**Exhibit 10.1**

 

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# **AMENDEDAND RESTATED NON-EXCLUSIVE DISTRIBUTION AGREEMENT**

# ** **

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

 

## **RECITALS**

 

**WHEREAS** theSupplier is the manufacturer of smooth and textured breast implant products(the “Breast Implants”) which Supplier desires to have distributed throughoutNorth America, including the United States of America and Canada, and anyterritories of the United States of America and Canada (the “Territory”);

 

**WHEREAS** theDistributor desires to distribute the Breast Implants, along with any otherproducts manufactured or sold by the Supplier (collectively, the “Products”) inthe Territory on a non-exclusive basis;

 

**WHEREAS** Supplierand Distributor have previously entered into a Non-Exclusive DistributionAgreement dated as of October 27, 1999 (the “Original Agreement”) in whichSupplier granted Distributor the non-exclusive right to distribute the Productsin the Territory; and

 

**WHEREAS**Supplier and Distributor desire in this Agreement to amend and restate theOriginal Agreement in its entirety to set forth in full the agreements andunderstandings of the parties with respect to the distribution of the Productsin the Territory and certain related matters, including the filing, prosecutionand ownership of the Pre-Market Approval (“PMA”) application currently inpreparation for Supplier’s pre-filled saline Breast Implant products, which theparties anticipate will be submitted to the United States Department of Healthand Human Resources, Food and Drug Administration (the “FDA”) * * *.

 

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

 

**1.****                                     ****Distribution Rights.**  Supplierhereby grants to Distributor a non-exclusive right and license to distributethe Products for sale throughout the Territory during the term of thisAgreement.  Supplier agrees that if theother non-exclusive distributor of the products, PIP/USA, Inc., breachesits agreement with Supplier or PIP/USA, Inc.’s agreement is cancelled orterminated for any reason, Supplier will not execute any other non-exclusivedistribution agreement with any other party and this Agreement shall becomeexclusive with respect to distribution of the Products in the Territory.  Distributor has only distribution rightsunder this Agreement.  At no time whilethis Agreement is in effect will Distributor, directly or indirectly (throughother companies, agents, subsidiaries or otherwise), manufacture equivalentbreast implants that conform with the PMA contemplated in this Agreement.  At no time while this Agreement is in effectwill Supplier, directly or indirectly (through other customers, agents,

 

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subsidiaries or otherwise), with theexception of the non-exclusive distribution agreement already in place betweenSupplier and PIP/USA, Inc.:

 

**(a)**                                  sell the Products in the Territory; or

 

**(b)**                                  sell the Products to any person or entity withreasonable basis to believe that such person or entity, or someone acting ontheir behalf, will resell the Products into the Territory; or

 

**(c)**                                  appoint or license any other person or entityas a distributor or representative of the Products without specificallyprohibiting such person or entity, in writing, from selling or reselling theProducts into the Territory; or

 

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

 

**2.****                                     ****Terms and Renewal.**  ThisAgreement and the rights granted Distributor hereunder shall be for an initialterm of ten (10) years, beginning on the date first written above.  Thereafter, the Distributor shall have theoption of renewing this Agreement on the same terms and conditions for three (3) additionalfive (5) year terms, provided Distributor is not in default of anyprovisions of this Agreement at the date of renewal, which renewal shall beautomatic unless the Distributor notifies Supplier of Distributor’s intent notto renew at least sixty (60) days prior to the renewal date.

 

**3.****                                     ****Orders and Shipping.**

 

**(a)**                                  Order Placement and Allocation.  Distributorshall place all orders for the Products with Supplier in writing on a weeklybasis (the “Purchase Orders”).  Suppliershall use commercially reasonable efforts to ship the Products on the PurchaseOrders to Distributor within thirty (30) days of the date of the PurchaseOrder.  Distributor shall provide toSupplier monthly an estimate of Products to be required for the following threemonths.  In the event an order (proratedfrom a weekly basis to a monthly basis) is in excess of * * * above thebudgeted order amount, then Supplier shall not be required to fulfill such excessabove * * * within such 30-day period but shall use commerciallyreasonable efforts to ship the excess Products as soon as practicable.

