**EMPLOYMENT AGREEMENT**

ThisEmployment Agreement, dated July 22, 2004, is by and between MENTOR Corporation("COMPANY"), with its executive offices at 201 Mentor Drive, Santa Barbara,California 93111, and Bobby Purkait ("EMPLOYEE") of  2995 East Valley Road,Santa Barbara, California 93108 and supercedes all other employment agreementsby and between the parties.

**RECITALS**

COMPANYis in the business of manufacturing and selling medical devices and relatedproducts. EMPLOYEE has experience in this business and possesses valuableskills and experience, which will be used in advancing COMPANY's interests.EMPLOYEE is willing to be engaged by COMPANY and COMPANY is willing to engageEMPLOYEE in an executive capacity responsible for the Science and Technology functionof COMPANY, upon the terms and conditions set forth in this Agreement. 

**AGREEMENT**

EMPLOYEE and COMPANY,intending to be legally bound, agree as follows:

1.         SERVICES

1.1       GeneralServices.

1.1.1 Company shall employ EMPLOYEE as Senior Vice President, Science and Technology).EMPLOYEE shall perform the duties customarily performed by one holding suchposition in a similar business as that engaged in by COMPANY.  To the extentthat they do not reduce the scope of the responsibilities described above,EMPLOYEE's duties may change from time to time on reasonable notice, based onthe needs of COMPANY and EMPLOYEE's skills as determined by COMPANY.  Theseduties shall hereinafter be referred to as "Services."  EMPLOYEE shall reportdirectly to the President and Chief Executive Officer of Mentor Corporation.  

1.1.2  As Senior Vice President, Science andTechnology of COMPANY, EMPLOYEE shall also be an officer of COMPANY and shallserve in such capacity without further compensation.  In the event thatEMPLOYEE shall from time to time serve COMPANY as a director or shall serve inany other office during the term of this Agreement; EMPLOYEE shall serve insuch capacities without further compensation.  If EMPLOYEE is, for any reason,removed as an officer or director of the COMPANY by the Board of Directors ofCOMPANY, such removal shall be without prejudice to EMPLOYEE's contractualrights under this Agreement.  

 

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1.1.3. EMPLOYEE shall devote his entire working time, attention, and energies to thebusiness of COMPANY, and shall not, during the term of this Agreement, beengaged in any other business activity whether or not such business activity ispursued for gain, profit or other pecuniary advantage, without the priorwritten consent of the Board of Directors of COMPANY.  This shall not beconstrued as preventing EMPLOYEE from investing his assets in a form or mannerthat does not require any services on the part of EMPLOYEE in the operation oraffairs of the entities in which such investments are made, or from engaging insuch civic, charitable, religious, or political activities that do notinterfere with the performance of EMPLOYEE's duties hereunder.  

1.2       BestAbilities.  EMPLOYEE shall serve COMPANY faithfully and to the best ofEMPLOYEE's ability.  EMPLOYEE shall use EMPLOYEE's best abilities to performthe Services.  Employee shall act at all times according to what EMPLOYEEreasonably believes is in the best interests of COMPANY.

1.3       CorporateAuthority.  Employee, as an executive officer, shall comply with all lawsand regulations applicable to EMPLOYEE as a result of this Agreement including,but not limited to, the Securities Act of 1933 and Securities Act of 1934. Prior to the execution of this Agreement, EMPLOYEE has received and reviewed COMPANY'sPolicies and Procedures and COMPANY's Employee Handbook.  EMPLOYEE shall complywith COMPANY's Policies and Procedures, and practices now in effect or as lateramended or adopted by COMPANY, as required of similarly-situated executives ofCOMPANY.

2.         TERM

ThisAgreement shall commence upon the execution of this Agreement and shall continueuntil terminated as provided in Section 4 of this Agreement.  Due to the natureof EMPLOYEE'S current special project (see Attachment A), EMPLOYEE willnot be terminated without cause prior to May 31, 2005; and if terminated as pursuantto Section 4.1.5, EMPLOYEE will receive all compensation through May 31,2005 including severance compensation per Section 4.2.5.

