Document:

exv10w22

 

Exhibit 10.22

TRANSPORTATION DRY LEASE AGREEMENT

     This
TRANSPORTATION DRY LEASE AGREEMENT (the “Agreement”) is made and
entered into effective as of this 1st day of June 2004, by and between Global
Aviation Delaware LLC, a Delaware limited liability company (“Owner”), and
MediCor Ltd., a Delaware corporation (“Operator”).

     In consideration of the mutual promises, agreements, covenants,
warranties, representations and provisions contained herein, the parties agree
as follows:

     1. Transportation
Equipment. Subject to the terms and conditions
contained herein, during the Term (as defined hereafter) Owner hereby
agrees to lease to Operator Owner’s transportation equipment in connection with Operator’s
business travel. Owner’s transportation equipment is hereby identified as a
Bombardier Challenger Model CL-604 aircraft, serial number 5304, engine serial
numbers GE-E 872011 and GE-E 872012, Federal Aviation Administration (“FAA”)
registration number N604VM (the “Aircraft”).

     2. Term. The term of this Agreement (the “Term”) shall commence on June
1, 2004 (the “Commencement Date”) and end on June 30, 2005 (the “Initial Term
Expiration Date”). Notwithstanding the foregoing, and unless this Agreement
has earlier been terminated in accordance with its terms, the Term shall
continue after the Initial Term Expiration Date on an annual basis. Either
party may terminate this Agreement at any time during the Term upon not less than
ninety (90) days written notice to the other. This Agreement
supersedes all
other agreements between Owner and Operator in regards to the Aircraft and is
applicable only to the hours that the Aircraft is under the Operator’s control
for the Operator’s use.

     3. Base of the Aircraft. Operator acknowledges that Owner currently
bases the Aircraft at Las Vegas McCarran Airport, Clark County, Nevada (the
“Base”), and that Operator’s use of the Aircraft for Operator’s business travel
shall include ferry flights to and from the Base at the beginning and end of
such business travel.

     4. Consideration.

            (a) Operator shall pay Owner in connection with use of the Aircraft during
the Term for Operator’s business travel an amount equal to Three Thousand One
Hundred Dollars ($3,100.00) per flight hour, as billed by Owner to Operator and
paid by Operator within 30 days of receipt of an invoice from Owner.

            (b) Operator agrees to pay directly all operating expenses for the
Aircraft for the hours used by the Operator, including but not limited to crew
charges and expenses, fuel, power by the hour charges, per hour engine
maintenance charges, per day maintenance charges, hangar charges other than the
Base, landing fees, per hour avionics maintenance charges, parking fees,
tie-down, handling, customs, use of airways, permission for overflight, flight
planning services, all communications charges, including in-flight telephone as
billed to Operator.

            (c) Operator agrees to pay directly all fees and charges, including
gasoline sales taxes or any other taxes or fees assessed or charged by any
airport or other entity for the operation of the aircraft, including any
federal excise taxes.

 

 

            (d) Owner’s invoices shall include the date, departure point, arrival
point, and number of flight hours for each flight by Operator.

            (e) In no event shall the amount paid to Owner under this Agreement on an
annual basis exceed $1 million without the further written
consent of Operator’s Board of Directors.

     5. Delivery of Aircraft. Owner shall deliver the Aircraft and all
applicable airframe and engine logs and any other records or documents in the
Owner’s possession to Operator at the Base upon twenty four (24) hour written
notice by Operator.

     6. Acceptance and Warranty. Owner represents to Operator that the
Aircraft is in good operating and mechanical condition and that Owner is
unaware of any facts or information which would prohibit or restrict the
Operator’s use of the Aircraft. Owner shall notify Operator of any and all
airworthiness directives and compliance with service bulletins, service
instructions and any other maintenance or operational publications of the
manufacturer of the Aircraft, engines or accessories.

     7. Title and Insurance. Title and ownership of the Aircraft shall
remain with the Owner throughout the Term and the Operator shall do nothing
which shall encumber, interfere with or otherwise dilute the Owner’s
unrestricted title to and ownership of the Aircraft.

