Exhibit
10.23


 


CONFORMED COPY


 


Loan Agreement


 


 


September 10, 2004


 


 


for


 


 


ES HOLDINGS S.A.S.


 


 


Arranged by


 


 


BNP PARIBAS


 


 


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


 

















 


TABLE OF CONTENTS


 


	
  1

  	
  DEFINITIONS – INTERPRETATION

  	
  6

  
	
   

  	
   

  	
   

  
	
   

  	
  1.1

  	
  Definitions

  	
  6

  
	
   

  	
  1.2

  	
  Principles of construction

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  2

  	
  PURPOSE

  	
  13

  
	
   

  	
   

  	
   

  
	
  3

  	
  CONDITIONS PRECEDENT

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.0

  	
  Conditions precedent
  specific to Tranche A1

  	
  14

  
	
   

  	
  3.1.1

  	
  Delivery of documents

  	
  14

  
	
   

  	
  3.1.2

  	
  Other conditions

  	
  16

  
	
   

  	
  2.0

  	
  Conditions precedent
  specific to Tranche A2

  	
  16

  
	
   

  	
  3.0

  	
  Conditions precedent
  specific to Tranche A3

  	
  16

  
	
   

  	
  4.0

  	
  Conditions precedent
  specific to Tranche A4

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  4

  	
  UTILIZING THE LOAN

  	
  17

  
	
   

  	
   

  	
   

  
	
   

  	
  4.1

  	
  Purpose of the Loan

  	
  17

  
	
   

  	
  4.2

  	
  Term and conditions of
  Drawdown

  	
  17

  
	
   

  	
  4.3

  	
  Drawdown Requests

  	
  18

  
	
   

  	
  4.4

  	
  Paying the Loan

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  5

  	
  REPAYMENT

  	
  18

  
	
   

  	
   

  	
   

  
	
   

  	
  5.1

  	
  Terms and conditions of
  repayment

  	
  18

  
	
   

  	
  5.1.1

  	
  Repayment of Tranche A1

  	
  18

  
	
   

  	
  1.0.0

  	
  Repayment of Tranche A2

  	
  18

  
	
   

  	
  2.0.0

  	
  Repayment of Tranche A3

  	
  19

  
	
   

  	
  5.1.4

  	
  Repayment of Tranche A4

  	
  19

  
	
   

  	
  5.2

  	
  Voluntary prepayment

  	
  19

  
	
   

  	
  5.3

  	
  Mandatory prepayment

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  6

  	
  INTERESTS

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  6.1

  	
  Interest rate

  	
  20

  
	
   

  	
  6.2

  	
  Reference Index

  	
  20

  
	
   

  	
  6.3

  	
  Applicable Margin

  	
  20

  
	
   

  	
  6.4

  	
  Interest Periods

  	
  21

  
	
   

  	
  6.5

  	
  Calculation Rule

  	
  21

  
	
   

  	
  6.6

  	
  Payment of interest

  	
  22

  
	
   

  	
  6.7

  	
  Notification of the interest
  rate

  	
  22

  
	
   

  	
  6.8

  	
  Late interest

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  7

  	
  CHANGES TO THE INTEREST
  CALCULATION

  	
  22

  
	
   

  	
   

  	
   

  
	
   

  	
  7.1

  	
  Market disruption

  	
  22

  
	
   

  	
  7.2

  	
  Lack of a quotation by a
  Bank of Reference

  	
  23

  
	
   

  	
   

  	
   

  	
   

  
	
  8

  	
  FEES

  	
  23

  
	
   

  	
   

  	
   

  
	
   

  	
  8.1

  	
  Agent Fee

  	
  23

  
	
   

  	
  8.2

  	
  Arrangement Fee

  	
  23

  
	
   

  	
  8.3

  	
  Underwriting Fee

  	
  24

  
	
   

  	
  8.4

  	
  Commitment Fee for Tranche
  A2

  	
  24

  



 


2

















 


	
   

  	
  8.5

  	
  Commitment Fee for Tranche
  A3

  	
  24

  
	
   

  	
  8.6

  	
  Commitment Fee for Tranche
  A4

  	
  24

  
	
   

  	
  8.7

  	
  Participation Fee

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  9

  	
  SUPPLEMENTARY PAYMENT
  OBLIGATIONS

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  9.1

  	
  Additional Costs

  	
  24

  
	
   

  	
  9.2

  	
  Illegality

  	
  25

  
	
   

  	
  9.3

  	
  Costs of execution

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  10

  	
  REPRESENTATIONS AND
  WARANTEES

  	
  26

  
	
   

  	
   

  	
   

  
	
  11

  	
  SECURITIES

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11.1

  	
  Financial Instrument Account
  Pledge

  	
  27

  
	
   

  	
  11.2

  	
  ‘Key man’ insurance
  delegation

  	
  27

  
	
   

  	
   

  	
   

  	
   

  
	
  12

  	
  BORROWER’S UNDERTAKINGS

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12.1

  	
  Commitment to securities

  	
  28

  
	
   

  	
  12.2

  	
  Commitment to interest rate
  exposure hedges

  	
  28

  
	
   

  	
  12.3

  	
  Commitment to Financial
  Ratios

  	
  28

  
	
   

  	
  12.4

  	
  Commitment to limit
  investments

  	
  29

  
	
   

  	
  12.5

  	
  Commitment to limit
  indebtedness

  	
  29

  
	
   

  	
  12.6

  	
  Miscellaneous commitments

  	
  30

  
	
   

  	
   

  	
   

  	
   

  
	
  13

  	
  INFORMATION OBLIGATIONS

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  14

  	
  EVENT OF DEFAULT

  	
  32

  
	
   

  	
   

  	
   

  	
   

  
	
  15

  	
  RULES FOR THE PARTICIPATION
  OF THE BANKS

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  16

  	
  THE BANK’S DECLARATIONS AND
  COMMITMENTS

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  17

  	
  AGENT’S ROLE AND POWERS

  	
  34

  
	
   

  	
   

  	
   

  	
   

  
	
  1

  	
  REPLACEMENT OF THE BORROWER

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  19

  	
  SUBSTITUTION OF THE BANKS

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  20

  	
  MISCELLANEOUS

  	
  36

  
	
   

  	
   

  	
   

  
	
   

  	
  20.1

  	
  Terms of payment

  	
  36

  
	
   

  	
  20.2

  	
  Attributing payments

  	
  37

  
	
   

  	
  20.3

  	
  No setoff

  	
  37

  
	
   

  	
  20.4

  	
  Currency

  	
  37

  
	
   

  	
  20.5

  	
  Annualized percentage rate

  	
  37

  
	
   

  	
  20.6

  	
  Working Days

  	
  38

  
	
   

  	
  20.7

  	
  Waiver of recourse

  	
  38

  
	
   

  	
  1.0

  	
  Notifications

  	
  38

  
	
   

  	
  20.9

  	
  Instruments – Languages

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  21

  	
  GOVERNING LAW

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  22

  	
  JURISDICTION

  	
  39

  
					



 


3

















 


	
  SCHEDULE 1

  	
  REFERENCE BUSINESS PLAN

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 2

  	
  FORM OF DRAWDOWN REQUEST

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 3

  	
  FORM OF CONTRACTOR
  REPLACEMENT AGREEMENT

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 4

  	
  FORM OF FINANCIAL RATIOS
  CERTIFICATE

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 5

  	
  FRENCH VERSION OF THE LOAN
  AGREEMENT

  	
   

  



 


4

















 


BETWEEN THE UNDERSIGNED :


 


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


 


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


 


In the capacity of
borrower (hereafter called ‘Borrower’),


 


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


 


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


 


5

















 


RECITALS :


 


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


 


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


 


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


 


 


1                                        DEFINITIONS - INTERPRETATION


 


1.1                              Definitions


 


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


 


	
  ‘Acquisition’

  	
   

  	
  means
  the Borrower’s acquisition of all the shares in LABORATOIRES EUROSILICONE’s capital.

  
	
   

  	
   

  	
   

  
	
  ‘Acquisition Price’

  	
   

  	
  means
  the price for the Borrower acquiring all the shares in LABORATOIRES
  EUROSILICONE’s share capital, i.e. 32,000,000 Euros increased by the
  Acquisition Subsequent Payments.

  
	
   

  	
   

  	
   

  
	
  ‘Acquisition

  	
   

  	
   

  
	
  Subsequent Payment 1’

  	
   

  	
  means
  the Acquisition Subsequent Payment of a maximum amount of 3,000,000 Euros,
  connected to LABORATOIRES EUROSILICONE’s results for the fiscal year closed
  on December 31, 2004.

