Exhibit
10.1


*** Confidential
Treatment Requested


AMENDED AND RESTATED
NON-EXCLUSIVE DISTRIBUTION AGREEMENT


This AMENDED AND RESTATED
NON-EXCLUSIVE DISTRIBUTION AGREEMENT (the “Agreement”) is made as of the
30th day of
March 2004, by and between Poly Implants Protheses, S.A., a French corporation
(“Supplier”) and III Acquisition Corp., a Delaware corporation and/or its
wholly owned subsidiaries (“Distributor”).


RECITALS


WHEREAS the Supplier is the manufacturer of smooth
and textured breast implant products (the “Breast Implants”) which Supplier
desires to have distributed throughout North America, including the United
States of America and Canada, and any territories of the United States of
America and Canada (the “Territory”);


WHEREAS the Distributor desires to distribute the
Breast Implants, along with any other products manufactured or sold by the
Supplier (collectively, the “Products”) in the Territory on a non-exclusive
basis;


WHEREAS Supplier and Distributor have previously
entered into a Non-Exclusive Distribution Agreement dated as of October
27, 1999 (the “Original Agreement”) in which Supplier granted Distributor the
non-exclusive right to distribute the Products in the Territory; and


WHEREAS Supplier and Distributor desire in this
Agreement to amend and restate the Original Agreement in its entirety to set
forth in full the agreements and understandings of the parties with respect to
the distribution of the Products in the Territory and certain related matters,
including the filing, prosecution and ownership of the Pre-Market
Approval (“PMA”) application currently in preparation for Supplier’s pre-filled
saline Breast Implant products, which the parties anticipate will be submitted
to the United States Department of Health and Human Resources, Food and Drug
Administration (the “FDA”) no later than 2005.


NOW,
THEREFORE, in
consideration of the premises and of the mutual covenants set forth below, the
parties hereto agree as follows:


1.             Distribution
Rights.  Supplier hereby grants to Distributor a
non-exclusive right and license to distribute the Products for sale throughout
the Territory during the term of this Agreement.  Supplier agrees that if the other
non-exclusive distributor of the products, PIP/USA, Inc., breaches its
agreement with Supplier or PIP/USA, Inc.’s agreement is cancelled or terminated
for any reason, Supplier will not execute any other non-exclusive distribution
agreement with any other party and this Agreement shall become exclusive with
respect to distribution of the Products in the Territory.  Distributor has only distribution rights
under this Agreement.  At no time while
this Agreement is in effect will Distributor, directly or indirectly (through
other companies, agents, subsidiaries or otherwise), manufacture equivalent
breast implants that conform with the PMA contemplated in this Agreement.  At no time while this



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Agreement is in effect will Supplier, directly or
indirectly (through other customers, agents, subsidiaries or otherwise), with
the exception of the non-exclusive distribution agreement already in place
between Supplier and PIP/USA, Inc.:


(a)           sell
the Products in the Territory; or


(b)           sell
the Products to any person or entity with reasonable basis to believe that such
person or entity, or someone acting on their behalf, will resell the Products
into the Territory; or


(c)           appoint
or license any other person or entity as a distributor or representative of the
Products without specifically prohibiting such person or entity, in writing,
from selling or reselling the Products into the Territory; or


(d)           sell
any components and/or parts for the Products that may be used in manufacturing
the Products for any person or entity in the Territory other than the
Distributor.


2.             Terms and Renewal.  This
Agreement and the rights granted Distributor hereunder shall be for an initial
term of ten (10) years, beginning on the date first written above.  Thereafter, the Distributor shall have the
option of renewing this Agreement on the same terms and conditions for three
(3) additional five (5) year terms, provided Distributor is not in default of
any provisions of this Agreement at the date of renewal, which renewal shall be
automatic unless the Distributor notifies Supplier of Distributor’s intent not
to renew at least sixty (60) days prior to the renewal date.


3.             Orders and Shipping.


(a)           Order Placement and Allocation.  Distributor shall place all orders for the
Products with Supplier in writing on a weekly basis (the “Purchase Orders”).  Supplier shall use commercially reasonable
efforts to ship the Products on the Purchase Orders to Distributor within
thirty (30) days of the date of the Purchase Order.  Distributor shall provide to Supplier monthly
an estimate of Products to be required for the following three months.  In the event an order (prorated from a weekly
basis to a monthly basis) is in excess of 20% above the budgeted order amount,
then Supplier shall not be required to fulfill such excess above 20% within
such 30-day period but shall use commercially reasonable efforts to ship
the excess Products as soon as practicable.


(b)           Title and Risk of Loss.  All Products shall be shipped C.I.F. to the
Distributor at such location designated by Distributor or such other location
as Distributor may notify Supplier of from time to time.  Supplier shall pay all costs associated with
shipping the Products to Distributor, including, without limitation, freight
costs, license fees and taxes. 
Distributor shall pay any applicable customs duties and United States
freight handling charges.



