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Exhibit 10.5    
    

DISTRIBUTION SERVICES AGREEMENT  

        This Distribution Services Agreement (this "Agreement") is made as of this 3rd day of November, 2003 (the
"Effective Date") by, between and among PIERRE FABRE, INC. (to be known as PHYSICIANS FORMULA, INC.), a New York corporation having its
address at 1055 West 8th Street, Azusa, California ("PFI"), RENE FURTERER INC., a New York corporation
("RF," and collectively with PFI, the "Parties"), and PFDC HOLDINGS, INC., a Delaware corporation
("PFDC Holdings"). 

W I T N E S S E T H:  

        WHEREAS, pursuant to that certain Stock Purchase Agreement, dated as of the date hereof (the "Purchase
Agreement"), among PIERRE FABRE DERMO-COSMETIQUE, S.A., a French société anonyme ("PFDC"), PFI,
PFI Holdings Corp., a Delaware corporation ("Holdings Corp.") and PFI Acquisition Corp., a New York corporation, Holdings Corp. will acquire all of the
beneficial ownership interests in PFI from PFDC; 

        WHEREAS,
RF is a wholly-owned subsidiary of PFDC Holdings; 

        WHEREAS,
in connection with the consummation of the transactions contemplated by the Purchase Agreement, PFI has offered to render various distribution and logistic services to RF in
relation to RF activities in the United States of America and Canada; and 

        WHEREAS,
RF distributes and sells various cosmetic products in the United States of America and Canada. 

        NOW,
THEREFORE, in consideration of the mutual promises set forth herein and other good and valuable consideration, receipt of which is hereby acknowledged, and intending to be legally
bound hereby, PFI, RF and PFDC Holdings hereby agree as follows: 

ARTICLE I DEFINITIONS  

        As used in this Agreement, the following terms shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of
the terms defined): 

        1.1   "Affiliate" means, with respect to any Person, (i) any other Person of which securities or other ownership
interests representing more than fifty percent (50%) of the voting interests are, at the time such determination is being made, owned, Controlled or held, directly or indirectly, by such Person, or
(ii) any other Person which, at the time such determination is being made, is Controlling, Controlled by or under common Control with, such Person. As used herein,
"Control," whether used as a noun or verb, refers to the possession, directly or indirectly, of the power to direct, or cause the direction of, the
management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise. 

        1.2   "Approval" means any permit, license, certificate, approval, consent, notice, waiver, franchise, registration, filing,
accreditation, or other similar authorization required by any Requirements of Law, Governmental Authority, or contract to which a Party is a party. 

        1.3   "Consideration" means the fees to be paid by RF as described under Article III hereafter in consideration of
services performed by PFI under this Agreement. 

        1.4   "Customer" means any person or entity to whom Products are delivered hereunder or who actually uses the Products. 

        1.5   "Effective Date" means the date that both PFI and RF shall have executed and delivered this Agreement. 

        1.6   "Governmental Authority" means any legislature, agency, bureau, branch, department, division, commission, court,
tribunal, magistrate, justice, multi-national organization, quasi-governmental body, or other similar recognized organization or body of any federal, state, county, municipal, local, or 

 

foreign
government or other similar recognized organization or body exercising similar powers or authority. 

        1.7   "Gross Sales" means the actual selling prices relative to the sale of the Products (as this term is defined hereafter)
charged by RF in bona fide sales to non-Affiliate third parties in the Territory (as this term is defined hereafter), less (i) shipping, handling and taxes and (ii) rebates
and trade and cash discounts to the extent reflected in RF's invoice to the customer, but, for the avoidance of doubt, not including any adjustments concerning such rebates and trade and cash
discounts made subsequent to such invoice. 

        1.8   "Lien" means a mortgage, deed of trust, pledge, hypothecation, assignment, encumbrance, lien (statutory or otherwise,
including, without limitation, any lien for taxes), security interest, preference, participation interest, priority or security agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing and the filing of any
document under the Requirements of Law of any applicable jurisdiction to evidence any of the foregoing. 

        1.9   "Products" means, initially, hair care and cosmetic products marketed and sold by RF in the Territory under the
Trademarks (as this term is defined hereafter), listed on Attachment A, and thereafter any cosmetic products marketed and sold in the Territory
under such brands as may be added under this Agreement from time to time by RF; provided that the ability to add such new products shall not materially expand the scope and quantity of services
provided historically by PFI and shall not supercede or modify any restrictions applicable to RF under any other agreement between the Parties or under any other provision of this Agreement. 

        1.10 "Requirements of Law" means, collectively, any law (statutory, common, or otherwise), constitution, treaty, convention,
ordinance, equitable principle, code, rule, regulation, executive order, or other similar authority enacted, adopted, promulgated, or applied by any Governmental Authority, each as amended and now or
hereinafter in effect. 

        1.11 "RF Business" means the business conducted by RF that was conducted by PFI in relation to the Excluded Businesses (as
defined in the Purchase Agreement) during the six-month period preceding the Effective Date. 

        1.12 "RF's Proprietary Intellectual Property" means, collectively, RF's or any of its Affiliates' trademarks, trademark
rights, trade names, trade name rights, service marks, service mark rights, service names, service name rights, brand names, copyrights and copyright rights, trade dress, business and product names,
logos, slogans, and all pending applications for and patenting or registration of any of the foregoing, in each of the foregoing cases only if and to the extent used in connection with any of the
Products or packaging thereof. 

        1.13 "Services" means the various distribution and logistic services as listed and described in  Attachment C, subject to below and the Shipping Procedures set forth in
Attachment D
attached hereto. 

        1.14 "Term" shall have the meaning ascribed to that term in Article IV of this Agreement. 

        1.15 "Territory" shall mean the United States of America and Canada. 

        1.16 "Trademarks" means the RF trademarks listed, identified or described on Attachment B. 

ARTICLE II TERMS AND CONDITIONS  

        2.1   During
the Term, PFI shall diligently perform the Services for the benefit of RF in relation to the delivery of Products in the Territory all in accordance with and
subject to the quality, timeliness, standards and procedures specified in Attachment C and  Attachment D attached hereto. 

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        2.2   In
consideration for the Services to be performed by PFI hereunder, RF grants to PFI for the Term the exclusive right and license, only as required under this Agreement,
to: (i) import into Canada, deliver and distribute the Products into and throughout the Territory for and on behalf of RF, and (ii) use the RF Intellectual Property and the Trademarks
only in connection with the delivery and distribution of Products in the Territory. 

        2.3   PFI
acknowledges that the Trademarks are owned by and proprietary to RF or its Affiliates. PFI agrees that it shall not contest the validity or RF's ownership of the
Trademark registrations listed in Attachment B as used in connection with the Products. Except as expressly provided herein, nothing in this
Agreement shall be deemed or construed to grant PFI any interest or right in the Trademarks or RF Intellectual Property whatsoever. PFI agrees to promptly inform RF of any infringement of the
Trademarks of which PFI may become aware and to provide commercially reasonable assistance, at RF's expense, to prosecute such infringement with respect to such Trademarks. 

        2.4   In
connection with its Services to be provided hereunder, PFI shall use, at all times and in accordance with RF's policies or instructions, each of the Trademarks in its
proper trademark sense on and with reference to the Products to the extent consistent with its past practices prior to the Effective Date. Additionally, PFI covenants that, in its relations with any
and all third parties, it will not represent, express or maintain that it owns or has any ownership rights in the Trademarks and will, upon request by RF or as is otherwise appropriate, publicly
acknowledge that it does not own the Trademarks. 

        2.5   Notwithstanding
anything to the contrary in this Agreement, PFI shall only be required to provide Services to the extent that (x) such Services have been provided
by the Retained Businesses (as defined in the Purchase Agreement) to the RF Business and shall only be required to provide such Services with materially the same degree of quality and timeliness as
had been conducted by the Retained Businesses during the six-month period preceding the date hereof, and (y) such Services would not involve additional time or cost than such
Services required prior to the Effective Date (other than to the extent such additional time or cost would not have a sustained or material adverse effect on the operations of PFI, or to the extent
such additional time or cost resulted from a material breach of the Agreement by PFI). Without limiting the foregoing, (1) PFI shall not have any obligation to make any modifications,
improvements or enhancements to any of the Services or to any software, hardware, data, electronic devices or other systems utilized in connection with the provision of the Services, shall not be
required to add additional inventory capacity or hire additional personnel and shall not be required to invest in additional equipment or facilities, and (2) PFI shall not be responsible for
any regulatory matters relating to the Products (apart from the distribution thereof). 

 
 

ARTICLE III CONSIDERATION

        In
consideration of the Services performed by PFI, RF will reimburse or pay PFI as follows: 

        3.1   RF
shall pay or reimburse (as applicable) PFI's out-of-pocket costs and expenses (excluding all labor and other internal costs) incurred in
connection with the picking, packing, transportation and delivery of the Products to Customers in the Territory as listed and described in Paragraph Nos. 3, 4, 5 and 6 on  Attachment C attached
hereto. With respect to out of pocket costs and expenses relating to the transportation and delivery of the Products to
Customers in the Territory, RF will pay or reimburse PFI for all such costs and expenses within ten (10) days following the delivery by PFI to RF of invoices relating to such costs. 

        3.2   With
regard to warehousing services and associated administrative and support services as listed and described in Paragraph Nos. 2, 7, 8 and 9 on  Attachment C attached hereto (solely to the extent
consistent with past practices of PFI prior to the Effective Date), RF will pay, on a monthly
basis, an amount equal to three and one-half percent (3.5%) of the Gross Sales reported by RF to PFI in a written report to be delivered to PFI within thirty (30) days after the end
of each month (the 

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"Monthly Fee"); provided that the Monthly Fee shall in no event be less than $7,000. RF shall pay the
Monthly Fee within thirty (30) days following delivery of the Gross Sales report referenced in the immediately preceding sentence. Notwithstanding the foregoing, title to any Products shall not
be transferred to PFI and RF shall retain ownership of such Products until such Products are delivered to Customers. Notwithstanding the foregoing, PFI will retain risk of loss for Products which are
lost, stolen or damaged as a result of PFI's failure to exercise due care while PFI retains possession of such Products in its warehouse. 

        3.3   Each
Party shall keep complete and accurate records in connection with the Consideration. Each Party shall have the right to nominate an independent firm of certified
public or chartered accountants who shall have reasonable access (which shall be no more frequently than quarterly) to the books and records of the other Party during reasonable business hours for the
purpose of verifying any amounts payable under this Agreement at the requesting Party's sole cost and expense. 

        3.4   Any
payment to be made by RF in accordance with Sections 3.1 and 3.2 above, shall be completed through wire-transfer to the following account, or any other
account PFI may from time to time designate along with invoices, within thirty (30) days from the date of receipt of the corresponding invoice: 

        Bank: Wells Fargo Bank

        Account Number: 412-7012144

        ABA Number: 121000248 

        3.5   All
accounts receivable arising out of the sale of Products, and all proceeds thereof, shall be the sole property of RF, and any amount collected by PFI shall promptly
be deposited into bank accounts designated and maintained by RF. Such accounts receivable and all proceeds thereof shall be maintained free of all Liens resulting from any actions or omissions of, or
asserted through, PFI. 

ARTICLE IV TERM AND TERMINATION  

        4.1   This
Agreement and the license hereby granted shall commence on the Effective Date and shall remain in full force and effect during the twelve (12) full months
following the Effective Date unless extended or terminated prior to such date pursuant to this Section (as extended or otherwise modified, the "Term").
The Term shall terminate automatically without notice at 11:59 P.M. on the last day of such 12th month, provided,  however, that the Parties may extend
the Term by mutual written agreement. 

        4.2   PFI
and RF may terminate this Agreement for cause upon any material breach of this Agreement by the other Party as provided in this Section 4.2. In the event of a
material breach of this Agreement by on Party under the terms of this Agreement, the other Party shall deliver written notice to the allegedly defaulting Party specifying in detail the nature of such
material breach. In the event such defaulting Party fails to cure such material breach within thirty (30) days following the delivery of such notice if such breach is not solely caused by the
non-payment of fees and expenses under this Agreement, or five (5) business days following the delivery of such notice if such breach results from the non-payment of any
fees or expenses under this Agreement, the non-defaulting Party may immediately elect to terminate this Agreement. Additionally, either PFI or RF may terminate this Agreement immediately
on written notice to the other Party upon the occurrence of any of the following: 

        4.2.1 The
insolvency of the other Party; 

        4.2.2 The
institution of any proceeding or arrangement by or against the other Party relating to or in the nature of a bankruptcy, insolvency or assignment for the benefit
of creditors, which proceeding or arrangement is consented to by such Party or is not dismissed or discontinued within forty-five (45) days after the institution of such proceeding
or arrangement; or 

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        4.2.3 the
making of any assignment for the benefit of creditors or the appointment of a receiver of or for the other Party or of or for all or substantially all of the
business, assets or properties of the other Party. 

        4.3   Notwithstanding
any provision to the contrary in this Section, this Agreement and the license granted hereby shall continue after the end of the Term with respect to any
Product in transit from PFI's warehouse. Promptly after the end of the Term, PFI shall return all Products then held by PFI to RF or any other party designated by RF, at RF's expense, including all
labor and other internal costs at standard hourly rates and all freight and other out-of-pocket costs with respect to the organization and transfer of such Products. 

ARTICLE V CERTAIN COVENANTS AND OBLIGATIONS OF RF  

        RF covenants and agrees with PFI as follows: 

        5.1   RF
shall bear all responsibility for monitoring and complying with Requirements of Law related to ownership, sales, advertising and rights in connection with or related
to the Products; 

        5.2   RF
ensures that it shall possess at all times during the Term all permits and/or other Approvals that are required to observe, perform or abide by each of the covenants
to be observed, performed or abided by RF under this Agreement; 

        5.3   RF
shall bear all responsibility for monitoring and complying with Requirements of Law related to import of the Products into and throughout the Territory; 

        5.4   Unless
otherwise provided by applicable law and subject to the terms and conditions of this Agreement, RF may at any time decide to discontinue selling any Product, and
PFI shall have no claim against RF for such decision other than with respect to out-of-pocket costs and expenses of PFI with respect to the Products held by PFI at the time it
is informed of the discontinuation; and 

        5.5   Except
as expressly stated in this Agreement, RF DOES NOT MAKE ANY, AND HEREBY DISCLAIMS ALL, OTHER WARRANTIES EXPRESS OR IMPLIED, IN CONNECTION WITH THIS AGREEMENT. 

