Document:

Exhibit 10.1

 

* * * Confidential Treatment Requested

 

AMENDED
AND RESTATED NON-EXCLUSIVE DISTRIBUTION AGREEMENT

 

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

 

RECITALS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(a)                                  sell the Products in the Territory; or

 

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

 

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

 

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

 

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

 

3.                                      Orders and Shipping.

 

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

 

(b)                                  Title and Risk of Loss.  All
Products shall be shipped * * * to the Distributor at such location designated
by Distributor or such other location as Distributor may notify Supplier of
from time to time.  * * *

 

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

 

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

 

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

 

(e)                                  * * *

 

4.                                      Pricing and Payment Terms.

 

(a)                                  Price.  Distributor shall pay * * * per
saline Breast Implant unit.  * * *  The price and terms for any Products other
than the saline Breast Implants shall be as mutually agreed upon by the parties
hereto.  Subject to the terms of this
Agreement, Distributor shall pay * * * per saline Breast Implant unit.  * * *

 

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

 

(c)                                  * * *

 

(d)                                  * * *

 

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

 

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

 

(f)                                    * * *

 

(g)                                 Right to Inspect.  From
time to time during the term of this Agreement, Supplier and its
representatives shall have the right to inspect and make copies of the books
and records of Distributor relating to sales of Products for the purpose of
confirming Distributor’s compliance with the terms of this Agreement.  Such inspection may occur not more frequently
than once in any three consecutive month period and shall be during ordinary
business hours at Distributor’s place of business upon not less than three
business days advance notice.  Supplier
shall bear all of the costs of such inspection unless it is determined that
Distributor has underpaid Supplier by an amount equal to * * * or more of the
amounts paid during the period covered by the inspection, in which case
Distributor shall reimburse Supplier for all of such costs.

 

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

 

6.                                      The Products.

 

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

 

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

 

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

 

(d)                                  * * *

 

(e)                                  * * *

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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7.                                      Regulatory Responsibilities.

 

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

 

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

 

(c)                                  For the purpose of maximizing the likelihood
of FDA GMP approval and clearance, Supplier agrees to allow an inspector of
Distributor’s selection to inspect Supplier’s facilities, processes, operations
and records prior to the FDA’s GMP inspection of Supplier’s facilities.  Supplier further agrees promptly to implement
the recommendations the inspector reasonably makes as necessary or appropriate
for the purpose of obtaining FDA GMP approval and clearance.  In addition, Supplier agrees to permit one or
more representatives of Distributor or other experts to participate directly in
cooperation with Supplier in the preparation of PMA application modules.

 

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

 

8.                                      Quality Assurance
Responsibilities.  Supplier agrees that, in order to expedite
the acceptance of Products by Distributor’s Quality Assurance and/or Regulatory
departments, that Distributor will, at Supplier’s expense, implement Quality
Assurance and/or Regulatory programs and/or personnel into the Supplier’s
manufacturing facilities.  Supplier
grants Distributor the right to conduct Quality Assurance and/or Regulatory
audits (based on Distributor’s Quality Assurance standards, which at all times
shall incorporate applicable FDA 

 

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and GMP requirements) using Distributor’s
personnel, Supplier’s personnel and/or independent consultants on a quarterly
basis or more frequent spot basis. 
Supplier agrees that Supplier will cure any curable deficiencies within *
* * of written notice by Distributor of any such Quality Assurance and/or
Regulatory audits and commence curing all other curable deficiencies that are
curable but not reasonably subject of cure within * * *.  Supplier agrees to credit Distributor’s
account in the amount of * * * for * * * that any deficiencies remain uncured
following * * *.  Similarly, following
Clearance Distributor agrees to credit Supplier’s account in the amount of * *
* for * * * that any deficiencies imposed by the FDA on Distributor and
relating to Distributor’s obligations under this Agreement remain uncured
following * * * commencing on the later of the date of Distributor’s receipt of
notice thereof from the FDA or the date imposed by the FDA for cure or
compliance.

 

9.                                      Distributor’s Representations and
Warranties.

 

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

 

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

 

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

 

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

 

10.                               Operational Commitments.  Distributor
agrees to the following:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

11.                               Notification of Material or
Process Change.  Supplier shall notify Distributor prior to
implementing any changes in the manufacture, assembly, labeling of the Product
or the processes used to produce the Product (the “Change Notification”).  No such change will be made by Supplier
without first obtaining the approval of Distributor’s Quality Assurance manager

 

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

 

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

 

(a)                                  all raw material testing records;

 

(b)                                  all manufacturing records;

 

(c)                                  all sterilization reports; and

 

(d)                                  all final Product testing reports.