  
	
   

  	
   

  	
   

  
	
  ‘Acquisition

  	
   

  	
   

  
	
  Subsequent Payment 2’

  	
   

  	
  means
  the Acquisition Subsequent Payment of a maximum amount of 3,000,000 Euros,
  connected to LABORATOIRES EUROSILICONE’s results for the fiscal year closed
  on December 31, 2005.

  
	
   

  	
   

  	
   

  
	
  ‘Acquisition

  	
   

  	
   

  
	
  Subsequent Payment 3’

  	
   

  	
  means
  the Acquisition Subsequent Payment of a maximum amount of 3,000,000 Euros,
  connected to LABORATOIRES EUROSILICONE’s results for the fiscal year closed
  on December 31, 2006.

  
	
   

  	
   

  	
   

  
	
  ‘Acquisition

  	
   

  	
   

  
	
  Subsequent Payments’

  	
   

  	
  means
  Acquisition Subsequent Payment 1, Acquisition Subsequent Payment 2 and the
  Acquisition Subsequent Payment 3 together.

  



 


6

















 


	
  ‘Agent’

  	
   

  	
  means
  BNP PARIBAS [Centre d’Affaires Entreprises Méditerranée, Z 02478A, 5,
  boulevard de Dunkerque, Cap Joliette - 13002 Marseille] and its
  beneficiaries, ex-officio as the Banks’ agent, under the provisions of
  Article 17 of this Agreement.

  
	
   

  	
   

  	
   

  
	
  ‘Agent Fee’

  	
   

  	
  means
  the fee owed to the Agent, covering the daily management of the Contractual
  Documents, excluding any exceptionals, payable for the first time on the
  Drawdown Date of Tranche A1, then on each anniversary date

  
	
   

  	
   

  	
   

  
	
  ‘Agreement’

  	
   

  	
  means
  this agreement (including its Schedules).

  
	
   

  	
   

  	
   

  
	
  ‘Arranger’

  	
   

  	
  means
  BNP PARIBAS [BDDF - Financements Structurés, CLD 08B1, 9, boulevard des
  Italiens - 75450 Paris Cedex 09].

  
	
   

  	
   

  	
   

  
	
  ‘Arrangement Fee’

  	
   

  	
  means
  the management fee owed to the Arranger, payable when the Agreement is
  signed.

  
	
   

  	
   

  	
   

  
	
  ‘Bank(s)’

  	
   

  	
  means,
  on the date that this Agreement is signed, BNP PARIBAS and subsequently, any
  other bank(s) which may totally or partially replace it in accordance with
  Article 19.

  
	
   

  	
   

  	
   

  
	
  ‘Banks of reference’

  	
   

  	
  means
  the SOCIETE GENERALE and HSBC or any other Banks which are the subject of an
  agreement between the Borrower and the Banks

  
	
   

  	
   

  	
   

  
	
  ‘Chart of Accounts’

  	
   

  	
  means
  the Chart of Accounts approved by the Order of June 22 1999 by the Justice
  Ministry, the Economy, Finance and Industry Ministry and the Secretary of
  State for the Budget approving Regulation n° 99-03 of April 29 1999 of the
  Accounting Regulation Committee, as well as the accounting practices and uses
  which are generally accepted in France for the application and the
  interpretation of the Chart of Accounts and any subsequent modification, and
  in particular, the accounting practices and uses which are generally accepted
  to draw up the consolidated accounts, as stipulated by the Regulation n°
  99-02 of April 29 1999 by the Accounting Regulation Committee approved by the
  Order of June 22 1999 by the Justice Ministry.

  
	
   

  	
   

  	
   

  
	
  ‘Commitment Fee

  	
   

  	
   

  
	
  for Tranche A2’

  	
   

  	
  means
  the fee calculated at the rate of 0.50% per year on the maximum amount of
  Tranche A2, payable quarterly in advance to the Agent from the date that the
  Agreement is signed to the Drawdown Date of Tranche 2 (or until the date that
  the Borrower totally surrenders its right to draw down the Tranche A2), and
  paid by the Agent to each Bank pro rata to its Participation.

  



 


7

















 


	
  ‘Commitment Fee

  	
   

  	
   

  
	
  for Tranche A3’

  	
   

  	
  means
  the fee calculated at the rate of 0.50% per year on the maximum amount of
  Tranche A3, payable quarterly in advance to the Agent from the date that the
  Agreement is signed to the Drawdown Date of Tranche 3 (or until the date that
  the Borrower totally surrenders its right to draw down the Tranche A3), and
  paid by the Agent to each Bank pro rata to its Participation.

  
	
   

  	
   

  	
   

  
	
  ‘Commitment Fee

  	
   

  	
   

  
	
  for Tranche A4’

  	
   

  	
  means
  the fee calculated at the rate of 0.50% per year on the maximum amount of
  Tranche A4, payable quarterly in advance to the Agent from the date that the
  Agreement is signed to the Drawdown Date of Tranche 4 (or until the date that
  the Borrower totally surrenders its right to draw down the Tranche A4), and
  paid by the Agent to each Bank pro rata to its Participation.

  
	
   

  	
   

  	
   

  
	
  ‘Contractual Documents’

  	
   

  	
   

  
	
   

  	
   

  	
  means
  the Agreement and the Securities and all documents relating to it.

  
	
   

  	
   

  	
   

  
	
  ‘Debt Service’

  	
   

  	
  means
  on the basis of the Borrower’s consolidated accounts :

  
	
   

  	
   

  	
  (a)
  Net Financial Cash Expenses,

  
	
   

  	
   

  	
  (b)
  Plus repayments of principal on Financial Debt (excluding fluctuations in the
  operating overdraft) made over the period in question, excluding any early
  repayment,

  
	
   

  	
   

  	
   

  
	
  ‘Drawdown’

  	
   

  	
  means
  the drawdown of the Loan by the Borrower through Drawdown Requests under
  Article 4.

  
	
   

  	
   

  	
   

  
	
  ‘Drawdown Date(s)’

  	
   

  	
  means
  each date that the funds are made available to the Borrower in Tranches A1,
  A2, A3 and A4.

  
	
   

  	
   

  	
   

  
	
  ‘Drawdown Request(s)’

  	
   

  	
  means
  each drawdown request for Tranches A1, A2, A3 and A4 of the Loan, in
  accordance with the model in Schedule 2, and handed to the Agent by the
  Borrower.

  
	
   

  	
   

  	
   

  
	
  ‘Economic Profit’

  	
   

  	
  means,
  on the basis of the Borrower’s consolidated accounts :

  
	
   

  	
   

  	
  (a)
  Group consolidated net profit,

  
	
   

  	
   

  	
  (b)
  Less the proportional share of net profit corresponding to the companies
  carried by the equity method,

  
	
   

  	
   

  	
  (c)
  Plus amortization charges for goodwill arising on acquisition and acquisition
  costs,

  
	
   

  	
   

  	
  (d)
  Plus companies tax (payable and deferred),

  
	
   

  	
   

  	
  (e)
  Less exceptional income and plus exceptional expense (including any capital
  gains or losses realized on asset disposals),

  
	
   

  	
   

  	
  (f)
  Less financial income and plus financial charges (including notably interest
  charges arising from the restatement on consolidation of finance lease
  agreements and financial rentals).

  



 


8

















 


	
  ‘EONIA’

  	
   

  	
  means :

  
	
   

  	
   

  	
  (A)
  the annual percentage rate fixed by the Federation of European banks European
  Banking Federation from day to day published on page 247 of the Telerate
  screen or, if it is unavailable, on the corresponding page on the Reuters
  screen or any other page which could be chosen by mutual agreement between
  the Agent, the Borrower and the Banks ;

  
	
   

  	
   

  	
  or

  
	
   

  	
   

  	
  (B)
  if none of these services is available, the arithmetic mean (rounded up to
  the four highest decimal points) of the rates offered by the Banks of
  Reference from day to day to the banks of first class credit standing on the
  European interbank market in the Euro zone.

  
	
   

  	
   

  	
  The
  EONIA rate used to calculate the EONIA rate on a date which is not a Working
  Day, will be the rate published for the preceding Working Day.

