, and that the operations of Dermedics do not involve thetransportation, warehousing, treatment or destruction of hazardous substances,materials or wastes.
     p) **Exhibit “B”**of this Agreement contains a detailed description of allproperties leased or used by Dermedics as of the Execution Date, and in whichDermedics performs its business and commercial activities (the “LeasedPremises”). Sellers represent that Dermedics does not own, nor it is thefiduciary beneficiary of any real estate, and that all rights and obligationsof Dermedics derived from any and all agreements, commitments and arrangementsrelated to the Leased Premises are in full force and effect as of the ExecutionDate, and that no conditions or limitations to execute this Agreement andcomply with Sellers’ obligations contained herein exist in such agreements,commitments and arrangements.
     q) As of the Execution Date, (i) all taxes, levies, governmental charges,duties, interest on taxes, tax penalties or interest on any tax penaltyrequired to be paid on behalf of or which are related in any way to Dermedics(“Taxes”) have been, or will be, timely paid; (ii) adequate accruals on theAccounting Information (as defined below) have been made for any unpaid Taxesattributable to any period prior to the Execution Date; (iii) all tax returnsrequired to be filed by, on behalf of or with respect to any Taxes have been,or will be, timely filed (taking into account any extensions of the due datefor the filing of such tax returns) with the appropriate tax authorities; (iv)all such tax returns reflect in all material respects the facts regarding theincome, business, assets, operations, activities and status of Dermedics andall other information required to be shown therein; (v) no action or proceedingby any governmental authority for the assessment or collection of Taxes ispending or has been threatened in writing; (vi) no claim or deficiency for theassessment or collection of any Taxes has been asserted or proposed, whichclaim or deficiency has not been settled with all amounts determined to havebeen due and payable having been timely paid; (vii) as far as Sellers areaware, no audit of any tax return with respect to any Taxes is in progress;(viii) there are no agreements, waivers or other arrangements in effectproviding for an extension of time with respect to the filing of any taxreturns with respect to any Taxes; (ix) Dermedics has timely withheld andremitted to the applicable governmental authority all Taxes required to havebeen withheld and paid in connection with amounts paid or owing to anyindependent contractor, creditor, shareholder or other third party incompliance with all withholding and similar provisions of any and allapplicable tax laws; and (x) neither Dermedics nor Sellers are a party to anyagreement, arrangement or practice for the sharing of taxes, or are obligatedto indemnify any other person for Taxes pursuant to any agreement, arrangementor practice, which agreement, arrangement or practice will remain in effect, orwill require the payment of any amount, after the Execution Date.
- 5 -

 

     r) **Exhibit “C”**of this Agreement contains a copy of the accounting balancesheet and income statement of Dermedics covering the period commencing on thedate of its incorporation and concluding on August 31, 2004 (the “AccountingInformation”), which Accounting Information has been prepared in accordancewith generally accepted accounting principles in Mexico (consistently applied),and which Accounting Information reflects the financial condition of Dermedicsand of the businesses developed by it as of and to the date of theirpreparation.
     s) Sellers represent that Dermedics has no financial, civil or commercialliabilities. Sellers further represent that Dermedics has not issued anyguarantees, promissory notes or otherwise created a Lien upon any of itsproperties or assets in order to secure any such financial, civil or commercialliabilities. In furtherance of the foregoing, Sellers represent that, Dermedicshas no liabilities (i) resulting from the restructuring of any indebtedness ofDermedics with its creditors, (ii) providing for a long term, this is, whichmaturity exceeds twelve months, (iii) which result from occurred events, or(iv) which are outstanding.
     t) Dermedics has no absolute or contingent, direct or indirect obligationsor liabilities, different from those set forth in the Accounting Information.**Exhibit “D”**hereto contains a list of all accounts receivable of Dermedics andaccounts payable of Dermedics in favor of a Related Party. For purposes of thisAgreement, (i) the term “Related Party” means the shareholders, sole manager ormembers of the Board of Directors, First Level Officers or any Affiliates ofthe aforementioned individuals or entities, (ii) the term “Affiliate” when usedwith respect to any Person, means any other Person which, directly orindirectly, Controls or is controlled by or is under common control with suchPerson, (iii) the term “Control” (including the correlative meanings of theterms “controlled by” and “under common control with”), with respect to anyPerson, shall mean possession, directly or indirectly, of the power to director cause the direction of the management and policies of such Person, whetherthrough the ownership of voting securities or by contract or otherwise, and(iv) the term “Person” or “Persons” shall mean any individual, corporation,partnership, joint venture, association, trust, unincorporated association,joint stock company, government, municipality, political subdivision or agency,or other entity.
     u) Dermedics has not assigned or otherwise transferred any liabilities toany third parties.
     v) As of the Execution Date hereof, Dermedics has not (i) resolved to payor pay any dividends, whether in cash, shares or otherwise, or reduced itscorporate capital or redeem its shares, or (ii) modified its accountingmethods, expect when such modifications result from modifications to thegenerally accepted accounting principles in Mexico.
     w) As of the Execution Date hereof, Dermedics has (i) carried out itscommercial activities solely in the Ordinary Course of Business (as definedbelow), (ii) except as requested by Buyer, performed all reasonable commercialefforts to preserve its business, properties and commercial relationship withclients and suppliers, (iii) continued with all maintenance and repair programsof its assets, (iv) not created any Lien upon any
- 6 -

