**Exhibit 10.6**

 

**EMPLOYMENTAGREEMENT**

 

This Employment Agreement (“Agreement”) ismade and entered into as of June 2, 2003, by and between Medicor Ltd., aDelaware corporation (the “Company”), and Thomas R. Moyes (“Executive”).

 

A.            The Company is engagedin the business of creation, production and distribution of medical devices anddesires to retain an individual for the position of Chief Financial Officer.

 

B.            Executive representsthat he is well qualified to perform the duties of Chief Financial Officer, andwill devote the necessary time, effort and energy to perform those duties.

 

C.            Based on theserepresentations, the Company desires to hire Executive as its Chief FinancialOfficer.

 

Now, Therefore, in consideration of the above recitalsand the respective agreements of Company and Executive set forth below, theCompany and Executive, intending to be legally bound, agree as follows:

 

**1.****             Employment.**  The Company shall employ Executive as itsChief Financial Officer, and Executive shall accept such employment and performthe services herein described for Company, upon the terms and conditions setforth in this Agreement.

 

**2.****             Termof Employment.**  Unlessterminated at an earlier date in accordance with Section 5 below, the termof Executive’s employment with Company (“Term of Employment”) shall commence onthe date first set forth above and shall continue for a period initially endingon June 30, 2005 (“Initial Term”).  TheTerm of Employment shall automatically be renewed at the end of the 12thmonth prior to the end of the Initial Term for an additional 12-month periodand shall be extended at the end of each succeeding month by an additionalmonth such that the Term of Employment shall extend each month until the end ofsucceeding 12th month (each such rolling 12-month period, a“Subsequent Term”) unless either party provides written notice of theirintention not to renew this Agreement to the other in advance of thenapplicable termination date of the Term of Employment.

 

**3.****             Positionsand Duties.**

 

a.             Employmentwith Company.  Executive shallperform for the Company the duties and responsibilities of a chief financialofficer of a corporation and such other duties and responsibilities as theCompany shall reasonably assign to Executive from time to time generallyconsistent with Executive’s position as Chief Financial Officer, as determinedin the sole discretion of the Company. Executive shall report to the Chief Executive Officer.  In addition, Executive shall be appointedand serve as a member of the Company’s Executive Committee which shall containfour or fewer members of senior management.

 

b.             Placeof Employment.  Executive’sprincipal place of employment shall be at the Company’s Principal ExecutiveOffices; provided however, that (i) for an initial period, not to exceed 12months (the “Transition Period”), the Company will establish an office on a

 

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month-to-month basis in orreasonably near Burbank, California from which Executive may work a materialportion of time, it being understood that Executive will be required to bepresent at all necessary and appropriate times at the Company’s principalexecutive offices and (ii) Executive will be expected to engage in travelwithin and outside the State of Nevada as Company may reasonably request ofExecutive.

 

**4.****             Compensation**.

 

a.             Salary.  The Company shall pay Executive ascompensation for his services a base salary at the annualized rate of$330,000.  Such salary shall be subjectto applicable tax withholding and shall be paid periodically in accordance withthe Company’s normal payroll practices. Such annual compensation shall be reviewed annually for increase (butnot decrease) in the discretion of the Board. In conducting any such annual review, the Board shall take into accountany increase in Executive’s responsibilities, increases in the compensation ofother executives of the Company or any Affiliate (or any competitor(s) ofeither or both), the performance of Executive and/or other pertinentfactors.  The annual compensationspecified in this Section 4.a, together with any increases in such annualcompensation that the Company may grant from time to time, is referred to inthis Agreement as “Base Compensation.”

 

b.             Bonuses.  The Company may pay to Executive periodic orannual discretionary bonuses for any period ending prior to the end of the Termof Employment in an amount that will be determined by the CompensationCommittee based on such factors as Executive’s performance and the performanceof the Company.  Executive shall bepaid, concurrently with signing this Agreement, a bonus of $40,000, payable$30,000 on the initial day of the Term of Employment and  $10,000 on the six-month anniversary of suchdate, subject to continued employment of Executive on such date.