     8. Return of Aircraft. Operator agrees to return the Aircraft to the
Owner at the Base in as good a condition as when it was delivered to Operator
by Owner, normal wear and tear excepted and in an undamaged and airworthy
condition, with all systems functioning properly and all applicable maintenance
complied with. Any exceptions or deviations shall be noted and listed
separately in a document forwarded by the Operator to the Owner upon return of
the Aircraft to the Owner.

     9. Owner’s Right to Inspect. The Owner or its designee shall have the
right to inspect the Aircraft at any reasonable time upon reasonable advance
notice. At the time of the inspection, provision should be made for the
Operator to make available to the Owner or its designee all of the Aircraft and
engine logbooks and other appropriate maintenance records.

     10. Lawful Use. Operator hereby warrants that the Aircraft will not be
maintained, used, operated or stored in violation of any law, rule or
regulation of any state or governmental authority or in violation of its
airworthiness certificate promulgated by the Federal Aviation Administration
(“FAA”). Any unlawful use of the Aircraft by the Operator or any operation of
the Aircraft in violation of any regulation will render this Agreement null and
void and entitle the Owner to immediately retake possession of the Aircraft.

     11. Transportation Location. The Aircraft is not to be operated in any
location that may be excluded from the terms of any applicable insurance policy
nor in any territories where it is threatened by risk of hostilities or by
seizure.

     12. Additional Equipment and Modification. Operator agrees not to
remove, substitute or replace any instrument or component of the Aircraft or
its avionics without Owner’s prior written consent. Any substitutions or
removals shall be of like value with the items that are substituted or removed
and there shall be no diminution in value of the aircraft by reason of any
swapped or replaced item.

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     13. Pilot Qualifications. At any time that the Operator is operating
the Aircraft, Operator agrees to cause the Aircraft to be operated by pilots
who are duly qualified under the Federal Aviation Regulations, including,
without limitation, with respect to currency and type-rating, whose licenses
and certificates are in good standing, and who meet all other requirements
established and specified by the FAA and the insurance policies required
hereunder.

     14. Maintenance and Repair. Operator warrants that it will keep and
maintain the Aircraft in a good and airworthy condition in compliance with all
applicable FAA regulations and all service letters, bulletins and instructions
issued by the manufacturer of the airframe or engines. Replacement, overhaul or
repair of any life-limited component or part of the Aircraft shall be paid by
the Operator at an hourly rate based upon Operator’s number of flight hours. If
a manufacturer of a component or part provides for a new kit, modification or
otherwise updated item, the cost shall be prorated between Operator and Owner
based on the Operator’s number of flight hours. Scheduled or unscheduled
overhaul, repair or maintenance of the engineers on the Aircraft shall be the
responsibility of the Owner except as otherwise provided herein.

     15. Hold Harmless; Indemnity; Loss or Damage Operator shall indemnify,
defend and hold harmless Owner and its officers, directors, agents and
employees from and against any and all liabilities, claims (including, without
limitation, claims involving or alleging Operator’s negligence and claims
involving strict or absolute liability in tort), demands, suits, causes of
action, losses, penalties, fines, expenses (including, without limitation,
attorneys’ fees) or damages (collectively, “Claims”), to the extent relating to
or arising out of Operator’s breach of this Agreement if and to the extent that
Owner would have had the benefit of insurance coverage for such Claims but for
Operator’s breach but not including circumstances in which a Claim is solely
attributable to the gross negligence or willful misconduct of Owner during the
operation, possession and control of the Aircraft by the Operator. Owner agrees
to seek recovery for any Claims from all available insurance before seeking
indemnification from Operator hereunder.

