Document:

Exhibit 10.1

 

SUBSCRIPTION AGREEMENT

 

Sangamo
BioSciences, Inc.

501 Canal Boulevard, Suite A100

Richmond, CA 94804

 

Ladies and Gentlemen:

 

The
undersigned (the “Investor”)
hereby confirms its agreement with you as follows:

 

1.                                      This Subscription Agreement (this “Agreement”) is made as of the date set
forth below between Sangamo BioSciences, Inc.,
a Delaware corporation (the “Company”),
and the Investor.

 

2.                                      The Company has authorized the sale and
issuance to the Investor of up to 235,849 shares (the “Shares”) of its Common Stock, par value
$0.01 per share (the “Common Stock”),
for a purchase price of $4.24 per share (the “Purchase
Price”).

 

3.                                      Subject to the delivery of a final
prospectus, the Company and the Investor agree that the Investor will purchase
from the Company and the Company will issue and sell to the Investor the number
of Shares of Common Stock set forth below for the aggregate purchase price set
forth below.  The Shares shall be
purchased pursuant to the Terms and Conditions for Purchase of Shares attached
hereto as Annex I and incorporated herein by this reference as if fully
set forth herein.

 

4.                                      The Investor represents that he has received
the prospectus, dated May 13, 2004, which is a part of the Company’s
registration statement relating to the Shares, prior to or in connection with
the receipt of this Agreement and confirms that it had full access to all
filings made by the Company with the Securities and Exchange Commission,
including the registration statement relating to the Shares, and that it was
able to read, review, download and print each such filing.

 

 

SANGAMO BIOSCIENCES, INC.

 

INVESTOR SIGNATURE PAGE

 

	
  Number of Shares:

  	
   

  	
  235,849

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Purchase Price Per Share:

  	
   

  	
  $

  	
  4.24

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Aggregate Purchase Price:

  	
   

  	
  $ $

  	
  999,999.76

  	
   

  
						

 

Please
confirm that the foregoing correctly sets forth the agreement between us by
signing in the space provided below for that purpose.

 

 

	
   

  	
  Dated as of: November 10, 2005

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Michael C. Wood

  	
   

  
	
   

  	
  Michael C. Wood

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed and Accepted

  	
   

  
	
  this 10th day of November 2005:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SANGAMO BIOSCIENCES, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Edward O. Lanphier

  	
   

  	
   

  
	
   

  	
  Edward O. Lanphier

  	
   

  
	
   

  	
  Chief Executive Officer

  	
   

  
								

 

 

ANNEX I

 

TERMS AND CONDITIONS
FOR PURCHASE OF SHARES

 

1.                                      Agreement
to Sell and Purchase the Shares.

 

1.1                               At
the Closing (as defined in Section 2.1), the Company will sell to
the Investor, and the Investor will purchase from the Company, upon the terms
and conditions set forth herein, the number of Shares set forth on the
signature page of the Agreement to which these Terms and Conditions for
Purchase of Shares are attached as Annex I (the “Signature Page”) for the aggregate
purchase price therefor set forth thereon.

 

1.2                               This
Agreement constitutes a valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ and contracting parties’ rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).

 

2.                                      Closings
and Delivery of the Shares and Funds.

 

2.1                               Closing.  The completion of the purchase and sale
of the Shares (the “Closing”)
shall occur at a place and time (the “Closing
Date”) to be specified by the Company, and of which the Investor
will be notified in advance.  At the
Closing, (a) the Company shall, or the Company’s transfer agent shall, deliver
to the Investor, the number of Shares set forth on the Signature Page registered
in the name of the Investor or, if so indicated on the Investor Questionnaire
attached hereto as Exhibit A, in the name of a nominee designated
by the Investor and (b) the aggregate purchase price for the Shares being
purchased by the Investor will be delivered by or on behalf of the Investor to
the Company.

 

2.2                               (a)                                  Conditions to the Company’s Obligations.  The Company’s obligation to issue and
sell the Shares to the Investor shall be subject to:  (i) the receipt by the Company of the
purchase price for the Shares being purchased hereunder as set forth on the
Signature Page and (ii) the accuracy of the representations and
warranties made by the Investor and the fulfillment of those undertakings of
the Investor prior to the Closing Date.

 

(b)                                 Conditions to the Investor’s Obligations.  The Investor’s obligation to purchase the
Shares will be subject to the condition that the transactions contemplated by
the Placement Agency Agreement, dated November __, 2005, among the Company
and Piper Jaffray & Co., JMP Securities LLC and Leerink Swann &
Company (the “Placement Agreement”) shall have closed.

 

2.3                               Delivery
of Funds.  The Investor may elect
to settle the Shares purchased by him in one of two ways.  First, the Investor may deliver a check for
the aggregate purchase price amount, payable to Sangamo Biosciences, Inc.,
to the following address:

 

Sangamo BioSciences, Inc.

501 Canal Boulevard, Suite A100

Richmond, CA 94804

Attn:  Edward O. Lanphier, Chief Executive Officer

 

Second, the Investor may
wire the aggregate purchase price amount to the following account:

 

 

[WIRE INFORMATION]

 

2.4                               Delivery
of Shares.  The Company shall deliver, by Federal
Express, a stock certificate for the number of shares purchased by the Investor
to the address on the Signature Page hereto, or to such other address as
may have been furnished to the Company in writing by the Investor.

 

3.                                      Representations,
Warranties and Covenants of the Investor.

 

3.1                               The
Investor represents and warrants to, and covenants with, the Company that (a) he
has received the Company’s prospectus for the Offering, (b) he is
knowledgeable, sophisticated and experienced in making, and is qualified to
make, decisions with respect to investments in securities representing an
investment decision like that involved in the purchase of the Shares, (c) he
has, in connection with its decision to purchase the number of Shares set forth
on the Signature Page, relied solely upon the registration statement, the
prospectus, and any amendments or supplements thereto as filed by the Company
with the Commission, and the representations and warranties of the Company
referenced in Section 4 herein, and (d) does not have any
agreement or understanding, directly or indirectly, with any person or entity
to distribute any of the Shares.

 

3.2                               The
Investor acknowledges, represents and agrees that no action has been or will be
taken in any jurisdiction outside the United States by the Company that would
permit an offering of the Shares, or possession or distribution of offering
materials in connection with the issue of the Shares in any jurisdiction
outside the United States where action for that purpose is required.

 

3.3                               The
Investor further represents and warrants to, and covenants with, the Company
that (a) the Investor has full right, power, authority and capacity to
enter into this Agreement and to consummate the transactions contemplated
hereby and has taken all necessary action to authorize the execution, delivery
and performance of this Agreement, and (b) this Agreement constitutes a
valid and binding obligation of the Investor enforceable against the Investor
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

 

3.4                               The
Investor understands that nothing in this Agreement, the prospectus or any
other materials presented to the Investor in connection with the purchase and
sale of the Shares constitutes legal, tax or investment advice.  The Investor has consulted such legal, tax
and investment advisors as he, in his sole discretion, has deemed necessary or
appropriate in connection with its purchase of Shares.

 

4.                                      Representations,
Warranties and Covenants of the Company.

 

(a)                                  Registration
Statement.  The Company has filed in
conformity with the requirements of the Securities Act of 1933, as amended (the
“Securities Act”), and
published rules and regulations thereunder (the “Rules and Regulations”) adopted by the Securities and
Exchange Commission (the “Commission”)
a “shelf” Registration Statement (as hereinafter defined) on Form S-3 (No. 333-113062),
which was declared by the Commission to be effective under the Securities Act
as of May 13, 2004 (the “Effective
Date”) including a Base Prospectus, dated as of the Effective Date,
relating to the Shares (the “Base
Prospectus”), and such amendments and supplements thereto as may
have been required to the date of this Agreement.  The Company will next file with the
Commission pursuant to Rule 424(b) under the Securities Act a final
prospectus supplement to the Base Prospectus (a “Prospectus Supplement”) describing the Shares and the
offering thereof.