 

c.             ExecutiveBenefits.  While Executive isemployed by the Company hereunder, Executive shall be entitled to participatein all employee benefit, pension and welfare plans and programs of Company forexecutive employees, including any group medical, dental, life insurance anddisability insurance plans, or similar benefit plans of the Company, to theextent that Executive meets the eligibility requirements for each individualplan or program.  Participation in anysuch benefits and plans shall be consistent with Executive’s rate of compensationto the extent that compensation is a determinative factor with respect toparticipation and/or coverage under any such benefit or plan.  The Company provides no assurance as to theadoption or continuance of any particular employee benefit plan or program, andExecutive’s participation in any such plan or program shall be subject to theprovisions, rules and regulations applicable thereto.

 

d.             Stock Options.  The Company will, within ten (10) days ofExecutive’s signature on this Agreement, grant to Executive an option topurchase 120,000 shares of the Company’s common stock (the “Option”) at theexercise price equal to the fair market value of the Company’s common stock onthe date of grant, in accordance with and subject to the Company’s 2003 Amendedand Restated Stock Compensation Program. Subject to the terms of the Option (including partial acceleration inthe event of a termination of this Agreement by the Company without Cause or bythe Executive for Good Reason), the Option granted pursuant to this Agreementwill vest with respect to 25% of the shares of common stock purchasable

 

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thereunder on each of the firstthrough fourth anniversaries of the date of grant, provided Executive remains employedby the Company on each such date. Unless specifically provided in this Agreement, vesting and exerciseprovisions and all other terms and conditions governing the Options shall be asset forth in the plan documents and such option agreements as may be enteredinto with Executive.

 

e.             SalaryContinuation.  Executive shall beentitled to receive his Base Compensation for all periods during which he isunable to perform his duties hereunder by reason of a mental or physicalincapacity, whether resulting from illness, accident or otherwise, prior tobeing determined to be suffering from a Disability.

 

f.              Expenses.  While Executive is employed by the Companyhereunder, Company shall reimburse Executive for all reasonable out-of-pocketbusiness, travel and entertainment expenses incurred by Executive in theperformance of Executive’s duties and responsibilities hereunder, subject tothe Company’s normal policies and procedures for expense verification anddocumentation as in effect from time to time. The Company shall pay the actual and reasonable moving expenses ofExecutive’s move to the location of the principal executive offices of theCompany.

 

g.             Vacation.  Executive shall be entitled to paid vacationin accordance with Company’s practices and policies for executive employees.

 

h.             TransitionHousing Assistance.  During theTransition Period, the Company shall provide Executive reasonable housingaccommodation in Las Vegas, Nevada for use during Executive’s performance ofhis Company duties in Las Vegas.

 

**5.****             Terminationof Employment.**

 

a.             VoluntaryTermination; Termination for Cause. The Company may terminate Executive’s employment at any time for Causeand Executive may terminate his employment for any reason.  If Executive’s employment terminates by reasonof Executive’s voluntary resignation without Good Reason, or if Executive isterminated for Cause (each as defined herein), Executive shall be entitled to:

 

(1)           Base Compensation at the rate in effect atthe time of his termination through the effective date of termination ofemployment;

 

(2)           any bonus awarded but not yet paid;

 

(3)           any deferred bonus, including interest orother credits on the deferred amounts;

 

(4)           reimbursement for expenses incurred, but notpaid prior to such termination of employment;

 

(5)           such rights to other compensation andbenefits as may be provided in applicable plans and programs of the Company,including, without limitation, applicable

 

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employeebenefit plans and programs, according to the terms and conditions of such plansand programs; and

 

(6)           any equity compensation that is vested as ofthe effective date of termination of employment.