  
	
   

  	
   

  	
   

  
	
  ‘EURIBOR’

  	
   

  	
  means :

  
	
   

  	
   

  	
  (A)
  the annual percentage rate fixed by the Federation of European Banks for the
  Interest Period concerned and published two Working Days before the start of
  this Interest period on page 248 of the Telerate screen, or, if it is
  unavailable, on the corresponding page on the Reuters screen or any other
  page which could be chosen by mutual agreement between the Agent, the
  Borrower and the Banks ;

  
	
   

  	
   

  	
  or

  
	
   

  	
   

  	
  (B)
  if none of these services is available, the arithmetic mean (rounded up to
  the four highest decimal points) of the rates offered by the Banks of
  Reference to the banks of first class credit standing on the European
  interbank market in the Euro zone, for deposits in Euros for a period
  comparable to the Interest Period, two Working Days before the start of this
  Interest Period.

  
	
   

  	
   

  	
   

  
	
  ‘Euro’

  	
   

  	
  means
  at any time, the currency with legal tender on the territory of the States in
  the European Economic and Monetary Union, having adopted the single currency
  in accordance with the Treaty founding the European Community signed in Rome
  on March 25, 1957, and subsequently amended.

  
	
   

  	
   

  	
   

  
	
  ‘Excess Cash-Flow’

  	
   

  	
  means,
  on the basis of the Borrower’s consolidated accounts :

  
	
   

  	
   

  	
  (a)
  Free Cash Flow,

  
	
   

  	
   

  	
  (b)
  Less Debt Service,

  
	
   

  	
   

  	
  (c)
  Less any voluntary or mandatory prepayments of the Loan,

  
	
   

  	
   

  	
  (d)
  Less any investment shortfall, if investment over the period is less than the
  maximum investment permitted.

  
	
   

  	
   

  	
   

  
	
  ‘Event of Default’

  	
   

  	
  means
  one of the cases of the events stipulated in Article 14.1.

  



 


9

















 


	
  ‘Financial Debt’

  	
   

  	
  means,
  on the basis of the Borrower’s consolidated accounts :

  
	
   

  	
   

  	
  (a)
  Total value of short-, medium-, and long-term financial debt, (including debt
  from the restatement on consolidation of finance lease agreements and
  financial rentals)

  
	
   

  	
   

  	
  (b)
  Plus bond debt and/or shareholders’ current accounts where these are not
  subordinated to the Loan,

  
	
   

  	
   

  	
  (c)
  Plus off-balance sheet debt, proceeds from the sale of “Dailly Law” loans or
  any other transfers from the debtors item of debts not classed as non-recourse.

  
	
   

  	
   

  	
  (For
  the avoidance of doubt, Financial Debt does not include any item listed under
  the definition of Shareholders’ Funds.)

  
	
   

  	
   

  	
   

  
	
  ‘Financial Instrument

  	
   

  	
   

  
	
  Account Pledge’

  	
   

  	
  means
  the financial instrument account pledge concluded between the Borrower as
  constitutor and the Agent, as the beneficiary on behalf of the Banks, as a
  security for the repayment of the Loan, and relating to a minimum of 66.65%
  of the shares comprising LABORATOIRES EUROSILICONE’s capital on the Drawdown
  Date of Tranche A1.

  
	
   

  	
   

  	
   

  
	
  ‘Financial Parties’

  	
   

  	
  means
  all the Banks, the Arranger and the Agent.

  
	
   

  	
   

  	
   

  
	
  ‘Financial ratios’

  	
   

  	
  means
  the following financial ratios :

  
	
   

  	
   

  	
  R2
  = Net Financial Debt / Restated EBITDA,

  
	
   

  	
   

  	
  R3
  = Free Cash Flow / Debt Service,

  
	
   

  	
   

  	
  R4
  = Financial Debt / Shareholders’ Funds.

  
	
   

  	
   

  	
   

  
	
  ‘Free Cash Flow’

  	
   

  	
  means,
  on the basis of the Borrower’s consolidated accounts :

  
	
   

  	
   

  	
  (a)
  Restated EBITDA,

  
	
   

  	
   

  	
  (b)
  Less companies tax payable,

  
	
   

  	
   

  	
  (c)
  Plus employee profit sharing charges and less employee profit-sharing charges
  disbursed,

  
	
   

  	
   

  	
  (d)
  Plus (where positive) or less (where negative) exceptional cash flows other
  than those from disposals of assets (exceptional items excluding asset sales
  occasioning a cash inflow or outflow).

  
	
   

  	
   

  	
  (e)
  Plus (if negative) or less (if positive) the change in operating or other
  working capital required, based on the gross change in the relevant items,

  
	
   

  	
   

  	
  (f)
  Less investment in tangible, intangible and financial fixed assets (including
  own work capitalized and the Acquisition Subsequent Payments),

  
	
   

  	
   

  	
  (g)
  Plus proceeds from the disposal of fixed assets for cash except where the
  sale forms part of an early repayment of the Loan,

  
	
   

  	
   

  	
  (h)
  Plus the principal value of any medium- and long-term finance taken out over
  the period in question within the permissible limits (for the avoidance of
  doubt, including any funds drawn under Tranche A2, A3 and A4),

  
	
   

  	
   

  	
  (k)
  Plus new cash inflows to Shareholders’ Funds and less dividends or other
  distributions paid out by the Borrower.

  
	
   

  	
   

  	
   

  
	
  ‘Group’

  	
   

  	
  means
  the Group formed by the Borrower and its Subsidiaries.

  



 


10

















 


	
  ‘Indemnification Claim’

  	
   

  	
  means
  the indemnification claim granted to the Borrower, for the Acquisition.

  
	
   

  	
   

  	
   

  
	
  ‘Interest Period’

  	
   

  	
  means
  each Interest Period determined in accordance with Article 6.4 for each of
  the Tranches A1, A2, A3 and A4.

  
	
   

  	
   

  	
   

  
	
  ‘LABORATOIRES

  	
   

  	
   

  
	
  EUROSILICONE’

  	
   

  	
  means
  LABORATOIRES EUROSILICONE, a French Société
  Anonyme with capital of 2,000,000 Euros, the registered office of
  which is at Chemin de Peyrolière - 84400 Apt, registered with the Avignon
  Trade and Companies’ Register under the number 347 535 296.

  
	
   

  	
   

  	
   

  
	
  ‘Latest Drawdown Date’

  	
   

  	
  means
  September 15 2004 for Tranche A1, June 30 2005 for Tranche A2, June 30 2006
  for Tranche A3, and June 30 2007 for Tranche A4.

  
	
   

  	
   

  	
   

  
	
  ‘Loan’

  	
   

  	
  means
  the loan granted by the Banks to the Borrower, as referred to in Article 2.

  
	
   

  	
   

  	
   

  
	
  ‘Majority of the Banks’

  	
   

  	
  means
  the Banks with cumulated Participations of more than sixty-six point
  sixty-six percent (66.66%) of the total amount of the Loan.

  
	
   

  	
   

  	
   

  
	
  ‘Material Adverse Effect’

  	
   

  	
  means
  an event or circumstance of combination thereof which is materially adverse
  to (i) the business, financial conditions or operations of the Borrower or
  its Subsidiaries (taken as a whole) and (ii) the ability of the Borrower to
  perform its payment obligations or comply with its undertakings under the
  Agreement.

  
	
   

  	
   

  	
   

  
	
  ‘MEDICOR LTD.’

  	
   

  	
  means
  MEDICOR Ltd., a corporation governed by the Laws of the State of Delaware,
  the registered office of which is at 4560 S. Decatur Boulevard, Las Vegas,
  Nevada 89103.

  
	
   

  	
   

  	
   

  
	
  ‘Net Financial Cash Expenses’

  	
   

  	
  means,
  on the basis of the Borrower’s consolidated accounts :

  
	
   

  	
   

  	
  (a)
  Interest and associated charges payable on the whole of the Financial Debt,
  including interest charges arising from the restatement on consolidation of
  finance lease agreements and financial rentals) but excluding a proportional
  share of any capitalized interest payments and associated charges,

  
	
   

  	
   

  	
  (b)
  Plus interest charges payable on bond loans and/or shareholder current accounts,
  excluding any capitalized interest payments and associated charges,

  
	
   

  	
   

  	
  (c)
  Less interest and other similar income (net proceeds on sale of investment
  securities) generated by management of the company’s treasury,

  
	
   

  	
   

  	
  (d)
  Less net proceeds and plus net charges on rate hedging instruments.

  
	
   

  	
   

  	
   

  
	
  ‘Net Financial Debt’

  	
   

  	
  means,
  on the basis of the Borrower’s consolidated accounts :

  
	
   

  	
   

  	
  (a)
  Financial Debt,

  
	
   

  	
   

  	
  (b)
  Less cash, cash equivalents, and investment securities that may be used or
  realized within not more than 30 business days.