     16. Insurance. Owner shall maintain in effect at its own expense
throughout the Term, insurance policies containing such provisions and
providing such coverage as Owner deems appropriate. Notwithstanding the
foregoing, Owner shall maintain property damage and personal injury aviation
liability insurance with coverage in the amount of no less than $300,000,000
combined single limit per occurrence (the “Required Insurance”). Owner shall
cause the policies providing the Required Insurance to (a) name Operator as an
additional insured, (b) not be subject to any offset by any other insurance
carried by Owner or Operator, (c) contain a waiver by the insurer of any
subrogation rights against Operator, (d) insure the interest of Operator,
regardless of any breach or violation by the Owner or of any other person
(other than is solely attributable to the gross negligence or willful
misconduct of Operator) of any warranty, declaration or condition contained in
such policies, (e) include a severability of interests endorsement providing
that such policy shall operate in the same manner (except for the limits of
coverage) as if there were a separate policy covering each insured and (f) not
be subject to cancellation or material modification without at least 30 days’
written notice to Operator. Operator acknowledges that Owner does not maintain
and is not required to maintain insurance against perils covered by “war risk”
insurance, including acts of war, hijacking, nuclear detonation, strikes,
sabotage, confiscation, and terrorism.

     17. Assignment, Sublease and Encumbrance. Owner shall have the right
to assign this Agreement without notice or consent of the Operator.
Notwithstanding the foregoing, Operator’s rights under this Agreement shall
continue during the Term. Owner shall have the right to use the Aircraft when
not in use by the Operator. Operator may not sublease, mortgage or

3

 

pledge or otherwise encumber the Aircraft and shall pay all maintenance
and repair costs so that no mechanic’s liens are placed or levied against the
Aircraft. Owner may pledge or otherwise encumber the Aircraft as security for a
loan to finance its purchase.

     18. Default and Breach. Owner may immediately terminate this Agreement
upon the following occurrences:

            (a) Operator files a petition in bankruptcy or becomes insolvent;

            (b) Operator is involved in involuntary proceedings under the bankruptcy
laws;

            (c) The rents and other sums due and payable remain unpaid for more than
thirty (30) days after written notice to the Operator;

            (d) Operator fails to perform the terms and conditions of the Agreement
after Operator has been notified of a deficiency; or

            (e) Operator attempts to assign or transfer its interest in the Aircraft
to third persons.

     19. Repossession. In the event of any default as described in Section
18 above, Owner shall have the right to terminate this Agreement and retake
immediate possession of the Aircraft. Owner’s remedies hereunder are cumulative
and the Owner may exercise them as it chooses.

     20. General Provisions

            (a) Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the construction or
interpretation of this Agreement.

            (b) Partial Invalidity. If any provision of this Agreement, or the
application thereof to any person, place or circumstance, shall be held by a
court of competent jurisdiction to be illegal, invalid, unenforceable or void,
then such provision shall be enforced to the extent that it is not illegal,
invalid, unenforceable or void, and the remainder of this Agreement, as well as
such provision as applied to other persons, shall remain in full force and
effect.

            (c) Waiver. With regard to any power, remedy or right provided in this
Agreement or otherwise available to any party, (i) no waiver or extension of
time shall be effective unless expressly contained in a writing signed by the
waiving party, (ii) no alteration, modification or impairment shall be implied
by reason of any previous waiver, extension of time, delay or omission in
exercise or other indulgence, and (iii) waiver by any party of the time for
performance of any act or condition hereunder does not constitute waiver of the
act or condition itself.

            (d) Notices. Any notice or other communication required or permitted
under this Agreement shall be in writing and shall be deemed duly given upon
actual receipt, if delivered personally, by overnight courier or by telecopy;
or three (3) days following deposit in the United States mail, if deposited
with postage pre-paid, return receipt requested, and addressed

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to such address as may be specified in writing by the relevant party from
time to time, and which shall initially be as follows:

	 	 	 
	To
Owner at:

	 	Global Aviation Delaware LLC
	

	 	5050 Koval Lane #C-105
	

	 	Las Vegas, NV 89119
	

	 	Attn: President
	To
Operator at:

	 	MediCor Ltd.
	

	 	4560 S. Decatur Blvd., Suite 300
	

	 	Las Vegas, NV 89103
	

	 	Attn: Chief Financial Officer

            No objection may be made to the manner of delivery of any notice or other
communication in writing actually received by a party.

            (e) Delaware Law. This Agreement shall be governed by and construed in
accordance with the law of the State of Delaware, regardless of the choice of
law provisions of Delaware or any other jurisdiction.