 

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

 

13.                               Patents and Trademarks.

 

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

 

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

 

14.                               Product Liability Insurance.  If
Supplier obtains product liability insurance for the Products, such insurance
shall contain either a vendor’s endorsement or contractual liability coverage
referencing the indemnification provisions contained herein on all
Products.  Upon issuance of any such
product liability insurance, Supplier shall immediately furnish to Distributor 

 

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a certificate of insurance issued by the
carrier evidencing the foregoing endorsements, coverages and limits and such
insurance shall not be cancelable by Supplier without at least fifteen (15)
days prior written notice to Distributor.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

19.                               Miscellaneous.

 

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

 

11

 

* * * Confidential Treatment Requested

 

Distributor or MediCor hereunder may be
assigned to any entity controlled by MediCor; provided that such entity assumes
all rights and obligations of Distributor or MediCor, as applicable, hereunder
and Distributor remains liable for all of its obligations hereunder incurred
prior to the effective date of such assignment.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(j)                                    Entire Agreement.  The parties
acknowledge that no representation, promise or inducement has been made other
than as set forth in this Agreement, and that they are not entering into this
Agreement in reliance upon any representation, promise or inducement not set
forth herein.  This Agreement supersedes
all prior negotiations, understandings and agreements (including the Original
Agreement which it amends and restates in its entirety) of any 

 

12

 

* * * Confidential Treatment Requested

 

kind, written or oral, with respect to the
subject matter hereof and contains all of the terms and provisions of agreement
between the parties hereto with respect to the subject matter hereof  provided, however, that nothing in this
Agreement shall supersede rights or obligations of the parties under the
Original Agreement with respect to events occurring prior to the date hereof,
except that Distributor’s claims under the Original Agreement for reimbursement
for PMA-related clinical study costs under the Original Agreement shall be
canceled hereby in consideration of the transfer to Distributor of the PMA and
Distributor’s claims under the Original Agreement in respect of product
replacement costs and legal expenses accrued through February 29, 2004
shall be canceled hereby.

 

13

 

* * * Confidential Treatment Requested

 

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

 

 

	
  “Supplier”

  	
  “Distributor”

  
	
  Poly Implants Protheses,
  S.A.

  	
  III Acquisition Corp.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  
	
  Address:

  	
  337 Avenue de Bruxelles

  83514 La Seyne Sur Mer France

  	
  Address:

  	
  4560 S. Decatur Blvd

  Suite 300

  Las Vegas, NV 89103

  
	
   

  
	
  Phone:

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

  	
  Phone:

  	
  +1 (702) 932-4560

  
	
   

  
	
  Fax:

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

  	
  Fax:

  	
  +1 (702) 932-4561

  
											

 

* * *

 

14Exhibit 10.2

 

POLY IMPLANTS PROTHESES, S.A.

 

6.75% REVOLVING PROMISSORY NOTE

 

 

March 30, 2004

 

 

Poly Implants Protheses,
S.A. (the “Company”), a French societe anonyme, promises to pay to III
Acquisition Corp., a Delaware corporation (“III”) or its assigns (collectively,
the “Holder”), at the time described below, the principal sum of up to
$1,657,675 (or such lesser amount that equals the total amount paid by III on
account of the Company’s products sold by PIP/USA or III as provided in the
next succeeding paragraph), plus any amounts added thereto pursuant to
paragraph 6 of this Note.  The Company
also promises to pay interest on the balance of that principal sum which is
unpaid from time to time at the rate of 6.75% per annum.

 