  



 


11

















 


	
  ‘Participation’

  	
   

  	
  means
  the amount of each Bank’s Participation in the Loan.

  
	
   

  	
   

  	
   

  
	
  ‘Participation Fee’

  	
   

  	
  means
  the fee payable to the Arranger on the Drawdown Date of Tranche A1, and paid
  by the Arranger to each Bank pro rata to its Participation in the Loan.

  
	
   

  	
   

  	
   

  
	
  ‘Receivables’

  	
   

  	
  means
  the two shareholder receivables for a unit amount of 1,000,000 Euros, granted
  by MEDICOR Ltd. to the Borrower.

  
	
   

  	
   

  	
   

  
	
  ‘Reference Business Plan’

  	
   

  	
  means
  the Business Plan prepared in USD and according to US GAAP communicated to
  the Arranger which was used as the base for structuring the Loan, as appears
  in Schedule 1.

  
	
   

  	
   

  	
   

  
	
  ‘Restated EBITDA’

  	
   

  	
  means,
  on the basis of the Borrowers’ consolidated accounts :

  
	
   

  	
   

  	
  (a)
  Economic Profit,

  
	
   

  	
   

  	
  (b)
  Plus allocations (net of writebacks) to operating provisions in respect of
  assets and in respect of provisions for risk and charges,

  
	
   

  	
   

  	
  (c)
  Plus allocations (net of writebacks) made for depreciation and amortization
  on tangible and intangible assets (including notably amortization charges for
  the restatement on consolidation of finance lease agreements and financial
  rentals),

  
	
   

  	
   

  	
   

  
	
  ‘Schedule, Article, Paragraph’

  	
   

  	
  means
  a schedule, an, article or a paragraph of the Agreement.

  
	
   

  	
   

  	
   

  
	
  ‘Securities’

  	
   

  	
  means
  the Financial Instruments Account Pledge and the delegation of the ‘key man’
  insurance and the guarantees which may be added to it or replace it, by
  mutual agreement between the Borrower and the Banks after the date that the
  Agreement is signed.

  
	
   

  	
   

  	
   

  
	
  ‘Shareholders’ Loan’

  	
   

  	
  means
  the shareholders’ loan granted by MEDICOR Ltd. to the Borrower of 30,000,000
  Euros.

  
	
   

  	
   

  	
   

  
	
  ‘Shareholder’s Funds’

  	
   

  	
  means,
  on the basis of the Borrower’s consolidated accounts :

  
	
   

  	
   

  	
  (a)
  Share capital,

  
	
   

  	
   

  	
  (b)
  Plus premiums, reserves, profits brought forward and net profit for the year,

  
	
   

  	
   

  	
  (c)
  Plus minority interests,

  
	
   

  	
   

  	
  (d)
  Plus bonds issued by the Borrower and/or current accounts of partners where
  these are subordinated to the Loan.

  
	
   

  	
   

  	
   

  
	
   ‘Subsidiaries’

  	
   

  	
  means
  all companies controlled within the meaning of paragraphs I and II of Article
  L 233-3 of the French Commercial Code.

  
	
   

  	
   

  	
   

  
	
  ‘Tax’

  	
   

  	
  means
  any tax, charge, withholding at source, registration or stamp duty or tax or
  parafiscal charge of the same kind.

  
	
   

  	
   

  	
   

  
	
  ‘Tranche(s)’

  	
   

  	
  means
  tranches A1, A2, A3 and A4 of the Loan, determined in accordance with
  ‘Article 2.

  



 


12

















 


	
  ‘Underwriting Fee’

  	
   

  	
  means
  the fee remunerating BNP PARIBAS’s commitment to pay, firm, 100% of the
  global maximum amount of the Loan.

  
	
   

  	
   

  	
   

  
	
  ‘Working Day’

  	
   

  	
  means
  any day when an interest rate must be calculated or a payment made under the
  Agreement, and day when the global clearing system known as Automated Real-time Gross settlement Express Transfer System (TARGET)
  operates.

  



 


1.2                              Principles of construction


 


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


 


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


 


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


 


(D) Unless otherwise
stipulated, the accounting terms used in the Agreement have the meaning given
to them in the Chart of Accounts.


 


(E) The Schedules
form an integral part of the Agreement and have the same legal force as the
other provisions of the Agreement.


 


 


2                                        PURPOSE


 


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


 


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


 


 


3                                        CONDITIONS
PRECEDENT


 


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


 


13

















 


3.1                              Conditions
precedent specific to Tranche A1


 


3.1.1                    Delivery
of documents


 


	
  (1)

  	
   

  	
  A
  copy of the Borrower’s updated statuts,
  certified to be a true copy by its legal representative ;

  
	
   

  	
   

  	
   

  
	
  (2)

  	
   

  	
  A
  copy of the updated statuts of
  LABORATOIRES EUROSILICONE, certified to be a true copy by its legal
  representative ;

  
	
   

  	
   

  	
   

  
	
  (3)

  	
   

  	
  An
  original copy of the Borrower’s and the LABORATOIRES EUROSILICONE’s, k-bis
  (business register extract) from the relevant Trade and Companies’ Register,
  dated less than three months ;

  
	
   

  	
   

  	
   

  
	
  (4)

  	
   

  	
  If
  necessary, a copy of the partners and /or shareholders agreements binding the
  Borrower’s and LABORATOIRES EUROSILICONE’s partners and /or
  shareholders ;

  
	
   

  	
   

  	
   

  
	
  (5)

  	
   

  	
  A
  copy of the minutes of the decisions of the Borrower’s competent corporate
  bodies, certified by the Borrower’s legal representative :

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)
  Authorizing the entry into to the Loan, and certifying that the repayment of
  the Loan is not contractually subordinated to the prior repayment of any
  other debt,

  
	
   

  	
   

  	
  (ii)
  the constitution of the Securities,

  
	
   

  	
   

  	
  (iii)
  the signature of the Contractual Documents ;

  
	
   

  	
   

  	
   

  
	
  (6)

  	
   

  	
  If
  LABORATOIRES EUROSILICONE’s statuts include
  an approval clause (clause d’agrément),
  a copy, certified to conform by LABORATOIRES EUROSILICONE’s legal
  representative, of the minutes of the decision of LABORATOIRES EUROSILICONE’s
  competent corporate bodies authorizing the constitution of the Financial
  Instruments Account Pledge, and approving the Agent, on behalf of the Banks,
  or any other purchaser of the pledged shares as a new shareholder if the
  Financial Instrument Account Pledge is enforced ;

  
	
   

  	
   

  	
   

  
	
  (7)

  	
   

  	
  A
  copy, certified to be a true copy by LABORATOIRES EUROSILICONE’s legal
  representative, of LABORATOIRES EUROSILICONE’s certified company accounts for
  the fiscal year closing December 31 2003, as well as the Statutory Auditors
  report relating to it ;

  
	
   

  	
   

  	
   

  
	
  (8)

  	
   

  	
  A
  list, certified to be correct by LABORATOIRES EUROSILICONE’s legal
  representative, of LABORATOIRES EUROSILICONE’s off balance sheet new
  commitments made during the period from December 31 2003 to the Drawdown Date
  of Tranche A1 ;

  
	
   

  	
   

  	
   

  
	
  (9)

  	
   

  	
  A
  recapitulative list, drawn up to the Drawdown Date of Tranche A1 and
  certified to be correct by LABORATOIRES EUROSILICONE’s legal representative,
  of the short, medium and long term bank debts (including any capital lease
  agreement) set up for LABORATOIRES EUROSILICONE, detailing the outstanding
  amount for the medium and long term bank debts, and the amount of the
  authorizations and the utilizations with each bank concerned, for the short
  term bank debt and including any operations concerning the transfer and /or
  the assignment of all or part of LABORATOIRES EUROSILICONE’s customer
  receivables ;

  
	
   

  	
   

  	
   

  
	
  (10)

  	
   

  	
  A
  copy, certified to be a true copy by the Borrower’s legal representative, of
  the due diligence reports relating to the Acquisition ;

  
	
   

  	
   

  	
   

  
	
  (11)

  	
   

  	
  The
  list of the Borrower’s shareholders certified to be correct by its legal
  representative, showing that MEDICOR Ltd. directly or indirectly controls
  100% of the Borrower’s capital and voting rights ;

  



 


14

















 


	
  (12)

  	
   

  	
  A
  copy, certified to be a true copy by the Borrower’s legal representative, of
  an amendment to the agreement for the Shareholder’s Loan, concluded between
  MEDICOR Ltd. and the Borrower, stipulating :