 

I-2

 

The term “Registration Statement”
as used in this Agreement means the registration statement, as amended at the
time it became effective, including all exhibits, financial schedules and all
documents and information deemed to be a part of the Registration Statement at
the time of effectiveness pursuant to Rule 430A or 434(d) under the
Securities Act.  No stop order preventing
or suspending the effectiveness of the Registration Statement has been issued
and, to the Company’s knowledge, no proceeding for that purpose has been
initiated or threatened by the Commission. If the Company has filed an
abbreviated registration statement to register additional securities pursuant
to Rule 462(b) under the Rules (the “462(b) Registration Statement”), then any reference
herein to the Registration Statement shall also be deemed to include such 462(b) Registration
Statement.

 

The Company,
if required by the Rules and Regulations, proposes to file the Prospectus
(as hereinafter defined) with the Commission pursuant to Rule 424(b) of
the Rules and Regulations (“Rule 424(b)”).  The term “Prospectus”
as used in this Agreement means the Prospectus, in the form in which it is to
be filed with the Commission pursuant to Rule 424(b), or, if the
Prospectus is not to be filed with the Commission pursuant to Rule 424(b),
the Prospectus in the form included as part of the Registration Statement at
the time the Registration Statement became effective, except that if any
revised prospectus or prospectus supplement shall be provided to the Investor by
the Company for use in connection with the offering and sale of the Shares
which differs from the Prospectus (whether or not such revised prospectus or
prospectus supplement is required to be filed by the Company pursuant to Rule 424(b)),
the term “Prospectus” shall be deemed to include
such revised prospectus or prospectus supplement, as the case may be, from and
after the time it is first provided to the Investor for such use.  Any preliminary prospectus or prospectus
subject to completion included in the Registration Statement or filed with the
Commission pursuant to Rule 424 under the Act is hereafter called a “Preliminary Prospectus.”
Any reference herein to the Registration Statement, any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed by the Company under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”),
on or before the last to occur of the effective date of the Registration
Statement, the date of the Preliminary Prospectus, or the date of the
Prospectus, and any reference herein to the terms “amend,” “amendment” or “supplement”
with respect to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include (i) the filing of any
document under the Exchange Act after the effective date of the Registration
Statement, the date of such Preliminary Prospectus or the date of the
Prospectus, as the case may be, and on or before the Closing Date, which is
incorporated therein by reference and (ii) any such document so filed. As
used in this Agreement, the phrase “disclosed in”
as it relates to information disclosed in any document includes any information
included or incorporated by reference in such document.

 

(b)                                 Registration
Statement and Prospectus.  On the
Effective Date, the Registration Statement (and any post-effective amendment
thereto), as amended or as supplemented if the Company shall have filed with
the Commission any amendment or supplement to the Registration Statement,
complied in all material respects with the Act and the Rules and
Regulations, and did not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading.  Upon the filing or first delivery to the
Investor of the Prospectus, as of the date hereof, and at the Closing Date, the
Prospectus (as amended or as supplemented if the Company shall have filed with the
Commission any amendment or supplement to the Registration Statement or the
Prospectus) complied and will comply, in all material respects, with the
requirements of the Securities Act and the Rules and Regulations and the
Exchange Act and the rules and regulations of the Commission thereunder
and did not at the Effective Date, does not as of the date hereof and will not
as of the Closing Date, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein (in light of the circumstances under which they
were made, in the case of the Prospectus) not misleading.  Notwithstanding the foregoing, none of the
representations and warranties in this Section 4 shall apply to

 

I-3

 

statements or omissions made in reliance
upon, and in conformity with, information herein or otherwise furnished in
writing by the Investor to the Company expressly for inclusion in the Registration
Statement or the Prospectus or any amendment or supplement thereto.  The incorporated documents, at the time they
became effective or were filed with the Commission, complied in all material
respects with the requirements of the Exchange Act and did not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.  The Company has not distributed and will not
distribute, prior to the completion of the distribution of the Shares, any
offering material in connection with the offering and sale of the Shares, other
than the Registration Statement and the Prospectus.

 

(c)                                  Subsidiaries.
The Company has no significant subsidiaries (as such term is defined in Rule 1-02
of Regulation S-X promulgated by the Commission) other than as listed in Schedule I
attached hereto (collectively, the “Subsidiaries”).  All of the issued and outstanding shares of
capital stock of each of the Subsidiaries have been duly and validly authorized
and issued and are fully paid, nonassessable and free of preemptive and similar
rights to subscribe for or purchase securities, and, except as listed on Schedule I
attached hereto or otherwise described in the Registration Statement and
Prospectus, the Company owns directly or indirectly, free and clear of any
security interests, claims, liens, proxies, equities or other encumbrances, all
of the issued and outstanding shares of such stock.

 

(d)                                 Financial
Statements.  The consolidated
financial statements of the Company, together with the related schedules and
notes thereto, set forth or incorporated by reference in the Registration
Statement and the Prospectus comply in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, as
applicable, and fairly present in all material respects (i) the
consolidated financial condition of the Company and its Subsidiaries, taken as
a whole, as of the dates indicated and (ii) the consolidated results of
operations, stockholders’ equity and changes in cash flows of the Company and
the Subsidiaries, taken as a whole, for the periods therein specified; and such
financial statements and related schedules and notes thereto, comply as to form
with the applicable accounting requirements under the Securities Act and have
been prepared in conformity with United States generally accepted accounting
principles, consistently applied throughout the periods involved (except as
otherwise stated therein and subject, in the case of unaudited financial
statements, to the absence of footnotes and normal year-end adjustments).  No other financial statements or schedules are
required by the Securities Act and the Rules and Regulations to be
included in the Registration Statement or Prospectus.

 

(e)                                  Independent
Accountants.  Ernst & Young
LLP (the “Auditors”), whose
report with respect to the audited consolidated financial statements and
schedules of the Company and its Subsidiaries included in the Prospectus, or
the Registration Statement, or incorporated by reference therein is an
independent registered public accounting firm within the meaning of the
Securities Act and the Rules and Regulations.

 

(f)                                    Organization.  Each of the Company and its Subsidiaries,
respectively, is and at the Closing Date will be, duly incorporated or
otherwise organized and validly existing as a corporation or other business
entity, as applicable, and in good standing under the laws of its respective
jurisdiction of incorporation or organization (as applicable). Each of the
Company and its Subsidiaries, respectively, is and at the Closing Date will be,
duly qualified as a foreign corporation for transaction of business and in good
standing under the laws of each other jurisdiction in which their respective
ownership or lease of property or the conduct of their respective businesses
requires such qualification, and have, and at the Closing Date will have, all
corporate or other power and authority necessary to own or hold their
respective properties and to conduct their respective businesses as described
in the Registration Statement and the Prospectus, except where the failure to
be so qualified or in good standing

 

I-4

 

or have such power or authority would not,
individually or in the aggregate, have or reasonably be expected to have a
material adverse effect upon the general affairs, business, prospects,
properties, management, consolidated financial position, stockholders’ equity
or results of operations of the Company and its Subsidiaries taken as a whole
(a “Material Adverse Effect”).