3.         COMPENSATIONAND BENEFITS

3.1 Compensation.  EMPLOYEE's total compensation consists of base salary,bonus potential, stock options, and medical and other benefits generallyprovided to employees of COMPANY.  Any compensation paid to EMPLOYEE shall bepursuant to COMPANY's policies and practices for exempt employees and shall besubject to all applicable laws and requirements regarding the withholding offederal, state and/or local taxes.  Compensation provided in this Agreement isfull payment for Services and EMPLOYEE shall receive no additional compensationfor extraordinary services unless otherwise authorized.  EMPLOYEE's entirecompensation package will be reviewed annually by the Compensation Committee ofthe Board of Directors, a practice which is consistent with COMPANY's ExecutiveCompensation Program.

 

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3.1.1 Base Compensation.  COMPANY agrees to pay EMPLOYEE an annualized basesalary of TWO HUNDRED SEVENTY-EIGHT THOUSAND FOUR HUNDRED SIXTY DOLLARS and NoCents ($278,460.00), less applicable withholdings, payable in equalinstallments no less frequently than semi-monthly.  

3.1.2    Cash Incentive Bonus.  EMPLOYEE shall be eligible for a cash incentivebonus per ATTACHMENT A ("Target Milestones"), and subject to the approval of the COMPANY's Compensation Committee and Board of Directors.  Any cashincentive bonus shall accrue and become payable to EMPLOYEE upon completion of eachmilestone(s). EMPLOYEE will not be eligible for a cash incentive bonus for anymilestone which is not fully completed by May 31, 2005.

3.1.3    Stock Options. Based upon satisfactory performance, under thePlan, COMPANY expects that EMPLOYEE will qualify for additional grants ofoptions to acquire common stock of COMPANY subject to determination by theBoard of Directors, of an amount which is consistent with COMPANY's ExecutiveCompensation Program.  Subsequent grants, if any, shall also be subject toperformance considerations as well as the determination of the Board ofDirectors.

3.2  Business Expenses.  COMPANY shall reimburse EMPLOYEE for businessexpenses reasonably incurred in performing Services according to COMPANY'sExpense Reimbursement Policy.

3.3  Additional Benefits.  COMPANY shall provide EMPLOYEE those additionalbenefits normally granted by COMPANY to its employees subject to eligibilityrequirements applicable to each benefit.  COMPANY has no obligation to provideany other benefits unless provided for in this Agreement. Currently COMPANYprovides major medical, dental, life, salary continuation, long term disabilitybenefits and eligibility to participate in COMPANY's 401(k) plan.

3.4  Vacation.  Employee shall accrue vacation equal to twenty (20) days peryear, at the rate of approximately 1.67 days per month.  The time or times forsuch vacation shall be selected by EMPLOYEE and approved by the Chairman of theBoard, President and Chief Executive Officer of COMPANY.

 

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4.  TERMINATION

4.1  Circumstances Of Termination.  This Agreement and the employmentrelationship between COMPANY and EMPLOYEE may be terminated as follows:

4.1.1    Death.  This Agreement shallterminate upon EMPLOYEE's death, effective as of the date of EMPLOYEE's death.

4.1.2    Disability.  COMPANY may, at its option, either suspendcompensation payments or terminate this Agreement due to EMPLOYEE's Disabilityif EMPLOYEE is incapable, even with reasonable accommodation by COMPANY, ofperforming the Services because of accident, injury, or physical or mentalillness for sixty (60) consecutive days, or is unable or shall have failed toperform the Services for a total period of ninety (90) within a twelve (12)month period, regardless of whether such days are consecutive.  If COMPANYsuspends compensation payments because of EMPLOYEE's Disability, COMPANY shallresume compensation payments when EMPLOYEE resumes performance of the Services. If COMPANY elects to terminate this Agreement due to EMPLOYEE's Disability, itmust first give EMPLOYEE three (3) days advance written notice. 

4.1.3    Discontinuance Of Business.  IfCOMPANY discontinues operating its business, this Agreement shall terminate asof the last day of the month on which COMPANY ceases its entire operations withthe same effect as if that last date were originally established as terminationdate of this Agreement.