 

of its assets, (iv) refrained from contracting liabilities, (f) refrainedfrom modifying the commercial policies applied to its Ordinary Course ofBusiness, (g) refrained from entering into any kind of written or oralagreements or transactions with any Related Party, (h) continued paying itsfiscal obligations in terms of applicable law, and (i) honored all agreementsentered into with any third parties. For purposes of the foregoing, the term“Ordinary Course of Business” means, with respect to Dermedics, the performanceof all acts which are necessary or convenient for the proper and normaldevelopment of its Commercial Activities (as defined below), as well as topreserve its businesses, properties and commercial relationship with itsclients and suppliers, but excluding those which, pursuant to Dermedic’s pastpractices, may be considered as extraordinary; and the term “CommercialActivities” shall mean the production, purchase, sale, import, export,distribution and, in general, commercialization of all kinds of saline,silicone gel and/or alternative medical, plastic surgery implants, cosmeticsurgery and dermatology health related and medical products, articles,materials, equipment and machinery in Mexico or abroad.
     x) **Exhibit “E”**contains a complete copy of the shareholders’ meetingsminutes book and the shareholders’ registry book of Dermedics, which bookscontain true, accurate and updated information regarding all meetings held bythe shareholders of Dermedics and all transfers of shares verified since theincorporation date of Dermedics to the Execution Date. Sellers represent thatthe capital variations book and the board meetings minutes book of Dermedicshave not been opened, since any variations to the corporate capital ofDermedics nor any board meeting have been verified.
     y) The execution of this Agreement and the compliance by Sellers of theirobligations contained herein, including, without limitation, the entering intoany other agreement or document necessary to achieve the purposes hereof, (i)shall not constitute a violation or breach by Dermedics of any of itsobligations under any other agreements, (ii) does not grant to any third partythe right to accelerate compliance of any obligation in charge of Dermedics,(iii) does not constitute a violation or breach of any legal provisions whichDermedics is obliged to observe, nor to Dermedic’s bylaws, (iv) shall notcreate a Lien in charge of Dermedics or its assets, and (v) does not grant toany third party a right to exercise any stock option to purchase or subscribeshares representing the corporate capital of Dermedics.
     z) Except as set forth in **Exhibit “F”**of this Agreement, there are noagreements, commitments, arrangements or legal or commercial relationships ofany nature whatsoever, direct or indirect, between Dermedics and its RelatedParties, and that any such agreements, commitments, arrangements or legal orcommercial relationships described in **Exhibit “F”**hereto have been entered intounder arms-length conditions.
     aa) Dermedics does not own, or is the legal or fiduciary beneficiary ofany real estate..
     bb) The Leased Premises are adequate for the performance and developmentof Dermedics’ Commercial Activities, and comply with any and all applicablefederal, local or
- 7 -