 

(g)                                 No Material Adverse
Change.  Except as set forth in the
Registration Statement (exclusive of any amendment thereof but inclusive of any
report incorporated by reference therein on or prior to the date of this
Agreement) or the Prospectus (exclusive of any supplement thereto but inclusive
of any report incorporated by reference therein on or prior to the date of this
Agreement), subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus and prior to the Closing, (i) there
has not been any change in the capital stock of the Company (except for changes
in the number of outstanding shares of Common Stock of the Company due to the
issuance of shares upon the exercise or conversion of securities exercisable
for, or convertible into, shares of Common Stock outstanding on the date
hereof) or long-term debt of the Company or any of its Subsidiaries or any
dividend or distribution of any kind declared, set aside for payment, paid or
made by the Company on any class of capital stock; (ii) any material
adverse change, or, to the knowledge of the Company, any development that would
result in a material adverse change in or affecting the general affairs,
business, prospects, properties, management, consolidated financial position,
stockholders’ equity or results of operations of the Company and its
Subsidiaries taken as a whole (a “Material
Adverse Change”); (iii) neither the Company nor any of its
Subsidiaries have entered or will enter into any transaction or agreement, not
in the ordinary course of business, that is material to the Company and its
Subsidiaries taken as a whole or incurred or will incur any liability or
obligation, direct or contingent, not in the ordinary course of business, that
is material to the Company and its Subsidiaries taken as a whole; and (iv) neither
the Company nor any of its Subsidiaries has sustained or will sustain any
material loss or interference with its business from any force majeure,
including fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor disturbance or dispute or any action, order or
decree of any court or arbitrator or governmental or regulatory authority,
except in each case as otherwise disclosed in the Registration Statement and
the Prospectus.

 

(h)                                 Legal Proceedings.
Except as set forth in the Registration Statement and the Prospectus, there is
not pending or, to the knowledge of the Company, threatened or contemplated,
any action, suit or proceeding to which the Company or any of its Subsidiaries
is a party or of which any property or assets of the Company or any of its Subsidiaries
is the subject before or by any court or governmental or regulatory agency,
authority or body, or any others, which, individually or in the aggregate, if
determined adversely to the company or any of its Subsidiaries, would
reasonably be expected to have a Material Adverse Effect or materially and
adversely affect the ability of the Company to perform its obligations under
this Agreement and, there are no current or pending legal, governmental or
regulatory investigations, actions, suits or proceedings that are required
under the Act to be disclosed in the Prospectus that are not so disclosed.

 

(i)                                     Due
Authorization and Enforceability. 
The Company has full legal power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.  This Agreement has been duly authorized,
executed and delivered by the Company, and constitutes a valid, legal and
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnity hereunder may be
limited by federal or state securities laws and except as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization or similar
laws affecting the rights of creditors generally and subject to general principles
of equity.

 

(j)                                     The Shares.  The Shares have been duly and validly
authorized by the Company and, when issued, delivered and paid for in
accordance with the terms of this Agreement, will

 

I-5

 

have been duly and validly issued and will be
fully paid and nonassessable; and the capital stock of the Company, including
the Common Stock, conforms to the description thereof in the Registration
Statement and Prospectus.  Except as
otherwise stated in the Registration Statement and Prospectus, there are no
preemptive rights or other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of, any shares of Common Stock pursuant
to the Company’s charter, bylaws or any agreement or other instrument to which
the Company is a party or by which the Company is bound that have not been
waived or complied with.

 

(k)                                  No Conflicts.  The execution, delivery and performance by
the Company of this Agreement and the consummation of the transactions herein
contemplated, including the issuance and sale by the Company of the Shares,
will not (i) conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default (or an event which with
notice or lapse of time or both would constitute a default) under, or require
any consent or waiver under, or result in the execution of any lien, charge or
encumbrance upon any properties or assets of the Company or its Subsidiaries
pursuant to the terms of, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound or to which any of the property or assets of the Company or any of its
Subsidiaries is subject, (ii) result in any violation of the provisions of
the charter or by-laws of the Company or any of its Subsidiaries or (iii) result
in any violation of any law, rule or regulation applicable to the Company,
statute or any judgment, order or decree of any court or governmental agency or
body having jurisdiction over the Company or any of its Subsidiaries or any of
their properties or assets, except, in the case of each of clauses (i) and
(iii) above, for any such conflict, breach, violation, default, lien,
charge or encumbrance that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

(l)                                     No Consents
Required.  No consent, approval,
authorization, filing with or order of or registration with, any court or
governmental agency or body, or approval of the stockholders of the Company, is
required for the execution, delivery and performance of this Agreement or for
the consummation of the transactions contemplated hereby, including the issuance
or sale of the Shares by the Company, except such as have been obtained or made
under the Securities Act or the Exchange Act, approval of the Shares for
quotation on the Nasdaq National Market and such as may be required under
applicable state securities laws or by the by-laws and rules of the
National Association of Securities Dealers, Inc. (the “NASD”) in connection
with the offer and sale of the Shares by the Company in the manner contemplated
herein and in the Prospectus.

 

(m)                               Capitalization.  All of the issued and outstanding shares of
capital stock of the Company, including the outstanding shares of Common Stock,
are duly authorized and validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities that have not been waived in writing.  As of the date hereof and as of the Closing
Date, the Company has or will have, as the case may be, an authorized, issued
and outstanding capitalization as is set forth in the Registration Statement
and the Prospectus (subject, in each case, to the issuance of shares of Common
Stock upon exercise of stock options and warrants disclosed as outstanding in
the Registration Statement and the Prospectus and grant of options under
existing stock option plans described in the Registration Statement and the
Prospectus), and such authorized capital stock conforms to the description
thereof set forth in the Registration Statement and the Prospectus.  Except as described in the Registration
Statement and the Prospectus, as of the date referred to therein, the Company
did not have outstanding any options, warrants, agreements, contracts or other
rights in existence to purchase or acquire from the Company or any subsidiary
of the Company any shares of the capital stock of the Company or any subsidiary.

 

I-6

 

(n)                                 Title to Real and
Personal Property.  The Company and
each of its Subsidiaries has good and valid title to all property (whether real
or personal) described in the Registration Statement and Prospectus as being
owned by each of them, in each case free and clear of all liens, claims,
security interests, other encumbrances or defects except such as are described
in the Registration Statement and the Prospectus and those that do not
materially and adversely affect the value of such property and do not
materially interfere with the use made of such property by the Company.  All of the property described in the
Registration Statement and the Prospectus as being held under lease by the
Company or a subsidiary is held thereby under valid, subsisting and enforceable
leases, without any liens, restrictions, encumbrances or claims, except those
that (A) do not materially interfere with the use made or proposed to be
made of such property by the Company or any of its Subsidiaries or (B) would
not, individually or in the aggregate, have a Material Adverse Effect.

 

(o)                                 Title to
Intellectual Property.  Except as set
forth in the Prospectus, the Company and its Subsidiaries own, possess, license
or have other rights to use all foreign and domestic patents, patent
applications, trade and service marks, trade and service mark registrations,
trade names, copyrights, licenses, inventions, trade secrets, technology,
Internet domain names, know-how and other intellectual property (collectively,
the “Intellectual Property”), necessary for
the conduct of their respective businesses as now conducted or as proposed in
the Prospectus to be conducted except to the extent that the failure to own or
possess adequate rights to use such Intellectual Property would not,
individually or in the aggregate, have a Material Adverse Effect.  Except as set forth in the Prospectus, (a) there
are no rights of third parties to any such Intellectual Property owned by the
Company and its Subsidiaries; (b) to the Company’s knowledge, there is no
infringement by third parties of any such Intellectual Property; (c) to
the Company’s knowledge, there is no pending or threatened action, suit,
proceeding or claim by others challenging the Company’s and its Subsidiaries’
rights in or to any such Intellectual Property; (d) to the Company’s
knowledge, there is no pending or threatened action, suit, proceeding or claim
by others challenging the validity or scope of any such Intellectual Property; (e) there
is no pending or, to the Company’s knowledge, threatened action, suit,
proceeding or claim by others that the Company and its Subsidiaries infringe or
otherwise violate any patent, trademark, copyright, trade secret or other
proprietary rights of others; (f) to the Company’s knowledge, there is no
third-party U.S. patent or published U.S. patent application which contains
claims for which an Interference Proceeding (as defined in 35 U.S.C. § 135)
have been commenced against any patent or patent application described in the
Prospectus as being owned by or licensed to the Company; and (g) the
Company and its Subsidiaries have taken all reasonable steps necessary to
perfect its ownership of the Intellectual Property, in each of clauses (a)-(g) except
for such infringement, conflict or action which would not, singularly or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.