ARTICLE VI CERTAIN COVENANTS AND OBLIGATIONS OF PFI  

        PFI covenants and agrees with RF as follows: 

        6.1   PFI
shall bear all responsibility for monitoring and complying with Requirements of Law related to distribution and delivery of the Products in the United States, and,
until December 31, 2003, Canada, in a manner consistent with past practices prior to the Effective Date; provided,  however, that PFI shall not be
responsible for any regulatory matters relating to the Products (apart from the distribution thereof). 

        6.2   PFI
shall possess and use commercially reasonable efforts to maintain at all times during the Term all permits and/or other Approvals that PFI is required to possess and
maintain in order to perform its obligations under this Agreement which were obtained by PFI prior to the Effective Date. In addition, if any such Approvals are required in the future that were not
obtained by PFI prior to the Effective Date, PFI and RF shall cooperate to obtain such approvals at RF's cost, or if obtaining such Approvals is not practical at a reasonable cost or would have a
sustained or material adverse effect on PFI's business, then the Parties shall work together in good faith to either eliminate the basis for the requirement of such Approval or else to terminate all
or part of the Services. 

        6.3   Subject
to the terms and conditions of this Agreement and in consideration of RF's payments under Article III above, PFI shall perform the Services in accordance
with the terms of Article II and Attachment C, subject to Article II above and the Shipping Procedures in  Attachment D hereto. PFI

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shall
provide all such Services throughout the Term in a timely and professional manner, consistent with past practices of the Retained Businesses; and 

        6.4   Except
as expressly stated in this Agreement, PFI DOES NOT MAKE ANY, AND HEREBY DISCLAIMS ALL, OTHER WARRANTIES EXPRESS OR IMPLIED, IN CONNECTION WITH THIS AGREEMENT. 

ARTICLE VII CERTAIN REPRESENTATIONS AND WARRANTIES OF RF  

        RF represents and warrants to PFI as follows: 

        7.1   With
respect to the Products and Services hereunder: 

        7.1.1 PFI's
packaging and distribution of Products in accordance with the terms of this Agreement does not and will not infringe upon, violate or misappropriate any patent,
design, trademark, trade secret, copyright or other proprietary right of any third party; 

        7.1.2 all
of the rights in the Products as of the Effective Date are owned by RF free and clear of any Liens of RF and free from any adverse claims of ownership of any
nature whatsoever of any third parties, and the Products shall at all times hereafter during the Term of this Agreement remain free and clear of any such right or claim of any nature whatsoever of any
third parties that might interfere with PFI's performance of its obligations under this Agreement; and 

        7.1.3 RF's
execution, delivery and performance of this Agreement has been duly authorized and approved by all necessary corporate action on the part of RF. RF has duly
executed and delivered this Agreement, which constitutes a legal, valid and binding obligation of RF enforceable against RF in accordance with its terms. 

        7.1.4 Neither
RF's execution and delivery of this Agreement nor the performance of its obligations hereunder will result in a violation or material breach of, or constitute
a default with respect to, or accelerate the performance required under, any other agreement or obligation to which RF is a party or to which it is otherwise bound and will not constitute a violation
of RF's articles of incorporation or bylaws (or their equivalent) or of any Requirements of Law to which RF is subject. 

        7.1.5 Except
for actions of Holdings and PFI immediately after Closing (as defined in the Purchase Agreement), (a) the execution and delivery of this Agreement by PFI
and the performance of its obligations hereunder will not result in a violation or material breach of, or constitute a default with respect to, or accelerate the performance required under, any other
agreement or obligation to which PFI or any Retained Subsidiary (as defined in the Purchase Agreement) are a party or to which PFI or any Retained Subsidiary are otherwise bound and will not
constitute a violation of PFI's or any Retained Subsidiary's articles of incorporation or bylaws (or their equivalent) or of any Requirements of Law to which PFI or any Retained Subsidiary is subject
and (b) PFI possesses all permits and/or other Approvals that are required to perform its obligations under this Agreement after giving effect to the consummation of the transactions
consummated by the Purchase Agreement and to prevent a violation or material breach of, or constitute a default with respect to, or accelerate the performance required under, any other agreement or
obligation to which PFI is a party or to which PFI is otherwise bound. 

 
 

ARTICLE VIII PRODUCTS—STOCK—DELIVERY—WARRANTY—RETURNS    
    

        8.1   PFI
shall properly and safely store the Products and use commercially reasonable efforts consistent in all material respects with past practices to protect the Products
from any loss or damage. PFI shall segregate the Products from all other property owned or held by PFI and place appropriate notification at the location of the Products stating in a clear and
unambiguous manner that the Products are the property of RF. 

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        8.2   RF
shall be responsible for delivering to PFI the Products, in accordance with DDP Delivery (ICC INCOTERM 2000 edition), the amount of which shall be determined by RF in
accordance with Customer orders in a manner consistent with past practices prior to the Effective Date. All Products shall be shipped, and title to such Products shall pass from RF to the Customer
upon delivery to such Customer. Except as set forth in Section 3.2, RF shall be responsible for all costs, risks and insurance with respect to the Products. In the event that (i) the
content of a delivery of Products differs from the data in the shipping documents, or (ii) any of the Products are damaged, PFI shall, as promptly as practicable after becoming aware of such
matters, make a written report detailing such difference or damage and shall send a copy of this report to RF. Without limiting the foregoing, PFI shall not take title to any Products. 

        8.3   If
any damage to the Products occurs during transportation from RF's plant to the PFI warehouse, PFI shall use reasonable efforts, at RF's sole cost and expense, to take
actions requested by RF in order to preserve RF's legal rights to make a claim for damages against the transportation company or other responsible party and shall send all documents in its possession
relating to a possible claim to RF promptly. RF shall be responsible for filing and prosecuting any such claim; provided that PFI will cooperate and provide reasonable assistance as may be requested
by RF. 

        8.4   Upon
RF's request, PFI shall prepare and deliver the Products to Customers in the Territory in accordance with RF's reasonable instructions (which shall be of a type
consistent with past practices of PFI prior to the Effective Date), which instructions shall include the information necessary for PFI to execute such delivery, including, but not limited to, the
quantity of Products to be delivered, the location to which such Products shall be delivered and the delivery date. 

        8.5   PFI
shall have no obligation to make any product warranty and, without the written consent of RF, shall not make any product warranty in respect of any of the Products. 

        8.6   If
there shall be any returns of Products by Customers under warranty, PFI shall receive the returns but RF shall be responsible for all costs (including sales credit or
replacement articles but excluding the direct cost of PFI's employees who deal with any such return) in connection with any product warranty return or claim, plus, in the event such returned Product
is returned to inventory (as opposed to destroyed), PFDC shall also pay a handling fee equal to five percent (5%) of the cost of inventory (determined in accordance with GAAP) of such returned
Product. 

ARTICLE IX CONFIDENTIALITY  

        9.1   The
Parties agree to the terms of the Confidentiality Addendum, Attachment E, which is incorporated and made a part of this Agreement as though fully set forth herein. 

        9.2   The
expiration or termination of this Agreement shall not release either Party from its obligations under this Article IX. 

ARTICLE X RELATIONSHIP OF THE PARTIES  

        10.1 PFI
and RF are independent contractors, and neither Party shall be, nor represent itself to be, the joint venturer, franchiser, franchisee, partner, broker, employee,
or servant of the other Party for any purpose. Neither Party shall be responsible for the acts or omissions of the other. 

        10.2 PFI's
personnel who may perform services in connection with this Agreement from time to time shall be PFI's employees or independent contractors and shall not for any
purpose be considered employees or agents of RF. PFI assumes full responsibility for the actions of all such personnel while performing PFI's services and obligations under this Agreement. 

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        10.3 The
Parties agree that this Agreement is solely for the benefit of the Parties hereto, and no provision of this Agreement shall be deemed to confer upon any other
person or entity any remedy, claim, liability, reimbursement, cause of action or other right whatsoever. 

        10.4 RF
may from time to time revise, develop, modify or enhance RF's Proprietary Intellectual Property. Nothing in this Agreement shall be deemed to create in PFI any right
or interest in or to any of RF's Proprietary Intellectual Property. PFI acknowledges that RF's Intellectual Property and the goodwill generated thereby are the exclusive property of RF and its
Affiliates, and that PFI shall not hereby acquire any ownership interest in any of RF's Intellectual Property. Subject to the terms and conditions of the license granted to PFI hereunder, all rights
to RF's Intellectual Property are expressly reserved by RF. All of PFI's limited right to use any of RF's Intellectual Property shall end upon the termination of this Agreement (except with respect to
Products in transit). 

ARTICLE XI FORCE MAJEURE  

        11.1 The
Parties will not be responsible towards each other for any delay if they cannot perform their respective contractual obligations under this Agreement due to any
cause of Force Majeure i.e. any cause, unavoidable and insurmountable with commercially reasonable efforts such as but not limited to: 

	•
	natural
disasters such as earthquake, flood, abnormal atmospheric conditions, epidemics;

	•
	state
of war, declared or not;

	•
	public
disorders such as insurrections, revolts, strikes, lock-outs, and other labour disputes of any nature and public and social demonstrations, riots;

	•
	binding
decisions of one Party's government or any international body such as embargo, prohibitions or limitations of any kind;

	•
	the
failure of any third-party supplier to provide materials or components used in the packaging and distribution of Products; or

	•
	any
other event beyond one Party's reasonable control. 

In
such a case, the Party claiming Force Majeure will notify the other Party without undue delay of the causes of any delay and the necessary extension of performance of time-limits. The
onus to establish the occurrence of a claimed Force Majeure event lies with the Party seeking to invoke this Article. 

        Any
delay due to a Force Majeure case will not be a sufficient reason to obtain an early termination of this Agreement in whole or in part except as provided below. 

        The
Party affected by the Force Majeure situation shall use its reasonable best efforts to continue performance when such situation is removed. 

        Notwithstanding
the foregoing, should the Force Majeure situation extend beyond a three (3) month period, either Party may immediately terminate the Agreement. 

ARTICLE XII LIABILITY—INSURANCE—INDEMNITY  

        12.1 Subject
to the terms of this Agreement, each Party shall be liable toward third parties for any loss, damage, injury or death to the extent arising from such Party's
negligence, recklessness, willful misconduct or breach of this Agreement. Neither Party shall recover from the other Party for any loss, damage, injury or death to the extent arising from such Party's
negligence, recklessness or willful misconduct. 

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        12.2 Except
as set forth in Section 12.6 and except for any breach of Article IX, in no event will PFI be liable under this Agreement for any damages, claims,
indemnification obligation or other losses of any kind or nature under or in connection with this Agreement, whether in contract, tort, statute or otherwise, to the extent that such losses exceed in
the aggregate (for all claims and occurrences) the revenues received by PFI under this Agreement during the twelve (12) month period immediately preceding the applicable loss. 

        12.3 Subject
to Section 12.5 below, each Party shall take all necessary steps, at its own cost and on its own behalf to properly insure as far as reasonably possible,
its entire legal liability to any third party which might be incurred as a consequence of its activity relating to this Agreement. Each Party undertakes to inform the other Party upon request
therefore of the identity of their respective insurance carriers. 

        12.4 Subject
to Section 12.5 below, during the Term each Party hereto shall obtain, pay for, and keep in full force and effect (a) comprehensive general
liability insurance with one or more reputable insurance carriers; (b) warehouse liability insurance; and (c) other insurance required by Requirements of Law in relation to the full
performance of its obligations under this Agreement. 

        12.5 Notwithstanding
the foregoing, PFI shall only be required to obtain or maintain such insurance to the extent such insurance was in full force and effect for the
six-month period immediately prior to the Effective Date and shall not be required to incur any costs or other liabilities which are greater than the costs incurred by PFI in the ordinary
course of business consistent with past practices of the RF Business prior to the Effective Date; provided that PFI shall cooperate with RF to obtain
and maintain such insurance as may be reasonably requested by RF, including without limitation, warehouse liability insurance, if RF agrees to reimburse PFI for the cost (or additional cost) with
respect to such insurance. 

        12.6 Each
Party shall indemnify and hold the other Party harmless from any and all liability to a third party for any and all judgments, claims, causes of action, suits,
proceedings, losses, damages, demands, fees, expenses, fines, penalties or costs (including without limitation reasonable attorney's fees, costs and disbursements) arising from any negligence or
intentional or willful misconduct of the indemnifying Party in connection with this Agreement or any breach by the indemnifying Party of this Agreement. In addition and notwithstanding any provision
to the contrary in this Agreement, RF shall indemnify and hold PFI harmless from any and all liability, judgments, claims, causes of action, suits, proceedings, losses, damages, demands, fees,
expenses, fines, penalties or costs (including without limitation reasonable attorney's fees, costs and disbursements) arising from PFI's performance under this Agreement except to the extent arising
from PFI's negligence, intentional or willful misconduct or breach of this Agreement. Notwithstanding any provision to the contrary in this Agreement, PFI shall indemnify and hold RF and PFDC Holdings
harmless from any and all liability, judgments, claims, causes of action, suits, proceedings, losses, damages (including, without limitation, consequential damages), demands, fees, expenses, fines,
penalties or costs (including without limitation reasonable attorney's fees, costs and disbursements) arising from PFI's negligence or intentional or willful misconduct in its performance of this
Agreement or from PFI's breach of this Agreement; provided, however, that, except to the extent arising
from PFI's intentional or willful misconduct, RF's and PFDC Holdings's sole and exclusive remedy under the foregoing indemnification shall be to recover any amounts payable under PFI's applicable
insurance policy, if any, as additional insured parties under such policy and, for the avoidance of doubt, except to the extent arising from PFI's intentional or willful misconduct, PFI shall have no
liability whatsoever for any uninsured liability, judgments, claims, causes of action, suits, proceedings, losses, damages, demands, fees, expenses, fines, penalties or costs (including without
limitation reasonable attorney's fees, costs and disbursements). 