 

**(b)**                                  Title and Risk of Loss.  AllProducts shall be shipped * * * to the Distributor at such location designatedby Distributor or such other location as Distributor may notify Supplier offrom time to time.  * * *

 

**(c)**                                  Incorrect or Erroneous Shipment.  Inthe event the Products shipped to Distributor do not conform to the PurchaseOrder, Supplier shall correct any such errors at no cost to Distributor withinten (10) days written notice by Distributor of such error.

 

**(d)**                                  Late Shipments.  Inthe event that Supplier has not shipped Products under the Purchase Orderwithin * * * days of the date of the Purchase Order (a “Late 

 

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Shipment”), Supplier agrees to allowDistributor to take a discount equal to * * * per month (prorated for parts ofmonths) that the Product in such Purchase Order remains unshipped.

 

**(e)**                                  * * *

 

**4.****                                     ****Pricing and Payment Terms.**

 

**(a)**                                  Price.  Distributor shall pay * * * persaline Breast Implant unit.  * * *  The price and terms for any Products otherthan the saline Breast Implants shall be as mutually agreed upon by the partieshereto.  Subject to the terms of thisAgreement, Distributor shall pay * * * per saline Breast Implant unit.  * * *

 

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

 

**(c)****                                 ***** * ***

 

**(d)**                                  * * *

 

**(e)**                                  Product Warranty Claims/Promissory Note.  Asof February 29, 2004, Supplier had certain obligations to patients anddoctors in respect of claims related to products sold by PIP/USA, Inc. andDistributor (“Existing Claims”). Distributor will undertake to administer and pay up to * * * of suchExisting Claim amounts, with Distributor consulting with Supplier prior topaying any such Existing Claim amounts. If Distributor determines in its sole discretion that payment of anyExisting Claim amount is necessary or advisable to (1) prosecute ormaintain the PMA, (2) settle any presently existing litigation or anyrelated or similar case, (3) avoid any adverse regulatory action, or (4) continueto market Products in any geographical market, then Distributor may withoutconsent of Supplier pay any such Existing Claim amount.  If with respect to any Existing Claim amountDistributor does not make the determination set forth in the immediatelypreceding sentence, then Distributor will consult with Supplier in theadministration of such Existing Claim. Unless Supplier (i) engages counsel reasonably acceptable toDistributor to consult on such Existing Claim administration and (ii) separatelyindemnifies Distributor from and against any loss, claim or liability relatedto 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 inthe immediately preceding sentence in respect of an Existing Claim covered bysuch sentence, then Distributor will not pay the respective Existing Claimamount without Supplier’s consent, which consent will not unreasonably bewithheld.  In consideration of theforegoing undertaking by Distributor, Supplier will issue to Distributor arevolving promissory note (the “Note”) in the initial nominal principal amountof * * * (and an actual principal amount equal to the Existing Claim amountspaid by Distributor), with interest on the principal amount at a rate per annumequal to 6.75%.  The principal amountpayable under the Note shall be increased by any additional amounts paid by 

 

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Distributor on Supplier’s or PIP/USA, Inc.’sbehalf with respect to products sold by Supplier, PIP/USA, Inc. orDistributor in the Territory that are not in respect of Existing Claims.

 

**(f)**                                    * * *

 

**(g)**                                 Right to Inspect.  Fromtime to time during the term of this Agreement, Supplier and itsrepresentatives shall have the right to inspect and make copies of the booksand records of Distributor relating to sales of Products for the purpose ofconfirming Distributor’s compliance with the terms of this Agreement.  Such inspection may occur not more frequentlythan once in any three consecutive month period and shall be during ordinarybusiness hours at Distributor’s place of business upon not less than threebusiness days advance notice.  Suppliershall bear all of the costs of such inspection unless it is determined thatDistributor has underpaid Supplier by an amount equal to * * * or more of theamounts paid during the period covered by the inspection, in which caseDistributor shall reimburse Supplier for all of such costs.