 

(p)                                 No Violation or
Default.  Neither the Company nor any
of its Subsidiaries is (i) in violation of any provision of its charter or
bylaws or similar organizational documents, (ii) is in default in any
respect, and no event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of any
term, covenant, or condition of any indenture, contract, lease, mortgage, deed
of trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or by which it is
bound or to which any of its property or assets is subject, or (iii) is in
violation in any respect of any statute, law, rule, regulation, ordinance,
judgment, order or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the
Company, its Subsidiaries or any of its properties, as applicable (including,
without limitation, those administered by the Food and Drug Administration of
the U.S. Department of Health and Human Services (the “FDA”) or by any foreign, federal, state or local
governmental or regulatory authority performing functions similar to those
performed by the FDA), except, with respect to clauses (ii) and (iii), any
violations or defaults which, singularly or in the aggregate, would not
reasonably be expected to result in a Material Adverse Effect.

 

I-7

 

(q)                                 Permits.  The
Company and each of its Subsidiaries has
made all filings, applications and submissions required by, and possesses all approvals, licenses, certificates,
certifications, clearances, consents, exemptions, marks, notifications, orders,
permits and other authorizations issued by, the
appropriate federal, state or foreign regulatory authorities (including,
without limitation, the FDA, and any other foreign, federal, state or local
government or regulatory authorities performing functions similar to those
performed by the FDA) necessary for the ownership or lease of their
respective properties or to conduct its
businesses as described in the Registration Statement and the Prospectus
(collectively, “Permits”), except for such
Permits the failure of which to possess, obtain or make the same would not
reasonably be expected to have a Material Adverse Effect; and neither the
Company nor any of its Subsidiaries has
received any written notice of proceedings relating to the limitation,
revocation, cancellation, suspension, modification or non-renewal of any such
Permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect, and
has any reason to believe that any such license, certificate, permit or
authorization will not be renewed in the ordinary course.

 

(r)                                    Taxes.  The Company and its Subsidiaries have timely
filed all federal, state, local and foreign income and franchise tax returns
(or timely filed applicable extensions therefore) required to be filed and are
not in default in the payment of any taxes which were payable pursuant to said
returns or any assessments with respect thereto, other than any which the
Company or any of its Subsidiaries is contesting in good faith and for which
adequate reserves have been provided.

 

(s)                                  Listing.  The Common Stock (including the Shares) is
registered pursuant to Section 12(g) of the Exchange Act and the
Company, in the two years preceding the date hereof, has not received any
notification (written or oral) from the Nasdaq National Market, any stock
exchange, market or trading facility on which the Common Stock is or has been
listed (or on which it has been quoted) to the effect that the Company is not
in compliance with the listing or maintenance requirements of such exchange,
market or trading facility.  The Company
shall comply with all requirements of the Nasdaq National Market with respect
to the issuance of the Shares and shall use its best efforts to have the Shares
listed on the Nasdaq National Market on or before the Closing Date.

 

(t)                                    Accounting
Controls.  The Company and each of
its Subsidiaries maintains a system of internal accounting controls sufficient
to provide reasonable assurances that (i) transactions are executed in accordance
with management’s general or specific authorization; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

 

(u)                                 Disclosure Controls.  The Company has established and maintains
disclosure controls and procedures (as such term is defined in Rule 13a-15e
and 15d-15e under the Exchange Act), which are designed to ensure that material
information relating to the Company is made known to the Company’s principal
executive officer and its principal financial officer by others within those
entities, particularly during the periods in which the periodic reports
required under the Exchange Act are being prepared,  and that such disclosure controls and
procedures are appropriate to allow timely decisions regarding required
disclosure to be included in the Company’s periodic filings under the Exchange
Act. The Company’s certifying officers have evaluated the effectiveness of the
Company’s disclosure controls and procedures as of the end of the quarter ended
September 30, 2005 (such date, the “Evaluation Date”).
The Company presented in its Form 10-Q for the quarter ended September 30,
2005 the conclusions of the certifying officers about the effectiveness of the
disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no

 

I-8

 

significant changes in the Company’s internal
control over financial reporting (as such term is defined in Exchange Act Rules 13a-15
and 15d-15) or, to the Company’s knowledge, in other factors that could
significantly affect the Company’s internal controls.

 

(v)                                 No Undisclosed
Relationships.  No relationship,
direct or indirect, exists between or among the Company on the one hand and the
directors, officers, stockholders, customers or suppliers of the Company on the
other hand which is required to be described in the Prospectus and which is not
so described.

 

(w)                               No Registration
Rights.  Except as described in the Prospectus,
no person or entity has the right, contractual or otherwise, to require
registration of shares of Common Stock or other securities of the Company
because of the filing or effectiveness of the Registration Statement with the
Commission or by reason of the issuance and sale of the Shares, except for
persons and entities who have expressly waived such right or who have been
given proper notice and have failed to exercise such right within the time or
times required under the terms and conditions of such right, and the Company is
not required to file any registration statement for the registration of any
securities of any person or register any such securities pursuant to any other
registration statement filed by the Company under the Securities Act for a
period of at least 180 days after the Effective Date.

 

(x)                                   Sarbanes-Oxley
Act.  The principal executive officer
and principal financial officer of the Company have made all certifications
required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”) with respect to all reports, schedules,
forms, statements and other documents required to be filed by it with the
Commission, and the statements contained in any such certification are complete
and correct. The Company, and to its knowledge after due inquiry, all of the
Company’s directors or officers, in their capacities as such, is in compliance
in all material respects with all applicable effective provisions of the
Sarbanes-Oxley Act (and intends to comply with all applicable provisions that
are not yet effective upon effectiveness).

 

(y)                                 Compliance with
Environmental Laws.  The Company and
its Subsidiaries: (i) are in compliance with any and all applicable
federal, state, local and foreign laws, rules, regulations, decisions and
orders relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
(collectively, “Environmental Laws”);
(ii) have received and are in compliance with all permits, licenses and
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses as described in the Registration Statement and the
Prospectus; and (iii) have not received notice of any actual or potential
liability for the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or contaminants, except, in
the case of any of clauses (i), (ii) or (iii) above, for any such
failure to comply or failure to receive required permits, licenses, or other
approvals or any such liability as would not, individually or in the aggregate,
have a Material Adverse Effect.

 

(z)                                   Compliance with
ERISA.  Each material employee
benefit plan, within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”),
that is maintained, administered or contributed to by the Company or any of its
affiliates for employees or former employees of the Company and its
Subsidiaries has been maintained in material compliance with its terms and the
requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of 1986, as
amended (the “Code”); no prohibited
transaction, within the meaning of Section 406 of ERISA or Section 4975
of the Code, has occurred which would result in a material liability to the
Company with respect to any such plan excluding transactions effected pursuant
to a statutory or administrative exemption; and for each such plan that is
subject to the funding rules of Section 412 of the Code or Section 302
of ERISA, no

 

I-9

 

“accumulated funding deficiency” as defined
in Section 412 of the Code has been incurred, whether or not waived, and
the fair market value of the assets of each such plan (excluding for these purposes
accrued but unpaid contributions) exceeds the present value of all benefits
accrued under such plan determined using reasonable actuarial assumptions.