        12.7 Neither
Party shall be under any obligation to compensate to the other Party under or in connection with this Agreement or any material breach thereof for any punitive,
indirect, special or 

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consequential
damages of such other Party, including but not limited to lost business or lost profits or damage to goodwill. 

        12.8 RF
shall defend, indemnify and hold PFI and its Affiliates, officers, directors, members, partners, employees and agents harmless from and against, and shall pay all
losses, damages, fees, expenses and costs (including reasonable attorneys' fees) incurred by PFI, resulting from or arising out of any infringement or alleged infringement of intellectual property
rights of a third party in connection with PFI's delivery and distribution of the Products under this Agreement. 

ARTICLE XIII CONTROLLING LAW; RESOLUTION OF DISPUTES  

        13.1 All
questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal law of the State of New York, in
the United States of America, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the
application of the laws of any jurisdictions other than the State of New York. 

        13.2 Except
as specifically provided in Section 13.3 below in the case of arbitration, and solely for purposes of any action or proceeding arising out of or relating
to this Agreement, each of the parties submits to the jurisdiction of the United States District Court for the Central District of California (or if not permitted, the Superior Court for the County of
Los Angeles) in any action or proceeding arising out of or relating to this Agreement, including any action or proceeding to enforce any Final Determination, and agrees that all claims in respect of
the action or proceeding may be heard and determined in any such court. Each party hereto hereby irrevocably submits to the jurisdiction of such courts, irrevocably consents to the service of process
by registered mail or personal service and hereby irrevocably waives, to the fullest extent permitted by law, any objection which it may have or hereafter have as to personal jurisdiction, the laying
of the venue of any such action or proceeding brought in any such court and any claim that any such action or proceeding brought in any court has been brought in an inconvenient forum and waives any
bond, surety or other security that might be required of any other party with respect thereto. Each party also agrees not to bring any action or proceeding arising out of or relating to this Agreement
in any other state or federal court unless and until the foregoing court renders a final order that it lacks, and cannot acquire, the necessary jurisdiction, and either all appeals have been exhausted
or the order is no longer appealable. Each party appoints CT Corporation (the "Process Agent") as its agent to receive on its behalf service of copies
of the summons and complaint and any other process that might be served in the action or proceeding. Any party may make service on any other party by sending or delivering a copy of the process
(i) to the party to be served at the address and in the manner provided for the giving of notices in Article XIV or (ii) to the party to be served in care of the Process Agent at
the address and in the manner provided for the giving of notices in Article XIV; provided,  however that if process is served in care of the Process
Agent, the serving Party shall also provide a copy of the process to the Party to be served at
the address and in the manner provided for the giving of notices in Article XIV. Nothing in this Section 13.2, however, shall affect the right of any party to serve legal process in any
other manner permitted by law or at equity. Each party agrees that a final judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any
other manner provided by law or at equity. 

        13.3 Arbitration Procedure. 

        13.3.1 Except
as provided in Section 13.2 above with respect to equitable relief, the Parties agree that the arbitration procedure set forth below shall be the sole
and exclusive method for resolving and remedying any and all disputes, controversies or claims that arise out of or in connection with, or relate in any manner to, the rights and liabilities of the
Parties hereunder or any provision of this Agreement or the interpretation, enforceability, performance, breach, termination or validity hereof, including this 

10

 

Section
relating to the resolution of disputes (the "Disputes") and questions concerning arbitrability; provided
that nothing in this Section shall prohibit a party hereto from instituting litigation to enforce any Final Determination (as defined below). The Parties hereby acknowledge and
agree that, except as otherwise provided in this Section or in the Rules for Non-Administered Arbitration of Business Disputes (the "Rules")
promulgated by the Center for Public Resources Institute for Dispute Resolutions (the "Institute") as in effect from time to time, the arbitration
procedures and any Final Determination hereunder shall be governed by, and shall be enforced pursuant to, the United States Arbitration Act, 9 U.S.C. §1 et. seq. 

        13.3.2 In
the event that either Party asserts that there exists a Dispute, such Party shall deliver a written notice to each other Party involved therein specifying the
nature of the asserted Dispute and requesting a meeting to attempt to resolve the same. If no such resolution is reached within ten business days after the delivery of such notice, the Party
delivering such notice of Dispute may thereafter commence arbitration hereunder by delivering to each other Party involved therein a notice of arbitration (a "Notice of
Arbitration"). Such Notice of Arbitration shall specify the nature of any Dispute and any other matters required by the Rules as in effect from time to time to be included
therein. The arbitrators shall permit and facilitate such discovery as the parties shall reasonably request and each of the Parties shall cause such designated arbitrators mutually to agree upon and
designate a third arbitrator; provided, however, that: (i) failing such agreement within 45 days of the date on which the Notice of Arbitration is delivered, the third arbitrator shall
be appointed in accordance with the Rules; (ii) if either Party fails to designate timely an arbitrator, the Institute shall appoint an arbitrator on behalf of such failing Party, and the two
designated arbitrators shall jointly designate a third arbitrator. Each Party shall pay the fees and expenses of their respectively designated arbitrators (or the arbitrator designated on their behalf
by the Institute) and shall bear equally the fees and expenses of the third neutral arbitrator; provided that at the conclusion of the arbitration, the
arbitrators shall award costs and expenses (including the costs of the arbitration previously advanced and the fees and expenses of attorneys, accountants and other experts) and interest at 8% per
annum to the prevailing Party. 

        13.3.3 The
arbitration shall be conducted in the English language in Los Angeles, California under the Rules as in effect from time to time. The arbitrator shall conduct the
arbitration so that a final result, determination, finding, judgment and/or award (the "Final Determination") is made or rendered as soon as
practicable, but in no event later than 90 business days after the delivery of the Notice of Arbitration nor later than ten days following completion of the arbitration. Notwithstanding any California
law to the contrary, the Final Determination shall be final and binding on each Party and there shall be no appeal from or reexamination of the Final Determination, including any right of appeal to
any court in any jurisdiction, except for fraud, perjury, evident partiality or misconduct by an arbitrator prejudicing the rights of any Party and to correct manifest clerical errors. 

        13.3.4 This
Agreement has been negotiated and executed by the Parties hereto in English. To the extent a translation of this Agreement exists, each of the Parties hereto
acknowledges that it has been prepared solely for convenience and agrees that the provisions of the English version of the Agreement prevail. 

        13.3.5 Notwithstanding
anything to the contrary, nothing in this Section 13.3 shall be construed to impair the right of either Party to seek injunctive or other
equitable relief, including pursuant to Section 13.2 above. 

ARTICLE XIV NOTICES  

        All notices, demands and other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be
deemed to have been given (i) when personally delivered, sent by telecopy (with hard copy to follow) upon receipt of mechanical 

11

 

confirmation
of delivery, (ii) for deliveries within the continental United States, one day following the day when deposited with a reputable and established overnight express courier (charges
prepaid), (iii) for overseas deliveries, five days following the day when deposited with a reputable and established overnight express courier (charges prepaid), or (iv) for deliveries
within the continental United States, five days following mailing by certified or registered mail, postage prepaid and return receipt requested. Unless another address is specified in writing,
notices, demands and communications to the Parties shall be sent to the addresses indicated below: 

	Notices to RF and PFDC Holdings shall be delivered to:
	 	
 Rene Furterer Inc.

1055 West 8th Street

Azusa, CA 91702

Attn: President

Telephone: (626) 334-3395

Telecopy: (626) 812-9462
	
with copies to (which shall not constitute notice to RF or PFDC Holdings):
	 	
 Pierre Fabre Dermo-Cosmetique S.A.

Legal Department

Les Cauquillous

81 506 LAVAUR Cedex

France

Attn: Pierre-André Poirier

General Counsel—Company Secretary

Telephone: + 33 (5) 63 58 88 38

Telecopy: + 33 (5) 63 58 86 68
	 	
 Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLC

333 West Wacker Drive

Suite 2700

Chicago, Illinois 60606

Peter J. Barack, Esq.

Telephone: (312) 948-3101

Telecopy: (312) 984-3150
	
Notices to PFI shall be delivered to:
	 	
 Pierre Fabre, Inc.

1055 West 8th Street

Azusa, CA 91702

Attn: Chief Executive Officer

Telephone: (626) 334-3395

Telecopy: (626) 812-9462
	 

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with copies to (which shall not constitute notice to PFI):
	 	
 Summit Partners, L.P.

499 Hamilton Avenue

Suite 200

Palo Alto, California 94301

Attn: Walter G. Kortschak

         Craig D. Frances

Telephone: (650) 321-1166

Telecopy: (650) 321-1188
	 	
 Kirkland & Ellis LLP

200 East Randolph Drive

Chicago, Illinois 60601

Attn: Ted H. Zook, P.C.

Telephone: (312) 861-2000

Telecopy: (312) 861-2200

ARTICLE XV ASSIGNMENT  

        This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted
assigns; provided that neither this Agreement nor any of the rights, interest or obligations hereunder may be assigned by either Party without the prior
written consent of the other Party hereto and any attempt to do so will be void. Notwithstanding the foregoing, without the consent of the other Party (a) any Party may assign any of its rights
or obligations arising from this Agreement to its Affiliates; provided that the assignor remains liable for all of its obligations under this Agreement
and (b) PFI may assign its rights and obligations pursuant to this Agreement to any of its lenders as collateral security. 

ARTICLE XVI INTERPRETATION  

        16.1 Any
reference to any federal, state, local or foreign law will also be deemed to refer to such law as amended and all rules and regulations promulgated thereunder,
unless the context otherwise requires. 

        16.2 This
Agreement, together with its Attachments hereto, constitutes the entire agreement and understanding of the Parties hereto in respect of its subject matter and
supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the
transactions contemplated hereby. 

        16.3 This
Agreement may be executed in two or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same
instrument. 

        16.4 This
Agreement may not be amended or modified, and no provisions hereof may be waived, other than in writing executed by each of PFI and RF. No action taken pursuant to
this Agreement, including any investigation by or on behalf of any Party, shall be deemed to constitute a waiver by the Party taking such action of compliance with any representation, warranty,
covenant or agreement contained herein. 

        16.5 The
provisions of this Agreement will be deemed severable and the invalidity or unenforceability of any provision hereof will not affect the validity or enforceability
of the other provisions hereof; provided that if any provision of this Agreement, as applied to any Party or to any circumstance, is adjudged by a Governmental Authority, arbitrator, or mediator not
to be enforceable 

13

 

in
accordance with its terms, the Parties agree that the Governmental Authority, arbitrator, or mediator making such determination will have the power to modify the provision in a manner consistent
with its objectives such that it is enforceable, and/or to delete specific words or phrases, and in its reduced form, such provision will then be enforceable and will be enforced. 

        16.6 The
Section headings contained in this Agreement are inserted for convenience only and will not affect in any way the meaning or interpretation of this Agreement. 

        16.7 The
attachments identified in this Agreement are incorporated herein by reference and made a part hereof. 

ARTICLE XVII FURTHER ASSURANCES  

        PFI and RF each agree to take such actions and execute and deliver such other documents or agreements as may be reasonably necessary or desirable for the
implementation of this Agreement and the consummation of the transactions contemplated hereby and thereby. 

ARTICLE XVIII PFDC HOLDINGS GUARANTEE  

        18.1 PFDC
Holdings acknowledges and agrees that it will receive substantial direct and indirect benefits from the consummation of the transactions contemplated hereby.
Accordingly, PFDC Holdings hereby absolutely and unconditionally guarantees and shall be liable for the prompt payment and performance of all of the duties and obligations of RF under and pursuant to
this Agreement as a primary obligor and shall be jointly and severally liable with RF for all liabilities and obligations of RF under this Agreements. 

*    *    *    *    * 

14

 

        IN WITNESS WHEREOF, PFI, RF and PFDC have executed this Agreement as of the day and year first above written. 

	 	 	RENE FURTERER INC., a New York corporation
	

 	
 	

By:	

/s/  ANDRE PIETERS      

	 	 	Name:	Andre Pieters
	 	 	Title:	President
	

 	
 	

PIERRE FABRE INC, a New York corporation
	

 	
 	

By:	

/s/  ANDRE PIETERS      

	 	 	Name:	Andre Pieters
	 	 	Title:	President
	

 	
 	

PFDC Holdings, Inc., a Delaware corporation
	

 	
 	

By:	

/s/  PIERRE-ANDRE POIRIER      

	 	 	Name:	Pierre-Andre Poirier
	 	 	Title:	Secretary

15

Attachment E  

 CONFIDENTIALITY ADDENDUM  

        1.    Definitions.    Except as set forth below, any capitalized term in this Addendum shall have the meaning given to
such term in the Agreement. 

	(a)
	The
term "Addendum" means this Confidentiality Addendum.

	(b)
	The
term "Agreement" means the agreement entered into between the Parties to which this Addendum is attached.

	(c)
	The
term "Disclosing Party" means the Party disclosing any Confidential Information to one or more Receiving Party(ies) as applicable

	(d)
	The
term "Party" or "Parties" means, individually, a party, or collectively the
parties, as the case may be, to the Agreement.

	(e)
	The
term "PFI" means Pierre Fabre, Inc. (to be known as Physicians Formula, Inc., a New York corporation), and any of its
Affiliates after the effective date of the Agreement.

	(f)
	The
term "Pre-Effective Date PFDC Confidential Information" means all proprietary information, documents or trade secrets,
of whatever form, solely related to the business of (i) the Excluded Subsidiaries (as defined in the Purchase Agreement), or (ii) PFDC or any of its Subsidiaries (other than the Retained
Subsidiaries), that was disclosed to, or in the possession of, any other Party or any of their respective Affiliates at any time prior to the effective date of the Agreement.

	(g)
	The
term "Pre-Effective Date PFI Confidential Information" means all proprietary information, documents or trade secrets,
of whatever form, related to the business of PFI or any of its Retained Subsidiaries (as defined in the Purchase Agreement) at any tier, that was disclosed to, or in the possession of, any other Party
or any of their respective Affiliates at any time prior to the effective date of the Agreement; excluding,  however, the Pre-Effective Date PFDC
Confidential Information.

	(h)
	The
term "Receiving Party" means the Party receiving any Confidential Information from the Disclosing Party. 