 

No termination for Cause shall be effective unless Executive is givenat least thirty (30) days prior written notice authorized by a vote of at leasta majority of the members of the Executive Committee of the Board that theCompany intends to terminate his employment for Cause except under theprovisions of Section 11(c)(i) or (iv). Such written notice shall specify the particular act or acts, or failureto act, which is or are the basis for the decision to so terminate Executive’semployment for Cause.  Executive shallbe given the opportunity within fifteen (15) days of the receipt of such noticeto meet with the Board to defend such act or acts, or failure to act, and if,thereafter, the Board, by majority vote, continues to maintain that Cause fortermination exists, Executive shall be given fifteen (15) days after suchdetermination to correct such act or failure to act (if such act or failure toact is reasonably susceptible of correction or cure within such time).  Upon failure of Executive, within fifteen(15) days, to correct such act or failure to act, Executive’s employment by theCompany shall be terminated under this subsection for Cause.

 

Anything herein to the contrarynotwithstanding, if, following a termination of Executive’s employment forCause due to any conviction of Executive for any crime, such conviction isoverturned on appeal, Executive shall be entitled to the payments and theeconomic equivalent of the benefits he would have received if his employmenthad been terminated without Cause.

 

b.             Termination Without Cause or for GoodReason.  The Company may terminate Executive’semployment at any time without Cause upon sixty (60) days advance writtennotice to Executive, and Executive may terminate his employment for GoodReason.  If the Company terminatesExecutive’s employment without Cause, other than due to Disability, orExecutive terminates his employment for Good Reason, then, subject toExecutive’s continuing obligations under Section 7, Executive shall thereuponbe entitled to:

 

(1)           a lump sum payment equal to the BaseCompensation for the remainder of the Term of Employment (subject to applicabletax withholdings), unless such termination is within 24 months of a Change inControl, in which event such lump sum shall be equal to Base Compensation for24 months;

 

(2)           any bonus awarded but not yet paid;

 

(3)           any deferred bonus, including interest orother credits on the deferred amounts;

 

(4)           a Pro Rata Bonus for the fiscal year inwhich termination of employment occurs;

 

(5)           reimbursement for expenses incurred, but notpaid prior to such termination of employment;

 

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(6)           continuation of the health and welfarebenefits of Executive, including, without limitation, any group healthinsurance and long-term disability insurance generally provided to seniorexecutives of the Company other than life insurance or accidental death anddismemberment insurance, at the level in effect at the time of his terminationof employment through the end of the twelfth (12th) month following suchtermination of employment or the economic equivalent thereof; and

 

(7)           any equity compensation that is vested as ofthe effective date of termination of employment.

 

Any payments to which Executive shall be entitled under this Subsection5.b, including any economic equivalent of any benefit, shall be made aspromptly as possible following the termination of Executive’s employmenthereunder and in no event later than thirty (30) days following suchtermination of employment.

 

c.             Deathor Disability.  In the event ofExecutive’s death or a termination of Executive’s employment due to Executive’sDisability, Executive or his legal representative, as the case may be, shall beentitled to:

 

(1)           Base Compensation at the rate in effect atthe time of his termination, through (x) in the case of death, for a period ofthree (3) months following termination, and (y) in the case of Disability, forthe period, if any, between the date of his termination and the date by whichthe Company’s long-term disability plan have commenced paying its benefits;

 

(2)           any bonus awarded but not yet paid;

 

(3)           a Pro Rata Bonus for the fiscal year inwhich death or disability occurs;

 

(4)           any deferred bonuses including interest orother credits on the deferred amounts;

 

(5)           reimbursement for expenses incurred but notpaid prior to such termination of employment;

 

(6)           in the case of death, Executive’s rights toother compensation and benefits as may be provided in applicable plans andprograms of the Company shall be determined according to the terms andprovisions of such plans and programs;

 

(7)           in the case of Disability, the Company shallcontinue Executive’s health and welfare benefits at the level in effect on thedate of termination at least through the end of the sixth month following thetermination of Executive’s employment or provide the economic equivalentthereof, and Executive’s rights to other compensation and benefits as may beprovided in applicable plans and programs of the Company shall be determinedaccording to the terms and provisions of such plans and programs; and

 

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(8)           any equity compensation that is vested as ofthe effective date of termination of employment.