 

**5.****                                     ****Marketing Assistance.**  Supplierwill provide Distributor with marketing assistance as requested by Distributorat 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 theTerritory.  Symposia costs from the datehereof shall be the responsibility of the Distributor.  Any other promotional materials, promotionalassistance and related issues shall be determined by the mutual, writtenagreement of the parties.

 

**6.****                                     ****The Products.**

 

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

 

**(b)**                                  Packaging.  Supplier shall adequatelylabel, package and deliver the Products in accordance with all applicableregulations, including applicable regulations in the Territory, usingreferences to and trademarks of the Supplier, and Supplier shall bear all costsassociated with packaging of the Products except that Distributor shall bearall costs associated with printing of labels and package inserts for theProducts to be sold in the Territory.

 

**(c)**                                  Defective Products.  Suppliershall accept the return of any Products that Distributor’s Quality Assuranceand/or Regulatory departments find unacceptable (“Rejected Products”) and uponreturn of such Rejected Products, shall provide Distributor with new Productsat no cost.

 

**(d)**                                  * * *

 

**(e)**                                  * * *

 

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**(f)**                                    Representations, Warranties and Covenants.  Supplierrepresents, warrants and covenants that:

 

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

 

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

 

(iii)                               Supplier has complied with all applicablelaws and regulations with respect to the Products, including, withoutlimitation, FDA approval and compliance; and

 

(iv)                              Subject to Sections 7 and 8 below, during theterm of this Agreement Supplier will be solely responsible for, and have acontinuing obligation to obtain and maintain, all necessary non-Territory governmentand regulatory approvals and compliance with respect to the Products, includingISO certification, and all necessary GMP certification relating to theTerritory; and

 

(v)                                 Supplier will be responsible for * * *; and

 

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

 

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

 

(viii)                        Except as provided in Section 7 belowwith respect to the PMA and future PMA-related (and other Territory regulatoryapproval) costs, Supplier will remain responsible for its operations andrelated financial obligations, including * * * and its other obligations underthis Agreement.

 

**(g)**                                 Indemnification.  Supplieragrees to hold Distributor harmless and indemnify, reimburse and defendDistributor, upon request, at Supplier’s cost, with mutually acceptablecounsel, from any proceeding related to any claim asserted against Distributoror its customers with respect to the Products (including without limitation,Product liability claims) or with respect to any previous agreements that theSupplier may have had with any other party regarding the distribution in theTerritory of the Products or which otherwise arises out of Supplier’srelationship with Distributor (including without limitation any action arisingout of the failure of Supplier to comply with any government or regulatoryrequirements) and shall pay Distributor for all amounts owed by Distributor tothird persons and expenses incurred by Distributor in connection with any suchclaim or suit.

 

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**7.****                                     ****Regulatory Responsibilities.**

 

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

 

**(b)**                                  Supplier agrees to conduct at its expense anyadditional or revised pre-clinical testing required for the PMAapplication.  Supplier will beresponsible for mechanical or other testing to be performed at Supplier’slocation and all manufacturing, process and production record, report andcompliance preparation and maintenance. Supplier agrees immediately after the date hereof to provide access toDistributor to all records (including all past PMA-related records and all pastand future manufacturing, process and production records), data, information,reports, clinical programs and consultants requested by Distributor to completethe PMA submission and subsequent FDA requests and to provide at its ownexpense all additional assistance requested by Distributor in connection withthe PMA application, other regulatory applications in the Territory and futuremanagement and maintenance of marketing clearances in the Territory.  Supplier shall notify Distributor immediatelyshould Supplier become aware of any defect or condition which may render any ofthe Products in violation of the United States Food, Drug and Cosmetic Act, FDAregulations, other Territory regulations or which in any way alters thespecification and quality of the Products.