        2.     The
term "Confidential Information" shall include all proprietary information, documents or trade secrets, of whatever
form, disclosed by a Disclosing Party to one or more Receiving Parties, in writing or orally, for the purposes of and pursuant to the Agreement, and corresponding to the conditions of Section 3
below, and including without limitation all written or printed documents, all samples, models or, more generally, all means of disclosing Confidential Information which may be chosen by either Party
during the term of the Agreement. Notwithstanding anything to the contrary, Confidential Information of PFI (as the Disclosing Party) shall include for all purposes the Pre-Effective Date
PFI Confidential Information and Confidential Information of PFDC (as the Disclosing Party) shall include for all purposes the Pre-Effective Date PFDC Confidential Information. 

        3.     Included
within the definition of "Confidential Information" is information or documents, of whatever form,
(i) transmitted by the Disclosing Party and designated Confidential Information by the Disclosing Party through the affixing or addition to them of a stamp or a formula or through the drawing
up and transmission or sending of written notification to this effect, or when they are disclosed orally, where the confidential nature of the information has been brought to the attention of the
Receiving Party, at the time of its disclosure and confirmed in writing as soon as possible (but, in no event later than thirty (30) days after the disclosure), or (ii) that a reasonable
person would consider and treat as confidential or proprietary in nature. Notwithstanding anything in this Addendum or the Agreement to the contrary, the designation or marking of any
Pre-Effective Date PFI Confidential Information or Pre-Effective Date PFDC Confidential Information as Confidential Information shall not be required for protection or
applicability of such Pre-Effective Date PFI Confidential Information or Pre-Effective Date PFDC Confidential Information, as applicable, under this Addendum. 

        4.     Each
Receiving Party undertakes that all Confidential Information issuing from the Disclosing Party: 

	(a)
	shall
be protected and kept strictly confidential and be treated with the same degree of care and protection as would be given to its own Confidential Information of the same
significance;

	(b)
	shall
be used solely for the purposes of carrying out the Receiving Party's obligations under the Agreement, or as otherwise permitted by the Agreement;

	(c)
	shall
be disclosed solely to its own employees and contractors who need to know such information to carry out their duties as required or contemplated by the Agreement, in each case
under a written agreement with the Receiving Party pursuant to which the recipient agrees to maintain the confidentiality of such information in accordance with the terms of this Addendum and for use
solely as contemplated or permitted under the Agreement; and

	(d)
	shall
not be disclosed, either directly or indirectly to any third party except as permitted above in Section 4(c) or to the limited extent required under Section 5(f)
below. 

        5.     Except
as provided above, a Receiving Party shall be under no obligation and subject to no restriction with regard to a particular item of Confidential Information to the
extent it can show proof that: 

	(a)
	such
information was in the public domain prior to its disclosure or afterwards, but that in the latter case not as a result of any disclosure by such Receiving Party or any of its
Affiliates;

	(b)
	other
than with respect to the Pre-Effective Date PF Confidential Information or Pre-Effective Date PFDC Confidential Information, as applicable, that such
information was known to the Receiving Party prior to disclosure hereunder;

	(c)
	that
such information was received legitimately from an unaffiliated third party, without constraint or breach of this Addendum, the Agreement or any other agreement to which the
Receiving Party is bound;

	(d)
	that
such information was published by a third party without contravening the terms of this Addendum, the Agreement or any other agreement to which the Receiving Party is bound;

	(e)
	that
such information was the result of internal, independent research and development undertaken in good faith by the Receiving Party's employees without access to any Confidential
Information;

	(f)
	that
such information is compelled to be disclosed by judicial or administrative process or, based on the advice of other legal counsel, by other requirements of law and then still
subject to the provisions of this Addendum to the extent permitted by law; provided that the disclosing Party shall, to the extent practicable, provide
prior notice of such disclosure to the other Party; or

	(g)
	that
the use or disclosure was authorized in writing by the Disclosing Party. 

        6.     It
is expressly agreed between the Parties that disclosure of Confidential Information under the terms of this Addendum may in no way be interpreted as conferring on the
other Party either explicitly or implicitly any right whatsoever (in terms of a licence or by any other means) over the materials, inventions or discoveries to which the Confidential Information
relates. The same applies to royalties or other rights attached to literary and artistic copyright, trademarks or professional secrecy. Property rights over Confidential Information disclosed under
the terms of this document belong in any event, subject to rights of third parties, to the Party from whom they originate. 

        7.     Within
fifteen (15) days after termination or expiration of the Agreement for any reason, the Receiving Party shall (i) cease using the Disclosing Party's
Confidential Information, and (ii) at the option of the Disclosing Party, either return or destroy all materials and documentation in any medium that constitute, contain, refer or relate to,
whether in written or electronic format, the Disclosing Party's Confidential Information then in the possession, custody or control of Receiving Party or its 

Affiliates,
and provide to the Disclosing Party, within ten (10) business days thereafter a written certification, signed by a director of the Receiving Party, that all such materials have been
either returned or destroyed as applicable. 

        8.     The
confidentiality obligations of each Receiving Party shall continue hereunder indefinitely as to all trade secrets of the Disclosing Party (determined in accordance
with New York law), and for ten (10) years for all other Confidential Information, or in any case for the longest period of time permitted under applicable law, and shall survive expiration or
termination of the Agreement for any reason. For the sake of clarity, no license or other permission under any patent or copyright is express or implied hereunder. 

        9.     The
foregoing provisions of this Addendum shall apply only to Confidential Information exchanged under the Agreement (including any Pre-Effective Date PFI
Confidential Information and any Pre-Effective Date PFDC Confidential Information), and for the purposes of each Party's respective performance under the Agreement, and shall not apply to,
modify or supercede any other agreements or arrangements governing such information. 

QuickLinks

Exhibit 10.5

ARTICLE III CONSIDERATION

ARTICLE VIII PRODUCTS—STOCK—DELIVERY—WARRANTY—RETURNSQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.6    
    

[Execution Copy]  

PFI HOLDINGS CORP.
 STOCKHOLDERS AGREEMENT

        THIS
AGREEMENT (this "Agreement") is made as of November 3, 2003, by and among PFI Holdings Corp., a Delaware corporation (the
"Company"), the Persons listed on Schedule I attached hereto (the "Summit
Stockholders"), and the Persons listed on Schedule II attached hereto (the "PFDC
Stockholders"). The Summit Stockholders and the PFDC Stockholders are collectively referred to herein as the "Stockholders" and
individually as a "Stockholder." Except as otherwise indicated herein, capitalized terms used herein are defined in  Section 11 hereof. 

        WHEREAS,
the Summit Stockholders shall purchase shares of the Company's Series A Preferred Stock, par value $.01 per share (the "Preferred
Stock"), and shares of the Company's Common Stock, par value $.01 per share (the "Common Stock"), pursuant to that certain Stock
Purchase Agreement between the Summit Stockholders and the Company dated as of the date hereof (the "Purchase Agreement"); 

        WHEREAS,
the Company, PFI Acquisition Corp., a New York corporation and a wholly owned subsidiary of the Company ("Acquisition Corp."),
Pierre-Fabre, Inc., a New York corporation, and Pierre Fabre Dermo-Cosmetique, S.A., a French société anonyme
("PFDC"), are parties to a Stock Purchase Agreement, dated as of the date hereof (the "Acquisition
Agreement"), pursuant to which (among other things) PFDC shall acquire shares of Common Stock and Preferred Stock; 

        WHEREAS,
the Company and the Stockholders acknowledge that PFDC has transferred 200,000 shares of Common Stock to Mr. Claude Gros as of the date hereof; 

        WHEREAS,
the Company and the Stockholders desire to enter into this Agreement to (among other things) establish the composition of the Company's Board of Directors (the
"Board"), to restrict the sale, transfer or other disposition of certain Stockholder Shares, to establish certain standards as set forth herein with
respect to the corporate governance of the Company, and to provide for certain rights and obligations in respect thereto as hereinafter provided; and 

        WHEREAS,
the execution and delivery of this Agreement is a condition to the transactions contemplated by the Purchase Agreement and the Acquisition Agreement. 

        NOW,
THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties to this Agreement hereby agree as follows: 

        1.    Board of Directors.    

        (a)   From
and after the date of this Agreement and until the provisions of this Section 1 cease to be effective, each holder of Stockholder Shares shall vote all of
its or his Stockholder Shares which are voting shares and any other voting securities of the Company over which such holder has voting control and shall take all other necessary or desirable actions
within its or his control as a stockholder (including attendance at meetings in person or by proxy for purposes of obtaining a quorum and execution of written consents in lieu of meetings), and the
Company shall take all necessary and desirable actions within its or his control (including calling special board and stockholder meetings), so that: 

          (i)  the
authorized number of directors on the Board shall be established at such number as the Majority Stockholders shall determine from time to time, which shall
initially be five directors; 

 

         (ii)  the
following persons shall be elected to the Board: 

        (A)  so
long as the PFDC Stockholders party to this Agreement as of the date hereof and the Permitted PFDC Transferees (collectively, the "Original
PFDC Stockholders") collectively hold at least fifty percent (50%) of the Common Stock and at least fifty percent (50%) of the Preferred Stock owned by the PFDC Stockholders in
the aggregate on the date hereof, one representative designated by the holders of a majority of the PFDC Shares who shall be reasonably acceptable to the Majority Stockholders, who shall initially be
Claude Gros (and with it being understood that Mr. Gros is acceptable to the Majority Stockholders) (the "PFDC Director"); 

        (B)  the
Company's Chief Executive Officer (the "Executive Director"); 

        (C)  so
long as the Summit Stockholders party to this Agreement as of the date hereof collectively hold at least fifty percent (50%) of the Common Stock and at least fifty
percent (50%) of the Preferred Stock owned by the Summit Stockholders in the aggregate on the date hereof, the remaining number of authorized directors as designated by the Majority Stockholders, who
shall initially be Walter G. Kortschak, Craig D. Frances, and Sonya Tarnow Brown (the "Summit Directors" and, collectively with the PFDC Director and
the Executive Director, the "Directors"); and 

        (D)  in
the event the Summit Stockholders party to this Agreement as of the date hereof collectively hold less than fifty percent (50%) of the Common Stock owned by the
Summit Stockholders in the aggregate on the date hereof or less than fifty percent (50%) of the Preferred Stock owned by the Summit Stockholders in the aggregate on the date hereof, the remaining
number of authorized directors as duly elected by the holders of Common Stock pursuant to the Company's bylaws and applicable law; 

        (iii)  the
Board shall establish a Compensation Committee and an Audit Committee; 

        (iv)  any
committee of the Board or a Sub Board (as defined below), including the Company's Compensation Committee and Audit Committee, shall include the PFDC Director unless
the PFDC Director elects not to participate on such committee; 

         (v)  the
composition of the board of directors of each of the Company's subsidiaries (a "Sub Board") shall include the PFDC
Director unless the PFDC Director elects not to participate on such Sub Board; 

        (vi)  if
the Executive Director ceases to be the Company's Chief Executive Officer, such Executive Director shall be removed promptly after such time from the Board, each Sub
Board and each committee; 

       (vii)  subject
to Section 1(a)(viii) below, any director of the Company may be (or, as and to the extent required
hereunder, shall be) removed from the Board or any Sub Board in the manner allowed by law and the Company's certificate of incorporation or bylaws; provided
that, (A) with respect to any Summit Director, such removal (with or without cause) shall only be upon the written request of the Majority Stockholders and for no other
reason and (B) with respect to the PFDC Director, such removal (with or without cause) shall, subject to Section 1(f) below, only be upon
the written request of the holders of a majority of the PFDC Shares and for no other reason; and 

      (viii)  if
at any time a vacancy is created on the Board by reason of the incapacity, death, removal or resignation of a director, such vacancy shall automatically reduce the
number of directors pro tanto, until such time as the holders of the Stockholder Shares entitled to designate such director pursuant to  Section 1(a)
shall designate a director to fill such vacancy and such director shall have been elected to the Board in accordance with this
Agreement and the 

2

 

Company's
bylaws, whereupon the number of directors shall be automatically increased pro tanto. Upon receipt of notice of the designation of a nominee
pursuant to this Section 1(a), each Stockholder shall, as soon as practicable after the date of such notice, take action, including the voting of
its or his voting securities, to elect the director so designated to fill such vacancy. 

        (b)   Regular
meetings of the Board shall be held at least quarterly. Any action which can be taken by a meeting of the Board, any Sub Board or by a committee thereof may be
taken by unanimous written consent. In addition, in lieu of meeting in person, the Board, any Sub Board or any such committee may convene by teleconference or videoconference so long as each
participant can hear and be heard by the other participants and provided that the quorum and other meeting requirements are met. All action at a telephonic meeting of the Board, any Sub Board or any
such committee shall be memorialized in written minutes prepared by the secretary of the meeting and distributed to all Directors. 

        (c)   All
notices regarding meetings of the Board, any Sub Board or any committee thereof shall be delivered at least seven (7) days in advance of the proposed meeting
date; provided, however, that notice of urgent or special meetings shall be valid and timely if
delivered at least two (2) days in advance of the proposed meeting date. 

        (d)   The
Company shall pay or promptly reimburse the reasonable out-of-pocket travel expenses incurred by each Director in connection with attending
meetings of the Board, any Sub Board or any committee of the Board or any Sub Board (and with it being understood that reasonable travel expenses shall include business-class travel on
intercontinental flights). 

        (e)   The
Board or the Majority Stockholders in the exercise of their reasonable discretion shall have the right to recuse the PFDC Director from participating in any portion
of any meeting of the Board or a Sub Board or any committee thereof and shall have the right to restrict the PFDC Director's access to any information or materials to the extent such meeting or
information or materials (i) relates to issues where a conflict of interest may exist between PFDC or any of its Affiliates and the Company and its Subsidiaries with respect to any agreements
entered into between or among those parties or (ii) otherwise constitutes competitively sensitive materials, information or discussion (including pricing and marketing plans and proposals and
other competitively or strategically sensitive information or data) the disclosure to, or use of which by, PFDC or any of its Affiliates could reasonably be expected to be materially detrimental to or
jeopardize in any material respect the competitive position of the Company or its Subsidiaries, in each case as determined by the Board or the Majority Stockholders in their reasonable discretion (but
with it being understood that, subject to the foregoing, the PFDC Director shall be entitled to receive all such other information as is reasonably related to such person's position as a director and
the fulfillment of his duties in connection therewith). 