 

d.             NoMitigation; No Offset.  In the eventof any termination of employment under this Section 5, Executive shall be underno obligation to seek other employment and there shall be no offset againstamounts due Executive under this Agreement on account of any remunerationattributable to any subsequent employment that Executive may obtain.  Any amounts due under this Section 5 are inthe nature of severance payments, or liquidated damages, or both, and are notin the nature of a penalty.

 

**6.****             Dutyof Loyalty.**  As an employee of Company, Executive willdevote his best efforts to the interests of the Company.  Executive agrees to devote all of hisworking time and attention to his duties hereunder, except for such reasonableamounts of time for personal, charitable, investment and professionalactivities that do not interfere with the service to be rendered by Executivehereunder.  During Executive’semployment with the Company, Executive will not, except with the writtenconsent of the Board, engage in any activity, investment, interest orassociation (1) which is hostile or adverse to or competitive with the Company,or (2) which so occupies Executive’s attention as to interfere with the properand efficient performance of his duties at the Company, or (3) which interfereswith the independent exercise of Executive’s judgment in the Company’s bestinterests.

 

**7.****             ConfidentialInformation.**  Executive shallmaintain the confidentiality of all confidential and proprietary information ofthe Company, and shall execute and deliver to the Company its standardProprietary Information and Invention Agreement in the form attached hereto asSchedule I (the “Confidentiality Agreement”). Such obligations shall survive any termination of Executive’s employmentrelationship or of this Agreement.

 

**8.****             Third-PartyTrade Secrets.**  Executive willnot, during his employment with Company, improperly use or disclose anyproprietary information or trade secrets of any third party, including theCompany’s customers and suppliers, or of any of Executive’s former orconcurrent employers or companies, if any. Executive shall not bring to the premises of the Company any unpublisheddocuments or any property belonging to such third parties, unless consented toin writing by such third party. Executive’s employment with the Company does not and will not breach anyagreement or duty which Executive has concerning confidential informationbelonging to others.  If Executive isasked to work on any project for the Company which raises a concern regardingthird-party confidential information, Executive will, as soon as this isapparent to Executive, discuss the situation with the Chief Executive Officerof Company without disclosing any confidences.

 

**9.****             Returnof Property.**  Upon terminationof Executive’s employment with the Company, Executive shall deliver promptly tothe Company all of the following things which are in Executive’s custody orcontrol:  (1) all records, files,manuals, books, forms, documents, letters, memoranda, data, customer lists,tables, photographs, video tapes, audio tapes, computer disks and othercomputer storage media and copies thereof, whether or not containingconfidential or proprietary information, that are the property of the Companyor that relate in any way to the business, products, services, personnel,customers, prospective customers, suppliers, practices, or techniques of theCompany; and (2) all other property of the Company, including

 

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but not limited to computers,personal digital assistants, cellular telephones, pagers, credit cards, andkeys.

 

**10.****          ProhibitedPost Termination Activities.**

 

a.             NoSolicitation.  For a period of oneyear following the termination of Executive’s employment, Executive will notinduce any employee of, or consultant to, the Company to engage in any businessin which the Company is engaged or contemplates engaging, or solicit anyemployee to leave the employment of the Company.

 

b.             Noncompetition.  For a period of one year following thetermination of Executive’s employment with the Company, Executive will notaccept employment with, engage in or render advice or assistance to anybusiness within any market in which the Company conducts business or effectssales which competes with or contemplates competition with the Company in anycapacity in which the employment or rendering of advice, assistance or otherservices to such business by Executive would be substantially similar to theservices provided by Executive to the Company during the term of Executive’semployment with Company or would result in a competitive advantage to such subsequentemployer.

 

**11.****          Definitions.**  As used herein, the following terms shallhave the respective meanings set forth below.

 

a.             “Affiliate”shall mean any person or entity controlling, controlled by or under commoncontrol with the Company.

 

b.             “Board”shall mean the board of directors of the Company.