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(c)           Incorrect or Erroneous Shipment.  In the event the Products shipped to
Distributor do not conform to the Purchase Order, Supplier shall correct any
such errors at no cost to Distributor within ten (10) days written notice by
Distributor of such error.


(d)           Late Shipments.  In the event that Supplier has not shipped
Products under the Purchase Order within forty five (45) days of the date of
the Purchase Order (a “Late Shipment”), Supplier agrees to allow Distributor to
take a discount equal to ten percent (10%) per month (prorated for parts of
months) that the Product in such Purchase Order remains unshipped.


(e)           Minimum Purchases.  The minimum number of Breast Implant units to
be purchased by Distributor from Supplier in each calendar year of this
Agreement following Clearance (as defined in Section 4(c) below) shall, unless
otherwise agreed by the parties in writing, be the figure set forth opposite
each year of this Agreement set forth below, with Year 1 being the year in
which Clearance occurs and with the amounts in Year 1 being prorated based on
the number of days in such year following the date of Clearance:




	
  Year 1

  	
   

  	
  * * *

  
	
  Year 2

  	
   

  	
  * * *

  
	
  Year 3

  	
   

  	
  * * *

  
	
  Year 4

  	
   

  	
  * * *

  
	
  Year 5 and after

  	
   

  	
  * * *

  






 


In the event silicone filled Breast Implants shall hereafter be
approved or cleared for marketing in the United States, the amounts set forth
above for each year of this Agreement (or part thereof on a prorated basis)
shall be reduced to a number equal to * * *% of the number for such year set
forth above (or such actual lesser percentage amount as shall equal the actual
percentage of the total United States Breast Implant market captured by saline
filled Breast Implants).


4.             Pricing and Payment Terms.


(a)           Price.  Distributor shall pay $* * * per saline
Breast Implant unit.  In the event of
unforseen market forces, including predatory pricing by competitors and/or
substantial increases in raw material costs, the parties shall engage in good
faith efforts to renegotiate the price of the saline Breast Implants.  Any agreed price increase will only be
effective after a ninety (90) day written notice by Supplier to
Distributor.  The price and terms for any
Products other than the saline Breast Implants shall be as mutually agreed upon
by the parties hereto.  Subject to the
terms of this Agreement, Distributor shall pay a minimum price of $* * * per
saline Breast Implant unit.  If the
weighted average of the net sales price of saline Breast Implant Products sold
by Distributor exceeds $* * * per saline Breast Implant unit during any
calendar quarter (the amount of such excess, the “Excess Amount”), then
Distributor shall pay within 45 days of the end of such quarter to Supplier as
additional purchase price for each unit sold during such quarter an amount equal
to the product of (1) * * * and (2) the Excess Amount.  The foregoing calculation shall be made by
Distributor after the end of each calendar quarter beginning with the



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first full calendar quarter commencing after Clearance
(as defined in Section 4(c) below). 
Example:


Weighted Average Resale price $* * *            Purchase
price $* * *


Weighted Average Resale price $* * *            Purchase
price per unit sold in quarter $* * * + $* * * 
= $* * *, with additional payment due of $* * * x n,
where n equals the number of units sold in the
quarter


(b)           Terms for Payment.  Distributor agrees to pay invoices as shipped
and billed by Supplier within Forty Five (45) after delivery, less any
discounts for Late Shipments as described in Section 3(d) above.  If Distributor fails to make payment under
this Section 4(b) within the time specified, Supplier may during the time such
payments remain unpaid cease making shipments to Distributor under Section 3.


(c)           Additional Payment Agreements. 
Following the date an amount equal to the Offset Amount (as calculated
under Section 4(d) below) has been accrued under this Section 4(c), Distributor
agrees to pay to Supplier the following sums to the extent the cumulative sums
calculated hereunder exceed the Offset Amount, such payments to be calculated
and paid on a calendar quarterly basis within 45 days of the end of each
quarter (the first such period ending at the end of the first complete calendar
quarter following the date of Clearance (as defined below), with Distributor
preparing an annual reconciliation (to account for product returns,
replacements, discounts, etc.) and any adjustments not implemented in prior
quarters being implemented in the fourth quarter payment.  Commencing with FDA approval of the PMA and
clearance (including customs and labeling clearance) to market the pre-filled
saline Breast Implant Products in the United States (the date of such
clearance, “Clearance”), Distributor shall pay to Supplier for Product
purchased and accepted for sale in the United States an amount equal to the
following percentages of Distributor’s Product profit (surgeon selling price
less (i) landed cost of Product to Distributor and (ii) any shipping and
handling costs paid by Distributor):




	
  Year 1

  	
   

  	
  * * *%

  
	
  Year 2

  	
   

  	
  * * *%

  
	
  Year 3

  	
   

  	
  * * *%

  
	
  Year 4

  	
   

  	
  * * *%

  
	
  Year 5

  	
   

  	
  * * *%

  






 


The years set forth above will commence with the first sale of Product
following Clearance and the first year will be the first consecutive 12-month
period beginning with the month in which Clearance occurs.  Distributor shall retain any amount otherwise
payable under this Section 4(c) that equals the Offset Amount.