 

(aa)                            No Labor Disputes.  No labor problem or dispute with the
employees of the Company or any of its Subsidiaries exists or, to the Company’s
knowledge, is threatened or imminent, which would reasonably be expected to
result in a Material Adverse Effect.  The Company is not aware that any key
employee or significant group of employees of the Company or any of its
Subsidiaries plans to terminate employment with the Company or any such subsidiary.

 

(bb)                          Insurance.  The Company and each of its Subsidiaries is
insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the businesses in
which they are engaged or propose to engage after giving effect to the
transactions described in the Prospectus; all policies of insurance and
fidelity or surety bonds insuring the Company and each of its Subsidiaries and
their businesses, assets, employees, officers and directors are in full force
and effect; the Company and each of its Subsidiaries is in compliance with the
terms of such policies and instruments in all material respects; and the
Company and each of its Subsidiaries has no reason to believe that it will not
be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that is not materially greater than the
current cost.

 

(cc)                            No Stabilization.  Neither the Company nor any of its
Subsidiaries nor any of their officers, directors, affiliates or controlling
persons has taken or will take, directly or indirectly, any action designed or
intended to stabilize or manipulate the price of any security of the Company.

 

(dd)                          Investment Company Act.  Neither the Company nor any of its
Subsidiaries is or, after giving effect to the offering and sale of the Shares
and the application of the proceeds thereof as described in the Prospectus,
will be required to register as an “investment company” as defined in the
Investment Company Act of 1940, as amended.

 

(ee)                            No Broker’s Fees.  Neither the Company nor any of its Subsidiaries
is a party to any contract, agreement or understanding with any person (other
than this Agreement) that would give rise to a valid claim against the Company
or its Subsidiaries for a brokerage commission, finder’s fee or like payment in
connection with the offering and sale of the Shares.

 

(ff)                                Contracts.  Each description of a contract, document or
other agreement in the Registration Statement and the Prospectus accurately
reflects in all material respects the terms of the underlying contract, document
or other agreement. Each contract, document or other agreement described in the
Registration Statement and Prospectus or listed in the exhibits to the
Registration Statement or incorporated therein by reference is in full force
and effect, unless validly terminated in accordance with the provisions
thereof, and is valid and enforceable against the Company or its subsidiary, as
the case may be, in accordance with its terms. Neither the Company nor any of
its Subsidiaries, if a subsidiary is a party, nor to the Company’s knowledge,
any other party, is in default in the observance or performance of any material
term or obligation to be performed by it under any such agreement, and no event
has occurred which with notice or lapse of time or both would constitute such a
default, in any such case which default or event, individually or in the
aggregate, would have a Material Adverse Effect.  There are no contracts or other documents
that are required under the Act to be filed as exhibits to the Registration Statement
that are not so filed.

 

I-10

 

(gg)                          Forward-Looking Statements.  No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the
Exchange Act) contained in the Registration Statement and the Prospectus has
been made or reaffirmed without a reasonable basis or has been disclosed other
than in good faith.

 

(hh)                          Foreign Corrupt Practices.  Neither the Company nor any of its
Subsidiaries, nor, to the knowledge of the Company, any director, officer,
agent or employee of the Company or its Subsidiaries, has, directly or
indirectly, during the last five years, while acting on behalf of the Company
or its Subsidiaries (i) used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses relating to political activity;
(ii) made any unlawful payment to foreign or domestic government officials
or employees or to foreign or domestic political parties or campaigns from
corporate funds; (iii) violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; (iv) made any other unlawful bribe,
rebate, payoff, influence, kickback or payment to any foreign or domestic
government official or employee.

 

(ii)                                  Clinical Studies.  The clinical, pre-clinical and other studies
and tests conducted by or on behalf of or sponsored by the Company and its
Subsidiaries were and, if still pending, are being conducted in accordance in
all material respects with all statutes, laws, rules and regulations, as
applicable (including, without limitation, those administered by the FDA or by
any foreign, federal, state or local governmental or regulatory authority
performing functions similar to those performed by the FDA).  The descriptions in the Registration
Statement and Prospectus of the results of such studies and tests are accurate
and complete in all material respects and fairly present the published data
derived from such studies and tests. 
Neither the Company nor any of its Subsidiaries have received any
notices or other correspondence from the FDA or any other foreign, federal,
state or local governmental or regulatory authority performing functions
similar to those performed by the FDA with respect to any ongoing clinical or
pre-clinical studies or tests requiring the termination or suspension of such
studies or tests.

 

(jj)                                  Compliance Program.  The Company has established and administers a
compliance program applicable to the Company, to assist the Company and the
directors, officers and employees of the Company in complying with applicable
regulatory guidelines (including, without limitation, those administered by the
FDA and any other foreign, federal, state or local governmental or regulatory
authority performing functions similar to those performed by the FDA).

 

(kk)                            Regulatory Filings.  Neither the Company nor any of its
Subsidiaries has failed to file with the applicable regulatory authorities
(including, without limitation, the FDA or any foreign, federal, state or local
governmental or regulatory authority performing functions similar to those
performed by the FDA) any filing, declaration, listing, registration, report or
submission; all such filings, declarations, listings, registrations, reports or
submissions were in compliance with applicable laws when filed and no
deficiencies have been asserted by any applicable regulatory authority with
respect to any such filings, declarations, listings, registrations, reports or
submissions.

 

5.                                      Survival
of Representations, Warranties and Agreements.  Notwithstanding any investigation made by any
party to this Agreement, all covenants, agreements, representations and
warranties made by the Company herein will survive the execution of this
Agreement, the delivery to the Investor of the Shares being purchased and the
payment therefor.

 

6.                                      Termination.  The Investor shall have the right to
terminate this Agreement by giving notice as hereinafter specified at any time
at or prior to the Closing Date, without liability on the part of the Investor
to the Company, if, prior to delivery and payment for the Shares the Placement
Agreement has been terminated pursuant to Section 9 thereof.  Any such termination shall be without
liability of any

 

I-11

 

party to any other party except that the
provisions of Section 11 hereof shall at all times be effective
notwithstanding such termination.

 

7.                                      Notices.  All notices, requests, consents and other
communications hereunder will be in writing, will be mailed (a) if within the
domestic United States by first-class registered or certified airmail, or
nationally recognized overnight express courier, postage prepaid, or by
facsimile or (b) if delivered from outside the United States, by
International Federal Express or facsimile, and will be deemed given (i) if
delivered by first-class registered or certified mail domestic, three business
days after so mailed, (ii) if delivered by nationally recognized overnight
carrier, one business day after so mailed, (iii) if delivered by International
Federal Express, two business days after so mailed and (iv) if delivered
by facsimile, upon electric confirmation of receipt and will be delivered and
addressed as follows:

 

(a)                                  if to the Company,
to:

 

Sangamo BioSciences, Inc.

501 Canal Boulevard, Suite A100

Richmond, CA 94804

Attention: Greg S.
Zante

Facsimile: (510) 236-8951

 

with
copies to:

 

Morgan, Lewis &
Bockius LLP

One Market Street

San Francisco, CA
94105

Attention:  John Larson, Esq.

Facsimile: (415) 442-1001

 

(b)                                 if to the Investor, at
its address on the Signature Page hereto, or at such other address or
addresses as may have been furnished to the Company in writing.

 

8.                                      Changes.  This Agreement may not be modified or
amended except pursuant to an instrument in writing signed by the Company and
the Investor.

 

9.                                      Headings.  The headings of the various sections of
this Agreement have been inserted for convenience of reference only and will
not be deemed to be part of this Agreement.

 

10.                               Severability.  In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein will not in any way be affected or impaired thereby.

 

11.                               Governing
Law.  This Agreement will be governed
by, and construed in accordance with, the internal laws of the State of California,
without giving effect to the principles of conflicts of law that would require
the application of the laws of any other jurisdiction.