 

c.             “Cause”shall mean (i) Executive is convicted of a felony involving moral turpitude,(ii) Executive, in carrying out his duties under this Agreement, is guilty of awillful act by Executive which constitutes gross misconduct and which ismaterially and demonstrably injurious to the Company, (iii) Executive, incarrying out his duties under this Agreement, is guilty of a willful violationof a written Company policy generally applicable to all employees, theviolation of which is stated in such policy to be grounds for termination, (iv)an act of fraud against, or the misappropriation of property belonging to, theCompany or its Affiliates resulting in material economic harm to the Company,(v) except as otherwise specified in this clause c, the breach in any materialrespect of this Agreement or any confidentiality or proprietary informationagreement between Executive and the Company or its Affiliates, or (vi) thecommission of a willful act which induces any customer of the Company to breaka contract with the Company resulting in material economic harm to the Company.

 

d.             A“Change in Control” shall be deemed to have occurred if:

 

(1) an event occurs of a nature that would be required to be reported in responseto Item 14 of Schedule 14A of Regulation 14A promulgated under Section 14 ofthe Securities Exchange Act of 1934 (the “1934 Act”);

 

(2) any “person,” as such term is used in Sections 13(d) and 14(d)(2) of the1934 Act, other than Donald K. McGhan or entities related to, controlled by,

 

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or owned by Donald K. McGhan or his immediate family (collectively, the“McGhan Entities”) (or with respect to Affiliates, the Company), becomes a“beneficial owner,” as such term is used in Rule 13d-3 promulgated under the1934 Act, at any time that the Company or any Affiliate is a Private Company,of more than 51% of the Voting Stock of the Company or such Affiliate;

 

(3) any “person,” as such term is used in Sections 13(d) and 14(d)(2) of the1934 Act, other than the McGhan Entities (or with respect to Affiliates, theCompany), becomes a “beneficial owner,” as such term is used in Rule 13d-3promulgated under the 1934 Act, while the Company or any Affiliate is a PublicCompany, of 20% or more of the Voting Stock of the Company or such Affiliate;

 

(4) any “person” as such term is used in Sections 13(d) and 14(d)(2) of the1934 Act, is the “beneficial owner,” as such term is used in Rule 13d-3promulgated under the 1934 Act, of a greater percentage of the Voting Stock ofthe Company than the percentage of such Voting Stock held, directly orindirectly, by the McGhan Entities;

 

(5)  amajority of the Board consists of individuals who are not members of theIncumbent Board;

 

(6) all or substantially all of the business of the Company and itsconsolidated subsidiaries is disposed of pursuant to a merger, consolidation,asset sale or other transaction in which the Company is not the survivingcorporation or the Company (on a consolidated basis) is materially orcompletely liquidated or in which all or substantially all of the Company’sconsolidated assets are sold; or

 

(7) the Company or a subsidiary combines with another company and,immediately after the combination, the stockholders of the Company immediatelyprior to the combination hold, directly or indirectly, less than 51% of theVoting Stock of the resulting company (viewed on a consolidated basis).

 

Notwithstanding the foregoing, a transaction or event shall not constitutea Change in Control if such transaction or event results from a transactionthat is approved in advance unanimously by the Executive Committee.

 

e.             “Disability”shall mean Executive’s inability to render, for a period of three consecutivemonths, full and effective services hereunder by reason of permanent mental orphysical disability, whether resulting from illness, accident or otherwise;provided, however, that in no event will Executive be considered disabled forthe purposes of this Agreement unless he is deemed disabled pursuant to theCompany’s long-term disability plan.

 

f.              “GoodReason” shall mean and exist if, without Executive’s prior written consent, oneor more of the following events occurs:

 

(1)           Executiveis not appointed to or is otherwise removed from any office or positionprovided for in Section 3.a above, for any reason other than the termination ofhis employment or transfer to a substantially equivalent or superior office orposition within the

 

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Company (such determination to be made on the overall responsibilitiesof Executive within the Company);

 

(2)           Executiveis assigned duties or responsibilities that are, when taken as a whole,inconsistent, in any significant respect, with the scope of duties andresponsibilities associated with Executive’s office or position as described inSection 3.a above;

 

(3)           Executivesuffers a material reduction, when taken as a whole, in the authorities, dutiesor responsibilities associated with his office or position as described inSection 3.a above, on the basis of which he makes a determination in good faiththat he can no longer carry out such office or position in the mannercontemplated at the time this Agreement was entered into;