(d)           Offset Amount.  Notwithstanding anything to the contrary
contained in Section 4(c), Distributor shall not be obligated to pay to
Supplier any sums calculated under Section 4(c) above until such time that the
cumulative amounts calculated under Section 4(c) exceed US$* * * (the “Offset
Amount”).  After such time, Distributor
shall have no obligation to 



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Supplier with respect to the Offset Amount and its
sole obligation under Section 4(c) will be to pay the future amounts in excess
of the Offset Amount as calculated under Section 4(c).


(e)           Product Warranty Claims/Promissory
Note.  As of February 29, 2004,
Supplier had certain obligations to patients and doctors in respect of claims
related to products sold by PIP/USA, Inc. and Distributor (“Existing Claims”).  Distributor will undertake to administer and
pay up to US$1,657,675 of such Existing Claim amounts, with Distributor
consulting with Supplier prior to paying any such Existing Claim amounts.  If Distributor determines in its sole
discretion that payment of any Existing Claim amount is necessary or advisable
to (1) prosecute or maintain the PMA, (2) settle any presently existing
litigation or any related or similar case, (3) avoid any adverse regulatory
action, or (4) continue to market Products in any geographical market, then
Distributor may without consent of Supplier pay any such Existing Claim
amount.  If with respect to any Existing
Claim amount Distributor does not make the determination set forth in the
immediately preceding sentence, then Distributor will consult with Supplier in
the administration of such Existing Claim. 
Unless Supplier (i) engages counsel reasonably acceptable to Distributor
to consult on such Existing Claim administration and (ii) separately
indemnifies Distributor from and against any loss, claim or liability related
to such Existing Claim in a manner reasonably acceptable to Distributor,
Distributor may pay such Existing Claim amount. 
If Supplier engages counsel and provides the indemnity as set forth in
the immediately preceding sentence in respect of an Existing Claim covered by
such sentence, then Distributor will not pay the respective Existing Claim
amount without Supplier’s consent, which consent will not unreasonably be
withheld.  In consideration of the
foregoing undertaking by Distributor, Supplier will issue to Distributor a
revolving promissory note (the “Note”) in the initial nominal principal amount
of US$1,657,675 (and an actual principal amount equal to the Existing Claim
amounts paid by Distributor), with interest on the principal amount at a rate
per annum equal to 6.75%.  The principal
amount payable under the Note shall be increased by any additional amounts paid
by Distributor on Supplier’s or PIP/USA, Inc.’s behalf with respect to products
sold by Supplier, PIP/USA, Inc. or Distributor in the Territory that are not in
respect of Existing Claims.


(f)            Limitations on Obligations in the
Event of No Clearance.  In the event
the FDA does not approve the PMA and grant marketing clearance to Distributor
for the pre-filled saline Breast Implant as a result of the action or
inaction of Supplier, including Supplier’s failure to meet FDA GMP requirements
or provide adequate pre-clinical data and other information, then the
amount owed under Section 4(e) above shall equal US$* * *, plus the principal
amount of the Note, and such amount shall be immediately due and payable.  In the event the FDA does not approve the PMA
and grant marketing clearance to Distributor for the pre-filled saline
Breast Implant as a result of the action or inaction of Distributor, but
excluding Supplier’s failure to provide any necessary modules, information,
assistance or access, then the amount owed under the Note referred to in
Section 4(e) above shall be immediately due and payable.


(g)           Right to Inspect.  From time to time during the term of this
Agreement, Supplier and its representatives shall have the right to inspect and
make copies of the books and



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records of Distributor relating to sales of Products
for the purpose of confirming Distributor’s compliance with the terms of this
Agreement.  Such inspection may occur not
more frequently than once in any three consecutive month period and shall be
during ordinary business hours at Distributor’s place of business upon not less
than three business days advance notice. 
Supplier shall bear all of the costs of such inspection unless it is
determined that Distributor has underpaid Supplier by an amount equal to five
percent (5%) or more of the amounts paid during the period covered by the
inspection, in which case Distributor shall reimburse Supplier for all of such
costs.


5.             Marketing Assistance. 
Supplier will provide Distributor with marketing assistance as requested
by Distributor at no cost to Distributor, including but not limited to,
provision of samples, “sizers” and up-to-date brochures for the
Products in languages appropriate to the Territory.  Symposia costs from the date hereof shall be
the responsibility of the Distributor. 
Any other promotional materials, promotional assistance and related
issues shall be determined by the mutual, written agreement of the parties.