        (f)    Notwithstanding
any provision in this Agreement to the contrary, (i) no designee of the PFDC Stockholders shall become a director of the Board or any Sub Board
unless and until such designee has executed a confidentiality agreement with the Company on terms reasonably satisfactory to the Company and (ii) the right of the PFDC Stockholders to elect a
PFDC Director shall terminate, and any PFDC Director then serving on the Board or any Sub Board shall promptly resign or be removed, in the event that PFDC or any of its Affiliates shall breach any of
the provisions of Section 8.4(a) of the Acquisition Agreement or knowingly breach any of the provisions of Section 8.4(b) of the Acquisition Agreement as it relates to any of the
Company's or its Subsidiaries' key employees. 

        (g)   The
provisions of this Section 1 shall terminate automatically and be of no further force and effect upon the
first to occur of (i) the consummation of an IPO and (ii) the consummation of a Sale of the Company. 

3

 

        2.    Representations and Warranties; Agreements.    Each Stockholder represents and warrants as of the date hereof
that (i) this Agreement has been duly authorized, executed and delivered by such Stockholder and constitutes the valid and binding obligation of such Stockholder, enforceable in accordance with
its terms, and (ii) such Stockholder has not granted and is not a party to any proxy, voting trust or other agreement which is inconsistent with, conflicts with or violates any provision of
this Agreement. No holder of Stockholder Shares shall grant any proxy or become party to any voting trust or other agreement which is inconsistent with, conflicts with or violates any provision of
this Agreement. 

        3.    Restrictions on Transfer of Stockholder Shares.    

        (a)    Transfer of Stockholder Shares.    No holder of Stockholder Shares (other than the Summit Stockholders) may
sell, transfer, assign, pledge or otherwise dispose of (whether directly or indirectly, whether with or without consideration and whether voluntarily or involuntarily or by operation of law) any
interest (legal or beneficial) in any Stockholder Shares (a "Transfer"), except Transfers pursuant to and in accordance with the provisions of  Section 3(b), Section 3(c),  Section 4 or Section 5 of this Agreement. 

        (b)    Certain Permitted Transfers.    The restrictions contained in  Section 3(a) shall not apply to any Transfer of
Stockholder Shares (i) in the case of any PFDC Stockholder, to or among any Subsidiaries
of Pierre Fabre, S.A., a French société anonyme and the owner of 99.91% of the outstanding equity of PFDC, (ii) in the case of any individual PFDC Stockholder, to
any member(s) of such individual's Family Group (as defined below) or by will or the laws of descent and distribution to any member(s) of such individual's Family Group or (iii) in the case of
PFDC, the Transfer of 200,000 shares of Common Stock to Claude Gros on the date hereof (collectively referred to herein as "Permitted PFDC
Transferees"); provided that the restrictions contained in this Agreement shall continue to apply to the Stockholder Shares
after any such Transfer and each transferee of such Stockholder Shares shall agree in writing, prior to and as a condition to the effectiveness of such Transfer, to be bound by the provisions of this
Agreement, without modification or condition, subject only to the consummation of the Transfer, and PFDC shall cause all of the Permitted PFDC Transferees to comply with the provisions of this
Agreement following any such Transfer. Upon the Transfer of Stockholder Shares pursuant to this Section 3(b), the transferor shall deliver a
written notice to the Company and the other parties to this Agreement, which notice shall disclose in reasonable detail the identity of such transferee(s) and shall include an original counterpart of
the agreement of such transferee(s) to be bound by this Agreement. Notwithstanding the foregoing, no party hereto shall avoid the provisions of this Agreement, including by making one or more
Transfers to one or more Permitted PFDC Transferees and then disposing of all or any portion of such party's interest in any such Permitted PFDC Transferees. For purposes of this Agreement,
"Family Group" means an individual's spouse, parents and descendants and any trust, family limited partnership or other entity solely for the benefit of
such individual and/or such individual's spouse, parents and/or descendents. 

        (c)    First Offer Right.    At least 60 days prior to making any Transfer of any Stockholder Shares by any
holder of Stockholder Shares other than the Summit Stockholders (other than a Transfer pursuant to and in accordance with the provisions of  Section 3(b), Section 4 or  Section 5), the transferring Stockholder (the "Transferring Stockholder") shall deliver a written
notice (an "Offer Notice") to the Company and the Summit Stockholders. The Offer Notice shall disclose in reasonable detail the proposed number of
Stockholder Shares to be transferred, the proposed terms (including price) and conditions of the Transfer and the identity and background of the prospective transferee(s) (if known) and shall
constitute a binding offer to sell the Stockholder Shares on such terms and conditions. First, the Company may elect to purchase all or any portion of the Stockholder Shares specified in the Offer
Notice at the price and on the terms specified therein by delivering written notice of such election to the Transferring Stockholder and the Summit Stockholders as soon as practical but in any event
within thirty (30) days after the delivery of the Offer Notice. If the Company has not elected to purchase all 

4

 

of
the Stockholder Shares specified in the Offer Notice within such thirty-day period, each Summit Stockholder (and/or its or his designees) may elect to purchase all or a portion of its
or his Pro Rata Share (as defined below) of the remaining available Stockholder Shares specified in the Offer Notice at the price and on the terms specified therein by delivering written notice of
such election to the Transferring Stockholder as soon as practical but in any event within 45 days after delivery of the Offer Notice. Any Stockholder Shares not elected to be purchased by the
end of such 45-day period shall be reoffered for the 15-day period prior to the expiration of the Election Period by the Transferring Stockholder on a pro rata basis to the
Summit Stockholders who have elected to purchase their entire Pro Rata Share and, if there are any such Stockholder Shares remaining after such allocation, the Company shall have the right to purchase
such remaining Stockholder Shares. If the Company and/or the Summit Stockholders have elected to purchase, in the aggregate, all (but not less than all) of the Stockholder Shares specified in the
Offer Notice from the Transferring Stockholder, the transfer of such shares shall be consummated as soon as practical after the delivery of the election notice(s) to the Transferring Stockholder, but
in any event within 15 days after the expiration of the Election Period. To the extent that the Company and the Summit Stockholders have not elected to purchase all of the Stockholder Shares
specified in the Offer Notice, then (i) neither the Company nor the Summit Stockholders shall be permitted to purchase any of the Stockholder Shares specified in the Offer Notice and
(ii) the Transferring Stockholder may, within 90 days after the expiration of the Election Period and subject to the provisions of Section 4 below, transfer all (but not less than
all) such Stockholder Shares to one or more third parties (so long as such Person is not a competitor of the Company or any of its Subsidiaries as determined by the Board in its reasonable good faith
judgment) at a price no less than the price per share specified in the Offer Notice and on other terms no more favorable to the transferees thereof than offered to the Company and the Summit
Stockholders in the Offer Notice. Any Stockholder Shares not transferred within such 90-day period shall be reoffered to the Company and the Summit Stockholders under this  Section 3(c) prior to any
subsequent Transfer. The purchase price specified in any Offer Notice shall be payable solely in cash at the closing of
the transaction (unless and to the extent that the Offer Notice provides that such Stockholder Shares are to be purchased for cash in installments over time). Each Summit Stockholder's
"Pro Rata Share" shall be based upon such Summit Stockholder's proportionate ownership of all Common Stock owned by the Summit Stockholders. 

        (d)    Termination of Restrictions.    The restrictions set forth in this  Section 3 shall continue with respect to each
Stockholder Share until the earlier of (i) the consummation of a Sale of the Company and
(ii) the consummation of an IPO. 

        4.    Stockholder Participation Rights.    

        (a)   At
least 30 days prior to any Transfer of Stockholder Shares (other than (i) a Public Sale, (ii) a Transfer to the Company or the Summit
Stockholders and/or their designees pursuant Section 3(c), (iii) a Transfer pursuant to and in accordance with the provisions of  Section 3(b), (iv) a Permitted Summit Stockholder Transfer, or (v) pursuant to an Approved Sale in which all of the Stockholders
are required to participate and in connection therewith will receive consideration pursuant to Section 5 below) the Stockholder making such
Transfer (also a "Transferring Stockholder" for purposes of this Section 4) shall deliver a
written notice (the "Sale Notice") to the Company and the other Stockholders (the "Other Stockholders"),
specifying in reasonable detail the identity of the prospective transferee(s), the number and class or classes of Stockholder Shares to be transferred and the terms and conditions of the Transfer
(which notice, if a Stockholder other than a Summit Stockholder, may be the same notice and given at the same time as the Offer Notice under  Section 3(c)). 

        (b)   In
the event that any Other Stockholders hold the class of Stockholder Shares which are to be transferred, such Other Stockholders may elect to participate in the
contemplated Transfer at the same 

5

 

price
per share and on the same terms by delivering written notice to the Transferring Stockholder within 30 days after delivery of the Sale Notice. 

        (c)   If
any Other Stockholders have elected to participate in such Transfer, the Transferring Stockholder and such Other Stockholders shall be entitled to sell in the
contemplated Transfer, at the same price and on the same terms, a number of Stockholder Shares of such class equal to the product of (i) the quotient determined by dividing the percentage of
Stockholder Shares of such class owned by such Person by the aggregate percentage of Stockholder Shares of such class owned by the Transferring Stockholder and the Other Stockholders participating in
such sale and (ii) the number and class of Stockholder Shares to be sold in the contemplated Transfer. 

For example, if the Sale Notice contemplated a sale of 100 shares of Common Stock by the Transferring Stockholder, and if the Transferring Stockholder
at such time owns thirty percent (30%) of all Common Stock which are Stockholder Shares and if one Other Stockholder elects to participate and owns twenty percent (20%) of all Common Stock which are
Stockholder Shares, the Transferring Stockholder would be entitled to sell 60 shares (30% ÷ 50% × 100 shares) and the Other Stockholder would be
entitled to sell 40 shares (20% ÷ 50% × 100 shares). 

Any
of the Other Stockholders may elect to sell in any Transfer contemplated under this Section 4 a lesser number of Stockholder Shares of any
class than such Other Stockholder is entitled to sell hereunder, in which case the Transferring Stockholder shall have the right to sell an additional number
of Stockholder Shares of such class in such Transfer equal to the number that such Other Stockholder has elected not to sell. 

        (d)   Each
Transferring Stockholder shall use reasonable efforts to obtain the agreement of the prospective transferee(s) to the participation of the Other Stockholders in any
contemplated Transfer, and no Transferring Stockholder shall transfer any of its or his Stockholder Shares to any prospective transferee if such prospective transferee(s) declines to allow the
participation of the Other Stockholders. 

        (e)   Notwithstanding
anything in this Section 4 to the contrary, if the Transferring Stockholder intends to
simultaneously Transfer a combination of more than one class of Stockholder Shares and/or any debt securities, such Other Stockholders may only participate in such Transfer if such Other Stockholders
Transfer both such classes of Stockholder Shares and/or other debt securities in accordance with the formula set forth in this Section 4 above. 

        (f)    Each
Stockholder transferring Stockholder Shares pursuant to this Section 4 shall pay its or his pro rata share
(based on the number of Stockholder Shares to be sold) of the expenses incurred by the Transferring Stockholders in connection with such transfer and shall be obligated to join on a pro rata basis
(based on the number of Stockholder Shares to be sold) in any indemnification or other obligations that the Transferring Stockholder agrees to provide in connection with such transfer (other than any
such obligations that relate specifically to a particular Stockholder such as indemnification with respect to representations and warranties given by a Stockholder regarding such Stockholder's title
to and ownership of Stockholder Shares). 

        (g)   The
restrictions set forth in this Section 4 shall continue with respect to each Stockholder Share until the
earlier of (i) the consummation of a Sale of the Company and (ii) the consummation of an IPO. 

        5.    Sale of the Company.    

        (a)   If
the Board and the Majority Stockholders approve a Sale of the Company (the "Approved Sale"), the holders of
Stockholder Shares shall consent to, vote in favor of, and raise no objections against the Approved Sale. If the Approved Sale is structured as a sale of stock, reverse merger or other transaction
having the effect of a stock sale, each such holder of Stockholder Shares shall agree 

6

 

to
sell such holder's Stockholder Shares on the terms and conditions approved by the Majority Stockholders. The holders of Stockholder Shares shall take all necessary and desirable actions in
connection with the consummation of the Approved Sale as requested by the Majority Stockholders. 

        (b)   Upon
the consummation of the Approved Sale, each Stockholder shall receive in exchange for the Stockholder Shares held by such Stockholder the same portion of the
aggregate consideration from such Approved Sale that such Stockholder would have received if such aggregate consideration had been distributed by the Company in complete liquidation pursuant to the
rights and preferences set forth in the Company's certificate of incorporation as in effect immediately prior to the consummation of such Approved Sale. All holders of Stockholder Shares representing
then currently exercisable options or warrants to acquire Common Stock shall be given an opportunity, at the Board's discretion, to either (A) exercise such options or warrants prior to the
consummation of the Approved Sale and participate in such sale as holders of Common Stock or (B) upon the consummation of the Approved Sale, receive in exchange for such options or warrants
consideration equal to the amount determined by multiplying (1) the same amount of consideration per share of Common Stock received by the holders of Common Stock in connection with the
Approved Sale less the exercise price per share of Common Stock of such options or warrants to acquire Common Stock by (2) the number of shares of Common Stock represented by such then
currently exercisable options or warrants. 

        (c)   Each
holder of Stockholder Shares shall be obligated to join on a pro rata basis (based upon the amount of consideration received by such holder for its or his
Stockholder Shares in such Approved Sale) in any purchase price adjustments, indemnification or other obligations that the sellers of Stockholder Shares are required to provide in connection with the
Approved Sale (other than any such obligations that relate solely to a particular Stockholder, such as indemnification with respect to representations and warranties given by a Stockholder regarding
such Stockholder's title to and ownership of Stockholder Shares, in respect of which only such Stockholder shall be liable). 

