Document:

Exhibit
10.7

 

EMPLOYMENT
AGREEMENT STOCK OPTION

 

This Employment
Agreement Stock Option (Stock Option #EO27), dated as of July 18, 2003, is by and between MediCor Ltd. and its subsidiaries (collectively,
the “Corporation”), and Thomas R. Moyes
(the “Employee”).

 

Effective as of
July 18, 2003, the Employee will receive an Employment Option (the “Option”) of
ONE HUNDRED TWENTY THOUSAND
(120,000) shares of the Corporation’s Common Stock, at a composite
price of THREE DOLLARS AND EIGHTY CENTS
($3.80) per share to be vested as follows: 25% PER YEAR FOR EACH FULL YEAR OF
EMPLOYMENT FROM THE EMPLOYMENT DATE.

 

The Option will expire
seven (7) years from the Employment Date identified in the Employment
Agreement, or upon termination of employment (as herein provided), whichever
first occurs.  The Option is not a part
of the Corporation’s Stock Compensation Plan (if any), is not transferable and
may be exercised only by the Employee, the Employee’s executor or spouse.  Continued employment with the Corporation is
a condition of the vesting of the Options. 
The Option may be exercised within six (6) months of the termination of
employment of the Employee, unless the Employee’s employment is terminated “For
Cause” as provided in Section 5 of the Employment Agreement, in which case the
un-vested portion of the Option terminates at the date of termination of the
Employee.  The Employee will execute
such other documents and make such representations as may be required for
securities or other regulatory compliance.

 

The number of
shares and the option price subject to the Option shall be adjusted for any
stock dividend, split-up, combination or exchange of shares, or any other
similar change.

 

In the event of a
Change of Control in ownership of the Corporation (defined for the purpose of
this Agreement as the purchase of more than fifty percent (50%) of the
Corporation’s outstanding shares by a shareholder who, at the date of this
Agreement is not a shareholder of the Corporation), all shares of the Option
shall vest and be available for purchase within thirty (30) days of
notification by the Corporation to the Employee of the Change of Control.

 

IN
WITNESS WHEREOF, the parties hereto have executed this
Employment Agreement Stock Option to be effective as of the 18th day
of July  2003.

 

	
   

  	
  CORPORATION:

  
	
   

  	
  MediCor Ltd.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Donald K. McGhan

  
	
   

  	
  Title:

  	
  Chairman of the Board

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Thomas R. Moyes

  	
   

  
						

 

1Exhibit
10.8

 

MediCor Ltd.

Form of Consulting Warrant Agreement

 

THE
SECURITIES REPRESENTED BY THIS INSTRUMENT OR DOCUMENT HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE
“SECURITIES ACT”).  WITHOUT
SUCH REGISTRATION, SUCH SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED AT
ANY TIME WHATSOEVER, EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH
TRANSFER OR THE SUBMISSION TO THE COMPANY TO THE EFFECT THAT ANY SUCH TRANSFER
WILL NOT BE IN VIOLATION OF THE SECURITIES ACT OR APPLICABLE STATE SECURITIES
LAWS OR ANY RULE OR REGULATION PROMULGATED THEREUNDER.

 

This Warrant (the
“Warrant”) is made and entered into on the date hereinafter set for
by and between MediCor Ltd., a Delaware corporation (the “Company”), and the
person whose name appears on the signature page hereof identified as the
warrant holder (the “Holder”).

 

WHEREAS:  The
Company wishes to grant the Holder the Warrant which gives the Holder the
right, but not the obligation, to purchase stock in the Company as recognition
of the Holder’s valuable services to the Company, and the Holder will, in
consideration of the receipt of said Warrant, agree to the terms, conditions
and provisions set forth herein.