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  • the partial
  repayment of up to 5,400,000 Euros of the Shareholder’s Loan, with the
  Drawdown of Tranche A1 of the Loan,

  
	
   

  	
   

  	
  • the partial
  repayment of a minimum amount of 6,400,000 Euros, of the Shareholder’s Loan,
  simultaneously with the performance of a capital increase for the Borrower,
  which must occur between now and October 11, 2004, the said partial repayment
  being equal to the amount of the capital increase,

  
	
   

  	
   

  	
  • the subordination
  of the repayment of the balance of the Shareholder’s Loan prior to the
  complete repayment of the Loan,

  
	
   

  	
   

  	
  • the capitalization
  of the interest relating to the Shareholders’ Loan ;

  
	
   

  	
   

  	
   

  
	
  (13)

  	
   

  	
  A
  copy, certified to be a true copy by the Borrower’s legal representative, of
  the contract(s) relating to the Shareholders’ Loan ;

  
	
   

  	
   

  	
   

  
	
  (14)

  	
   

  	
  A
  certificate by the Borrower’s representative certifying that the Receivables
  have been repaid simultaneously with the Drawdown of Tranche A1 ;

  
	
   

  	
   

  	
   

  
	
  (15)

  	
   

  	
  A
  copy, certified to be a true copy by the Borrower’s representative, of the
  contract relating to the Acquisition stipulating  :

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  • an Acquisition
  Price of a maximum amount of 41,000,000 Euros, including a maximum of
  9,000,000 Euros Acquisition Subsequent Payments,

  
	
   

  	
   

  	
  • the terms and
  conditions for paying the said Acquisition Subsequent Payments, each one for
  3,000,000 Euros if 20.5% of the sales revenue realized by LABORATOIRES
  EUROSILICONE during the fiscal year preceding the year during which the
  relevant Acquisition Subsequent Payment must be paid, equals or exceeds the
  target value for the said fiscal year (i.e. 4.000.000 Euros for the fiscal
  year closed on December 31 2004, 5,000,000 Euros for the fiscal year closed
  on December 31 2005 and 6,000,000 Euros for the fiscal year closed on
  December 31 2006). It is specified that if the sales revenue realized by
  LABORATOIRES EUROSILICONE for a given fiscal year is less than the
  aforementioned target value, the amount of the Acquisition Subsequent Payment
  for the sales revenue realized by LABORATOIRES EUROSILICONE during the said
  fiscal year, will be an amount equaling:

  
	
   

  	
   

  	
  (3,000,000
  Euros) – [(20.5% of the sales revenue realized by LABORATOIRES EUROSILICONE
  during the fiscal year in question) / (the target value for the fiscal year
  in question)],

  
	
   

  	
   

  	
  • The
  Indemnification Claim, with the specification, that any payment relating to
  the Indemnification Claim will be partially or totally offset against the
  sums owed by the Borrower for Acquisition Subsequent Payments ;

  
	
   

  	
   

  	
   

  
	
  (16)

  	
   

  	
  A
  copy, certified to be a true copy by the Borrower’s legal representative, of
  the transfer order(s) relating to the Acquisition ;

  
	
   

  	
   

  	
   

  
	
  (17)

  	
   

  	
  The
  list of the Borrower’s subsidiaries, certified to be correct by the
  Borrower’s representative, showing the percentages of holding capital and the
  voting rights ;

  
	
   

  	
   

  	
   

  
	
  (18)

  	
   

  	
  A
  list, certified to be correct by the Borrower’s representative of all
  collateral and third-party guarantees granted by the Borrower including the
  maximum pledge of 33.33% of LABORATOIRES EUROSILICONE’s share capital in
  favor of the sellers of the shares of LABORATOIRES EUROSILICONE to the
  Borrower, to guarantee the payment of the Acquisition Subsequent
  Payments ;

  



 


15

















 


	
  (19)

  	
   

  	
  A
  list, certified to be correct by LABORATOIRES EUROSILICONE’s legal
  representative of all collateral and third-party guarantees granted by
  LABORATOIRES EUROSILICONE, that LABORATOIRES EUROSILICONE’s business
  undertaking (fonds de commerce)
  has not been pledged, or a certificate from LABORATOIRES EUROSILICONE’s legal
  representative certifying the absence of securities and guarantees granted by
  LABORATOIRES EUROSILICONE ;

  
	
   

  	
   

  	
   

  
	
  (20)

  	
   

  	
  A
  list, signed by the Borrower’s legal representative, of the persons
  authorized to sign the Contractual Documents and to give opinions, or
  instructions to the Agent in relation to the Contractual Documents as well as
  the specimen signatures of the said persons.

  



 


3.1.2                    Other
conditions


 


(1)                        The simultaneous
constitution of the Financial Instruments Account Pledge over 66.65% of the
shares comprising LABORATOIRES EUROSILICONE’s share capital, on behalf of the
Banks in the Agent’s favor;


 


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


 


(3)                        Payment of the Agent
Fee, the Arrangement Fee, the Underwriting Fee as well as the Participation
Fee.


 


1.0                              Conditions
precedent specific to Tranche A2


 


(1)                        Drawdown of Tranche
A1 ;


 


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


 


(3)                        Delivery of any
document to certify the Borrower’s payment of the said Acquisition Subsequent
Payment 1 ;


 


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


 


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


 


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


 


2.0                              Conditions
precedent specific to Tranche A3


 


(1)                        Drawdown of Tranche
A1 ;


 


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


 


(3)                        Delivery of any
document to certify the Borrower’s payment of the said Acquisition Subsequent
Payment 2 ;


 


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


 


16

















 


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


 


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


 


3.0                              Conditions
precedent specific to Tranche A4


 


(1)                        Drawdown of Tranche
A1 ;


 


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


 


(3)                        Delivery of any
document to certify the Borrower’s payment of the said Acquisition Subsequent
Payment 3 ;


 


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


 


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


 


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


 


4                                        UTILIZING THE LOAN


 


4.1                              Purpose of the Loan


 


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


 


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


 


4.2                              Term and conditions of Drawdown


 


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


 


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


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


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


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


 


17

















 


It is expressly
agreed that, the Borrower may, if it gives the Agent five (5) Working Days
irrevocable written notice cancel, at any time, the whole or any part of
Tranches A2 and/or A3 and/or A4.


 


4.3                              Drawdown Requests


 


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


 


4.4                              Paying the Loan


 


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


 


Bank Code: 30004


Branch Code :
02478


Account number :
00010125902


RIB Key : 13


 


Each Bank will when
requested by the Agent, credit the amount of this Participation on the correct
value date by interbank transfer to the Agent’s account. The references of this
account will be previously communicated to it by the Agent.


 


5                                        REPAYMENT


 


5.1                              Terms and Conditions of repayment


 


5.1.1                    Repayment
of Tranche A1


 


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


 


Installment of
September 15 2005: 1,060,000 Euros,


Installment of
September 15 2006: 1,060,000 Euros,


Installment of
September 15 2007: 1,060,000 Euros,


Installment of
September 15 2008: 1,060,000 Euros,


Installment of
September 15 2009: 1,060,000 Euros,


Installment of
September 15 2010: 1,060,000 Euros,


Installment of
September 15 2011: 1,040,000 Euros.


 


5.1.2                    Repayment
of Tranche A2


 


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


 


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


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


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


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


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


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


 


18

















 


5.1.3       Repayment of Tranche A3


 


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


 


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


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


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


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


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


 


5.1.4       Repayment of Tranche A4


 


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


 


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


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


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


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


 


5.2          Voluntary prepayment


 


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


 


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


 


(C)
If the Loan is refinanced by a bank other than one of the Banks by way of a
banking debt (dette bancaire) granted at the
level of the Borrower, the prepayments will result in the payment of a single
penalty, provided that such penalty may not be requested by the Banks if the
prepayment results from Clause 7.1 (E), 9.1 (D), 9.1 (E), 9.2 (B) or is
otherwise permitted hereunder. This penalty will be equal to 2% of the amount
repaid, if the repayments are made within three (3) years of the date the
Agreement is signed and 1% of the amounts repaid if the repayment occurs more
than three years after the date that the Agreement is signed.


 


(D)
Any sum, which the Borrower prepays, will be applied to reduce the outstanding
installment of Tranches A1 and/or A2 and/or A3 and/or A4, in order of
decreasing maturity, pro rata to the outstanding amount for each Tranche
compared to the total amount outstanding on the Loan.