6.             The Products.


(a)           Definition.  As used in this Agreement, the terms “Products”
includes not only the products of the Supplier in existence as of the date
hereof or licensed to Supplier by any third party, but any and all products of
the Supplier in existence or licensed to Supplier by any third party at any
time while this Agreement is in effect, including all upgrades, changes,
amendments, improvements and modifications thereto, as well as, any parts and
components necessary for the repair and replacement thereof.


(b)           Packaging.  Supplier shall adequately label, package and
deliver the Products in accordance with all applicable regulations, including
applicable regulations in the Territory, using references to and trademarks of
the Supplier, and Supplier shall bear all costs associated with packaging of
the Products except that Distributor shall bear all costs associated with
printing of labels and package inserts for the Products to be sold in the
Territory.


(c)           Defective Products.  Supplier shall accept the return of any
Products that Distributor’s Quality Assurance and/or Regulatory departments
find unacceptable (“Rejected Products”) and upon return of such Rejected
Products, shall provide Distributor with new Products at no cost.


(d)           Replacement Program.  Supplier agrees to credit Distributor as
follows for payments made to and replacement product sent to surgeons (the “Replacement
Product”) under a product warranty program. 
The Supplier agrees to the following reimbursement to the Distributor
for saline Breast Implants:


                              (i)            If
a saline Breast Implant deflates within five (5) years of the date of
implantation, the Distributor shall receive a credit of * * * Dollars (US$* *
*) and two replacement implants at * * *.



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                              (ii)           If a saline Breast
Implant deflates at any time between five (5) and ten (10) years following the
date of implantation, the Distributor shall receive a credit for * * *
replacement implants at * * *.


                              (iii)          If a saline Breast Implant deflates at
any time after ten (10) years from the date of implantation, the Distributor
shall receive a credit for one replacement implant at * * *.


(e)           Replacement Procedure.  Supplier agrees that Distributor, in its sole
discretion, may send Replacement Product and payments to surgeons to cover
re-implantation (the “Re-Implantation Fees”) and, upon written notice by
Distributor describing the original product, the Replacement Product and the
Re-Implantation Fees, Supplier agrees to credit the Distributor for One Hundred
Percent (100%) of the cost of * * * Replacement Products and the
Re-Implantation Fee of * * * Dollars (US$* * *).


(f)            Representations, Warranties and
Covenants.  Supplier represents,
warrants and covenants that:


                              (i)        Supplier
has the right, title and interest in and to the distribution of the Products
necessary to enter into and perform its obligations to Distributor hereunder;
and


                              (ii)       The
Products operate and perform as intended; and


                              (iii)      Supplier
has complied with all applicable laws and regulations with respect to the
Products, including, without limitation, FDA approval and compliance; and


                              (iv)      Subject
to Sections 7 and 8 below, during the term of this Agreement Supplier will be
solely responsible for, and have a continuing obligation to obtain and
maintain, all necessary non-Territory government and regulatory approvals
and compliance with respect to the Products, including ISO certification, and
all necessary GMP certification relating to the Territory; and


                              (v)       Supplier
will be responsible for funding for all of its non-PMA application costs,
including (A) Supplier’s United States litigation and settlement costs
(including indemnity responsibilities), (B) United States warranty and
deflation costs and (C) other product liability claims arising from Supplier’s
Breast Implants sold in the United States; and


                              (vi)      Supplier
will immediately pay all accrued sums presently owed * * * and terminate the
current contract with * * * and release him from any conflict of interest in
working with Distributor through delivering to * * * any letter reasonably
requested by him; and


                              (vii)     Supplier
will immediately pay all accrued sums presently owed * * * and terminate its
relationship with * * * and release * * * from any conflict of interest in
working with Distributor through delivering to * * * any letter reasonably
requested by * * * ; and



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                              (viii)    Except as provided in
Section 7 below with respect to the PMA and future PMA-related (and other
Territory regulatory approval) costs, Supplier will remain responsible for its
operations and related financial obligations, including PIP/USA, Inc. deflation
costs and indemnification costs and its other obligations under this Agreement.


(g)           Indemnification.  Supplier agrees to hold Distributor harmless
and indemnify, reimburse and defend Distributor, upon request, at Supplier’s
cost, with mutually acceptable counsel, from any proceeding related to any
claim asserted against Distributor or its customers with respect to the
Products (including without limitation, Product liability claims) or with
respect to any previous agreements that the Supplier may have had with any
other party regarding the distribution in the Territory of the Products or
which otherwise arises out of Supplier’s relationship with Distributor
(including without limitation any action arising out of the failure of Supplier
to comply with any government or regulatory requirements) and shall pay
Distributor for all amounts owed by Distributor to third persons and expenses
incurred by Distributor in connection with any such claim or suit.