 

municipal zoning, construction, use of soil, security, hygiene and safetylaws and regulations.
     cc) **Exhibit “G”**of this Agreement contains a list of all the machinery andequipment (including computing hardware) owned or used by Dermedics in carryingout the Commercial Activities, indicating which of such machinery andequipments are owned by Dermedics or leased from third parties by Dermedics.
     dd) Except as set forth in **Exhibit “G”**hereto, the machinery, tools andequipment listed therein are in good physical condition and are suitable fortheir use. Such machinery, tools and equipment are adequate to carry out theOrdinary Course of Business, and are free and clear from any Lien.
     ee) As of the Execution Date, Dermedics has not guaranteed any third-partyobligations and, except for the Shares, it has not issued any promissory notesor other credit instruments which could be enforceable against it by a thirdparty.
     ff) Except as otherwise described in **Exhibit “F”**of this Agreement,Dermedics is not a party to any agreement, arrangement or commitment, whichagreement, arrangement or commitment is a valid, binding and enforceableobligation of, and has not been breached by Dermedics.
     gg) Dermedics does not own any trademarks, trade names, patents or otherindustrial and/or intellectual property rights, nor it is a licensee of anytrademarks, trade names, patents and other industrial and/or intellectualproperty rights owned by third parties.
     hh) **Exhibit “H”**contains a list of all software used by Dermedics in theOrdinary Course of Business. All such software has been duly licensed toDermedics by the legitimate owner of the rights thereof, and that all licensesare in full force and effect as of the Execution Date.
     ii) Dermedics has complied in all material respects with its corporatebylaws, with all legal provisions applicable to its Commercial Activities andall contractual obligations to which it is subject.
     jj) Dermedics has not obtained any insurance policies for the properoperation of its Commercial Activities, nor it has obtained any insurancepolicy for the benefit of a third party, or to guaranteed any obligationsassumed by it with a bond or similar instrument.
     kk) Dermedics has obtained all necessary authorizations, licenses andpermits for the proper operation of its Commercial Activities, and Dermedicshas complied in all material respects with all obligations imposed by suchauthorizations, licenses and permits, and has exercised all rights contemplatedtherein. All such authorizations, licenses and permits are in effect as of theExecution Date, and Sellers are not knowledgeable of any
- 8 -

 

legal, administrative and/orjudicial procedure commenced against Dermedics which seeks the nullity or invalidity of any such authorizations,licenses and permits.
     ll) **Exhibit “I”**of this Agreement contains a detailed list of Dermedics’clients and suppliers. None of the commercial relationship, between Dermedicsand the clients and suppliers listed in **Exhibit “I”**hereto are, as of theExecution Date, jeopardized in manner whatsoever due to the execution of thisAgreement or the transactions contemplated hereunder.
     mm) **Exhibit “J”**of this Agreement contains a complete list of alldocuments evidencing Sellers’ indebtedness related to Dermedics (including anyindebtedness incurred by a Seller all or part of the proceeds of which wereused to invest in or/and money to Dermedics); Sellers further represent thatall interests, fees and other amounts accrued and outstanding under suchindebtedness have been paid on time. Dermedics has not been and is not a partyto any loan or credit agreement, whether as borrower or as lender and,therefore, no third party or Related Party may seek payment from Dermedicsunder a loan or credit agreement.
     nn) None of the execution, delivery or performance by the Sellers of thisAgreement has, as of the Execution Date, or will (i) violate or conflict withany provision of the organizational documents of Dermedics, (ii) violate anyprovision of law, statute, judgment, order, writ, injunction, decree, award,rule, or regulation of any court, arbitrator, or other governmental orregulatory authority applicable to Dermedics or the Shares, (iii) violate,result in a breach of, constitute (with due notice or lapse of time or both) adefault or cause any obligation, penalty or premium to arise or accrue underany contract, lease, loan agreement, mortgage, security agreement, trustindenture or other agreement or instrument to which any of the Sellers orDermedics is a party, or by which any of them is bound or to which any of theirrespective properties or assets is subject, or otherwise relating to theShares, (iv) result in the creation or imposition of any encumbrance upon anyof the assets of Dermedics or the shares, or (v) result in the cancellation,modification, revocation or suspension of any permits, authorizations orlicenses of Dermedics.
     **NOW, THEREFORE**, in consideration of the mutual covenants andrepresentations set forth above, Sellers and Buyers grant the following
**CLAUSES**
     **FIRST**. Defined Terms; Exhibits; Rules of Construction. All capitalizedterms shall have the meanings expressly set forth herein for such terms, andvariants and derivatives of such defined terms shall have correlative meanings.To the extent that certain of the defined terms set forth herein suggest,indicate or express agreements between or among parties to this Agreement, theparties agree to the same by execution hereof.
     It is specifically acknowledged by the parties hereto that certainagreements and documents listed in the Exhibits are not to be delivered on theExecution Date, but have been previously delivered to Buyers and/or theirrepresentatives, or shall be delivered or made available to Buyers or theirrepresentatives promptly after the Execution Date, but no later
- 9 -