 


5.3          Mandatory prepayment


 


The
Borrower must prepay all or part of Tranches A1 and/or A2 and/or A3 and/or A4
of the Loan in the cases and under the terms and conditions stipulated in (1)
and (2) below. It is specified that the amount of the sales of assets and the
Excess Cash-Flow will be assessed on the basis of the Borrower’s consolidated
accounts closed on June 30 of each fiscal year (“the Fiscal Year of Reference”).


 


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


 


19

















 


(1)           Excess Cash Flow:


 


On
December 15 of the fiscal year following each Fiscal Year of Reference and for
the first time on December 15 2005, on the basis of its consolidated accounts
closed on June 30 2005, the Borrower must annually repay, the sum set out
below.


 


50%
of the portion of Excess Cash Flow exceeding eight hundred thousand Euros
(800,000)

and below four million Euros (4,000,000)


 


it is specified for the avoidance of doubt that
no mandatory prepayment will be made on the amount of Excess Cash Flow
exceeding four million Euros (4,000,000).


 


(2)           Sale of assets:


 


The
Borrower must pay annually an amount equal to the proceeds of the sale of the
Borrower’s and its subsidiaries’ fixed assets, net of all tax, duties and
expenses connected to the sales, calculated on the basis of its consolidated
accounts closed on June 30 of the Fiscal Year of Reference, on December 15 of
the fiscal year following each Fiscal Year of Reference, for the first time on
December 15 2005, on the basis of its consolidated accounts closed on June 30
2005, after deduction, where applicable, of any amounts reinvested no later
than one hundred fifty (150) calendar days after the end of the Fiscal Year of
Reference (being specified that the reinvestment can only be charged against
the sale of assets from a single Fiscal Year of Reference). An allowance of two
hundred thousand Euros (200,000) per year will be applied.


 


6             INTEREST


 


6.1          Interest rate


 


The
interest rate for each of Tranches A1, A2, A3 and A4 of the Loan for any
interest period, determined under Article 6.4, is equal to the annual rate
resulting from the sum of the margin and the reference index for the said
interest period.


 


6.2          Reference Index


 


6
months EURIBOR.


 


6.3          Applicable Margin


 


The
margin applicable to Tranches A1, A2, A3 and A4, initially calculated at the
rate of two point twenty five (2,25)% per year will be revised yearly upwards
or downwards on sight of the Financial Ratios certificate referred to in
Article 13, based on the Borrower’s annual certified consolidated accounts.


 


The
margin applicable to Tranches A1, A2, A3 and A4 will be reduced as follows if
no Event of Default has occurred and is continuing and if the two conditions
concerning financial ratios below are simultaneously met.


 


20

















 




	
  Margin revised to:

  	
   

  	
  R2 below or 

  equal to:

  	
   

  	
  R3 higher or equal 

  to:

  	
   

  
	
  2% a year

  	
   

  	
  1.2

  	
   

  	
  1.3

  	
   

  
	
  1.75% a year

  	
   

  	
  1

  	
   

  	
  1.4

  	
   

  
	
  1.50% a year

  	
   

  	
  0.8

  	
   

  	
  1.5

  	
   

  






 


The
margin applicable to each of Tranches A1, A2, A3 and A4 will be revised upwards
once the above conditions relating to any one of the applicable margin level
are no longer satisfied and revised downwards again as soon as the above
conditions are again simultaneously satisfied, if no Event of Default has
occurred and is continuing.


 


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


 


The
margin will be adjusted to any relevant level depending on the fulfillment of
the corresponding ratios.


 


6.4          Interest Periods


 


(A)
Tranches A1, A2, A3 and A4 will be divided into Interest Periods to calculate
the interest.


 


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


 


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


 


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


 


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


 


(F)
Any interest Period that finishes on a day, which is not a Working Day, will be
deemed on the next Working Day.


 


6.5          Calculation Rule


 


The
interest, fees and other amounts drawn up annually, payable under the Agreement
will be calculated on the actual number of calendar days in the period in
question on the basis of three hundred and sixty (360) days.


 


21

















 


The
interest on each Loan Tranche will calculated using the following formula:


 


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


 


Formula in which:


I
= Amount of interest for the Interest Period in question,


E
= Outstanding amount for the Tranche concerned (A1 or A2 or A3 or A4),


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


 


6.6          Payment of interest


 


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


 


6.7          Notification of the interest rate


 


The
Agent will inform the Borrower and the Banks of the interest rates applicable
to each Interest Period, as soon as possible and 120 calendar days before the
end of the Interest Period at the latest.


 


6.8          Late Interest


 


(A)
If any sum whatsoever which is owed under the Agreement is not paid on its due
date, the Borrower will pay the Agent late interest calculated on the unpaid
sum from the due date concerned up until the date of actual payment (whether
this is before or after the pronouncement of a judgment) at the EONIA rate
increased by the applicable margin if the delay of payment involves interest
plus two percent (2%).


 


(B)
Any late interest will be immediately payable by the Borrower, on the Agent’s
request. If it remains unpaid the late interest will be capitalized in every
way authorized by law but will remain immediately due and payable.


 


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


 


7             CHANGES TO THE INTEREST CALCULATION


 


7.1          Market disruption


 


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


 


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


 


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


 


22

















 


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


 


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


 


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


 


(E)
If the Borrower does not agree to the replacement base set by the Bank (or each
Bank) in accordance with Paragraph 7.1 (C), the Borrower can repay all the amounts
owed to the Bank(s) under the Agreement in principal, late interest, fees,
costs and incidental expenses, provided that it gives fifteen (15) calendar
days written notice. The interest rate applicable to Tranches A1 and/or A2
and/or A3 and/or A4 during the period that the Euro zone Interbank market is
disrupted will be calculated in all cases on the basis of the replacement index
fixed by the Bank (or each Bank) as stipulated in Article 7.1 (C). This
repayment will not give rise to the payment of any penalty, including if the
Loan is refinanced by banks which are not Banks.


 


7.2          Lack of a quotation by a Bank of Reference


 


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


 


8             FEES


 


The
Borrower will pay the following fees under the Loan:


 


8.1          Agent Fee


 


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


 


8.2          Arrangement Fee


 


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


 


23

















 


8.3          Underwriting Fee


 


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


 


8.4          Commitment Fee for Tranche A2


 


The Commitment Fee for Tranche A2, calculated
at the rate of 0.50% a year on the maximum amount of Tranche A2, will be
payable quarterly in advance to the Agent from the date that the Agreement is
signed to the Drawdown Date of Tranche A2 (or up until the date that the
Borrower fully surrenders its rights to draw down the Tranche A2). The Agent
will pay each Bank its share in pro rata to its Participation.


 


8.5          Commitment Fee for Tranche A3


 


The Commitment Fee for Tranche A3, calculated
at the rate of 0.50% a year on the maximum amount of Tranche A3, will be
payable quarterly in advance to the Agent from the date that the Agreement is
signed to the Drawdown Date of Tranche A3 (or up until the date that the
Borrower fully surrenders its rights to draw down the Tranche A3). The Agent
will pay each Bank its share in pro rata to its Participation.


 


8.6          Commitment Fee for Tranche A4


 


The Commitment Fee for Tranche A4, calculated
at the rate of 0.50% a year on the maximum amount of Tranche A4, will be
payable quarterly in advance to the Agent from the date that the Agreement is
signed to the Drawdown Date of Tranche A4 (or up until the date that the
Borrower fully surrenders its rights to draw down the Tranche A4). The Agent
will pay each Bank its share in pro rata to its Participation.


 


8.7          Participation Fee


 


The
Participation Fee will be payable by the Borrower to the Arranger on the
Drawdown Date of Tranche A1. The Arranger will pay part of this fee to each
Bank, pro rata to its Participation. The amount of this fee is the subject of a
separate agreement between the Borrower and the Arranger.


 


9             SUPPLEMENTARY
PAYMENT OBLIGATIONS


 


9.1          Additional costs


 


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


 


24

















 


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


 


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


 


(C)
The Agent will immediately inform the Borrower in writing of any event which to
its knowledge, would permit the Bank(s) to benefit from the provisions of
Paragraph 9.1 (A) and will endeavor to exempt the Borrower from paying such a
Supplementary Cost, in particular by transferring the Bank’s(s’) rights and
obligations under this Agreement to one or more of its (their) branches and to
other banks which may not be affected by this event.