            (f) Entire Agreement. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter contained in this
Agreement and supersedes any prior or contemporaneous agreements,
representations and understandings, whether written or oral, of or between the
parties with respect to the subject matter of this Agreement. There are no
representations, warranties, covenants, promises or undertakings, other than
those expressly set forth or referred to herein.

            (g) Amendment. This Agreement may be amended only by a written agreement
signed by all of the parties.

            (h) Binding Effect; Assignment. This Agreement shall be binding on, and
shall inure to the benefit of, the parties to it and their respective
successors and assigns; provided, however, that Operator may not assign any of
its rights under this Agreement, and any such purported assignment shall be
null, void and of no effect.

            (i) Attorneys’ Fees. Should any action (including any proceedings in a
bankruptcy court) be commenced between any of the parties to this Agreement or
their representatives concerning any provision of this Agreement or the rights
of any person or entity thereunder, solely as between the parties or their
successors, the party or parties prevailing in such action as determined by the
court shall be entitled to recover from the other party all of its costs and
expenses incurred in connection with such action (including, without
limitation, fees, disbursements and expenses of attorneys and costs of
investigation).

            (j) Remedies Not Exclusive. No remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity
by statute or otherwise. The election of any one or more remedies shall not
constitute a waiver of the right to pursue other remedies.

            (k) No
Third-Party Rights. Nothing in this Agreement, whether express or
implied, is intended to confer any rights or remedies under or by reason of
this Agreement on any

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person other than the parties to this Agreement and their respective
successors and assigns, nor is anything in this Agreement intended to relieve
or discharge the obligation or liability of any third persons to any party to
this Agreement, nor shall any provision give any third person any right of
subrogation or action over or against any party to this Agreement.

            (l) Counterparts. This Agreement may be executed in one or more
counterparts, each of which independently shall be deemed to be an original,
and all of which together shall constitute one instrument.

            (m) Relationship of the Parties. Nothing contained in this Agreement
shall in any way create any association, partnership, joint venture, or
principal-and-agent relationship between the parties hereto or be construed to
evidence the intention of the parties to constitute such.

            (n) Limitation of Damages. Each party waives any and all claims, rights
and remedies against the other, whether express or implied, or arising by
operation of law or in equity, for any punitive, exemplary, indirect,
incidental or consequential damages whatsoever.

            (o) Survival.
All representations, warranties, covenants and agreements contained in this Agreement shall survive the expiration or termination of this
Agreement.

     IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to
be duly executed effective as of the day and year first written above.

	 	 	 	 	 	 	 
	OWNER:	 	OPERATOR:
	GLOBAL AVIATION DELAWARE LLC	 	MEDICOR LTD.
	By:

	 	

	 	By:
	 	

	

	 	     Name:
	 	 	 	Name:
	

	 	     Title:
	 	 	 	Title:

6exv10w23

 

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	 
	 
	 
	 	3.1	 	Conditions precedent specific to Tranche A1	 	 	14	 
	 
	 	3.1.1	 	Delivery of documents	 	 	14	 
	 
	 	3.1.2	 	Other conditions	 	 	16	 
	 
	 	3.2	 	Conditions precedent specific to Tranche A2	 	 	16	 
	 
	 	3.3	 	Conditions precedent specific to Tranche A3	 	 	16	 
	 
	 	3.4	 	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	 
	 
	 	5.1.2	 	Repayment of Tranche A2	 	 	18	 
	 
	 	5.1.3	 	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	 
	 
	 	8.5	 	Commitment Fee for Tranche A3	 	 	24	 

2

 

	 	 	 	 	 	 	 	 	 
	 
	 	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	 
	 
	18
	 	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	 
	 
	 	20.8	 	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 * * *
including a maximum of * * * 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. * * * increased by the Acquisition Subsequent Payments.
	 
	 	 
	“Acquisition
Subsequent Payment 1”

	 	means the Acquisition Subsequent Payment of a maximum amount of * * * , 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 * * * , 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 * * * , 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 * * * 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 * * * 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 * * * 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 * * *, 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 * * *.
	 
	 	 
	“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 * * *.