 

NOW, THEREFORE, in consideration of the
premises and promises, warranties and representations herein contained, it is
agreed as follows:

 

1.             WARRANT.         Subject to the conditions
set forth herein, the Company hereby grants to the Holder the right, privilege
and option to purchase the number of shares of the Company’s Common Stock
identified on the signature page hereof (the “Warrant Shares”) at a price per share
as stated on the signature page hereof (the “Strike Price”) in the manner
hereinafter provided, effective as of the date stated on the signature page
hereof (the
“Grant Date”).

 

2.             VESTING
OF WARRANT SHARES.              The Warrant
Shares shall be vested as follows, unless the Warrant has been terminated
pursuant to Section 5 hereof:

(a)           Twenty
Five Percent (25%) on the first anniversary of the Grant Date;

(b)           Twenty
Five Percent (25%) on the second anniversary of the Grant Date;

(c)           Twenty
Five Percent (25%) on the third anniversary of the Grant Date;

(d)           The
remaining Warrant Shares on the fourth anniversary of the Grant Date;

 

3.             CHANGE
OF CONTROL.                 Additionally,
the Warrant, unless it has expired or been earlier terminated, shall vest as to
all the Warrant Shares on the Acceleration Date as defined below occurring upon
a change of control of the Company.

 

MediCor Ltd.

Consulting  Warrant
#    

 

1

 

(a)           As
defined herein, “Change of Control” shall mean the occurrence of any of the
following: (i) any “person” or “group” (as such term is used in Sections 13(d)
and 14(d)(2) of the Exchange Act), other than the Company, a trustee or other
fiduciary holding securities under an employee benefit plan of the Company or a
company owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company),
is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the total combined voting power represented by the
Company’s then outstanding voting securities; or (ii) during any period of two
consecutive years, individuals who at the beginning of such period constitute
the Board and any new director (other than a director designated by a person
who has entered into an agreement with the Company to effect a transaction
described in clause (i), (iii) or (iv) of this definition) whose election by
the Board or nomination for election by the Company’s stockholders was approved
by a vote of at least two-thirds (2/3) of the directors who either were
directors at the beginning of the two-year period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof;  (iii)
any Reorganization as defined below; or (iv) the stockholders of the Company
adopt a plan of complete liquidation of the Company.

 

(b)           The term “Reorganization”
as used herein shall mean: (i) the approval by the stockholders of the Company
of any statutory merger, consolidation or share exchange to which the Company
is a party as a result of which the persons who were stockholders of the
Company immediately prior to the effective date of such Reorganization shall
have beneficial ownership of less than fifty percent (50%) of the total
combined voting power in the election of directors of the surviving corporation
following the effective date of such Reorganization; or (ii) the approval by
stockholders of an agreement for the sale or disposition by the Company of all
or substantially all of the assets of the Company.

 

(c)           The term “sale or
disposition by the Company of all or substantially all of the assets of the
Company” shall mean a sale or other disposition transaction or series of related
transactions involving assets of the Company or any subsidiary thereof
(including the stock of any direct or indirect subsidiary of the Company) in
which the value of the assets or stock being sold or otherwise disposed of (as
measured by the purchase price being paid therefor or by such other method as
the Board of Directors of the Company determines is appropriate in a case where
there is no readily ascertainable purchase price) constitutes more than
two-thirds of the fair market value of the Company (as hereinafter
defined).  For purposes of the preceding
sentence, the “fair market value of the Company” shall be the aggregate market
value of the outstanding shares of Common Stock of the Company (on a fully
diluted basis) plus the aggregate market value of the Company’s other
outstanding equity securities.  The
aggregate market value of the shares of Common Stock of the Company shall be
determined by multiplying the number of shares of the Company’s Common Stock (on
a fully diluted basis) outstanding on the date of the execution and delivery of
a definitive agreement with respect to the transaction or series of related
transactions (the “Transaction Date”) by the average closing price of the
shares of Common Stock of the Company for the ten trading days immediately
preceding the Transaction Date.  The
aggregate market value of any other equity securities of the Company shall be
determined in a manner similar to that prescribed in the immediately preceding
sentence for determining the aggregate market value of the shares of Common
Stock of the Company or by such other method as the Board shall determine is
appropriate.