        (d)   In
the event an Approved Sale closes, and to the extent not otherwise paid by the Company, holders of Stockholder Shares shall bear their pro rata share (based upon the
amount of consideration received by such holder for its or his Stockholder Shares in such Approved Sale) of the costs of any Approved Sale to the extent such costs are incurred for the benefit of all
holders of Stockholder Shares participating in such Approved Sale and are not otherwise paid by the Company or the acquiring party. Costs incurred by holders of Stockholder Shares on their own behalf
shall not be considered costs of the transaction hereunder; and with it being understood that the fees and disbursements of one counsel chosen by the Majority Stockholders shall be deemed for the
benefit of all holders of Stockholder Shares participating in such Approved Sale. 

        (e)   The
provisions of this Section 5 shall terminate upon the earlier to occur of (i) the consummation of an IPO and (ii) the consummation of a Sale of
the Company. 

        6.    Initial Public Offering.    In the event that the Board and the Majority Stockholders approve an IPO, then each
holder of Stockholder Shares shall vote for, consent to, and raise no objections against such proposed IPO, and shall take all such other necessary or desirable actions requested by the Majority
Stockholders in connection with the consummation of such IPO, including compliance with the requirements of all laws and regulatory bodies which are applicable or which have jurisdiction over such IPO
and waiving any dissenters' rights, appraisal rights, approval rights or similar rights in connection with such IPO, and executing all agreements, documents and instruments in connection therewith in
the form presented and executed by the Majority Stockholders. 

        7.    First Refusal Rights.    

        (a)   Except
for issuances of Equity Securities (a) to the Stockholders pursuant to the Purchase Agreement or the Acquisition Agreement, (b) to employees,
officers, directors, consultants and independent contractors in amounts and on terms which have been approved by the Board, (c) upon 

7

 

the
conversion, recapitalization or reorganization of any securities of the Company (other than the amendment, recapitalization or reorganization of any security originally issued after the date
hereof without any direct or indirect rights to purchase or convert into Common Stock of the Company into a security with a direct or indirect right to purchase or convert into Common Stock of the
Company (unless in each such case each Stockholder is given an opportunity pursuant to this Section 7 to acquire the amount of such security
originally issued without any direct or indirect rights to convert into Common Stock of the Company such Stockholder was entitled to acquire pursuant to this  Section 7 when such securities were
initially issued at a price equal to the greater of the initial issuance price thereof and the fair market
value of such security immediately prior to such amendment, recapitalization or reorganization as determined by the Board), (d) directly (or indirectly through one or more Subsidiaries) in
connection with acquisitions, alliances or joint ventures which have been approved by the Board which are bona fide transactions with one or more Independent Third Parties, (e) pursuant to an
IPO, (f) as additional yield or return in connection with indebtedness for borrowed money, or (g) in connection with a stock dividend, stock split or similar event, if the Company or any
of its Subsidiaries at any time authorizes the issuance or sale of any Equity Securities (other than the issuance or sale of Equity Securities by a Subsidiary of the Company to the Company or any of
its other Subsidiaries), the Company shall first offer to sell or cause to be offered to be sold to each Stockholder a portion of such Equity Securities equal to the quotient determined by dividing
(1) the number of shares of Common Stock held by such Stockholder (on a fully diluted basis immediately prior to such issuance on an as-if-converted or exchanged or
exercised and fully diluted basis) by (2) the total number of shares of Common Stock outstanding (on a fully diluted basis immediately prior to such issuance on an
as-if-converted or exchanged or exercised and fully diluted basis). Each Stockholder shall be entitled to purchase such Equity Securities on the same terms as such Equity
Securities are to be offered to any other Persons. Notwithstanding the foregoing, if the Equity Securities offered to any Person include more than one type or class of security (including debt
securities) of the Company or any of its Subsidiaries, then notwithstanding the foregoing, if a Stockholder exercises its or his right to acquire Equity Securities pursuant to this
paragraph (a), such Stockholder will also be required to purchase the same strip of securities (on the same terms and conditions) that such Person is required to purchase such Equity
Securities. 

        (b)   In
order to exercise its or his purchase rights hereunder, the Stockholders must within 30 days after receipt of written notice from the Company describing the
Equity Securities being offered, the purchase price thereof, the payment terms and such holder's percentage allotment deliver a written notice to the Company describing its or his election hereunder
(which election shall be absolute and unconditional). 

        (c)   Upon
the expiration of the offering period described above, the Company or such Subsidiary of the Company, as appropriate, shall be entitled to sell such Equity
Securities which the Stockholders have not elected to purchase during the 180 days following such expiration. Any Equity Securities offered or sold by the Company or any of such Subsidiaries
after such 180-day period must be reoffered to the Stockholders pursuant to the terms of this Section. 

        (d)   The
provisions of this Section 7 shall terminate upon the earlier to occur of (i) the consummation of an
IPO and (ii) the consummation of a Sale of the Company. 

        8.    Legend; Securities Law Matters.    

        (a)   Each
certificate evidencing Stockholder Shares and each certificate issued in exchange for or upon the Transfer of any Stockholder Shares (if such shares remain
Stockholder Shares as defined herein after such Transfer) shall be stamped or otherwise imprinted with a legend in substantially the following form: 

"THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), 

8

 

AND
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER. THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO CERTAIN TRANSFER AND VOTING AND OTHER RESTRICTIONS PURSUANT TO A STOCKHOLDERS AGREEMENT, DATED AS OF NOVEMBER 3, 2003, AMONG THE ISSUER OF SUCH SECURITIES (THE "COMPANY") AND CERTAIN OF THE
COMPANY'S STOCKHOLDERS (AS AMENDED FROM TIME TO TIME, THE "STOCKHOLDER AGREEMENT"). A COPY OF SUCH STOCKHOLDERS AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON
WRITTEN REQUEST." 

The
Company shall imprint such legend on all certificates evidencing Stockholder Shares. The legend set forth above shall be removed from the certificates evidencing any shares which cease to be
Stockholder Shares in accordance with Section 11 hereof. 

        (b)   In
connection with the Transfer of any Stockholder Shares, the holder thereof shall deliver written notice to the Company describing in reasonable detail the Transfer or
proposed Transfer, together with, if so requested by the Company, an opinion of counsel which (to the Company's reasonable satisfaction) is knowledgeable in securities law matters to the effect that
such Transfer of Stockholder Shares may be effected without registration of such Stockholder Shares under the Securities Act. In addition, if the holder of the Stockholder Shares delivers to the
Company an opinion of such counsel that no subsequent Transfer of such Stockholder Shares shall require registration under the Securities Act, the Company shall promptly upon such contemplated
Transfer deliver new certificates for such securities which do not bear the first sentence of the legend set forth in Section 8(a) above. If the
Company is not required to deliver new certificates for such Stockholder Shares not bearing such legend, the holder thereof shall not effect any Transfer of the same until the prospective transferee
has confirmed to the Company in writing its or his agreement to be bound by the conditions contained in this Section 8(b) and  Section 8(a) above.

        (c)   If
any Stockholder Shares become eligible for sale pursuant to Rule 144(k) of the Securities and Exchange Commission or no longer constitute "restricted
securities" (as defined under Rule 144(a) of the Securities and Exchange Commission), the Company shall, upon the request of the holder of such Stockholder Shares, remove the first sentence of
the legend set forth in Section 8(a)above from the certificates for such securities. 

        9.    Transfers; Future Sales.    Prior to any Stockholder Transferring any Stockholder Shares (other than in a Public
Sale and other than pursuant to Section 5) to any Person, such Stockholder shall (subject to the remaining provisions of this  Section 9) cause
the prospective transferee to be bound by this Agreement and to execute and deliver to the Company and the other Stockholders a
counterpart of this Agreement. Transferees of Summit Shares (other than the PFDC Stockholders, all of whom shall be deemed to be PFDC Stockholders and the holders of PFDC Shares hereunder) shall be
deemed to be Summit Stockholders and the holders of Summit Shares hereunder. Transferees of PFDC Shares (other than the Summit Stockholders or their Affiliates and their designees, all of whom shall
be deemed to be Summit Stockholders and holders of Summit Shares hereunder) shall be deemed to be PFDC Stockholders hereunder. The provisions of this  Section 9 shall terminate automatically and
shall be of no further force or effect upon the first to occur of (i) the consummation of an
IPO and (ii) the consummation of a Sale of the Company. 

        10.    Covenants.    

        (a)    Key-Man Life Insurance.    The Company shall maintain life insurance, with benefits payable to the
Company, on the lives of such senior executives and in such amounts as the Board shall designate. 

9

 

        (b)    Financial Statements.    The Company shall deliver to each Stockholder (so long as such Stockholder and its
Affiliates holds at least 10% of the Company's outstanding Common Stock on a fully diluted basis or, in the case of the PFDC Stockholders, so long as the Original PFDC Stockholders collectively hold
at least fifty percent (50%) of the Common Stock and at least fifty percent (50%) of the Preferred Stock owned by the PFDC Stockholders in the aggregate on the date hereof and with it being understood
that the rights of the PFDC Stockholders under this Section 10(b) shall automatically terminate if PFDC or any of its Affiliates shall breach any
of the provisions of Section 8.4(a) of the Acquisition Agreement or knowingly breach any of the provisions of Section 8.4(b) of the Acquisition Agreement as it relates to any of the
Company's or its Subsidiaries' key employees): 

          (i)  within
45 days after the end of each monthly accounting period in each fiscal year, unaudited consolidated statements of income and cash flows of the Company and
its Subsidiaries for such monthly period and an unaudited consolidated balance sheet of the Company and its Subsidiaries as of the end of such monthly period; 

         (ii)  prior
to the beginning of each fiscal year, an annual budget for the Company and its Subsidiaries for such fiscal year approved by the Board (displaying anticipated
statements of income and cash flows); and 

        (iii)  within
120 days after the end of each fiscal year, consolidated statements of income and cash flows of the Company and its Subsidiaries for such fiscal year,
and a consolidated balance sheet of the Company and its Subsidiaries as of the end of such fiscal year, in each case audited by a "Big 4" accounting firm selected by the Board. 

        (c)    Inspection of Property.    The Company shall permit any representatives designated by the holders of a majority
of the PFDC Shares (so long as the Original PFDC Stockholders collectively hold at least fifty percent (50%) of the Common Stock and at least fifty percent (50%) of the Preferred Stock owned by the
PFDC Stockholders in the aggregate on the date hereof and with it being understood that the rights of the PFDC Stockholders under this  Section 10(c) shall automatically terminate if PFDC or any of
its Affiliates shall breach any of the provisions of Section 8.4(a) of the
Acquisition Agreement or knowingly breach any of the provisions of Section 8.4(b) of the Acquisition Agreement as it relates to any of the Company's or its Subsidiaries' key employees) or the
holders of a majority of the Summit Shares (so long as the holders of the Summit Shares hold at least ten percent (10%) of the Common Stock on a fully diluted basis in the aggregate), upon reasonable
notice and during normal business hours and at such Stockholder's expense, to (i) visit and inspect any of the properties of the Company and its Subsidiaries, and (ii) examine the
corporate and financial records of the Company and its Subsidiaries. 

        (d)    Confidentiality.    Except as otherwise expressly required by law or judicial order or decree or by any
governmental agency or authority or with respect to information that becomes available to the public other than as a result of a breach of confidentiality obligations to the Company, each Person
entitled to receive information regarding the Company and its Subsidiaries under this Section shall use the same standards and controls which such Person uses to maintain the confidentiality of its
own confidential information (but in no event less than reasonable care) to maintain the confidentiality of all nonpublic information of the Company or any of its Subsidiaries obtained by it or him
pursuant to this Section; provided that each such Person may disclose such information in connection with a Transfer of Stockholder Shares if such
Person's transferee agrees in writing to be bound by the provisions hereof. Notwithstanding anything to the contrary in this Agreement or otherwise, in no event shall the PFDC Stockholders be entitled
to receive any information or materials pursuant to this Agreement or otherwise to the extent such information or materials (i) relates to issues where a conflict of interest may exist between
PFDC or any of its Affiliates and the Company and its Subsidiaries with respect to any agreements entered into between or among those parties or 

10

 

(ii) otherwise
constitutes competitively sensitive materials or information (including pricing and marketing plans and proposals and other competitively or strategically sensitive information
or data) the disclosure to, or use of which by, PFDC or any of its Affiliates could reasonably be expected to be materially detrimental to or jeopardize in any material respect the competitive
position of the Company or its Subsidiaries, in each case as determined by the Board or the Majority Stockholders in their reasonable discretion (but with it being understood that, subject to the
foregoing, the PFDC Stockholders shall be entitled to receive all such other information as is customarily provided to institutional investors in order to permit such investors to reasonably monitor
their investment in a privately-held company). 

        (e)    Form W-8BEN.    Each Stockholder that is not a U.S. Person for U.S. income tax purposes
shall deliver to the Company a properly completed and executed United States Internal Revenue Service Form W-8BEN and shall provide the Company a new Form W-8BEN
(or applicable successor form) upon the expiration or obsolescence of any previously delivered form. 