 

**(c)**                                  For the purpose of maximizing the likelihoodof FDA GMP approval and clearance, Supplier agrees to allow an inspector ofDistributor’s selection to inspect Supplier’s facilities, processes, operationsand records prior to the FDA’s GMP inspection of Supplier’s facilities.  Supplier further agrees promptly to implementthe recommendations the inspector reasonably makes as necessary or appropriatefor the purpose of obtaining FDA GMP approval and clearance.  In addition, Supplier agrees to permit one ormore representatives of Distributor or other experts to participate directly incooperation with Supplier in the preparation of PMA application modules.

 

**(d)**                                  All Territory regulatory approvals (includingthe PMA application) shall be applied for, issued and registered in Distributor’sname.  Commencing immediately, theownership of the PMA application (and related applications and PMA applicationwork in process) for Supplier’s pre-filled saline breast implant will betransferred to Distributor.  Foravoidance of doubt, Distributor will own in its own name the PMA and relatedmarketing clearance once issued.

 

**8.****                                     ****Quality AssuranceResponsibilities.**  Supplier agrees that, in order to expeditethe acceptance of Products by Distributor’s Quality Assurance and/or Regulatorydepartments, that Distributor will, at Supplier’s expense, implement QualityAssurance and/or Regulatory programs and/or personnel into the Supplier’smanufacturing facilities.  Suppliergrants Distributor the right to conduct Quality Assurance and/or Regulatoryaudits (based on Distributor’s Quality Assurance standards, which at all timesshall incorporate applicable FDA 

 

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and GMP requirements) using Distributor’spersonnel, Supplier’s personnel and/or independent consultants on a quarterlybasis or more frequent spot basis. Supplier agrees that Supplier will cure any curable deficiencies within ** * of written notice by Distributor of any such Quality Assurance and/orRegulatory audits and commence curing all other curable deficiencies that arecurable but not reasonably subject of cure within * * *.  Supplier agrees to credit Distributor’saccount in the amount of * * * for * * * that any deficiencies remain uncuredfollowing * * *.  Similarly, followingClearance Distributor agrees to credit Supplier’s account in the amount of * ** for * * * that any deficiencies imposed by the FDA on Distributor andrelating to Distributor’s obligations under this Agreement remain uncuredfollowing * * * commencing on the later of the date of Distributor’s receipt ofnotice thereof from the FDA or the date imposed by the FDA for cure orcompliance.

 

**9.****                                     ****Distributor’s Representations andWarranties.**

 

**(a)**                                  Product Warranties of Supplier.  Distributoracknowledges that Supplier has the exclusive right to determine the productguarantees and warranties to be provided on each of its products, with theexception of the Replacement Program and other specific and implied warrantiescontained herein.

 

**(b)**                                  Conduct of Distributor and itsRepresentatives.  Distributor agrees not to make anycommitments either orally or in writing with respect to Supplier or on Supplier’sbehalf unless such commitment is specifically authorized hereunder or Supplierspecifically authorizes Distributor in writing make such commitment.  Distributor agrees not to make anyrepresentations outside the agreed Territory specified in this Agreement orsubsequently agreed to in writing by the parties hereto.  Any leads or contacts outside the Territorygenerated through the efforts of the Distributor will be promptly forwarded tothe Supplier.  Distributor further agreesto conduct all representations in a positive and professional manner.

 

**(c)**                                  Regulatory Approvals.  Subjectto Sections 6(f), 7 and 8 above, from and after the date hereof, during theterm of this Agreement Distributor will be solely responsible for, and have acontinuing obligation to obtain and maintain, all necessary Territorygovernment and regulatory approvals and compliance with respect to theProducts, including prosecution of the PMA application for pre-filled salineimplants, related clinical studies, and reporting and monitoring of implantrecipients.  Subject to Sections 6(f), 7and 8 above, Distributor will pay all future costs of prosecuting the PMAapplication with the FDA.

 

**(d)**                                  Costs.  Distributor will beresponsible for its own * * * and its other obligations under this Agreement.