 


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


 


(E)
If the Borrower agrees to pay a Supplementary Cost, the Agent and the Borrower
will meet as quickly as possible to decide whether it is necessary to take this
Supplementary Cost into account when calculating the Financial ratios. If an
agreement is not reached, the Borrower can revoke on its agreement to pay the
Supplementary Cost and pay all the sums owed to the Bank(s) under the
Agreement, in principal, late interest, fee, costs and incidental expenses. No
penalty will be applied to this type of prepayment, including if the Loan is
refinanced by third party banks.


 


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


 


9.2          Illegality


 


(A)
If the Bank(s) is (are) prevented from maintaining or performing its (their)
obligations stipulated in the Agreement for all or part of the Loan, by a new
legislative or regulatory provision, the Agent will endeavor to find a solution
which is acceptable to all of the parties to continue the Loan. If an agreement
cannot be reached, the Bank(s) will endeavor to transfer the rights and
obligations under the Agreement to other Banks which are not affected by this
new provision.


 


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


 


25

















 


9.3          Costs of execution


 


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


 


10           REPRESENTATIONS AND WARRANTIES


 


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


 


(A)   The Borrower is a société par
actions simplifiée validly incorporated and registered ;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


26

















 


(I)     The Borrower and /or its Subsidiaries do not
have any off balance sheet commitments, other than these, on the Drawdown Date
of Tranche A1 concerning LABORATOIRES EUROSILICONE as appear in its certified company
accounts for the fiscal year closed on December 31 2003, as well as the
schedule referred to in Article 3.1 (8), and secondly, on the date of the close
of each fiscal year, other than those appearing in the Borrower’s certified
consolidated accounts for the said fiscal year ;


 


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


 


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


 


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


 


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


 


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


 


10.2        Subject to the information which is
expressly contained in the due diligence reports and /or in the Indemnification
Claim, relating to the Acquisition, as disclosed to the Agent, and subject to
the operations, which although making one of the above representations
incorrect may have been previously authorized by the Agent under the Agreement,
acting on behalf of the Banks, the above declarations will be deemed to be
correct until the Borrower has paid all sums owed under the loan in full, in
principal, interest, late interest, fee, costs and incidental expenses. The
Borrower shall inform the Agent of the occurrence of an event calling the
accuracy of, these representation into question, as soon as its is aware of the
occurrence of a such an event.


 


11           SECURITIES


 


11.1        Financial Instrument Account Pledge


 


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


 


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


 


11.2        ‘Key men’ insurance delegation


 


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


 


27

















 


behalf
of the Banks, to the prepayment of the Loan, which will be applied to reduce
the outstanding installments, for Tranches A1 and /or A2 and /or A3 and /or A4
in order of decreasing maturity, pro rata to the amount outstanding for each
Tranche compared to the total amount outstanding on the Loan.


 


This
delegation must be set up within a maximum of four (4) months from the date
that the Agreement is signed. If this deadline is exceeded, the margin
applicable to each Tranche will be immediately increased by 0,50% a year until
regularization, apart from the Agent’s prior agreement in writing acting on
behalf of the Banks ; this provision does not prevent Article 14 applying.


 


12           BORROWER’s
UNDERTAKINGS


 


The Borrower undertakes to perform the
following obligations throughout the term of the Agreement :


 


12.1        Commitment to securities


 


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


 


The
Borrower undertakes to make all the necessary arrangements to make the above
commitment effective.


 


12.2        Commitment to interest rate exposure hedges


 


The
Borrower undertakes to hedge against interest rate exposure within 5 months at
most following the Drawdown Date of Tranches A1, A2, A3 and A4, so that it is
protected, until September 15 2008, inclusive, against the consequences of a
rise in the 6 month EURIBOR of more than 2.50% compared to its value on the
date that the Agreement is signed, on at least 50% of the amount of each of the
said Tranches.


 


12.3        Commitment to Financial Ratios


 


The
Borrower undertakes to comply with the following Financial Ratio levels R2, R3
and R4, which are calculated on the basis of the Borrower’s consolidated
accounts certified by the Statutory Auditors on the date of the close of each
fiscal year (i.e. June 30 of each year) :


 




	
  12
  month-period 

  	
   

  	
  R2

  	
   

  	
  R3

  	
   

  	
  R4

  	
   

  
	
  ending
  on :

  	
   

  	
  Lower than :

  	
   

  	
  Higher than :

  	
   

  	
  Lower than :

  	
   

  
	
  30/06/2005
  **

  	
   

  	
  2.5

  	
   

  	
  1

  	
   

  	
  0.7

  	
   

  
	
  30/06/2006

  	
   

  	
  1.6

  	
   

  	
  1.2

  	
   

  	
  0.7

  	
   

  
	
  30/06/2007

  	
   

  	
  1.3

  	
   

  	
  1.2

  	
   

  	
  0.7

  	
   

  
	
  30/06/2008

  	
   

  	
  1

  	
   

  	
  1.2

  	
   

  	
  0.7

  	
   

  
	
  30/06/2009

  	
   

  	
  1

  	
   

  	
  1.2

  	
   

  	
  0.7

  	
   

  
	
  30/06/2010

  	
   

  	
  1

  	
   

  	
  1.2

  	
   

  	
  0.7

  	
   

  






 






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


 


28

















 


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


 


It
is expressly agreed that the costs of the Expert’s appraisal will be paid half
each by the Borrower and the Bank(s).


 


12.4        Commitment to limit investments


 


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


 


Fiscal
year closed on June 30 2005 : 1,100,000 Euros,


Fiscal
year closed on June 30 2006 : 1,100,000 Euros,


Fiscal
year closed on June 30 2007 : 1,100,000 Euros,


Fiscal
year closed on June 30 2008 : 1,100,000 Euros,


Fiscal
year closed on June 30 2009 : 1,100,000 Euros,


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


 


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


 


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


 


12.5        Commitment to limit indebtedness


 


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


 


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


 


29

















 


12.6        Miscellaneous commitments


 


The
Borrower undertakes, during the term of the Agreement :


 


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


 


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


 


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


 


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


 


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


 


6.      To pay all of the taxes due on the correct
date, unless the Borrower and /or the Subsidiaries disputes these sums in good
faith, and in this last case provided the Agent is provided with reasonable
information relating to the said dispute, on behalf of the Banks ;


 


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


 


8.      To ensure that its dividend policy regarding
its Subsidiaries is consistent with the constraints on repayment of the Loan
and the payment of the interest relating to it, and to give priority to any
distribution of dividends to the repayment of the Loan and payment of the
associated interests ;


 


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


 


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


 


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


 


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


 


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


 


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


 


30

















 


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


 


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


 


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


 


17.    No later than 30 calendar days
following the date that the Agreement is signed, to provide the Agent with a
copy of the minutes of the Extraordinary General Meeting of Shareholders of the
Borrower, at which a cash capital increase of a minimum amount of 6,400,000
Euros was approved and
exclusively done by MEDICOR Ltd. or one of its Subsidiary and a documentation
certifying that the aforesaid capital has been subscribed and paid in full,
provided that if the capital increase has been made through by one of MEDICOR
Ltd.’s Subsidiaries, to provide the Agent with a certified copy of the statuts of the aforementioned Subsidiary, a “certificat d’immatriculation” and the list of the
shareholders showing that MEDICOR Ltd. owns directly or indirectly 100% of the
capital and voting rights of the Subsidiary;


 


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


 


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


 


13           INFORMATION
OBLIGATIONS


 


13.1        The Borrower undertakes to perform the following information obligations
throughout the term of the Agreement :


 


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


 


(i) its consolidated audited accounts certified by the Statutory
Auditors five (5) months at the latest after the close of each fiscal year,


 


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


 


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


 


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


 


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


 


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


 


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


 


31

















 


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


 


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


 


The
Agent and the Banks will be bound to respect the confidentiality of the
information disclosed by the Borrower. If the Banks need to be provided with
part or all of the information disclosed, the Agent will ensure, within the
scope of its duty of information to the Banks, that the Banks will, as far as
they are concerned, respect its confidentiality.


 


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


 


14           EVENT
OF DEFAULT


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


32

















 


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


 


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


 


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


 


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


 


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


 


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


 


(M) Any change to the Financial Instruments Account
Pledge, resulting from the reorganization of LABORATOIRES EUROSILICONE, without
the prior written agreement of the Agent acting on behalf of the Banks, with
the effect of transferring all of LABORATOIRES EUROSILICONE’s own resources in
particular in terms of sales forces, of support functions, to a third company,
and thereby compromises LABORATOIRES EUROSILICONE’s ability to conduct its
business independently;


 


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


 


(O)  Any insolvency proceedings (procédure collective)
against the Borrower or anyone of
its Subsidiaries, subject however, to the powers which the law expressly attributes
by law to the official receiver or to the representative;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


33

















 


from the above mentioned notification, to
decide on the possible methods for remedying the Event of Default and to
continue the Loan.


