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").

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, 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:

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.

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

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.

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).

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

"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.

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:

4.2.2 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

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.

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.

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

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.

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.

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.

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.

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.

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.

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).

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:

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.

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.

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

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.

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.

13.3.1 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

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.

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

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 8^th 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 8^th Street Azusa, CA 91702 Attn: Chief Executive Officer Telephone: (626) 334-3395 Telecopy: (626) 812-9462

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

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.

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

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.

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.

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.

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

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

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:

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:

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.

		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