Concurrently herewith, the Company
and III are entering into an Amended and Restated Non-Exclusive Distribution
Agreement dated as of March 30, 2004 (the “Agreement”).  As provided in Section 4(e) of the
Agreement, as of February 29, 2004, the Company had certain obligations to
patients and doctors in respect of claims related to products sold by PIP/USA, Inc.
and III (“Existing Claims”).  III has
undertaken in the Agreement to administer and pay up to US$1,657,675 of such
Existing Claim amounts, with III consulting with the Company prior to paying
any such Existing Claim amounts.  As
provided in the Agreement, if III determines in its sole discretion that
payment of any Existing Claim amount is necessary or advisable to (1) prosecute
or maintain the PMA (as defined in the Agreement), (2) settle any
presently existing litigation or any related or similar case, (3) avoid
any adverse regulatory action, or (4) continue to market Products (as
defined in the Agreement) in any geographical market in the Territory (as
defined in the Agreement), then III may without consent of the Company pay any
such Existing Claim amount.  As provided
in the Agreement, if with respect to any Existing Claim amount III does not
make the determination set forth in the immediately preceding sentence, then
III will consult with the Company in the administration of such Existing
Claim.  As provided in the Agreement,
unless the Company (i) engages counsel reasonably acceptable to III to
consult on such Existing Claim administration and (ii) separately
indemnifies III from and against any loss, claim or liability related to such
Existing Claim in a manner reasonably acceptable to III, III may pay such
Existing Claim amount.  As provided in
the Agreement, if the Company engages counsel and provides the indemnity as set
forth in the immediately preceding sentence in respect of an Existing Claim
covered by such sentence, then III will not pay the respective Existing Claim
amount without the Company’s consent, which consent will not unreasonably be
withheld.  In consideration of the
foregoing undertakings by III, the Company has issued to III this Note in the
initial nominal principal amount of US$1,657,675 (and an actual principal
amount equal to the Existing Claim amounts paid by III as provided above).  As provided in paragraph 6 below, the
principal amount payable under this Note shall be increased by any additional
amounts paid by III on the Company’s or PIP/USA, Inc.’s behalf with
respect to products sold by the Company, PIP/USA, Inc. or III in the
Territory that are not in respect of Existing Claims.

 

1

 

1.                                       The unpaid principal balance of the sum
evidenced by this Note will be due and payable, as follows:

 

(a)                                  Each time the III becomes obligated to make a
payment (an “Additional Payment”) to the Company under Section 4(c) of
an Amended and Restated Non-Exclusive Distribution Agreement dated March 30,
2004 (the “Distribution Agreement”) between the Company and III, (i) III
will not make the Additional Payment to the Company, and (ii) the
outstanding balance of the principal sum evidenced by this Note will be reduced
by an amount equal to the payment III was to have made to the Company.  This paragraph will constitute an assignment
by the Company to the Holder of the right to receive all the Additional
Payments from III until the principal sum evidenced by this Note has been paid
in full.  However, the reduction of the
principal sum evidenced by this Note will be effective whether or not III makes
the payment to the Holder.

 

(b)                                 If the Distribution Agreement is terminated
for any reason, including, but not limited to, because the products that are
the subject of the Distribution Agreement do not receive governmental approvals
that are required to permit them to be sold in the Territory described in the
Distribution Agreement, because III or the Company ceases or suspends the
operation of all facilities where III is selling or the Company is producing
the products that are the subject of the Distribution Agreement, the entire balance
of the principal sum evidenced by this Note will be due and payable on the day
the Distribution Agreement terminates.

 

2.                                       Interest will be payable on the first day of
January, April, August and October of each year (each an “Interest
Payment Date”), with the first interest payment to be made on the first
Interest Payment Date after the date of this Note, except that no interest
payment will be due on April 1, 2004.

 

3.                                       Each payment of principal or interest will be
made to the Holder by certified or bank cashier’s check or wire transfer, at
such address or to such account as the Holder specifies to the Company in
writing at least three business days before the payment is to be made.

 

4.                                       Any payment of principal or interest which is
not made when it is due will bear interest from the day it is due until it is
paid at the rate which is 200 basis points higher than the interest rate in
effect on the day the payment is due, or such lower rate as is the maximum rate
permitted by law.

 

5.                                       The Company may at any time prepay all or any
portion of the outstanding balance of the principal sum evidenced by this Note,
provided that each prepayment must be at least $50,000,
or such lesser amount as is the entire principal sum which is outstanding
immediately before the prepayment.  Each
prepayment of principal will be accompanied by all accrued but unpaid interest
on the principal sum being prepaid.

 

6.                                       (a)                                  Whenever the Company notifies III, or III
otherwise becomes aware, that a claim other than an Existing Claim (an “Additional
Claim”) has been made against the Company or PIP/USA in the United States of
America for breach of warranty or for liability relating to products
distributed in the United States, III will review the Additional Claim and
recommend to the Company that PIP either (a) pay the Additional Claim in
full, (b) make a partial payment in settlement of the Additional Claim, or
(c) deny liability for the Additional Claim.  In any instance in which III recommends that
the Company pay an Additional Claim in full, or in which III recommends that
the Company pay an amount in settlement of the Additional Claim and the
claimant 

 

2

 

agrees to accept that amount in full settlement of the Additional
Claim, the Company will pay the recommended amount within 30 days after III
recommends that it do so.

 

(b)                                 If the Company fails to pay an Additional
Claim as recommended by III within 30 days after III recommends that the
Company make the payment, III may, but will not be required to, pay the
Additional Claim and add the sum that III paid to the principal balance due
this Note.  At III’s request, the Company
will acknowledge that the principal balance of this Note has been increased by
the amount of the payment made by III (and, if III so requests, issue a new
Note reflecting the increased principal balance in exchange for the existing
Note).