        (f)    Certain Restrictions.    So long as the Original PFDC Stockholders collectively hold at least fifty percent
(50%) of the Common Stock and at least fifty percent (50%) of the Preferred Stock owned by the PFDC Stockholders in the aggregate on the date hereof, the Company shall not, and shall not permit any of
its Subsidiaries (as applicable) to, without the consent of the PFDC Stockholders (which consent may be evidenced by written approval by the holders of a majority of the PFDC Shares) or written
approval by the PFDC Director: 

          (i)  enter
into, amend or waive any material rights with respect to any transaction, agreement, commitment or arrangement with any Summit Stockholder or any Affiliate of any
Summit Stockholder, except for any transaction, agreement, commitment or arrangement which is not substantially less favorable to the Company as would be obtainable by the Company at the time in a
comparable arm's-length transaction with a Person not affiliated with the Company, any Summit Stockholder or any Affiliate of any Summit Stockholder; provided that the provisions of this  Section 10(f)(i) shall not apply
to any amendment to or waiver of any of the agreements contemplated by the Acquisition Agreement which is amended or waived pursuant to its terms or to any transactions, agreements, commitments or
arrangements (i) contemplated in the Acquisition Agreement or any of the agreements contemplated thereby, including this Agreement or (ii) with respect to the repayment of indebtedness
owed to any of the Summit Stockholders or any of their Affiliates which is issued after the date hereof; and provided further that in no event shall any Summit Stockholder or any Affiliate of any
Summit Stockholder be entitled to receive any management fees (or its equivalent, whether in cash or Equity Securities) from the Company or any of its Subsidiaries; 

         (ii)  amend
the terms of the Common Stock, Preferred Stock or Subordinated Notes in any manner that would treat the PFDC Stockholders in a disproportionately adverse manner,
whether directly or indirectly through any related transactions, as compared to the Summit Stockholders (and with it being understood that, for the avoidance of doubt and without limitation, an
example of "indirect" disproportionate adverse treatment would be if the Company amended the terms of the Subordinated Notes so as to reduce the interest rate thereon, but at the same time increased
the rate of interest on different notes that were held by the Summit Stockholders but not held by the PFDC Stockholders so as to make the Summit Stockholders whole in respect of the decrease in
interest rate on the Subordinated Notes to the exclusion of the PFDC Stockholders); 

        (iii)  approve
any material change in the scope of the Company's business in a manner such that thereafter no significant portion of the business of the Company and its
Subsidiaries would be related to the development, manufacture, sale or distribution of cosmetics or sunscreen or other similar or related products; 

11

 

        (iv)  approve
the sale, transfer or disposition of all or substantially all of the assets of the Company and its Subsidiaries on a consolidated basis other than in connection
with a Sale of the Company; 

         (v)  declare
or pay any dividends upon the Common Stock or Preferred Stock held by the Summit Stockholders unless dividends in the same amount per share are declared and paid
on the Common Stock and/or Preferred Stock, as the case may be, held by the PFDC Stockholders; 

        (vi)  redeem
or otherwise acquire any shares of Equity Securities held by the Summit Stockholders unless a pro rata number of shares of the same class of stock is redeemed or
acquired from the PFDC Stockholders (based on the total number of shares held by the Summit Stockholders and the PFDC Stockholders), and with it being understood that the PFDC Stockholders shall
tender shares of Preferred Stock for purchase or redemption as and to the extent required by Section 4 of Article IV of the Company's certificate of incorporation; or 

       (vii)  amend
the Company's certificate of incorporation or bylaws in a manner that conflicts with any of the express terms of this Agreement. 

        (g)    Subordination Agreement.    So long as the Majority Stockholders hold any of the Subordinated Notes, neither
the Company nor any Summit Stockholder will request, consent to or accept any amendment, waiver or forbearance under the Subordination Agreement (as defined in the Acquisition Agreement) unless such
amendment, waiver or forbearance affords to all other holders of Subordinated Notes the same amendment, waiver and/or forebearance, in such manner that all holders of the Subordinated Notes enjoy the
benefits of such amendment, waiver and/or forebearance on a pro rata basis. 

        (h)    Election to Transfer Right to Repurchase Certain Equity Securities.    In the event that the Company has the
right to designate another Person to acquire Equity Securities from an employee or executive officer of the Company or its Subsidiaries pursuant to an agreement with such Person employee or executive
officer, the Company shall not designate its right to acquire such Equity Securities to any of the Summit Stockholders or any of their respective Affiliates unless the Company designates its right to
acquire such Equity Securities to all Stockholders who elect to participate in such acquisition based upon each Stockholder's proportionate ownership of all Common Stock owned by the Stockholders who
elect to participate in such acquisition. 

        (i)    The
provisions of this Section 10 shall terminate upon the earlier to occur of (i) the consummation of an
IPO and (ii) the consummation of a Sale of the Company. 

        11.    Definitions.    

        "Affiliate" of a Stockholder means any other Person controlling, controlled by or under common control with such Stockholder and, in the
case of a Stockholder which is a partnership or a limited liability company, any partner or member of such Stockholder. 

        "Capital Stock" means, collectively, the Preferred Stock, the Common Stock and any other capital stock hereafter created by the Company,
as the context may require. 

        "Equity Securities" means (i) any Capital Stock, (ii) any capital stock of any Subsidiary of the Company, (iii) any
warrants, options, or other rights to subscribe for or to acquire, directly or indirectly, Capital Stock or capital stock of any Subsidiary of the Company, whether or not then exercisable or
convertible, and (iii) any stock, notes, or other securities which are convertible into or exchangeable for, directly or indirectly, Capital Stock or capital stock of any Subsidiary of the
Company, whether or not then convertible or exchangeable. 

        "Independent Third Party" means any Person who, immediately prior to the contemplated transaction, does not own in excess of 5% of the
Common Stock on a fully-diluted basis (a "5%  

12

 

 Owner") and who is not controlling, controlled by or under common control with any such 5% Owner (and with it being understood that no Person controlling, controlled by or
under common control with any Summit Stockholder shall constitute an "Independent Third Party" for purposes of this Agreement). 

        "IPO" means the sale in an underwritten public offering registered under the Securities Act of shares of the Company's Common Stock. 

        "Majority Stockholders" means the holders of a majority of the Summit Shares then outstanding. 

        "Marketable Securities" means securities that are publicly-tradable (including, for the avoidance of doubt, securities that may be subject
to the resale provisions of Rule 145 adopted under the Securities Act) or securities that are subject to registration rights exercisable (whether pursuant to a shelf registration, a contractual
obligation with a third party or otherwise) by the PFDC Stockholders, collectively, within three (3) months following the issuance of such securities pursuant to a registration agreement. 

        "Permitted Summit Stockholder Transfer" means any Transfer of Summit Shares (i) to or among a Summit Stockholder and/or its
Affiliates and (ii) pursuant to an in-kind distribution by a Summit Stockholder to its partners or members; provided that in each
such case (A) the restrictions contained herein shall continue to be applicable to such Stockholder Shares after any such Permitted Summit Stockholder Transfer, and (B) the transferee(s)
of such Summit Shares shall have agreed in writing to be bound by the provisions of this Agreement with respect to the Summit Shares so transferred. 

        "Person" means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization or other entity, or a government or any branch, department, agency, political subdivision or official thereof. 

        "PFDC Shares" means (i) any Capital Stock acquired by any PFDC Stockholder and (ii) any equity securities issued or issuable
directly or indirectly with respect to the Capital Stock referred to in clause (i) above by way of stock dividend or stock split or in connection with a combination of stock, recapitalization,
merger, consolidation or other reorganization, or, in each case, any comparable transaction. Notwithstanding the foregoing, for purposes of this Agreement, a "majority of the
PFDC
Shares" shall mean a majority of each of (a) the Common Stock held by all PFDC Stockholders and (b) the Preferred Stock held by all PFDC Stockholders. 

        "Public Sale" means any sale of Stockholder Shares to the public pursuant to an offering registered under the Securities Act or to the
public through a broker, dealer or market maker pursuant to the provisions of Rule 144 adopted under the Securities Act. 

        "Sale of the Company" means a bona-fide sale of the Company to an Independent Third Party or group of Independent Third
Parties pursuant to which such party or parties acquire (i) capital stock of the Company possessing the voting power under normal circumstances to elect a majority of the Company's board of
directors (whether by merger, consolidation or sale or transfer of the Company's Capital Stock or otherwise) or (ii) all or substantially all of the Company's assets determined on a
consolidated basis, for consideration consisting of (a) cash or Marketable Securities representing at least 75% of the total consideration to be received by the Stockholders in connection
therewith or (b) at least $10,520,000 in cash or Marketable Securities to the PFDC Stockholders less the aggregate amount of any cash previously or concurrently received by the PFDC
Stockholders with respect to the PFDC Shares and PFDC's Subordinated Note (but excluding all cash payments previously received by the PFDC Stockholders with respect to interest or dividends thereon).
Upon the consummation of an Approved Sale, each Stockholder shall receive in exchange for the Stockholder Shares held by such Stockholder the same portion of the aggregate consideration from such
Approved Sale that such Stockholder would have received if such aggregate consideration had been distributed by the Company 

13

 

in
complete liquidation pursuant to the rights and preferences set forth in the Company's Certificate of Incorporation as in effect immediately prior to the consummation of such Approved Sale. 

        "Securities Act" means the Securities Act of 1933, as amended from time to time. 

        "Stockholder Shares" means the Summit Shares and the PFDC Shares. For purposes of this Agreement, each Stockholder who holds options or
warrants to acquire Capital Stock shall be deemed to be the holder of all Stockholder Shares issuable (at the time of such determination) upon the exercise of such options or warrants. As to any
particular shares of stock constituting Stockholder Shares, such shares shall cease to be Stockholder Shares when they have been (x) effectively registered under the Securities Act and disposed
of in accordance with the registration statement covering them or (y) sold to the public through a broker, dealer or market maker pursuant to Rule 144 (or by any similar provision then
in force) under the Securities Act, in each case in conformity with the terms and conditions of this Agreement. Notwithstanding the foregoing, for purposes of this Agreement, a
"majority of the Stockholder Shares" shall mean a majority of each of (a) the Common Stock held by all Stockholders and (b) the Preferred
Stock held by all Stockholders. 

        "Subordinated Notes" means the subordinated promissory notes of PFI Acquisition Corp., a New York corporation, issued on the date hereof
to certain Stockholders. 

        "Subsidiary" means with respect to any Person, any corporation, partnership, limited liability company, association or other business
entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors
is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof or (ii) if a partnership,
association, limited liability company or other business entity, a majority of the partnership, membership or other similar ownership interests thereof is at the time owned or controlled, directly or
indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a
partnership, association or other business entity if such Person or Persons shall be allocated a majority of partnership, association or other business entity gains or losses or shall be or control
the managing director or general partner of such partnership, association or business entity. 

        "Summit Shares" means (i) any Capital Stock acquired by any Summit Stockholder and (ii) any equity securities issued or
issuable directly or indirectly with respect to the Capital Stock referred to in clause (i) above by way of stock dividend or stock split or in connection with a combination of stock,
recapitalization, merger, consolidation or other reorganization, or, in each case, any comparable transaction. Notwithstanding the foregoing, for purposes of this Agreement, a
"majority of the Summit Shares" shall mean a majority of each of (a) the Common Stock held by all Summit Stockholders and (b) the
Preferred Stock held by all Summit Stockholders. 

        12.    Transfers in Violation of Agreement.    Any Transfer or attempted Transfer of any Stockholder Shares in
violation of any provision of this Agreement shall be void as against the Company and of no force or effect, and the Company shall not record such Transfer on its books or treat any purported
transferee of such Stockholder Shares as the owner of such shares for any purpose. 

        13.    Amendment and Waiver.    Except as otherwise provided herein, the provisions of this Agreement may be amended,
modified or waived only upon the prior written consent of the Company, the holders of a majority of the PFDC Shares, and the holders of a majority of the Summit Shares;  provided that the addition of new
parties to this Agreement from time to time as Summit Stockholders or PFDC Stockholders shall require only the consent
of the Company and the holders of a majority of the Stockholder Shares. The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such
provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms. 

14

 

        14.    Severability.    Whenever possible, each provision of this Agreement shall be interpreted in such manner as to
be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction,
such invalidity, illegality or unenforceability shall not affect any other provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement shall be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein. 

        15.    Entire Agreement.    Except as otherwise expressly set forth herein, this Agreement embodies the complete
agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the
parties, written or oral, which may have related to the subject matter hereof in any way. 

        16.    Successors and Assigns.    Except as otherwise provided herein (and subject to the provisions of  Section 9), this
Agreement shall bind and inure to the benefit of and be enforceable by the Company and its successors and assigns and the
Stockholders and any subsequent holders of Stockholder Shares and the respective successors and assigns of each of them, so long as they hold Stockholder Shares. If a party hereto ceases to own any
Stockholder Shares, such party shall no longer be deemed to be a Stockholder for purposes of this Agreement. 

        17.    Counterparts.    This Agreement may be executed in one or more counterparts (including by means of telecopied
signature pages), each of which shall be an original and all of which taken together shall constitute one and the same agreement. 

        18.    Remedies.    The parties hereto acknowledge and agree that money damages may not be an adequate remedy for any
breach of the provisions of this Agreement and that the Company and any Stockholder shall have the right to injunctive relief, in addition to all of its or his rights and remedies at law or in equity,
to enforce the provisions of this Agreement. Nothing contained in this Agreement shall be construed to confer upon any Person who is not a signatory hereto or any successor or assign of a signatory
hereto any rights or benefits, as a third party beneficiary or otherwise. 

        19.    Notices.    All notices, demands and other communications to be given or delivered under or by reason of the
provisions of this Agreement shall be in writing and shall be deemed to have been given (i) when personally delivered or sent by telecopy (with hard copy to follow) upon receipt of mechanical
confirmation of delivery, (ii) for deliveries within the continental United States, one day following the day when deposited with a reputable and established overnight express courier (charges
prepaid), (iii) for overseas deliveries, five days following the day when deposited with a reputable and established overnight express courier (charges prepaid), or (iv) for deliveries
within the continental United States, five days following mailing by certified or registered mail, postage prepaid and return receipt requested. Unless another address is specified in writing,
notices, demands and communications to the Company shall be sent to the addresses indicated below, and any notices, demands and communications to the Stockholders shall be sent to the addresses
indicated on Schedule I attached hereto or Schedule II
attached hereto, as appropriate, or at any address listed in the Company's records in case of any Stockholder not so listed herein. 

If to the Company: 

PFI
Holdings Corp.

1055 West 8th Street

Azusa, CA 91702

Attn: Chief Executive Officer

Telephone: (626) 334-3395 

Telecopy: (626) 812-9462 

15

 

With a copy to (which shall not constitute notice to the Company): 

Summit
Partners, L.P.

499 Hamilton Avenue

Palo Alto, California 94301

Attention: Walter G. Kortschak

                   Craig D. Frances

Telephone: (650) 321-1166

Telecopy: (650) 321-1188 

And to: 

Kirkland &
Ellis LLP

200 East Randolph Drive

Chicago, Illinois 60601

Attention: Ted H. Zook, P.C.

Telephone: (312) 861-2000

Telecopy: (312) 861-2200 

        20.    Governing Law.    All issues and questions concerning the construction, validity, interpretation and
enforceability of this Agreement and the schedules hereto shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or
conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. 

        21.    Arbitration.    For purposes of this Section 21, the
Summit Stockholders shall be deemed to be one party and the PFDC Stockholders shall be deemed to be one party to the extent that such Stockholders are involved in any Dispute (as defined below) and
the Company shall be deemed to be a party (to the extent it is involved in the Dispute). 