7.             Regulatory Responsibilities.


(a)           From and after the date hereof,
Distributor shall assume (subject to Section 6(f) and Section 7(b)) at
Distributor’s expense all responsibilities for the PMA application and program,
and for other similar Territory regulatory approvals, for the pre-filled
saline Breast Implant.  Additionally,
Distributor shall assume general management responsibilities for the explant
investigation program.


(b)           Supplier agrees to conduct at its
expense any additional or revised pre-clinical testing required for the
PMA application.  Supplier will be
responsible for mechanical or other testing to be performed at Supplier’s
location and all manufacturing, process and production record, report and
compliance preparation and maintenance. 
Supplier agrees immediately after the date hereof to provide access to
Distributor to all records (including all past PMA-related records and all past
and future manufacturing, process and production records), data, information,
reports, clinical programs and consultants requested by Distributor to complete
the PMA submission and subsequent FDA requests and to provide at its own
expense all additional assistance requested by Distributor in connection with
the PMA application, other regulatory applications in the Territory and future
management and maintenance of marketing clearances in the Territory.  Supplier shall notify Distributor immediately
should Supplier become aware of any defect or condition which may render any of
the Products in violation of the United States Food, Drug and Cosmetic Act, FDA
regulations, other Territory regulations or which in any way alters the
specification and quality of the Products.


(c)           For the purpose of maximizing the
likelihood of FDA GMP approval and clearance, Supplier agrees to allow an
inspector of Distributor’s selection to inspect Supplier’s facilities,
processes, operations and records prior to the FDA’s GMP inspection of Supplier’s
facilities.  Supplier further agrees
promptly to implement the recommendations the inspector reasonably makes as
necessary or appropriate for the purpose of obtaining FDA GMP approval



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and clearance. 
In addition, Supplier agrees to permit one or more representatives of
Distributor or other experts to participate directly in cooperation with
Supplier in the preparation of PMA application modules.


(d)           All Territory regulatory approvals
(including the PMA application) shall be applied for, issued and registered in
Distributor’s name.  Commencing
immediately, the ownership of the PMA application (and related applications and
PMA application work in process) for Supplier’s pre-filled saline breast
implant will be transferred to Distributor. 
For avoidance of doubt, Distributor will own in its own name the PMA and
related marketing clearance once issued.


8.             Quality Assurance Responsibilities. 
Supplier agrees that, in order to expedite the acceptance of Products by
Distributor’s Quality Assurance and/or Regulatory departments, that Distributor
will, at Supplier’s expense, implement Quality Assurance and/or Regulatory
programs and/or personnel into the Supplier’s manufacturing facilities.  Supplier grants Distributor the right to
conduct Quality Assurance and/or Regulatory audits (based on Distributor’s
Quality Assurance standards, which at all times shall incorporate applicable
FDA and GMP requirements) using Distributor’s personnel, Supplier’s personnel
and/or independent consultants on a quarterly basis or more frequent spot
basis.  Supplier agrees that Supplier
will cure any curable deficiencies within ten (10) days of written notice by
Distributor of any such Quality Assurance and/or Regulatory audits and commence
curing all other curable deficiencies that are curable but not reasonably
subject of cure within 10 days.  Supplier
agrees to credit Distributor’s account in the amount of Five Thousand Dollars
(US$5,000.00) per day for every calendar day that any deficiencies remain
uncured following the ten (10) day written notice period described above.  Similarly, following Clearance Distributor
agrees to credit Supplier’s account in the amount of Five Thousand Dollars
(US$5,000.00) per day for every calendar day that any deficiencies imposed by
the FDA on Distributor and relating to Distributor’s obligations under this
Agreement remain uncured following the 10-day period commencing on the
later of the date of Distributor’s receipt of notice thereof from the FDA or
the date imposed by the FDA for cure or compliance.


9.             Distributor’s Representations and Warranties.


(a)           Product Warranties of Supplier.  Distributor acknowledges that Supplier has
the exclusive right to determine the product guarantees and warranties to be
provided on each of its products, with the exception of the Replacement Program
and other specific and implied warranties contained herein.


(b)           Conduct of Distributor and its
Representatives.  Distributor agrees
not to make any commitments either orally or in writing with respect to
Supplier or on Supplier’s behalf unless such commitment is specifically
authorized hereunder or Supplier specifically authorizes Distributor in writing
make such commitment.  Distributor agrees
not to make any representations outside the agreed Territory specified in this
Agreement or subsequently agreed to in writing by the parties hereto.  Any leads or contacts outside the Territory
generated through the



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efforts of the Distributor will be promptly forwarded
to the Supplier.  Distributor further
agrees to conduct all representations in a positive and professional manner.


(c)           Regulatory Approvals.  Subject to Sections 6(f), 7 and 8 above, from
and after the date hereof, during the term of this Agreement Distributor will
be solely responsible for, and have a continuing obligation to obtain and
maintain, all necessary Territory government and regulatory approvals and
compliance with respect to the Products, including prosecution of the PMA
application for pre-filled saline implants, related clinical studies, and
reporting and monitoring of implant recipients. 
Subject to Sections 6(f), 7 and 8 above, Distributor will pay all future
costs of prosecuting the PMA application with the FDA.