 

**10.****                              ****Operational Commitments.**  Distributoragrees to the following:

 

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

 

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**(b)**                                  Controlled Conditions of Saline BreastImplant Storage.  Distributor agrees to store the Productswithin a restricted access storage area that is secure, clean (with adocumented regular cleaning program in force), infestation fee, temperaturecontrolled and organized according to established Quality Assurance and/orRegulatory requirements.

 

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

 

**(d)**                                  Complaint Procedure.  Allcomplaints shall be handled by Distributor’s established complaint procedureand the details of each complaint shall be forwarded by fax to Supplier on aregular basis.

 

**(e)**                                  Returned Products.  Allreturned Products shall be handled by Distributor’s established returnprocedure and the details of each return shall be documented.

 

**(f)**                                    Implant Tracking and Product Recalls.  AllProducts sold by Distributor shall have Lot Number and Serial Number records asestablished by Distributor’s Regulatory and/or Quality Assurance departmentsand Distributor shall maintain these records so that each and every Product, upto and including when the Product is used or implanted, can be tracked inaccordance with the USFDA tracking requirements then in effect.

 

**(g)**                                 Medical Device Reports (“MDRs”).  Anyadverse effect reported by a patient, whether critical or chronic, which may beassociated with a potential Product malfunction shall be immediately reportedby Distributor according to the FDA MDR requirements then in effect.

 

**(h)**                                 Monitoring Implant Clinical Studies.  Fromand after the date hereof, Supplier will provide non-financial cooperation to Distributorin the clinical studies of Supplier’s saline breast implants, including providingnon-financial cooperation to Distributor in collecting information anddocumentation from participating surgeons and communicating any problems withthe 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 * * *, all breast implantsreturned to Distributor in * * * that are subject to a warranty claim.  Each returned implant will be accompanied by (i) therelated Medical Device Registration Form and (ii) the related ExplantData Form.  If provided to Distributor bythe physician, Distributor will also supply to Supplier on the later of thedate set forth in the previous sentence or within * * * (1) the relatedImplantation Operative Report, (2) the related Pre-Explantation OperativeReport, and (3) in the case of implant deflation, related photos.

 

**11.****                              ****Notification of Material orProcess Change**.  Supplier shall notify Distributor prior toimplementing any changes in the manufacture, assembly, labeling of the Productor the processes used to produce the Product (the “Change Notification”).  No such change will be made by Supplierwithout first obtaining the approval of Distributor’s Quality Assurance manager

 

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in writing. Supplier agrees to give Distributor one full and complete set ofSupplier’s Standard Operating Procedures (“SOPs”) and Manufacturing Proceduresand to provide Distributor with any and all revisions, corrections and/oradditions to the SOPs and Manufacturing Procedures as implemented at Supplier’sfacilities.

 

**12.****                              ****Product Documentation**.  Supplieragrees to forward to Distributor with each shipment of Product alldocumentation generated during the production of the Product including, but notlimited 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 anydiscrepancies shall be cured at Supplier’s expense.

 

**13.****                              ****Patents and Trademarks.**

 

**(a)**                                  Patents.  Supplier shall notifyDistributor promptly of any United States and foreign patents which may now orhereafter be pending covering any of the Products.  Supplier shall diligently prosecute anyapplications for United States and foreign patents which may now or hereafterbe pending covering any of the Products and, on issuance of any such patent,prosecute each infringer thereof.  Suppliershall defend, indemnify and hold harmless Distributor from and against anyliability arising out of a claim of patent infringement made with respect toany of the Products.  Supplier agrees torepurchase from Distributor, at a price equivalent to the full purchase pricepaid by Distributor, any quantity of Products in Distributor’s inventory whichProducts Distributor reasonably believes it should not or cannot sell, basedupon an opinion of counsel that future sales of such Product by Distributor mayresult in patent infringement, or because of a decision, whether interlocutoryor final, rendered in any patent infringement action.  Supplier hereby grants to Distributor aroyalty free perpetual license to all such patents.  This license will survive during the term ofthis Agreement.