 


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


 


15           RULES
FOR THE PARTICIPATION OF THE BANKS


 


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


 


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


 


15.3        Any information which the Borrower informs the Agent of, will be deemed
to be made to each of the Banks, under the responsibility of the Agent towards
the Borrower.


 


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


 


16           THE
BANKS’ DECLARATIONS AND COMMITMENTS


 


16.1        Each Bank declares that its decision to participate in the Agreement was
taken on the basis of its own appraisal, and that in taking this decision, it
has not based itself on the declarations or information supplied by the Agent
or by the Arranger, or by any Bank, in particular on the validity of the
financing schema or the Borrower’s financial position.


 


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


 


17           AGENT’S
ROLE AND POWERS


 


17.1        Each Bank appoints the Agent as its representative in order to
regularize the Securities and to execute the legal instruments and materials which
are expressly entrusted to it under the terms of the Agreement and the other
Contractual Documents, in its name and on its behalf. The Banks therefore give
the Agent authority to conserve all of the original instruments and documents
relating to all of the Securities. The Agent is therefore a sequestrator
depository which it expressly accepts.


 


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


 


34

















 


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


 


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


 


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


 


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


 


(A) of all of the Banks for the following
decisions :


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(B) of the Majority of the Banks for all other
decisions by the Banks, and in particular any authorization given to the
Borrower to temporarily waive respecting the Financial ratios or the method of
calculating the Financial Ratios.


 


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


 


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


 


17.5        Apart from gross negligence or fraud, neither the Agent nor the Arranger
will be liable to the other Banks for the inaccuracy of the Borrower’s
declarations, contained in the Agreement, nor the Contractual Documents, nor
for the Borrower’s or its Subsidiaries’ performance of the provisions of the
Agreement or the Contractual Documents. The Agent or the Arranger will also not
be liable to the Borrower for the non performance by the other Banks of their
obligations under this Agreement. It is expressly agreed that the failure by
the Agent or the Arranger to reply within the deadlines stipulated in Article
1.2 Paragraph (C) to any request for agreement, authorization or approval of
the Banks under the Agreement made by the Borrower, can constitute gross
negligence.


 


17.6        The Agent will communicate all notifications received by the Borrower in
performance of the Agreement to the Banks as quickly as possible (other than
purely administrative) and will also communicate any decision taken by the
Majority of the Banks as quickly as possible.


 


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


 


17.8        If the Borrower does not reimburse the Agent all its costs incurred
under this Agreement, including the fees and costs of its counsel, the Banks
will reimburse the Agent 


 


35

















 


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


 


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


 


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


 


17.11     The cessation of the functions of the resigning the Agent will only be
effective after the Agent has received the written acceptance of the designated
successor, which the Agent will inform the Borrower and the Banks of.


 


18           REPLACEMENT
OF THE BORROWER


 


The
Borrower cannot assign its rights or delegate its obligations under the
Agreement to a third party nor replace itself with a third party to perform its
obligations under this Agreement.


 


19           SUBSTITUTION
OF THE BANKS


 


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


 


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


 


19.3        Each Bank is therefore free to conclude
securitization contracts throughout the term of the Agreement.


 


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


 


20           MISCELLANEOUS


 


20.1        Terms of payment


 


All
the payments owed by the Borrower under this Agreement will be debited by the
Agent, which the Borrower expressly accepts on the due date of value for funds
immediately available on the Borrower’s account opened in the books of BNP
PARIBAS under the following references :


 


36

















 


Bank Code: 30004


Branch Code : 02478


Account
number : 00010125902


RIB
Key : 13


 


The
Agent will pay each Bank on the right value date any amount received from the
Borrower and which is owed to the Bank pro rata to its Participation with
respect to repaying the principal as well as the payment of interests, interest
on arrears, commissions, costs and incidental expenses.


 


20.2        Attributing payments


 


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


 


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


 


(B)
secondly, to late interest ,


 


(C)
thirdly, to interest,


 


(D)
fourthly, to the principal.


 


20.3        No setoff


 


The
Borrower is expressly prohibited from making any setoff between its debts which
are payable under the Agreement and any receivable which it may hold against
the Financial Parties.


 


20.4        Currency


 


All
payments made by the Borrower will be made in Euros.


 


20.5        Annualized percentage rate


 


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


 


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


 


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


 


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


 


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


 


•
5,43 % per year, for Tranche A4, on the basis of a 6-month EURIBOR 2,21 % per
year in force on September 9, 2004, the period rate on a semestrial basis
working out at 2,71 %.


 


37

















 


20.6        Working Days


 


If
a payment has to be made on a day which is not a Working Day, the payment in
question must be made on the next Working Day.


 


20.7        Waiver of recourse


 


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


 


20.8        Notifications


 


(A)
All the notifications concerning this Agreement must be made by fax and will
take effect from receipt of transmission of the fax apart from notification of
an Event of Default or of any agreement authorization or approval request from
the Bank(s) as referred to in Article 1.2 (C) which must be sent by recorded
delivery mail with notification of receipt.


 


(B)
The notifications which are made under this Agreement must be sent to the
parties as follows :


 


	
  Borrower :

  	
   

  	
  ES
  HOLDINGS S.A.S.

  
	
   

  	
   

  	
  112,
  avenue Kléber

  
	
   

  	
   

  	
  75116
  Paris

  
	
   

  	
   

  	
  For
  the attention of : Mr. Thomas MOYES and Mr. Jean-Claude VECCHIATTO

  
	
   

  	
   

  	
  Fax :
  01.44.05.52.00

  
	
   

  	
   

  	
   

  
	
  Agent :

  	
   

  	
  BNP PARIBAS

  
	
   

  	
   

  	
  Z 02478A

  
	
   

  	
   

  	
  Centre
  d’Affaires Entreprises Méditerranée

  
	
   

  	
   

  	
  5, boulevard de
  Dunkerque

  
	
   

  	
   

  	
  Cap Joliette

  
	
   

  	
   

  	
  13002
  Marseille

  
	
   

  	
   

  	
  For
  the attention of : Mr. Dominique BOUYX

  
	
   

  	
   

  	
  Fax :
  04 95 09 43 29

  
	
   

  	
   

  	
  For
  the current operations

  
	
   

  	
   

  	
   

  
	
  Arranger :

  	
   

  	
  BNP PARIBAS -
  BDDF Financements Structurés

  
	
   

  	
   

  	
  CLD 08B1

  
	
   

  	
   

  	
  9, boulevard
  des Italiens

  
	
   

  	
   

  	
  75450 Paris
  Cedex 09

  
	
   

  	
   

  	
  Fax :
  01.55.77.64.80

  
	
   

  	
   

  	
  For
  any question concerning the construction of this document

  



 


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


 


38

















 


20.9        Instruments - Languages


 


This
Agreement sets forth the entire agreement between the parties hereto with
respect to the Loan. It replaces any previous instrument, including the term
sheet signed on July 30 2004. A French version of the Agreement has been
prepared, but is not binding. This French version shall not be used in
interpreting this Agreement in case of litigation ; it may be used for the
information of the banks during the syndication process, with the agreement of
the Borrower.


 


21           GOVERNING
LAW


 


This
Agreement is governed by French law.


 


22           JURISDICTION


 


Any
dispute concerning the construction or the performance of the Agreement will be
for the exclusive competence of the Paris Commercial Court.


 


	
   

  	
   

  	
  Signed
  at Paris, September 10, 2004

  
	
   

  	
   

  	
  In
  two (2) original copies.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BNP
  PARIBAS

  	
   

  	
  ES
  HOLDINGS S.A.S.

  
	
  Centre
  d’Affaires Méditerranée Entreprises

  	
   

  	
  In
  the capacity of the Borrower,

  
	
  In
  the capacity of Bank and Agent,

  	
   

  	
  Represented
  by :

  
	
  Represented
  by :

  	
   

  	
  Mr.
  Theodore MALONEY

  
	
  Ms.
  Valérie BENQUET

  	
   

  	
  and
  Mr. Thomas MOYES

  
	
  and
  Mr. Bertrand MONTFORT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BNP PARIBAS

  	
   

  	
   

  
	
  BDDF - Financements
  Structurés

  	
   

  	
   

  
	
  In
  the capacity of Arranger,

  	
   

  	
   

  
	
  Represented
  by :

  	
   

  	
   

  
	
  Ms.
  Géraldine SALOMON

  	
   

  	
   

  



 


39