 

12.                               Counterparts.  This Agreement may be executed in two or
more counterparts, each of which will constitute an original, but all of which,
when taken together, will constitute but one instrument, and will become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other parties.  The
Company and the Investor acknowledge and agree that the Company shall deliver
its counterpart to the Investor along with the Prospectus Supplement.

 

I-12

 

13.                               Confirmation of Sale.  The Investor acknowledges and agrees that
such Investor’s receipt of the Company’s counterpart to this Agreement,
together with the Prospectus Supplement, shall constitute written confirmation
of the Company’s sale of Shares to such Investor.

 

13

 

Exhibit A

 

SANGAMO BIOSCIENCES,
INC.

 

INVESTOR QUESTIONNAIRE

 

Please provide us with the following
information:

 

	
  1.

  	
   

  	
  The exact name that your Shares are to be registered in. You may use
  a nominee name if appropriate. If none given, the name on the signature page will
  be used:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  The relationship between the Investor and the registered holder
  listed in response to item 1 above:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  The mailing address of the registered holder listed in response to
  item 1 above:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  The Social Security Number or Tax Identification Number of the
  registered holder listed in the response to item 1 above:

  	
   

  

 

 

Schedule I

 

Subsidiaries of the
Company

 

	
  Name

  	
   

  	
  Percent Owned

  	
   

  	
  Jurisdiction of Incorporation

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Gendaq Limited

  	
   

  	
  100%

  	
   

  	
  United KingdomExhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into as
of April 1, 2005, by and between MEDICOR
LTD. (“MediCor” or the “Company”) and MARC S. SPERBERG (“Executive”).

 

A.            MediCor is engaged in the business of
creation, production and distribution of medical devices and desires to retain
an individual for the position of Executive Vice President and Corporate
Secretary (“EVP/CS”) of the Company.

 

B.            Executive represents that he is well
qualified to perform the duties of EVP/CS, and will devote the necessary time,
effort and energy to perform those duties.

 

C.            Based on these representations, the
Company desires to hire Executive as its EVP/CS.

 

NOW, THEREFORE, in
consideration of the above recitals and the respective agreements of Company
and Executive set forth below, the Company and Executive, intending to be
legally bound, agree as follows:

 

1.             Employment.  The Company shall employ Executive as its EVP/CS,
and Executive shall accept such employment and perform the services herein
described for Company, upon the terms and conditions set forth in this
Agreement.

 

2.             Term
of Employment.  This Agreement
shall commence as of the Effective Date of the fully executed Personnel Action Form shown
in blank form as Exhibit A hereto. Unless terminated at an earlier date in
accordance with Section 5 below, the term of Executive’s employment with
Company (“Term of Employment”) shall commence on the date first set forth above
and shall continue for a period initially ending on March 31, 2006 (“Initial
Term”). The Term of Employment shall automatically be renewed at the end of the
12th month prior to the end of the Initial Term for an additional 12-month
period and shall be extended at the end of each succeeding month by an additional
month such that the Term of Employment shall extend each month until the end of
succeeding 12th month (each such rolling 12-month period, a “Subsequent
Term”) unless either party provides written notice of their intention not to
renew this Agreement to the other in advance of then applicable termination
date of the Term of Employment.

 

3.             Positions
and Duties.

 

a.             Employment
with Company.  Executive shall
perform for the Company the duties and responsibilities of an EVP/CS of a
corporation and such other duties and responsibilities as the Company shall
reasonably assign to Executive from time to time generally consistent with
Executive’s position as EVP/CS, as determined in the sole discretion of the
Company. Executive shall report to the Company’s Chairman.

 

b.             Place
of Employment.  Executive’s principal
place of employment shall be at the Company’s Executive Offices; provided,
however, that Executive will be expected to engage in travel as Company may
reasonably request of Executive.

 

 

4.             Compensation.

 

a.             Salary.  The Company shall pay Executive as
compensation for his services a base salary at the annualized rate of $192,000.00.
Such salary shall be subject to applicable tax withholding and shall be paid
periodically in accordance with the Company’s normal payroll practices. Such
annual compensation shall be reviewed annually for increase (but not decrease)
in the discretion of the Board. In conducting any such annual review, the Board
shall take into account any increase in Executive’s responsibilities, increases
in the compensation of other executives of the Company or any Affiliate (or any
competitor(s) of either or both), the performance of Executive and/or other
pertinent factors. The annual compensation specified in this Section 4.a,
together with any increases in such annual compensation that the Company may
grant from time to time, is referred to in this Agreement as “Base
Compensation.”

 

b.             Bonuses.  The Company may pay to Executive periodic or
annual discretionary bonuses for any period ending prior to the end of the Term
of Employment in an amount that will be determined by the Company’s
Compensation Committee based on such factors as Executive’s performance and the
performance of the Company.

 

c.             Executive
Benefits.  While Executive is employed
by the Company hereunder, Executive shall be entitled to participate in all
employee benefit, pension and welfare plans and programs of Company for
executive employees, including any group medical, dental, life insurance and
disability insurance plans, or similar benefit plans of the Company (including
group plans sponsored by MediCor), to the extent that Executive meets the
eligibility requirements for each individual plan or program. Participation in
any such benefits and plans shall be consistent with Executive’s rate of
compensation to the extent that compensation is a determinative factor with
respect to participation and/or coverage under any such benefit or plan. The
Company provides no assurance as to the adoption or continuance of any
particular employee benefit plan or program, and Executive’s participation in
any such plan or program shall be subject to the provisions, rules and
regulations applicable thereto.

 

d.             Stock Options.  MediCor will, within thirty (30) days of
Executive’s signature on this Agreement, grant to Executive an option to
purchase 80,000 shares of MediCor’s common stock (the “Option”) at the exercise
price equal to the fair market value of MediCor’s common stock on the date of
grant. Subject to the terms of the Option (including partial acceleration in
the event of a termination of this Agreement by the Company without Cause or by
the Executive for Good Reason), the Option granted pursuant to this Agreement
will vest with respect to 25% of the shares of common stock purchasable
thereunder on each of the first through fourth anniversaries of the date of
grant, provided Executive remains employed by the Company (or MediCor or
another subsidiary of MediCor) on each such date. Unless specifically provided
in this Agreement, vesting and exercise provisions and all other terms and
conditions governing the Option shall be as set forth in the plan documents and
such option agreements as may be entered into with Executive.

 

e.             Salary
Continuation.  Executive shall be
entitled to receive his Base Compensation for all periods during which he is
unable to perform his duties hereunder by reason of a mental or physical
incapacity, whether resulting from illness, accident or otherwise, prior to
being determined to be suffering from a Disability.

 

2

 

f.              Expenses.  While Executive is employed by the Company
hereunder, Company shall reimburse Executive for all reasonable out-of-pocket
business, travel and entertainment expenses incurred by Executive in the
performance of Executive’s duties and responsibilities hereunder, subject to
the Company’s normal policies and procedures for expense verification and
documentation as in effect from time to time.

 

g.             Paid
Leave.  Executive shall be entitled
to paid leave in accordance with Company’s practices and policies for executive
employees.

 

5.             Termination
of Employment.

 

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

 

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

 

(2)           any
bonus awarded but not yet paid;

 

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

 

(4)           reimbursement
for expenses incurred, but not paid prior to such termination of employment;

 

(5)           such
rights to other compensation and benefits as may be provided in applicable
plans and programs of the Company, including, without limitation, applicable
employee benefit plans and programs, according to the terms and conditions of
such plans and programs; and

 

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

 

No termination for
Cause shall be effective unless Executive is given at least thirty (30) days
prior written notice authorized by a vote of at least a majority of the members
of the Executive Committee of the Board that the Company intends to terminate
his employment for Cause except under the provisions of Section 11(c)(i) or
(iv). Such written notice shall specify the particular act or acts, or failure
to act, which is or are the basis for the decision to so terminate Executive’s
employment for Cause. Executive shall be given the opportunity within fifteen
(15) days of the receipt of such notice to 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 for termination exists, Executive shall
be given fifteen (15) days after such determination to correct such act or
failure to act (if such act or failure to act 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 the
Company shall be terminated under this subsection for Cause.