(d)           Costs.  Distributor will be responsible for its own
non-indemnified litigation costs, its distributor warranty obligations
and its other obligations under this Agreement.


10.          Operational Commitments. 
Distributor agrees to the following:


(a)           Rotation of Stock.  Distributor shall rotate its stock of saline
breast implants on a first-in/first-out basis of shelf life based
on the time of receipt from Supplier. 
For any given size, the oldest saline breast implants in Distributor’s
stock will be dispatched first and the most recently received saline breast
implants in any size will be sold last.


(b)           Controlled Conditions of Saline
Breast Implant Storage.  Distributor
agrees to store the Products within a restricted access storage area that is
secure, clean (with a documented regular cleaning program in force),
infestation fee, temperature controlled and organized according to established
Quality Assurance and/or Regulatory requirements.


(c)           Maintenance of Quarantine Area.  Distributor shall maintain a clearly
segregated and marked out quarantine area which is labeled as such and which is
maintained with Distributor’s Quality Assurance and/or Regulatory policies,
including a quarantine log book.


(d)           Complaint Procedure.  All complaints shall be handled by Distributor’s
established complaint procedure and the details of each complaint shall be
forwarded by fax to Supplier on a regular basis.


(e)           Returned Products.  All returned Products shall be handled by
Distributor’s established return procedure and the details of each return shall
be documented.


(f)            Implant Tracking and Product
Recalls.  All Products sold by
Distributor shall have Lot Number and Serial Number records as established by
Distributor’s Regulatory and/or Quality Assurance departments and Distributor
shall maintain these records so that each and every Product, up to and
including when the Product is used or implanted, can be tracked in accordance
with the USFDA tracking requirements then in effect.


(g)           Medical Device Reports (“MDRs”).  Any adverse effect reported by a patient,
whether critical or chronic, which may be associated with a potential Product
malfunction



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shall be immediately reported by Distributor according
to the FDA MDR requirements then in effect.


(h)           Monitoring Implant Clinical Studies.  From and after the date hereof, Supplier will
provide non-financial cooperation to Distributor in the clinical studies
of Supplier’s saline breast implants, including providing non-financial
cooperation to Distributor in collecting information and documentation from
participating surgeons and communicating any problems with the clinical studies
to Distributor.


(i)            Product Warranty Procedure.  Distributor agrees to return to the Supplier
(after suitable liquid sterilization), in compliance with FDA requirements not
later than the first Tuesday of the month following each calendar month, all
breast implants returned to Distributor in such month that are subject to a
warranty claim.  Each returned implant
will be accompanied by (i) the related Medical Device Registration Form and
(ii) the related Explant Data Form.  If
provided to Distributor by the physician, Distributor will also supply to
Supplier on the later of the date set forth in the previous sentence or within
three business days of receipt thereof (1) the related Implantation Operative
Report, (2) the related Pre-Explantation Operative Report, and (3) in the case
of implant deflation, related photos.


11.          Notification of Material or Process Change. 
Supplier shall notify Distributor prior to implementing any changes in
the manufacture, assembly, labeling of the Product or the processes used to
produce the Product (the “Change Notification”).  No such change will be made by Supplier
without first obtaining the approval of Distributor’s Quality Assurance manager
in writing.  Supplier agrees to give
Distributor one full and complete set of Supplier’s Standard Operating
Procedures (“SOPs”) and Manufacturing Procedures and to provide Distributor
with any and all revisions, corrections and/or additions to the SOPs and
Manufacturing Procedures as implemented at Supplier’s facilities.


12.          Product Documentation. 
Supplier agrees to forward to Distributor with each shipment of Product
all documentation generated during the production of the Product including, but
not limited to:


(a)           all raw material testing records;


(b)           all manufacturing records;


(c)           all sterilization reports; and


(d)           all final Product testing reports.


Supplier agrees that any
discrepancies shall be cured at Supplier’s expense.


13.          Patents and Trademarks.


(a)           Patents.  Supplier shall notify Distributor promptly of
any United States and foreign patents which may now or hereafter be pending
covering any of the Products.



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Supplier shall diligently prosecute any applications
for United States and foreign patents which may now or hereafter be pending
covering any of the Products and, on issuance of any such patent, prosecute
each infringer thereof.  Supplier shall
defend, indemnify and hold harmless Distributor from and against any liability
arising out of a claim of patent infringement made with respect to any of the
Products.  Supplier agrees to repurchase
from Distributor, at a price equivalent to the full purchase price paid by
Distributor, any quantity of Products in Distributor’s inventory which Products
Distributor reasonably believes it should not or cannot sell, based upon an
opinion of counsel that future sales of such Product by Distributor may result
in patent infringement, or because of a decision, whether interlocutory or
final, rendered in any patent infringement action.  Supplier hereby grants to Distributor a
royalty free perpetual license to all such patents.  This license will survive during the term of
this Agreement.