 

**(b)**                                  Trademarks and Trade Names.  Distributorrecognizes that Supplier is the owner of the trademarks and trade names whichare used in the promotion and sale of the Products and that Distributor has noright or interest in such trademarks and trade names.  Supplier hereby grants Distributor theroyalty free right to use Supplier’s trademarks on the Products during the termof this Agreement, it being understood that Distributor shall discontinue theuse of such trademarks upon the termination of this Agreement and disclaims anyrights in the trademarks other than the said license.

 

**14.****                              ****Product Liability Insurance**.  IfSupplier obtains product liability insurance for the Products, such insuranceshall contain either a vendor’s endorsement or contractual liability coveragereferencing the indemnification provisions contained herein on allProducts.  Upon issuance of any suchproduct liability insurance, Supplier shall immediately furnish to Distributor 

 

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a certificate of insurance issued by thecarrier evidencing the foregoing endorsements, coverages and limits and suchinsurance 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 shallhave the right to terminate this Agreement upon written notice if the otherparty hereto:

 

**(a)**                                  commits or suffers any act of bankruptcy orinsolvency; or

 

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

 

The non-defaulting partyshall have the right to terminate this Agreement by giving written notice oftermination to the defaulting party at any time within ninety (90) days afterthe 60-day default period set forth in clause (b) above.  Termination under this Section 15 shallnot be deemed an election, but shall be in addition to other rights andremedies available to the non-defaulting party.

 

On the termination of thisAgreement, for whatever reason, Supplier shall continue to honor Distributor’sorders for Products up to the effective date of termination and, other than inconnection with expiration of the term of this Agreement, for a period of * * *thereafter and Distributor shall pay for such Products all on the terms andconditions of this Agreement.  Uponeffectiveness of termination, Distributor shall have the option of returningall Products then in inventory to Supplier for full credit or continue to sellthe Products for a period of no more than * * * after termination, at the endof which period Distributor may then return all unsold Products in inventoryfor full credit.

 

**16.****                              ****Confidentiality.**  Theparties acknowledge and agree that, pursuant to this Agreement, valuableinformation of a confidential nature may be disclosed by one or more parties toanother; that such information shall be retained by either party in confidence;and that the transmittal of such information by any party to the another partyis upon the expressed condition that the information is to be used solely forthe purpose of effectuating this Agreement. No party shall, either during the term of this Agreement or after itstermination, use, publish or disclose or cause anyone else to use, publish ordisclose the terms and conditions hereunder, any marketing information suppliedby another party or any other information considered by either party hereto tobe confidential, proprietary or a trade secret. Notwithstanding anything in the foregoing, the above restrictions ondisclosure and use shall not apply to any information which a party can show bywritten evidence was known to it at the time of receipt from the other party orwhich may subsequently be obtained from sources other than the other party whoare not bound by a confidentiality agreement with either party.

 

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

 

**(a)**                                  neither Supplier or Distributor shall beliable for its failure to perform hereunder (except for obligations to makepayments hereunder) if performance is made impossible due to any occurrencebeyond its reasonable control, including, but not limited to, acts of God,fires, floods, wars, sabotage, accidents, equipment failure, labor disputes orshortages, government laws, ordinances, rules, regulations, standards ordecrees, whether valid or invalid (including but not limited to, priorities,requisitions, allocations and price adjustment restrictions), inability toobtain raw materials, equipment or transportation, and any other similaroccurrence, and

 

**(b)**                                  neither Supplier nor Distributor shall beliable for its failure to perform hereunder if Supplier or Distributor ceasesor suspends the operation of all facilities where Distributor is selling orSupplier is producing the Products deliverable hereunder, because saidfacilities, the operation thereof, and/or the product therefrom fails to complywith any governmental law, regulation, ordinance, standard, order or decreerelating to health, safety or environmental matters.