4.1.4 For Cause.  COMPANY may terminate this Agreement without advance noticefor Cause.  For the purpose of this Agreement, "Cause" shall mean any failureto comply in any material respect with this Agreement or any Agreementincorporated herein; personal or professional misconduct by EMPLOYEE(including, but not limited to, criminal activity or gross or willful neglectof duty); breach of EMPLOYEE's fiduciary duty to the COMPANY; conduct whichthreatens public health or safety, or threatens to do immediate or substantialharm to COMPANY's business or reputation; or any other misconduct, deficiency,failure of performance, breach or default, reasonably capable of being remediedor corrected by EMPLOYEE.  To the extent that a breach pursuant to this Section4.1.4 is curable by EMPLOYEE without harm to COMPANY and/or it's reputation,COMPANY shall, instead of immediately terminating EMPLOYEE pursuant to thisAgreement, provide EMPLOYEE with notice of such breach, specifying the actionsrequired to cure such breach, and EMPLOYEE shall have ten (10) days to curesuch breach by performing the actions so specified.  If EMPLOYEE fails to curesuch breach within the ten (10) day period, COMPANY may terminate thisAgreement without further notice.  COMPANY's exercise of its right to terminateunder this section shall be without prejudice to any other remedy to whichCOMPANY may be entitled at law, in equity, or under this Agreement.

 

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4.1.5.   For Convenience Of Party.  This Agreement and employment relationship isterminable by either party, for convenience, with or without cause, at any timeupon thirty (30) days' advance written notice to the other party. 

4.1.6.   Change of Control.  If employment is terminated within twelve (12)months upon any of the following events EMPLOYEE shall be entitled to severancecompensation pursuant to Section 4.2.6 (I) and (ii) and (iii): 

(i)         the sale, lease or otherdisposition of all or substantially all of  Company's assetsto a single purchaser or group of related purchasers;

(ii)        the sale, lease or other disposition,in one transaction or a series of related transactions of the majority ofCOMPANY's outstanding capital stock;or,

(iii)       the merger or consolidation of COMPANYinto or with another corporation in which the stockholders of COMPANY shall ownless than fifty (50%) percent of****the voting securities of thesurviving corporation (all of****which events shall be referred to as aChange in Control).

4.2       EMPLOYEE'sRights Upon Termination

4.2.1    Death.  Upon termination of thisAgreement because of death of EMPLOYEE pursuant to Section 4.1.1 above, COMPANYshall have no further obligation to EMPLOYEE under the Agreement except todistribute to EMPLOYEE's estate or designated beneficiary any unpaidcompensation and reimbursable expenses, less applicable withholdings, owed toEMPLOYEE prior to the date of EMPLOYEE's death.

4.2.2    Disability.   Upon termination ofthis Agreement because of Disability of EMPLOYEE pursuant to Sections 4.1.2above, COMPANY shall have no further obligation to EMPLOYEE under the Agreementexcept to distribute to EMPLOYEE's estate or designated beneficiary any unpaidcompensation and reimbursable expenses, less applicable withholdings, owed toEMPLOYEE prior to the date of EMPLOYEE's termination due to Disability.

 

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4.2.3    Discontinuance Of Business.  Upon termination of this Agreement because ofdiscontinuation of COMPANY's business pursuant to Section 4.1.3, COMPANY shallhave no further obligation to EMPLOYEE under the Agreement except to distributeto EMPLOYEE any unpaid compensation and reimbursable expenses, less applicablewithholdings, owed to EMPLOYEE prior to the date of termination of thisAgreement. 

4.2.4    Termination With Cause.  Upontermination of EMPLOYEE's employment for Cause pursuant to Section 4.1.4,COMPANY  shall have no further obligation to EMPLOYEE under this Agreementexcept to distribute to EMPLOYEE:

i. Any compensation and reimbursable expenses owed to EMPLOYEE by COMPANY throughthe termination date, less applicable withholdings; and

ii. Severance compensation as provided for in COMPANY's Severance Policy, if any,less applicable withholdings.

4.2.5    Termination Without Cause.  Upontermination of EMPLOYEE's employment by COMPANY without cause pursuant toSection 4.1.5, COMPANY shall have no further obligation to EMPLOYEE under thisAgreement except to distribute to EMPLOYEE:

i.          Any compensation andreimbursable expenses owed by COMPANY to EMPLOYEE through the termination date,less applicable withholdings; 

ii.          Severance compensationtotaling three- (3) month's base pay, plus one (1) month base pay for each fullyear of service, determined at EMPLOYEE's then-current rate of base pay.  Inconsideration for this severance compensation, EMPLOYEE, on behalf of himself,his agents, heirs, executors, administrators, and assigns, expressly releasesand forever discharges COMPANY and its successors and assigns, and all of itsrespective agents, directors, officers, partners, employees, representatives,insurers, attorneys, parent companies, subsidiaries, affiliates, and jointventures, and each of them, from any and all claims based upon acts or eventsthat occurred on or before the date on which EMPLOYEE accepts the severancecompensation, including any claim arising under any state or federal statute orcommon law, including, but not limited to, Title VII of the Civil Rights Act of1964, 42 U.S.C. " 2000e, et seq., the Americans with Disabilities Act,42 U.S.C. " 12101, et seq., the Age Discrimination in Employment Act, 29U.S.C. " 623, et. seq., the Worker Adjustment and RetrainingNotification Act, 29 U.S.C. " 2101, et. seq., and the California FairEmployment and Housing Act, Cal. Gov't Code " 12940, et seq. EMPLOYEEacknowledges that he is familiar with section 1542 of the California CivilCode, which reads as follows:

 

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AGENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW ORSUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IFKNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

EMPLOYEEexpressly acknowledges and agrees that he is releasing all known and unknownclaims, and that he is waiving all rights he has or may have under Civil CodeSection 1542 or under any other statute or common law principle of similareffect.  EMPLOYEE acknowledges that the benefits he is receiving in exchangefor this Release are more than the benefits to which he otherwise would havebeen entitled, and that such benefits constitute valid and adequateconsideration for this Release.  EMPLOYEE further acknowledges that he has readthis Release, understands all of its terms, and has consulted with counsel ofhis choosing before signing this Agreement.  

Severancecompensation pursuant to this paragraph shall be in lieu of any other severancebenefit to which EMPLOYEE would otherwise be entitled under COMPANY's policiesin effect on the date of execution of this Agreement.  Severance compensationshall be paid upon termination of EMPLOYEE's employment and in one lump sumpayment at the date of termination, less applicable withholdings.

4.2.6    Termination Due to ChangeOf Control.   If employment isterminated within twelve (12) months upon any of the events delineated inSection 4.1.6 of this Agreement ("Change of Control"), COMPANY shall have nofurther obligation to EMPLOYEE under this Agreement except to distribute toEMPLOYEE:

 

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i.   Any compensation andreimbursable expenses owed by  COMPANYto EMPLOYEE through the termination date, less applicable withholdings;

ii. A pro-rated share of the cash incentive bonus that would be due to EMPLOYEE ifEMPLOYEE had remained employed with COMPANY through the last day of the fiscalyear for which the cash incentive bonus is calculated, less applicablewithholdings; and

iii. Severance compensation totaling twelve (12) months base pay, plus one (1) monthbase pay for each full year of service, determined at EMPLOYEE's then-currentrate of base pay.  In consideration for this severance compensation, EMPLOYEE,on behalf of himself, his agents, heirs, executors, administrators, andassigns, expressly releases and forever discharges COMPANY and its successorsand assigns, and all of its respective agents, directors, officers, partners,employees, representatives, insurers, attorneys, parent companies,subsidiaries, affiliates, and joint ventures, and each of them, from any andall claims based upon acts or events that occurred on or before the date onwhich EMPLOYEE accepts the severance compensation, including any claim arisingunder any state or federal statute or common law, including, but not limitedto, Title VII of the Civil Rights Act of 1964, 42 U.S.C. '' 2000e, etseq.,the Americans with Disabilities Act, 42 U.S.C. '' 12101, etseq.,the Age Discrimination in Employment Act, 29 U.S.C. ''  623, etseq.,the Worker Adjustment and Retraining Notification Act, 29 U.S.C. '' 2101, etseq., and the California Fair Employment and Housing Act, Cal. Gov'tCode '' 12940, etseq.  EMPLOYEE acknowledges that he isfamiliar with section 1542 of the California Civil Code, which reads asfollows:

AGENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW ORSUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IFKNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

EMPLOYEEexpressly acknowledges and agrees that he is releasing all known and unknownclaims, and that he is waiving all rights he has or may have under Civil CodeSection 1542 or under any other statute or common law principle of similareffect.  EMPLOYEE acknowledges that the benefits he is receiving in exchangefor this Release are more than the benefits to which he otherwise would havebeen entitled, and that such benefits constitute valid and adequateconsideration for this Release.  EMPLOYEE further acknowledges that he has readthis Release, understands all of its terms, and has consulted with counsel ofhis choosing before signing this Agreement.  

 

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Severancecompensation pursuant to this paragraph shall be in lieu of any other severancebenefit to which EMPLOYEE would otherwise be entitled under COMPANY's policiesin effect on the date of execution of this Agreement.  Severance compensationshall be paid upon termination of EMPLOYEE's employment and in one lump sumpayment at the date of termination, less applicable withholdings.