(b)           Trademarks and Trade Names.          Distributor recognizes that Supplier
is the owner of the trademarks and trade names which are used in the promotion
and sale of the Products and that Distributor has no right or interest in such
trademarks and trade names.  Supplier
hereby grants Distributor the royalty free right to use Supplier’s trademarks
on the Products during the term of this Agreement, it being understood that
Distributor shall discontinue the use of such trademarks upon the termination
of this Agreement and disclaims any rights in the trademarks other than the
said license.


14.          Product Liability Insurance.  If
Supplier obtains product liability insurance for the Products, such insurance
shall contain either a vendor’s endorsement or contractual liability coverage
referencing the indemnification provisions contained herein on all
Products.  Upon issuance of any such
product liability insurance, Supplier shall immediately furnish to Distributor
a certificate of insurance issued by the carrier evidencing the foregoing
endorsements, coverages and limits and such insurance shall not be cancelable
by Supplier without at least fifteen (15) days prior written notice to
Distributor.


15.          Default; Termination. 
Subject to the provisions of Section 17 below, either party shall have
the right to terminate this Agreement upon written notice if the other party
hereto:


(a)           commits or suffers any act of
bankruptcy or insolvency; or


(b)           shall fail to perform or fulfill, at
any time and in the manner herein provided, any obligation or condition
required to be performed or fulfilled by such party hereunder, and if such
party fails to remedy any such failure within sixty (60) days after notice
thereof from the non-defaulting party.


The non-defaulting party shall have the right to terminate this
Agreement by giving written notice of termination to the defaulting party at
any time within ninety (90) days after the 60-day default period set
forth in clause (b) above.  Termination
under this Section 15 shall not be deemed an election, but shall be in addition
to other rights and remedies available to the non-defaulting party.



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On the termination of this
Agreement, for whatever reason, Supplier shall continue to honor Distributor’s
orders for Products up to the effective date of termination and, other than in
connection with expiration of the term of this Agreement, for a period of sixty
(60) days thereafter and Distributor shall pay for such Products all on the
terms and conditions of this Agreement. 
Upon effectiveness of termination, Distributor shall have the option of
returning all Products then in inventory to Supplier for full credit or
continue to sell the Products for a period of no more than One Hundred and
Twenty (120) days after termination, at the end of which period Distributor may
then return all unsold Products in inventory for full credit.


16.          Confidentiality.  The parties acknowledge and
agree that, pursuant to this Agreement, valuable information of a confidential
nature may be disclosed by one or more parties to another; that such
information shall be retained by either party in confidence; and that the
transmittal of such information by any party to the another party is upon the
expressed condition that the information is to be used solely for the purpose
of effectuating this Agreement.  No party
shall, either during the term of this Agreement or after its termination, use,
publish or disclose or cause anyone else to use, publish or disclose the terms
and conditions hereunder, any marketing information supplied by another party
or any other information considered by either party hereto to be confidential,
proprietary or a trade secret. 
Notwithstanding anything in the foregoing, the above restrictions on
disclosure and use shall not apply to any information which a party can show by
written evidence was known to it at the time of receipt from the other party or
which may subsequently be obtained from sources other than the other party who
are not bound by a confidentiality agreement with either party.


17.          Contingencies.  Except with respect to
obtaining or maintaining GMP compliance and with respect to failure to maintain
compliance with the Quality Assurance programs in accordance with Section 8
above,


(a)           neither Supplier or Distributor shall
be liable for its failure to perform hereunder (except for obligations to make
payments hereunder) if performance is made impossible due to any occurrence
beyond its reasonable control, including, but not limited to, acts of God,
fires, floods, wars, sabotage, accidents, equipment failure, labor disputes or
shortages, government laws, ordinances, rules, regulations, standards or
decrees, whether valid or invalid (including but not limited to, priorities,
requisitions, allocations and price adjustment restrictions), inability to
obtain raw materials, equipment or transportation, and any other similar
occurrence, and


(b)           neither Supplier nor Distributor
shall be liable for its failure to perform hereunder if Supplier or Distributor
ceases or suspends the operation of all facilities where Distributor is selling
or Supplier is producing the Products deliverable hereunder, because said
facilities, the operation thereof, and/or the product therefrom fails to comply
with any governmental law, regulation, ordinance, standard, order or decree
relating to health, safety or environmental matters.



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Notwithstanding anything to the contrary contained herein, the failure
to cure a condition set forth in this Section 17 within the times specified in
Section 15 shall be grounds for termination of this Agreement as provided in
Section 15.