        (a)   Except
as otherwise expressly provided in this Agreement, the parties agree that the arbitration procedure set forth below shall be the sole and exclusive method for
resolving and remedying any and all disputes, controversies or claims that arise out of or in connection with, or relate in any manner to, the rights and liabilities of the parties hereunder or any
provision of this Agreement or the interpretation, enforceability, performance, breach, termination or validity hereof, including this Section 21
relating to the resolution of disputes (the "Disputes") and questions concerning arbitrability; provided that nothing in this  Section 21 shall
prohibit a party hereto from instituting litigation to enforce any Final Determination (as defined below). The parties hereby
acknowledge and agree that, except as otherwise provided in this Section 21 or in the Rules for Non-Administered Arbitration of
Business Disputes (the "Rules") promulgated by the Center for Public Resources Institute for Dispute Resolutions (the
"Institute") as in effect from time to time, the arbitration procedures and any Final Determination hereunder shall be governed by, and shall be
enforced pursuant to, the United States Arbitration Act, 9 U.S.C. §1 et. Seq. 

        (b)   In
the event that any party hereto asserts that there exists a Dispute, such party shall deliver a written notice to each other party involved therein specifying the
nature of the asserted Dispute and requesting a meeting to attempt to resolve the same. If no such resolution is reached within ten business days after the delivery of such notice, the party
delivering such notice of Dispute may thereafter commence arbitration hereunder by delivering to each other party involved therein a notice of arbitration (a "Notice of
Arbitration"). Such Notice of Arbitration shall specify the nature of any Dispute and any other matters required by the Rules as in effect from time to time to be included
therein. The arbitrators shall permit and facilitate such discovery as the parties shall reasonably request and each party will cooperate with requests by the arbitrators. Each party involved in the
Dispute shall designate one arbitrator within 15 days of the date on which the Notice of Arbitration is delivered. 

16

 

Each
party involved in the Dispute shall cause such designated arbitrators mutually to agree upon and designate a third arbitrator; provided,  however, that:
(i) failing such agreement within 45 days of the date on which the Notice of Arbitration is delivered, the third arbitrator
shall be appointed in accordance with the Rules; (ii) if either party involved in the Dispute fails to designate timely an arbitrator, the Institute shall appoint an arbitrator on behalf of
such failing party, and the two designated arbitrators shall jointly designate a third arbitrator. Each party involved in the Dispute shall pay the fees and expenses of their respectively designated
arbitrators (or the arbitrator designated on their behalf by the Institute) and shall bear equally the fees and expenses of the third neutral arbitrator; provided
that at the conclusion of the arbitration, the arbitrators shall award costs and expenses (including the costs of the arbitration previously advanced and the fees and expenses
of attorneys, accountants and other experts) to the parties based upon the relative fault of each party as determined by the arbitrators. 

        (c)   The
arbitration shall be conducted in the English language in Los Angeles, California under the Rules as in effect from time to time. The arbitrators shall conduct the
arbitration so that a final result, determination, finding, judgment and/or award (the "Final Determination") is made or rendered as soon as
practicable, but in no event later than 90 business days after the delivery of the Notice of Arbitration nor later than ten days following completion of the arbitration. Notwithstanding any Delaware
law to the contrary, the Final Determination shall be final and binding on all parties and there shall be no appeal from or reexamination of the Final Determination, including any right of appeal to
any court in any jurisdiction, except for fraud, perjury, evident partiality or misconduct by an arbitrator prejudicing the rights of any party and to correct manifest clerical errors. 

        (d)   This
Agreement has been negotiated and executed by the parties hereto in English. To the extent a translation of this Agreement exists, each of the parties hereto
acknowledges that it has been prepared solely for convenience and agrees that the provisions of the English version of the Agreement prevail. 

        (e)   Notwithstanding
anything to the contrary, nothing in this Section 21 shall be construed to impair the right of any
party hereto to seek injunctive or other equitable relief. 

        22.    Submission of Jurisdiction.    Except as specifically provided in  Section 21 above in the case of arbitration, and
solely for purposes of any action or proceeding arising out of or relating to this Agreement,
each of the parties submits to the jurisdiction of the United States District Court for the Central District of California in any action or proceeding arising out of or relating to this Agreement,
including any action or proceeding to enforce any Final Determination or any action to seek injunctive or other equitable relief, and agrees that all claims in respect of the action or proceeding may
be heard and determined in any such court. Each party hereto hereby irrevocably submits to the jurisdiction of such courts, irrevocably consents to the service of process by registered mail or
personal service and hereby irrevocably waives, to the fullest extent permitted by law, any objection which it or he may have or hereafter have as to personal jurisdiction, the laying of the venue of
any such action or proceeding brought in any such court and any claim that any such action or proceeding brought in any court has been brought in an inconvenient forum and waives any bond, surety or
other security that might be required of any other party with respect thereto. Each party also agrees not to bring any action or proceeding arising out of or relating to this Agreement in any other
state or federal court unless and until the foregoing court renders a final order that it lacks, and cannot acquire, the necessary jurisdiction, and either all appeals have been exhausted or the order
is no longer appealable. Each party appoints CT Corporation (the "Process Agent") as its agent to receive on its behalf service of copies of the summons
and complaint and any other process that might be served in the action or proceeding. Any party may make service on any other party by sending or delivering a copy of the process (i) to the
party to be served at the address and in the manner provided for the giving of notices in Section 19 above or (ii) to the party to be
served in care of the Process Agent at the address and in the manner provided for the giving of notices in Section 19 above;  provided, however, that if process is 

17

 

served
in care of the Process Agent, the serving party shall also provide a copy of the process to the party to be served at the address and in the manner provided for the giving of notices in  Section 19
above. Nothing in this Section 20, however, shall affect the right of any party
to serve legal process in any other manner permitted by law or at equity. Each party agrees that a final judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit
on the judgment or in any other manner provided by law or at equity. 

        23.    Delivery by Facsimile.    This Agreement and any signed agreement or instrument entered into in connection
herewith or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a facsimile machine, shall be treated in all manner and respects as an original
agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to
any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to all other parties. No party hereto or to any such agreement
or instrument shall raise the use of a facsimile machine to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile
machine as a defense to the formation of a contract and each such party forever waives any such defense. 

        24.    Interpretation.    The headings and captions used in this Agreement or in any Schedule hereto are for
convenience of reference only and do not constitute a part of this Agreement and shall not be deemed to limit, characterize or in any way affect any provision of this Agreement or any Schedule hereto,
and all provisions of this Agreement and the Schedules hereto shall be enforced and construed as if no
caption or heading had been used herein or therein. Any capitalized terms used in any Schedule attached hereto and not otherwise defined therein shall have the meanings set forth in this Agreement.
Each defined term used in this Agreement shall have a comparable meaning when used in its plural or singular form. The use of the word "including" herein shall mean "including without limitation" and,
unless the context otherwise required, "neither," "nor," "any," "either" and "or" shall not be exclusive. The use of masculine, feminine or neuter gender shall include the other genders (unless the
context otherwise requires). 

        25.    No Strict Construction.    The parties hereto have participated jointly in the negotiation and drafting of this
Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. 

[The
rest of this page is intentionally left blank] 

*
* * * * 

18

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written. 

	 	 	PFI HOLDINGS CORP.
	

 	
 	

By:	
 	

/s/  ANDRE PIETERS      

	 	 	Name:	 	Andre Pieters
	 	 	Its:	 	President
	

 	
 	

SUMMIT VENTURES V, L.P.
	

 	
 	

By:	
 	

Summit Partners V, L.P.,

its General Partner
	

 	
 	

By:	
 	

Summit Partners, LLC,

its General Partner
	

 	
 	

By:	
 	

/s/  WALTER KORTSCHAK      
Member
	

 	
 	

SUMMIT V COMPANION FUND, L.P.
	

 	
 	

By:	
 	

Summit Partners V, L.P.,
	 	 	Its	 	General Partner
	

 	
 	

By:	
 	

Summit Partners, LLC,
	 	 	Its:	 	General Partner
	

 	
 	

By:	
 	

/s/  WALTER KORTSCHAK      
Member
	

 	
 	

SUMMIT V ADVISORS (QP) FUND, L.P.
	

 	
 	

By:	
 	

Summit Partners V, L.P.,
	 	 	Its:	 	General Partner
	

 	
 	

By:	
 	

Summit Partners, LLC,
	 	 	Its:	 	General Partner
	

 	
 	

By:	
 	

/s/  WALTER KORTSCHAK      
Member
	

 	
 	

SUMMIT V ADVISORS FUND, L.P.
	

 	
 	

By:	
 	

Summit Partners V, L.P.
	 	 	Its:	 	General Partner
	

 	
 	

By:	
 	

Summit Partners, LLC
	 	 	Its:	 	General Partner
	

 	
 	

By:	
 	

/s/  WALTER KORTSCHAK      
Member
	 	 	 	 	 

	

 	
 	

SUMMIT VENTURES VI-A, L.P.
	

 	
 	

By:	
 	

Summit Partners VI (GP), L.P.
	 	 	Its:	 	General Partner
	

 	
 	

By:	
 	

Summit Partners VI (GP), LLC
	 	 	Its:	 	General Partner
	

 	
 	

By:	
 	

/s/  WALTER KORTSCHAK      
Member
	

 	
 	

SUMMIT VENTURES VI-B, L.P.
	

 	
 	

By:	
 	

Summit Partners VI (GP), L.P.
	 	 	Its:	 	General Partner
	

 	
 	

By:	
 	

Summit Partners VI (GP), LLC
	 	 	Its:	 	General Partner
	

 	
 	

By:	
 	

/s/  WALTER KORTSCHAK      
Member
	

 	
 	

SUMMIT VI ADVISORS FUND, L.P.
	

 	
 	

By:	
 	

Summit Partners VI (GP), L.P.
	 	 	Its:	 	General Partner
	

 	
 	

By:	
 	

Summit Partners VI (GP), LLC
	 	 	Its:	 	General Partner
	

 	
 	

By:	
 	

/s/  WALTER KORTSCHAK      
Member
	

 	
 	

SUMMIT VI ENTREPRENEURS FUND, L.P.
	

 	
 	

By:	
 	

Summit Partners VI (GP), L.P.
	 	 	Its:	 	General Partner
	

 	
 	

By:	
 	

Summit Partners VI (GP), LLC
	 	 	Its:	 	General Partner
	

 	
 	

By:	
 	

/s/  WALTER KORTSCHAK      
Member
	

 	
 	

SUMMIT INVESTORS VI, L.P.
	

 	
 	

By:	
 	

Summit Partners VI (GP), L.P.
	 	 	Its:	 	General Partner
	

 	
 	

By:	
 	

Summit Partners, VI (GP), LLC
	 	 	Its:	 	General Partner
	

 	
 	

By:	
 	

/s/  WALTER KORTSCHAK      
Member
	 	 	 	 	 

	

 	
 	

SUMMIT SUBORDINATED DEBT FUND II, L.P.
	

 	
 	

By:	
 	

Summit Partners SD II, LLC
	 	 	Its:	 	General Partner
	

 	
 	

By:	
 	

Stamps, Woodsum & Co. IV
	 	 	Its:	 	Managing Member
	

 	
 	

By:	
 	

/s/  WALTER KORTSCHAK      
General Partner
	

 	
 	

PIERRE FABRE DERMO-COSMETIQUE, S.A.
	

 	
 	

By:	
 	

/s/  PIERRE-ANDRE POIRIER      

	 	 	Name:	 	Pierre-Andre Poirier
	 	 	Its:	 	Secretary
	

 	
 	

/s/  CLAUDE GROS      
 Claude Gros

SCHEDULE I  

 Summit Stockholders  

Summit
Ventures V, L.P.

Summit V Companion Fund, L.P.

Summit V Advisors (QP) Fund, L.P.

Summit V Advisors Fund, L.P.

Summit Ventures VI-A, L.P.

Summit Ventures VI-B, L.P.

Summit VI Advisors Fund, L.P.

Summit VI Entrepreneurs Fund, L.P.

Summit Subordinated Debt Fund II, L.P.

Summit Investors VI, L.P. 

Notices:

All notices to the Summit Stockholders shall be delivered to:

	Summit Partners, L.P.

499 Hamilton Avenue

Palo Alto, California 94301
	Attention:	 	Walter G. Kortschak

Craig D. Frances
	Telephone:	 	(650) 321-1166
	Telecopy:	 	(650) 321-1188
	
With a copy to (which shall not constitute notice to the Summit Stockholders):
	

Kirkland & Ellis LLP

200 East Randolph Drive

Chicago, Illinois 60601
	Attention:	 	Ted H. Zook, P.C.
	Telephone:	 	(312) 861-2000
	Telecopy:	 	(312) 861-2200

SCHEDULE II  

 PFDC Stockholders  

Pierre
Fabre Dermo-Cosmetique, S.A.

Claude Gros 

Notices: 

All notices to Pierre Fabre Dermo-Cosmetique, S.A. to: 

	Pierre Fabre Dermo-Cosmetique, S.A.

1, Avenue d'Albi

la Michonne

81 106 Castres Cedex

France

Attn: Bertrand Parmentier, CFO

Telephone:+33 (5) 63 71 47 31

Telecopy: +33 (5) 63 71 47 16
	
With a copy to (which shall not constitute notice to the PFDC Stockholder):
	

Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLC

333 West Wacker Drive

Chicago, Illinois 60606
	Attention:	 	Peter J. Barack, Esq.
	Telephone:	 	(312) 948-3101
	Telecopy:	 	(312) 984-3150

All notices to Mr. Claude Gros to: 

	Mr. Claude Gros

1 place de l' Etoile

38000 Grenoble

France Telephone: 33 476 18 93 64

Telecopy: 33 476 61 91 64
	
With a copy to (which shall not constitute notice to Mr. Claude Gros):
	

Barack Ferrazzano Kirschbaum Perlman & Nagelberg LLC

333 West Wacker Drive

Chicago, Illinois 60606
	Attention:	 	Peter J. Barack, Esq.
	Telephone:	 	(312) 948-3101
	Telecopy:	 	(312) 984-3150

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Exhibit 10.6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00109-of-00352.parquet"}]]