 

3

 

Anything herein to
the contrary notwithstanding, if, following a termination of Executive’s
employment for Cause due to any conviction of Executive for any crime, such
conviction is overturned on appeal, Executive shall be entitled to the payments
and the economic equivalent of the benefits he would have received if his
employment had been terminated without Cause.

 

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

 

(1)           a
lump sum payment equal to the Base Compensation for the remainder of the Term
of Employment (subject to applicable tax withholdings), unless such termination
is within 12 months of a Change in Control, in which event such lump sum shall
be equal to Base Compensation for 12 months;

 

(2)           any
bonus awarded but not yet paid;

 

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

 

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

 

(5)           reimbursement
for expenses incurred, but not paid prior to such termination of employment;

 

(6)           continuation
of the health and welfare benefits of Executive, including, without limitation,
any group health insurance and long-term disability insurance generally
provided to senior executives of the Company other than life insurance or
accidental death and dismemberment insurance, at the level in effect at the
time of his termination of employment through the end of the twelfth (12th)
month following such termination of employment or the economic equivalent
thereof; and

 

(7)           any
equity compensation that is vested as of the effective date of termination of
employment or would otherwise vest during the remainder of the Term of
Employment (or within 12 months of the effective date of termination of
employment if such termination is within 12 months of a Change in Control),
which shall be deemed to have vested immediately prior to the effective date of
termination of employment.

 

Any payments to
which Executive shall be entitled under this Subsection 5.b, including any
economic equivalent of any benefit, shall be made as promptly as possible
following the termination of Executive’s employment hereunder and in no event
later than thirty (30) days following such termination of employment.

 

4

 

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

 

(1)           Base
Compensation at the rate in effect at the time of his termination, through (x)
in the case of death, for a period of three (3) months following
termination, and (y) in the case of Disability, for the period, if any, between
the date of his termination and the date by which the 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 in which death or disability occurs;

 

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

 

(5)           reimbursement
for expenses incurred but not paid prior to such termination of employment;

 

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

 

(7)           in
the case of Disability, the Company shall continue Executive’s health and
welfare benefits at the level in effect on the date of termination at least
through the end of the sixth month following the termination of Executive’s
employment or provide the economic equivalent thereof, and Executive’s rights
to other compensation and benefits as may be provided in applicable plans and
programs of the Company shall be determined according to the terms and
provisions of such plans and programs; and

 

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

 

d.             No
Mitigation; No Offset.  In the event
of any termination of employment under this Section 5, Executive shall be
under no obligation to seek other employment and there shall be no offset
against amounts due Executive under this Agreement on account of any
remuneration attributable to any subsequent employment that Executive may
obtain. Any amounts due under this Section 5 are in the nature of
severance payments, or liquidated damages, or both, and are not in the nature
of a penalty.

 

6.             Duty
of Loyalty. As an employee of Company, Executive will devote his best efforts
to the interests of the Company. Executive agrees to devote all of his working
time and attention to his duties hereunder, except for such reasonable amounts
of time for personal, charitable, investment and professional activities that
do not interfere with the service to be rendered by Executive hereunder. During
Executive’s employment with the Company, Executive will not, except with the
written consent of the Board, engage in any activity, investment, interest or
association (1) which is hostile or adverse to or competitive with the
Company, or (2) which

 

5

 

so occupies
Executive’s attention as to interfere with the proper and efficient performance
of his duties at the Company, or (3) which interferes with the independent
exercise of Executive’s judgment in the Company’s best interests.

 

7.             Confidential
Information.  Executive shall
maintain the confidentiality of all confidential and proprietary information of
the Company, and shall execute and deliver to MediCor its standard Proprietary
Information and Invention Agreement in the form attached hereto as Schedule I
(the “Confidentiality Agreement”). Such obligations shall survive any
termination of Executive’s employment relationship or of this Agreement.

 

8.             Third-Party
Trade Secrets.  Executive will
not, during his employment with Company, improperly use or disclose any
proprietary information or trade secrets of any third party, including the
Company’s customers and suppliers, or of any of Executive’s former or
concurrent employers or companies, if any. Executive shall not bring to the
premises of the Company any unpublished documents or any property belonging to
such third parties, unless consented to in writing by such third party. Executive’s
employment with the Company does not and will not breach any agreement or duty
which Executive has concerning confidential information belonging to others. If
Executive is asked to work on any project for the Company which raises a
concern regarding third-party confidential information, Executive will, as soon
as this is apparent to Executive, discuss the situation with the Chairman of
Company without disclosing any confidences.

 

9.             Return of Property.  Upon termination of Executive’s employment
with the Company, Executive shall deliver promptly to the Company all of the
following things which are in Executive’s custody or control:  (1) all records, files, manuals, books,
forms, documents, letters, memoranda, data, customer lists, tables,
photographs, video tapes, audio tapes, computer disks and other computer
storage media and copies thereof, whether or not containing confidential or
proprietary information, that are the property of the Company or that relate in
any way to the business, products, services, personnel, customers, prospective
customers, suppliers, practices, or techniques of the Company; and (2) all
other property of the Company, including but not limited to computers, personal
digital assistants, cellular telephones, pagers, credit cards, and keys.

 

10.          Prohibited
Post-Termination Activities.

 

a.             No
Solicitation.  For a period of one
year following the termination of Executive’s employment, Executive will not
induce any employee of, or consultant to, MediCor or any of its subsidiaries to
engage in any business in which MediCor or any of its subsidiaries is engaged
or contemplates engaging, or solicit any employee to leave the employment of MediCor
or any of its subsidiaries.

 

b.             Noncompetition.  For a period of one year following the
termination of Executive’s employment with the Company, Executive will not
accept employment with, engage in or render advice or assistance to any
business within any market in which MediCor or any of its subsidiaries conducts
business or effects sales which competes with or contemplates competition with
MediCor or any of its subsidiaries in any capacity in which the employment or
rendering of advice, assistance or other services to such business by Executive
would be substantially similar to the services provided by Executive to the
Company during the term of

 

6

 

Executive’s
employment with Company or would result in a competitive advantage to such
subsequent employer.

 

11.          Definitions.  As used herein, the following terms shall
have the respective meanings set forth below.

 

a.             “Affiliate”
shall mean any person or entity controlling, controlled by or under common
control 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 a willful act by Executive which constitutes gross misconduct
and which is materially and demonstrably injurious to the Company, (iii) Executive,
in carrying out his duties under this Agreement, is guilty of a willful
violation of a written Company policy generally applicable to all employees,
the violation 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, the
Company or its Affiliates resulting in material economic harm to the Company, (v) except
as otherwise specified in this clause c, the breach in any material respect of
this Agreement or any confidentiality or proprietary information agreement
between Executive and the Company or its Affiliates, or (vi) the
commission of a willful act which induces any customer of the Company to break
a 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 with respect to MediCor of a nature that would be required to
be reported in response to Item 14 of Schedule 14A of Regulation 14A
promulgated under Section 14 of the 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
the 1934 Act, other than Donald K. McGhan or entities related to, controlled
by, or owned by Donald K. McGhan or his immediate family (collectively, the “McGhan
Entities”) (or with respect to Affiliates, MediCor), becomes a “beneficial
owner,” as such term is used in Rule 13d-3 promulgated under the 1934 Act,
at any time that MediCor or any Affiliate is a Private Company, of more than
51% of the Voting Stock of MediCor or such Affiliate;

 

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

 

(4) 
any “person” as such term is used in Sections 13(d) and 14(d)(2) of
the 1934 Act, is the “beneficial owner,” as such term is used in Rule 13d-3
promulgated under the 1934 Act, of a greater percentage of the Voting Stock of

 

7

 

MediCor than the
percentage of such Voting Stock held, directly or indirectly, by the McGhan
Entities;

 

(5) 
all or substantially all of the business of MediCor and its consolidated
subsidiaries is disposed of pursuant to a merger, consolidation, asset sale or
other transaction in which MediCor is not the surviving corporation or MediCor
(on a consolidated basis) is materially or completely liquidated or in which
all or substantially all of MediCor’s consolidated assets are sold; or

 

(6) 
MediCor or a subsidiary combines with another company and, immediately after
the combination, the stockholders of MediCor immediately prior to the
combination hold, directly or indirectly, less than 51% of the Voting Stock of
the resulting company (viewed on a consolidated basis).