 

than 15 (fifteen) days thereafter. All such agreements and documents madeavailable or delivered to Buyers by Sellers and/or Dermedics shall be originalsor true and correct copies of the originals of all such agreements anddocuments. Each Exhibit and the agreements and documents listed in eachExhibit to this Agreement shall be deemed incorporated by mere reference. Therepresentations of Sellers set forth in this Agreement shall not be affected ordeemed waived or limited by the information provided in the Exhibits to thisAgreement, except to the extent that any qualification, exception or limitationto any representation is expressly contained herein or therein.
     **SECOND**. Purchase and Sale of the Shares. Subject to the terms andconditions of this Agreement, Sellers hereby sell to Buyers, and Buyers herebyacquire from Sellers, in the proportions set forth below, the Shares, free andclear from any Lien.
     a) Mr. Carlos Lazo hereby sells to MediCor LA 150,000 (One Hundred FiftyThousand) Shares representing the corporate capital of Dermedics;
     b) Mr. Hector Chuliá hereby sells to MediCor LA 149,999 (One Hundred FortyNine Thousand Nine Hundred Ninety Nine) Shares representing the corporatecapital of Dermedics; and,
     c) Mr. Hector Chuli hereby sells to IIM 1 (One) Share representing thecorporate capital of Dermedics.
     As a result of the purchase and sale of the Shares, the corporate capitalof Dermedics shall be, as of the Execution Date, distributed in the followingmanner and among the following persons:     **Shareholder** **Shares**MediCor Latin America, S.A. de C.V.  299,999 International Integrated Management Inc.  1 **TOTAL:**  **300,000** 
     **THIRD.**Purchase Price. In consideration of the Shares, Buyers agree to payto Sellers, in the corresponding proportion, the amount of *** (the“Purchase Price”). The Purchase Price is paid in cash by Buyers to Sellers onthe date hereof. Therefore, the execution of this Agreement by Sellers shall beconsidered for all legal purposes as the broadest receipt by Sellers of thePurchase Price.
     **FOURTH**. Stock Certificates’ Endorsement; Recording. In terms and forpurposes of articles 33, 34 and other applicable provisions of the MexicanGeneral Law of Negotiable Instruments and Credit Transactions, Sellers herebydeliver to Buyers the stock certificates issued by Dermedics in their favorduly endorsed in property, and which are more specifically described in **Exhibit“K”**of this Agreement.
- 10 -

 

     Dermedics hereby takes note of the purchase of the Shares, and agrees torecord each Buyer as a shareholder in the stock registry book of Dermedicswithin 2 (two) days following the Execution Date, in terms of article 124 andfor the purposes of article 125, both, of the Mexican General Law of BusinessOrganizations.
     **FIFTH.**Taxes. All Taxes derived from the transactions contemplatedhereunder shall be withheld and paid by the party responsible of suchwithholding and payment, in accordance with the applicable Mexican fiscal laws.
     **SIXTH**. Joint Obligations; Indemnity. Sellers hereby agree to jointly andseparately, irrevocably, absolutely and unconditionally guarantee Buyers andtheir respective successors and assignees (i) the accuracy and truthfulness ofeach representation made by Sellers in the Representations chapter of thisAgreement (“Sellers’ Representations”), and (ii) the payment of any damages,losses, fines, suits and/or claims made by any authority and/or third partiesagainst Dermedics and/or Buyers and/or its successors and assignees, whichresult from the inaccuracy and/or falseness of Sellers’ Representations, inaccordance with the following:
1.  *Immediate Compliance.*Sellers agree that in the event any ofSellers’ Representations result to be inaccurate or false, Sellers,jointly and separately, shall pay Buyers all damages, losses, fines,suits and/or claims made or imposed by any authority and/or thirdparties against Dermedics and/or Buyers and/or its successors andassignees resulting from such falseness or inaccuracy of Sellers’Representations, without demand or notice different from those setforth herein below. Any payments which need to be made pursuant to theforegoing shall be made to the benefit of Buyers or their successors orassignees in immediately available funds. 2. *Unconditional Obligations.*The obligations of Sellers provided forin this Clause Sixth are absolute and unconditional, joint andseparate, and regardless of whether such obligations are affected bythe value, truthfulness, validity, regularity or enforceability of thisAgreement or any other agreement or document executed in connectionwith this Agreement, or any substitution, release or exchange of anyother joint obligation, personal guarantee or guarantee made withrespect of Sellers’ Representations, since the intent of theseindemnification provisions is for the relevant obligation to beabsolute, unconditional, joint and separate under any circumstances.Therefore, no act or fact shall alter or modify Sellers’ responsibilityto indemnify Buyers, thus such responsibility shall be absolute andunconditional in the terms set forth above. 3. *Waivers.*Each Seller, in his capacity as joint obligor, herebywaives the benefits of *orden*and *excusión*to which articles 2814, 2815,2817, 2818, 2819, 2820, 2821 and 2827 of the Mexican Federal Civil Coderefer and, therefore, Buyers may demand from either of the Sellers thepayment of any and all damages, losses, fines, demands and/or claimsmade or imposed by any authority or third party, which result from theinaccuracy or falseness of any Sellers’ Representations in terms of
- 11 -