 

2

 

(d)           “Acceleration
Date” shall mean the earliest date on which any of the following events
shall have first occurred: (i) the acquisition described in clause (i) of the
definition of Change of Control above; (ii) the change in the composition of
the Board of Directors of the Company described in clause (ii) above; or (iii)
the stockholder approval or adoption described in clauses (iii) and (iv) above.

 

4.             METHOD OF EXERCISE.                 Warrant
Shares purchased under this Warrant shall, at the time of purchase, be
paid for in full, either in cash or through a “cashless” exercise,
whereby in lieu of paying the exercise price in cash, the Holder may elect to
receive a number of shares of Common Stock equal to the number of such shares
originally issuable upon exercise less such number of shares as have the then
current trading price equal in the aggregate to the exercise price of the
Warrant Shares (based on the average closing bid price of the Common Stock for
the five trading day period immediately prior to the date of exercise) and any
applicable federal, state and local taxes. 
To the extent that the right to purchase Warrant Shares has accrued
hereunder, this Warrant may be exercised, from time to time, by written notice
to the Company stating the number of shares with respect to which this Warrant
is being exercised and the time of delivery thereof, which shall be at least
fifteen (15) days after the giving of such notice, unless an earlier date shall
have been mutually agreed upon.  If
requested by the Company, Holder shall provide the Company with an opinion of
counsel satisfactory to the Company that the exercise of the Warrant and the
issuance of the Warrant Shares do not require registration under, and that any
such exercise and issuance will not be in violation of, the Securities Act or
applicable state securities laws or rule or regulations promulgated thereunder.

 

At the time
specified in such notice, the Company shall, without transfer or issue tax to
the Holder, deliver to the Holder by certified mail, a certificate or
certificates for such Warrant Shares, against the payment by the Holder of the
Strike Price, in full, for the number of Warrant Shares to be delivered, by
certified or bank cashier’s check, or the equivalent thereof acceptable to the
Company or through a “cashless” exercise in accordance with the preceding
paragraph, provided, however, that the time of such delivery may be postponed
by the Company for such period as may be required for it, with reasonable
diligence, to comply with any requirements of any state or federal agency or
any securities exchange.  If the Holder
fails to accept delivery of and pay for all or any part of the number of shares
specified in the notice given by the Holder, upon tender and delivery of said
shares, the Holder’s right to exercise this Warrant with respect to such
undelivered shares shall be terminated. 
If this Warrant is exercised within six (6) months of the Company’s
Initial Public Offering (an “IPO”), the Holder shall execute a lock-up
agreement for the balance of the six month period following the IPO.

 

5.             TERMINATION
OF WARRANT.          Except as herein
otherwise stated, this Warrant, to the extent not theretofore
exercised, shall terminate at 5:00 p.m. local time at Las Vegas, Nevada on
the date which is five (5) years from the Grant Date.

 

6.             REPRESENTATIONS
AND WARRANTIES OF THE HOLDER.              The Holder hereby
warrants and represents to the Company, as of the date hereof and as of the
date or dates on which any Warrant Shares are purchased hereunder, as follows:

 

3

 

(a)           The
Holder is an Accredited Investor as defined in Regulation D promulgated by the
Securities and Exchange Commission (the “SEC”) under the Act;

 

(b)           The
Holder is, by reason of the Holder’s business or financial experience, capable
of evaluating the merits and risks of the purchase of the Warrant Shares and of
protecting the Holder’s own interests in connection with the Warrant;

 

(c)           In
deciding whether to acquire the Warrant Shares, the Holder has relied, and will
rely, exclusively upon consultations with Holder’s legal, financial and tax
advisers with respect to the nature of the Warrant;

 

(d)           The
Holder understands that neither the SEC, nor any other governmental agency
having jurisdiction over the sale and issuance of the Warrant Shares will make
any finding or determination relating to the appropriateness for investment of
the Warrant Shares and that none of them has or will recommend or endorse the
Warrant Shares.