The Loan will be divided into Tranche A1, of * * * , to partially refinance the
Receivables and the Shareholders’ Loan and a Tranche A2, of a maximum sum of *
* * , a Tranche A3, of a maximum sum of * * * and a Tranche A4, of a maximum
sum of * * * , 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).

3.1 Conditions precedent specific to Tranche A1

13

 

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;
	 
	(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:

14

 

	 	•	 	the partial repayment of up to * * * of the Shareholder’s Loan, with the
Drawdown of Tranche A1 of the Loan,
	 
	 	•	 	the partial repayment of a minimum amount of * * * , 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 * * *, including a maximum
of * * * Acquisition Subsequent Payments,
	 
	 	•	 	the terms and conditions for paying the said 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.

3.2 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.

3.3 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.

3.4 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:

	•	 	* * * , for Tranche A1,
	 
	•	 	the amount of Acquisition Subsequent Payment 1 up to a maximum of * * * for Tranche A2,
	 
	•	 	the amount of Acquisition Subsequent Payment 2 up to a maximum of * * * for Tranche A3,
	 
	•	 	the amount of Acquisition Subsequent Payment 3 up to a maximum of * * * 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: * * *

Branch Code: * * *

Account number: * * *

RIB Key: * * *

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: * * *,

Installment of September 15 2006: * * *,

Installment of September 15 2007: * * *,

Installment of September 15 2008: * * *,

Installment of September 15 2009: * * *,

Installment of September 15 2010: * * *,

Installment of September 15 2011: * * *.

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: * * *,

Installment of September 15 2007: * * *,

Installment of September 15 2008: * * *,

Installment of September 15 2009: * * *,

Installment of September 15 2010: * * *,

Installment of September 15 2011: * * *.

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: * * *,

Installment of September 15 2008: * * *,

Installment of September 15 2009: * * *,

Installment of September 15 2010: * * *,

Installment of September 15 2011: * * *.

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: * * *,

Installment of September 15 2009: * * *,

Installment of September 15 2010: * * *,

Installment of September 15 2011: * * *.

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 *
* *and above this, in multiples of * * *.

(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 * * * of the amount repaid, if the repayments are made
within three (3) years of the date the Agreement is signed and * * * 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.

* * * of the portion of Excess Cash Flow exceeding * * * and below * * *

it is specified for the avoidance of doubt that no mandatory prepayment will be
made on the amount of Excess Cash Flow exceeding * * *.

(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 * *
* 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 * * *% 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:
	* * *% a year
	 	* * *
	 	* * *
	* * *% a year
	 	* * *
	 	* * *
	* * *% a year
	 	* * *
	 	* * *

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 * * * % 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 * * *.

(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 * * *% 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 * * *% 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 * * *% 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 * * * 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 behalf of the Banks, to the
prepayment of the Loan, which

27

 

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 * * *% 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 * * *% compared to its value on the
date that the Agreement is signed, on at least * * *% 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**
	 	* * *
	 	* * *
	 	* * *
	30/06/2006
	 	* * *
	 	* * *
	 	* * *
	30/06/2007
	 	* * *
	 	* * *
	 	* * *
	30/06/2008
	 	* * *
	 	* * *
	 	* * *
	30/06/2009
	 	* * *
	 	* * *
	 	* * *
	30/06/2010
	 	* * *
	 	* * *
	 	* * *

** 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: * * *,

Fiscal year closed on June 30 2006: * * *,

Fiscal year closed on June 30 2007: * * *,

Fiscal year closed on June 30 2008: * * *,

Fiscal year closed on June 30 2009: * * *,

Fiscal year closed on June 30 2010: * * *.

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 * * * for
the term of the Loan for all of the Group’s companies. However, it is specified
that this additional indebtedness of * * * can be increased during each of the
fourth and fifth 12 month-periods after the date that the Agreement is signed,
by * * *% 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 * * *% 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 * * * 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:

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

33

 

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

34

 

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

35

 

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: * * *

Branch Code: * * *

Account number: * * *

RIB Key: * * *

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:

- * * * % 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 %,

- * * * % 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 %,

- * * * % 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 %,

- * * * % 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

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