If either party reasonably believes it is impossible to take corrective
action to remedy any occurrence under clause (a) above or to achieve or
maintain compliance under clause (b) above, such party may suspend or terminate
this Agreement upon written notice to the other party in accordance with
Section 15.  The party who fails to
perform as a result of any occurrence described in clause (a) or (b) above
shall notify the other party of any such occurrence, setting forth the full
particulars in connection therewith, and shall promptly notify the other party
of the cessation of such occurrence.  In
no event shall either party be required by this Section 17 to settle strikes,
lockouts or other labor difficulties contrary to its best interest.


18.          Dispute Resolution.  Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration
conducted in the State of Delaware, before a single arbitrator in accordance
with the rules of the American Arbitration Association then in effect.  Judgment may be entered on the arbitrator’s
award in any court having jurisdiction. 
This Agreement and the parties’ performance under it shall be construed
in accordance with the laws of the State of Delaware.


19.          Miscellaneous.


(a)           Assignment.  Except as expressly provided herein, neither
this Agreement nor any rights or obligations hereunder may be assigned by
either party without the written consent of the other party; provided, however,
that the rights and obligations of Distributor or MediCor hereunder may be
assigned to any entity controlled by MediCor; provided that such entity assumes
all rights and obligations of Distributor or MediCor, as applicable, hereunder
and Distributor remains liable for all of its obligations hereunder incurred
prior to the effective date of such assignment.


(b)           Waiver.  Failure of either party to exercise or
enforce any right under this Agreement upon one occasion shall not waive the
right to exercise or enforce the same on another occasion.  The waiver by either party of one or more
terms, conditions or defaults of this Agreement shall not constitute a waiver
of the remaining terms and conditions or of any future defaults of this
Agreement.


(c)           Governing Law.  The validity, interpretation and performance
of this Agreement shall be controlled by and construed under the laws of the
State of Delaware.


(d)           Headings.  The headings appearing in this Agreement are
inserted only as a matter of convenience and in no way define, limit, construe
or describe the scope or extent of such section or in any way affect such
paragraph.


(e)           Counterparts.  This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute a single instrument
and agreement.



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(f)            Notices.  Any notices under this Agreement shall be in
writing addressed to the Chief Executive Officer of such party at the address
set forth on the signature page hereof, or such other addresses as a party may
notify the other party in writing) and shall be delivered by certified mail,
return receipt requested or by an overnight delivery service of international
standing.


(g)           Acknowledgment.  The parties, and each of them, represent and
warrant that, in entering into this Agreement, they have read this Agreement,
they have had this Agreement explained by counsel of their choice, they are
aware of the contents and legal effect of this Agreement and they are acting on
the advice of counsel of their choice.


(h)           Expenses.  Each party shall bear his or its own
expenses, including attorneys’ fees, incurred by it, in connection with the
negotiation, execution, delivery and performance of this Agreement.


(i)            Severability.  In the event that any provision of this
Agreement shall be held invalid, such provision shall not affect the validity
of the remainder of this Agreement, and the remainder of this Agreement shall
be construed as if the invalid provision or provisions had not been included.


(j)            Entire Agreement.  The parties acknowledge that no
representation, promise or inducement has been made other than as set forth in
this Agreement, and that they are not entering into this Agreement in reliance
upon any representation, promise or inducement not set forth herein.  This Agreement supersedes all prior
negotiations, understandings and agreements (including the Original Agreement
which it amends and restates in its entirety) of any kind, written or oral,
with respect to the subject matter hereof and contains all of the terms and
provisions of agreement between the parties hereto with respect to the subject
matter hereof  provided, however, that
nothing in this Agreement shall supersede rights or obligations of the parties
under the Original Agreement with respect to events occurring prior to the date
hereof, except that Distributor’s claims under the Original Agreement for
reimbursement for PMA-related clinical study costs under the Original
Agreement shall be canceled hereby in consideration of the transfer to
Distributor of the PMA and Distributor’s claims under the Original Agreement in
respect of product replacement costs and legal expenses accrued through
February 29, 2004 shall be canceled hereby.



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IN
WITNESS WHEREOF, and intending to be legally bound hereby,
the parties hereto have executed this Agreement the day and year first above
written.


	
  “Supplier”

  	
   

  	
   

  	
  “Distributor”

  	
   

  
	
  Poly Implants
  Protheses, S.A.

  	
   

  	
   

  	
  III Acquisition Corp.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Address:

  	
  337 Avenue de Bruxelles

  	
   

  	
  Address:

  	
  4560 S. Decatur Blvd

  
	
   

  	
  83514 La Seyne Sur Mer France

  	
   

  	
   

  	
  Suite 300

  
	
   

  	
   

  	
   

  	
   

  	
  Las Vegas, NV 89103

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Phone:

  	
  +33 (04)
  94-10-98-10

  	
   

  	
  Phone:

  	
  +1 (702) 932-4560

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fax:

  	
  +33 (04)
  94-10-98-11

  	
   

  	
  Fax:

  	
  +1 (702) 932-4561

  
										



 



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