 

Notwithstanding the
foregoing, a transaction or event shall not constitute a Change in Control if
such transaction or event results from a transaction that is approved in
advance unanimously by MediCor’s executive committee.

 

e.             “Disability”
shall mean Executive’s inability to render, for a period of three consecutive
months, full and effective services hereunder by reason of permanent mental or
physical disability, whether resulting from illness, accident or otherwise;
provided, however, that in no event will Executive be considered disabled for
the purposes of this Agreement unless he is deemed disabled pursuant to the
Company’s long-term disability plan (or any plan in which the Company’s
employees participate).

 

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

 

(1)           Executive
is not appointed to or is otherwise removed from any office or position
provided for in Section 1 or Section 3.a above, for any reason other
than the termination of his employment or transfer to a substantially
equivalent or superior office or position within the Company (such
determination to be made on the overall responsibilities of Executive within
the Company);

 

(2)           Executive
is assigned duties or responsibilities that are, when taken as a whole,
inconsistent, in any significant respect, with the scope of duties and
responsibilities associated with Executive’s office or position as described in
Section 1 or Section 3.a above;

 

(3)           Executive
suffers a material reduction, when taken as a whole, in the authorities, duties
or responsibilities associated with his office or position as described in Section 1
or Section 3.a above, on the basis of which he makes a determination in
good faith that he can no longer carry out such office or position in the
manner contemplated at the time this Agreement was entered into;

 

(4)           Executive’s
Base Compensation is decreased by the Company, or his benefits or opportunities
under any employee benefit or incentive plan or program of the Company is or
are materially reduced, with the result that Executive’s overall benefits
package is materially reduced;

 

8

 

(5)           There
occurs a Change in Control;

 

(6)           the
Company fails to pay Executive any deferred payments under any bonus or
incentive plans which are due to him at that time;

 

(7)           the
Company fails to reimburse Executive within a reasonable time for business
expenses in accordance with this Agreement or the Company’s policies,
procedures or practices;

 

(8)           if
and to the extent applicable, the Company fails to agree to or actually
indemnify Executive for his actions and/or inactions, as either a director or
executive officer of the Company, to the fullest extent permitted by Delaware
law, and/or the Company fails to maintain satisfactory levels of directors and
officers liability insurance coverage for Executive when such insurance is
available and maintained by MediCor;

 

(9)           the
Company fails to obtain a written agreement reasonably satisfactory to
Executive from any successor or assign of the Company to assume and perform
this Agreement; or

 

(10)         the
Company purports to terminate Executive’s employment for Cause and such
purported termination of employment is not effected in accordance with the
procedures required by this Agreement, and for purposes of this Agreement, such
purported termination of employment shall be invalid and of no force and
effect.

 

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

 

h.             “Pro
Rata Bonus” shall mean an amount equal to the annual bonus otherwise payable
with respect to the year in question, calculated as if Executive had been
employed by the Company for the full year, multiplied by a fraction, the
numerator of which is the number of days in such year during which Executive is
actually employed by the Company and the denominator of which is 365.

 

i.              “Public
Company” shall mean an entity that has one or more classes of its Voting Stock
registered pursuant to Section 12(b), 12(g) or 15(d) of the 1934
Act.

 

j.              “Voting
Stock” shall mean capital stock (or similar security) of any class or classes
having general voting power under ordinary circumstances, in the absence of
contingencies, to elect the directors of a corporation or similar managers of
another entity.

 

12.          Miscellaneous.

 

a.             Amendments;
Assignment.  No amendment or
modification of this Agreement
shall be deemed effective unless made in writing and signed by the parties
hereto. This Agreement may be assigned by the Company to MediCor or a
wholly-owned subsidiary of MediCor without Executive’s consent.

 

b.             No
Waiver.  No term or condition of this
Agreement shall be deemed to have been waived, except by a statement in writing
signed by the party against whom enforcement of the waiver is sought.  Any written waiver shall not be deemed a
continuing

 

9

 

waiver unless
specifically stated, shall operate only as to the specific term or condition waived and shall not
constitute a waiver of such term or condition for the future or as to any act
other than that specifically waived.

 

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

 

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

 

e.             Captions
and Headings.  The captions and
paragraph headings used in this
Agreement are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement or any of the provisions
hereof.

 

f.              Notices.  All notices, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given (i) upon receipt, if delivered
personally or via courier, (ii) upon confirmation of receipt, if given by
electronic facsimile provided that another copy is sent by another means permitted by this subsection within
two (2) business days thereafter, and (iii) on the third business day
following mailing, if mailed first-class, postage prepaid, registered or
certified mail from the continental United States as follows:

 

If to Company
to:

 

MediCor Ltd.

4560 S. Decatur Blvd., Ste. 300

Las Vegas, Nevada 89103

Fax: (702) 932-4561

Attn: Chief Operating Officer

 

If to
Executive to:

 

Marc S. Sperberg

1917 Grey Eagle Street

Henderson, NV 89074

Fax: (702) 920-8086

 

Any party may
by notice given in accordance with this subsection to the other party to
designate another address or person for receipt of notices hereunder.

 

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

 

10

 

h.             Governing
Law.  The parties agree that this
Agreement will be governed by the laws of the State of Delaware.

 

i.              Arbitration.  Any controversy or claim arising out of or
relating to this Agreement or the breach thereof (including the arbitrability
of any controversy or claim), shall be settled by arbitration in accordance
with the laws of the State of Delaware by one arbitrator. If the parties cannot
agree on the appointment of an arbitrator, then the arbitrator shall be
appointed by the American Arbitration Association. The arbitration shall be
conducted in Clark County, Nevada in accordance with the rules of the
American Arbitration Association, except with respect to the selection of an
arbitrator which shall be as provided in this Section 12.i. The cost of
any arbitration proceeding hereunder shall be borne by the Company. The award
of the arbitrator shall be binding upon the parties. Judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof.

 

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

 

j.              Entire
Agreement.  This Agreement contains
the entire agreement of the parties relating to Executive’s employment with the
Company and supersedes all prior agreements and understandings with respect to such subject matter.

 

IN WITNESS WHEREOF, Executive, the Company and, with respect to Section 4.d,
MediCor have executed this Agreement as of the date first set forth above.

 

	
   

  	
   “COMPANY”

  
	
   

  	
   

  
	
   

  	
  MEDICOR LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald
  K. McGhan

  	
   

  
	
   

  	
   

  	
  Donald K.
  McGhan

  
	
   

  	
   

  	
  Its:
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “EXECUTIVE”

  
	
   

  	
  By:

  	
  /s/ Marc S.
  Sperberg

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Marc S.
  Sperberg

  
						

 

WITH RESPECT TO SECTION 4.D:

 

MEDICOR LTD.

 

11

 

	
  By:

  	
  /s/ Donald
  K. McGhan

  	
   

  
	
   

  	
  Donald K.
  McGhan

  
	
   

  	
  Its:
  Chairman

  

 

12

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