 

  this Agreement. Likewise, each Seller hereby expressly waives theprovisions of articles 2822, 2844, 2845, 2846, 2847 and 2848 of theFederal Civil Code.
4. *Continuous Guaranty; Term.*The obligation of Sellers to indemnifyBuyers under this Clause Sixth constitutes a continuous and irrevocableguaranty, and shall remain in effect for a period of 5 (five) yearsfollowing the Execution Date. 6. *Costs and Expenses.*Without prejudice of Sellers’ obligation toindemnify in the above terms, Sellers agree to jointly and separatelypay any and all costs and expenses incurred by Buyers and/or Dermedics(including reasonable attorneys fees) in connection with the executionand enforceability of the provisions contained in this Clause Sixth.
     **SEVENTH.**Non-Compete. During a period of 5 (five) years following theExecution Date, Sellers shall not, jointly or separately:
(i) Incorporate, participate, invest in or in anyother manner get involved with any Person or business thatcompetes with Dermedics and/or Buyers and /or BuyersAffiliates or carries out the Commercial Activities (the“Competence”), in the understanding, however, that theforegoing prohibition shall not include the acquisition bySellers of any participation or interests of the Competenceacquired through any stock exchange, provided such acquisitiondoes not exceed 1% (one percent) of the corporate capital ofthe Competence, and that Sellers are not entitled to appointmembers of the board of directors, officers or any otherindividuals who may at any point decide on the policies andmanagement of the Competence; (ii) Persuade any supplier of products or serviceprovider of Dermedics not to enter into any commercialagreements or arrangement with Dermedics; (iii) Request from any employee of Dermedics toterminate his/her labor relationship with Dermedics, or to beemployed by any Person or Affiliate of Sellers; or, (iv) Enter into any agreement or arrangement by meansof which either Seller agrees to assist, or in any othermanner facilitate, the participation of any other Person inthe Competence, or the development of the activities of theCompetence or the supplying of products or furnishing ofservices to the Competence to or for the benefit of any otherperson.
     In the event that either Seller has the opportunity to participate in orcommence a business with the Competence, such Seller shall notify such fact inwriting to Buyers, in
- 12 -

 