 

(c)                                  The Company hereby indemnifies III and its
parent, subsidiaries, shareholders, directors, officers, employees and agents,
against and agrees to hold each of them harmless from, any liabilities costs or
expenses any of them may incur, because the Company fails to pay an amount that
III recommends in accordance with paragraph 6(a) within 30 days after III
recommends the payment.

 

7.                                       Each of the following events will constitute
an Event of Default:

 

(a)                                  The Company fails to make any payment of
principal on or before the day on which it is due; or

 

(b)                                 The Company fails to make any payment of
interest within ten days after the day on which is it due; or

 

(c)                                  The Company defaults in any of its
obligations under this Note other than obligations described in subparagraphs (a) and
(b) and fails to cure that default within 30 days after a written demand
from the Holder that the Company do so; or

 

(d)                                 The Company, Heritage Worldwide, Inc., a
Delaware corporation (“HWWI”) or a significant subsidiary of either (as that
term is defined in Securities and Exchange Commission Regulation S-X) commences
a proceeding seeking relief as a debtor under any French, U.S. or other
insolvency law; or

 

(e)                                  An order is entered in a proceeding under any
French, U.S. or other insolvency law declaring the Company, HWWI or a
significant subsidiary of either to be insolvent or appointing a receiver or
similar official for substantially all the Company’s, HWWI’s or a significant
subsidiary’s properties, and that order is not dismissed within 90 days; or

 

(f)                                    Because of events of default, holders of
indebtedness of the Company for borrowed money aggregating $100,000 accelerate
the time when that indebtedness is due and payable.

 

8.                                       Upon the occurrence of an Event of Default,
the Holder may, by a notice to the Company given while the Event of Default is
continuing, declare the entire unpaid balance of the principal sum evidenced by
this Note and all accrued but unpaid interest to be due and payable, in which
event that principal balance and accrued but unpaid interest will be
immediately due and payable, except that if the Event of Default is of the type
described in subparagraph (d) or (e), the entire unpaid balance of the
principal sum evidenced by this Note and all accrued but unpaid interest 

 

3

 

will be immediately due and payable when the Event of Default occurs,
without requiring any notice or other action by the Holder.

 

9.                                       No amendment of this Note, waiver of any
provision of this Note, or extension of the time by which the Company must make
any payment of principal or interest required by this Note, will be effective
unless it is made in writing by the Holder. 
Any waiver or extension will be effective only in the instance and for
the purpose for which it is given.

 

10.                                 The remedies provided in this Note are
cumulative and are not exclusive of any other remedies provided by law.  The Company will pay on demand any expenses
(including reasonable attorneys fees and expenses) incurred by the Holder in
enforcing its rights under this Note.

 

11.                                 Any notice or other communication required or
permitted to be given under this Note must be in writing and will be deemed
given on the day when it is delivered in person or sent by facsimile (with
proof of receipt at the number to which it is required to be sent), or on the
third business day after the day on which it is mailed by first class mail from
within the United States of America, addressed (i) if to the Company, to
the Company’s principal executive offices and to the principal facsimile number
at those executive offices, Attention: President, or at such other address or
facsimile number as the Company may specify to the Holder in writing, and (ii) if
to the Holder, at the address or facsimile number specified by the Holder to
the Company in writing.

 

12.                                 This Note will be binding upon the Company
and its assigns, and will inure to the benefit of the Holder and the Holder’s
assigns.  This Note will be governed by,
and construed under, the laws of the State of  Delaware in the United States of
America, without regard to principles of conflicts of laws that might apply the
laws of another jurisdiction.

 

13.                                 The Company agrees that any action or
proceeding to collect any principal or interest due under this Note or to
enforce any other provision of this Note may be brought in any state or federal
court sitting in Wilmington, Delaware in the United States of America, and the
Company (i) submits to the jurisdiction of each of those courts for the
purpose of any such action or proceeding, (ii) agrees not to seek to
change the venue of any such action or proceeding which is brought in any of
those courts, whether because of inconvenience of the forum or otherwise (but
nothing in this Paragraph will prevent a party from removing an action or
proceeding from a state court sitting in Wilmington, Delaware to a Federal
court sitting in that county), and (iii) agrees that process in any such
action or proceeding may be served by registered mail or in any other manner
permitted by the rules of the court in which the action or proceeding is
brought.

 

IN WITNESS WHEREOF, the
Company is executing this Note on the date shown on the first page.

 

	
   

  	
  POLY IMPLANT PROTHESES,
  S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  

 

4

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