 

(4)           Executive’sBase Compensation is decreased by the Company, or his benefits or opportunitiesunder any employee benefit or incentive plan or program of the Company is orare materially reduced, with the result that Executive’s overall benefitspackage is materially reduced;

 

(5)           Thereoccurs a Change in Control;

 

(6)           Exceptas provided in Section 3.b above, Executive’s work location is relocated to alocation other than the Principal Executive Offices;

 

(7)           theCompany fails to pay Executive any deferred payments under any bonus orincentive plans which are due to him at that time;

 

(8)           theCompany fails to reimburse Executive within a reasonable time for businessexpenses in accordance with the Company’s policies, procedures or practices;

 

(9)           ifand to the extent applicable, the Company fails to agree to or actuallyindemnify Executive for his actions and/or inactions, as either a director orexecutive officer of the Company, to the fullest extent permitted by Delawarelaw, and/or the Company fails to maintain satisfactory levels of directors andofficers liability insurance coverage for Executive when such insurance isavailable;

 

(10)         theCompany fails to obtain a written agreement reasonably satisfactory toExecutive from any successor or assign of the Company to assume and performthis Agreement; or

 

(11)         theCompany purports to terminate Executive’s employment for Cause and suchpurported termination of employment is not effected in accordance with theprocedures required by this Agreement, and for purposes of this Agreement, suchpurported termination of employment shall be invalid and of no force andeffect.

 

g.             “IncumbentBoard” shall mean the members of the Board on the date of this Agreement for aslong as each serves on the Board, provided that any person becoming a directorsubsequent to the date of this Agreement whose election or nomination forelection was approved unanimously by the directors then comprising the fullmembership of the Incumbent

 

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Board shall, for purposes of this Agreement, be considered to be amember of the Incumbent Board for as long as such director serves the Board.

 

h.             “PrincipalExecutive Offices” of the Company shall mean for purposes of this Agreementonly the offices of the Company where the principal executive functions areperformed, (i) currently located in Clark County, Nevada, (ii) in the future atsuch location as is determined by the Company’s Executive Committee, and (iii)in the future if not so determined, as elected by Executive.

 

i.              “PrivateCompany” shall mean an entity that has no class of its Voting Stock registeredpursuant to Section 12(b), 12(g) or 15(d) of the 1934 Act.

 

j.              “ProRata Bonus” shall mean an amount equal to the annual bonus otherwise payable withrespect to the year in question, calculated as if Executive had been employedby the Company for the full year, multiplied by a fraction, the numerator ofwhich is the number of days in such year during which Executive is actuallyemployed by the Company and the denominator of which is 365.

 

k.             “PublicCompany” shall mean an entity that has one or more classes of its Voting Stockregistered pursuant to Section 12(b), 12(g) or 15(d) of the 1934 Act.

 

l.              “VotingStock” shall mean capital stock (or similar security) of any class or classeshaving general voting power under ordinary circumstances, in the absence ofcontingencies, to elect the directors of a corporation or similar managers ofanother entity.

 

**12.****          Miscellaneous.**

 

a.             Amendments.  No amendment or modification of thisAgreement shall be deemed effective unless made in writing and signed by theparties hereto.

 

b.             NoWaiver.  No term or condition ofthis Agreement shall be deemed to have been waived, except by a statement inwriting signed by the party against whom enforcement of the waiver issought.  Any written waiver shall not bedeemed a continuing waiver unless specifically stated, shall operate only as tothe specific term or condition waived and shall not constitute a waiver of suchterm or condition for the future or as to any act other than that specificallywaived.

 

c.             Counterparts.  This Agreement may be executed in any numberof counterparts, and such counterparts executed and delivered, each as anoriginal, shall constitute but one and the same instrument.

 

d.             Severability.  To the extent that any portion of anyprovision of this Agreement shall be invalid or unenforceable, it shall beconsidered deleted herefrom and the remainder of such provision and of thisAgreement shall be unaffected and shall continue in full force and effect.