 

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

 

If either party reasonablybelieves it is impossible to take corrective action to remedy any occurrenceunder 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 theother party in accordance with Section 15. The party who fails to perform as a result of any occurrence describedin clause (a) or (b) above shall notify the other party of any suchoccurrence, setting forth the full particulars in connection therewith, andshall promptly notify the other party of the cessation of such occurrence.  In no event shall either party be required bythis Section 17 to settle strikes, lockouts or other labor difficultiescontrary to its best interest.

 

**18.****                              ****Dispute Resolution.**  Anydispute or controversy arising under or in connection with this Agreement shallbe settled exclusively by arbitration conducted in the State of Delaware,before a single arbitrator in accordance with the rules of the AmericanArbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court havingjurisdiction.  This Agreement and theparties’ performance under it shall be construed in accordance with the laws ofthe State of Delaware.

 

**19.****                              ****Miscellaneous.**

 

**(a)**                                  Assignment.  Except as expressly providedherein, neither this Agreement nor any rights or obligations hereunder may beassigned by either party without the written consent of the other party;provided, however, that the rights and obligations of 

 

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Distributor or MediCor hereunder may beassigned to any entity controlled by MediCor; provided that such entity assumesall rights and obligations of Distributor or MediCor, as applicable, hereunderand Distributor remains liable for all of its obligations hereunder incurredprior to the effective date of such assignment.

 

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

 

**(c)**                                  Governing Law.  Thevalidity, interpretation and performance of this Agreement shall be controlledby and construed under the laws of the State of Delaware.

 

**(d)**                                  Headings.  The headings appearing in thisAgreement 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 anyway affect such paragraph.

 

**(e)**                                  Counterparts.  ThisAgreement may be executed in one or more counterparts, all of which takentogether shall constitute a single instrument and agreement.

 

**(f)**                                    Notices.  Any notices under thisAgreement shall be in writing addressed to the Chief Executive Officer of suchparty at the address set forth on the signature page hereof, or such otheraddresses as a party may notify the other party in writing) and shall bedelivered by certified mail, return receipt requested or by an overnightdelivery 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 bycounsel of their choice, they are aware of the contents and legal effect ofthis Agreement and they are acting on the advice of counsel of their choice.

 

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

 

**(i)**                                    Severability.  Inthe event that any provision of this Agreement shall be held invalid, suchprovision shall not affect the validity of the remainder of this Agreement, andthe remainder of this Agreement shall be construed as if the invalid provisionor provisions had not been included.

 

**(j)**                                    Entire Agreement.  The partiesacknowledge that no representation, promise or inducement has been made otherthan as set forth in this Agreement, and that they are not entering into thisAgreement in reliance upon any representation, promise or inducement not setforth herein.  This Agreement supersedesall prior negotiations, understandings and agreements (including the OriginalAgreement which it amends and restates in its entirety) of any 

 

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* * * Confidential Treatment Requested

 

kind, written or oral, with respect to thesubject matter hereof and contains all of the terms and provisions of agreementbetween the parties hereto with respect to the subject matter hereof  provided, however, that nothing in thisAgreement shall supersede rights or obligations of the parties under theOriginal Agreement with respect to events occurring prior to the date hereof,except that Distributor’s claims under the Original Agreement for reimbursementfor PMA-related clinical study costs under the Original Agreement shall becanceled hereby in consideration of the transfer to Distributor of the PMA andDistributor’s claims under the Original Agreement in respect of productreplacement costs and legal expenses accrued through February 29, 2004shall 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 abovewritten.

 

 
| “Supplier”           | “Distributor”                                |
|--------------------------------|--------------------------------------------------------|
| Poly Implants Protheses,  S.A. | III Acquisition Corp.                                  |
|                           |                                                   |
|                           |                                                   |
| By:                            |                                                   |   | By: |   |   |
|                           |                                                   |
| Title:                         |                                                   |   | Title: |   |   |
|                           |
| Address:                       | 337 Avenue de Bruxelles  83514 La Seyne Sur Mer France | Address: | 4560 S. Decatur Blvd  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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