order for the Board of Directors of Dermedics to evaluate if it isfeasible for Dermedics to participate or commence business with the businesswith the Competence.
     Sellers acknowledge and agree that their agreement not to compete is anincentive for Buyers to purchase the Shares in terms of this Agreement, andthat the non-compete obligations imposed on each Seller are reasonable in scopeand time, thus such obligations do not impose restrictions which are notnecessary to preserve and protect the Commercial Activities of Dermedics or ofBuyers.
     Each Seller further acknowledges and agrees that neither Buyers norDermedics would have adequate and sufficient legal relief if the non-competeobligations in charge of Sellers are breached, and that non-compliance thereofwould result in a material damage for Dermedics and Buyers. Therefore, in orderto prevent any disputes with respect to the contents of this Clause Seventh andthe amount of damages caused by Sellers to Dermedics and/or Buyers if either ofthem breaches his non-compete obligations, the parties hereby enter into a“*convenio de transacción*” (settlement agreement) according to the provisions ofarticle 2944 of the Mexican Federal Civil Code, and agree that the amount ofany damages and losses which could be suffered by Dermedics and/or Buyers inthe event Sellers breach any of the obligations provided in this Clause Seventhwould not be less than the Purchase Price times six.
     Therefore, if either of the Sellers breaches his obligation not to competewith Dermedics and/or Buyers in terms of this Clause Seventh, which obligationis hereby recognized by Sellers as a main obligation in their charge, suchSeller shall pay to Dermedics and/or Buyers an amount equal to the PurchasePrice times six, every time he breaches such obligation.
     **EIGHTH**. Successors and Assigns; No Third-Party Beneficiaries. ThisAgreement shall inure to the benefit of, and be binding upon the parties heretoand their respective successors and assigns. Neither Sellers nor Buyers shallassign or delegate any of their obligations hereunder without the prior writtenconsent of the other parties.
     **NINTH.**Fees and Expenses. Except as otherwise provided in this Agreement,all legal, accounting and other fees, costs and expenses incurred in connectionwith the preparation of this Agreement and the transactions contemplated herebyshall be paid by the party incurring such fees, costs or expenses.
     **TENTH.**Notices. All notices and other communications given or madepursuant hereto shall be in writing and shall be deemed to have been duly givenor made if delivered personally or by an internationally recognized overnightcarrier, by facsimile, or sent by registered or certified mail (postageprepaid, return receipt requested) to the parties at the addresses set forth inthe preamble of this Agreement, or to such other persons or at such otheraddresses as shall be furnished by either party by like notice to the otherparties, and such notice or communication shall be deemed to have been given ormade as of the date so delivered or mailed. No change in any of such addressesshall be effective insofar as notices under this Clause Tenth are concernedunless notice of such change shall have been given to such other party heretoas provided in this Clause Tenth.
- 13 -

 

     **ELEVENTH**. Entire Agreement. This Agreement, together with its Exhibits,represents the entire agreement and understanding of the parties with referenceto the transactions set forth herein, and no representations or warranties havebeen made in connection with this Agreement other than those expressly setforth herein. This Agreement supersedes all prior negotiations, discussions,correspondence, communications, understandings and agreements between theparties relating to the subject matter of this Agreement, including the Promiseof Sale Agreement.
     **TWELFTH**. Waivers and Amendments. The waiver by any party of a breach ofany provision or representation of this Agreement shall not operate or beconstrued as a waiver of any subsequent breach, whether or not similar, unlesssuch waiver specifically states that it is to be construed as a continuingwaiver. This Agreement may be amended, modified or supplemented only by awritten instrument executed by the parties.
     **THIRTEENTH**. Severability. The invalidity or unenforceability of any termor provision hereof shall not affect the validity or enforceability of thisAgreement or of any other term or provision hereof. Furthermore, in lieu of anysuch invalid or unenforceable term or provision, the Parties intend that thereshall be added as a part of this Agreement a provision as similar in terms tosuch invalid or unenforceable provision as may be possible and be valid andenforceable.
     **FOURTEENTH**. Titles and Headings; Exhibits. The titles and headingscontained in this Agreement are solely for convenience of reference and shallnot affect the meaning or interpretation of this Agreement or of any term orprovision hereof. All references in this Agreement to “Exhibits” shall be areference to the applicable exhibit delivered by Sellers to Buyers on theExecution Date.
     **FIFTEENTH**. Governing Law and Jurisdiction. This Agreement shall begoverned by, construed and enforced in accordance with the laws of Mexico. Anydisputes arising in connection with this Agreement shall be submitted to thecompetent courts in Mexico Federal District, Mexico.
**[SIGNATURE PAGE TO FOLLOW]**
- 14 -

 

**IN WITNESS WHEREOF**, this Agreement is executed in four counterparts on the datespecified above.     **MediCor Latin America, S.A. de C.V.**     By: Mr. Theodore R. Maloney Its: Legal Representative    **International Integrated Management Inc.**     By: Mr. Theodore R. Maloney Its: Legal Representative     Mr. Carlos Francisco Lazo de la Vega Jasso     Mr. Héctor Jesús Chuliá de la Torre    **Dermatological Medical Products and** **Specialties, S.A. de C.V.**     Mr. Carlos Lazo de la Vega Pérez Rivas Its: Legal Representative
- 15 -