 

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e.             Captionsand Headings.  The captions andparagraph headings used in this Agreement are for convenience of reference onlyand shall not affect the construction or interpretation of this Agreement orany of the provisions hereof.

 

f.              Notices.  All notices, requests, demands and othercommunications required or permitted to be given hereunder shall be in writingand shall be deemed to have been duly given (i) upon receipt, if deliveredpersonally or via courier, (ii) upon confirmation of receipt, if given byelectronic facsimile provided that another copy is sent by another meanspermitted by this subsection within two (2) business days thereafter, and (iii)on the third business day following mailing, if mailed first-class, postageprepaid, registered or certified mail from the continental United States asfollows:

 
|   | If to Company to:   |
|--------|---------------------|
|   |                |   |
|   |                | MediCor Ltd. |
|   |                | 4560 S. Decatur Blvd., Ste. 300 |
|   |                | Las Vegas, Nevada  89013 |
|   |                | (702) 932-4563 |
|   |                | Attn: Chairman |
|   |                |
|   | If to Executive to: |
|   |                |   |
|   |                | Thomas R. Moyes |
|   |                | 1526 Cleveland Road |
|   |                | Glendale, California 91202 |
|   |                | (818) 409-0166 |

 

Any party may by notice given in accordance with this subsection to theother party to designate another address or person for receipt of noticeshereunder.

 

g.             Attorneys’Fees.  If any legal action or otherproceeding is brought for the enforcement of this Agreement, or because of analleged dispute, breach, default or misrepresentation in connection with any ofthe provisions of this Agreement, the successful or prevailing party shall beentitled to recover such reasonable attorneys’ fees and other costs incurred inthat action or proceeding, in addition to any other relief to which it may be entitled,as may be awarded by the court or arbitrator.

 

h.             GoverningLaw.  The parties agree that thisAgreement will be governed by the laws of the State of Delaware.

 

i.              Arbitration.  Any controversy or claim arising out of orrelating to this Agreement or the breach thereof (including the arbitrabilityof any controversy or claim), shall be settled by arbitration in accordancewith the laws of the State of Delaware by one arbitrator.  If the parties cannot agree on theappointment of an arbitrator, then the arbitrator shall be appointed by theAmerican Arbitration Association.  Thearbitration shall be conducted in Clark County, Nevada in accordance with therules of the American Arbitration Association, except with respect to theselection of an arbitrator which shall be as provided in this Section12.i.  The

 

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cost of any arbitration proceeding hereunder shall be borne by theCompany.  The award of the arbitratorshall be binding upon the parties.  Judgmentupon the award rendered by the arbitrator may be entered in any court havingjurisdiction thereof.

 

If it shall be necessary or desirable for Executive to retain legalcounsel and incur other costs and expenses in connection with the enforcementof any or all of his rights under this Agreement, and provided that Executivesubstantially prevails in the enforcement of such rights, the Company shall pay(or Executive shall be entitled to recover from the Company, as the case maybe) Executive’s reasonable attorneys’ fees and costs and expenses in connectionwith the enforcement of his rights including the enforcement of any arbitrationaward.

 

j.              Guaranty.  The Company shall cause each of its materialAffiliates to execute and deliver to Executive a Guaranty in the form ofSchedule II hereto.

 

k.             EntireAgreement.  This Agreement and thePurchase Agreement contain the entire agreement of the parties relating toExecutive’s employment with the Company and supersede all prior agreements andunderstandings with respect to such subject matter.

 

IN WITNESSWHEREOF, Executive and the Company have executed this Agreement as of the datefirst set forth above.

 
|   |   |   | “COMPANY”   |
|--------|--------|--------|-----------------------|
|   |   |   |                  |
|   |   |   | MEDICOR LTD.          |
|   |   |   |                  |
|   |   |   |                  |
|   |   |   | By:                   |   |   |
|   |   |   |                  | Its: Chairman |
|   |   |   |                  |
|   |   |   |                  |
|   |   |   | “EXECUTIVE” |
|   |   |   |                  |
|   |   |   |                  |   |

 

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