 

(e)           The
Holder represents that the Warrant Shares will purchased for Holder’s own
account for investment and will not be purchased with a view to the sale or
distribution thereof, and that the Holder has no intention of distributing or
reselling any portion of the Warrant or Warrant Shares which the Holder is
receiving or may purchase.  The Holder
acknowledges that the Warrant and the Warrant Shares have not been registered
under the Act and must be held indefinitely unless subsequently registered
under the Act or an exemption for such registration is available.  The Holder also acknowledges that Holder is
fully aware of the restrictions on disposing of the Warrant Shares resulting
from the provisions of the Act and the General Rules and Regulations of the SEC
thereunder.  The Holder further
understands that the Warrant Shares have not been, and will not be, qualified
under applicable state securities laws.

 

(f)            The
Holder, if requested by the Company’s underwriters from time to time, will
execute “lock-up” agreements as requested, relating to the Warrant and the
Warrant Shares.

 

(g)           The
Holder recognizes that “stop transfer” instructions will be issued against any
stock certificates under this Warrant and that a restrictive legend that
addresses acquisition for investment, subject to Rule 144, will be placed on
the stock certificates issued under this Warrant.

 

7.             RESTRICTIONS ON
ISSUANCE OF SHARES.           The Company shall
not be obligated to sell and issue any share pursuant to this Warrant, unless
permission to issue said shares has first been obtained from any judicial or
governmental agency, if required, and further, unless the shares with respect
to which this Warrant is exercised are, at the time, effectively registered, or
exempt from registration, under the Securities Act.  The Company may require an opinion of counsel acceptable to the
Company to the effect of any exemption.

 

8.             TRANSFERABILITY OF
WARRANT; RIGHTS PRIOR TO EXERCISE.              During the
Holder’s lifetime, the Warrant hereunder shall be exercisable only by the
Holder, or any guardian or legal representative of the Holder in accordance
with this Warrant Agreement.  In event
of (a) any attempt by the Holder to alienate, assign, pledge, hypothecate or
otherwise dispose of the Warrant, except as provided herein; or (b) the levy of
any attachment, execution or

 

4

 

similar process upon the
rights or interest hereby conferred, the Company may terminate the Warrant by
notice to the Holder and it shall thereupon become null and void. The Holder
shall have no rights as a shareholder of shares subject to this Warrant until
payment in full for the Warrant Shares and the delivery of such shares as
herein provided.

 

9.             REGISTRATION
RIGHTS.               The Holder
shall have the same registration rights under Form S-8 or otherwise as may be
generally made available from time to time to officers and employees of the
Company.

 

10.          SERVICE NOT AFFECTED.             The
granting of this Warrant or its exercise shall not be construed as granting to
the Holder any right with respect to any other agreement between the Holder and
the Company.

 

11.          BINDING EFFECT.             This
Warrant shall be binding upon the heirs, executors, administrators and
successors of the parties hereto.

 

12.          GOVERNING LAW.           This
Warrant shall be governed by, and construed and enforced in accordance with,
the laws of the State of Delaware.

 

 

SIGNATURES
ON NEXT PAGE

 

5

 

IN WITNESS WHEREOF, the parties have caused
this Consulting Warrant Agreement to be executed as of this
           day of
                           ,
200    .

 

	
   

  	
  “Company”

  	
   

  
	
   

  	
  MediCor Ltd., a
  Delaware corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Chairman of the Board

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  “Holder”

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Printed Name

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  
	
  Address of Holder:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Phone:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Fax:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  E-Mail:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Tax Id. or Soc. Sec.
  Number:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
							

 

 

“STRIKE PRICE”:

	
  DOLLARS
  PER SHARE ($        )

  

 

	
  “GRANT DATE”:

  
	
   

  

 

	
  “WARRANT SHARES”:

  
	
  EXACTLY
  (                   )

  

 

6

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