5.         REPRESENTATIONSAND WARRANTIES

5.1 Representations of EMPLOYEE.  EMPLOYEE represents and warrants thatEMPLOYEE has all right, power, authority and capacity, and is free to enterinto this Agreement; that by doing so, EMPLOYEE will not violate or interferewith the rights of any other person or entity; and that EMPLOYEE is not subjectto any contract, understanding or obligation that will or might prevent,interfere with or impair the performance of this Agreement by EMPLOYEE. EMPLOYEE shall indemnify and hold COMPANY harmless with respect to any losses,liabilities, demands, claims, fees, expenses, damages and costs (includingattorneys' fees and court costs) resulting from or arising out of any claim oraction based upon EMPLOYEE's entering into this Agreement.

5.2 Representations of COMPANY.  COMPANY represents and warrants that it hasall right, power and authority, without the consent of any other person, toexecute and deliver, and perform its obligations under, this Agreement.  Allcorporate and other actions required to be taken by COMPANY to authorize theexecution, delivery and performance of this Agreement and the consummation ofall transactions contemplated hereby have been duly and properly taken.  ThisAgreement is the lawful, valid and legally binding obligation of COMPANYenforceable in accordance with its terms.

5.3 Materiality of Representations.  The representations, warranties andcovenants set forth in this Agreement shall be deemed to be material and tohave been relied upon by the parties hereto.

6.         COVENANTS

6.1 Nondisclosure and Invention Assignment.  EMPLOYEE acknowledges that, asa result of performing the Services, EMPLOYEE shall have access to confidentialand sensitive information concerning COMPANY's business including, but notlimited to, their business operations, sales and marketing data, andmanufacturing processes.  EMPLOYEE also acknowledges that in the course ofperforming the Services, EMPLOYEE may develop new product ideas or inventionsas a result of COMPANY's information.  Accordingly, to preserve COMPANY'sconfidential information and to assure it the full benefit of that information,EMPLOYEE shall, as a condition of employment with COMPANY, execute COMPANY'sstandard form of Employee Confidentiality Agreement attached hereto as ExhibitA, and execute updated versions of the Employee Confidentiality Agreement as itmay be modified from time to time by COMPANY and as may be required ofsimilarly-situated executives of COMPANY.  The Employee ConfidentialityAgreement is incorporated herein by this reference.  EMPLOYEE's obligationsunder the Employee Confidentiality Agreement continue beyond the termination ofthis Agreement.

 

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6.2 Covenant Not to Compete.  In addition to the provisions of the EmployeeConfidentiality Agreement, EMPLOYEE shall abide by the following covenant notto compete if COMPANY, at its option upon the termination of this Agreement(regardless of the reason for the termination), exercises this Covenant Not toCompete.  COMPANY shall notify EMPLOYEE within ten (10) days of termination of thisAgreement of its intention to exercise this option and make an additionalpayment to EMPLOYEE of six (6) months' base pay determined at EMPLOYEE's lastrate of pay with COMPANY.  EMPLOYEE agrees that for a period of one (1) yearfollowing the termination of this Agreement, he shall not directly orindirectly for EMPLOYEE, or as a member of a partnership, or as an officer,director, stockholder, employee, or representative of any other entity orindividual, engage, directly or indirectly, in any business activity which isthe same or similar to work engaged in by EMPLOYEE on behalf of COMPANY withinthe same geographic territory as EMPLOYEE's work for COMPANY and which isdirectly competitive with the business conducted or to EMPLOYEE's knowledge,contemplated by COMPANY at the time of termination of this Agreement, asdefined in the Employee Confidentiality Agreement incorporated into thisAgreement by reference.  EMPLOYEE may accept employment with an entitycompeting with COMPANY only if the business of that entity is diversified andEMPLOYEE is employed solely with respect to a separately-managed andseparately-operated part of that entity's business that does not compete withCOMPANY.  Prior to accepting such employment, EMPLOYEE and the prospective employerentity shall provide COMPANY with written assurances reasonably satisfactory toCOMPANY that EMPLOYEE will not render services directly or indirectly to anypart of that entity's business that competes with the business of COMPANY.

6.3 Covenant to Deliver Records.  All memoranda, notes, records and otherdocuments made or compiled by EMPLOYEE, or made available to EMPLOYEE duringthe term of this Agreement concerning the business of COMPANY, shall be andremain COMPANY's property and shall be delivered to COMPANY upon thetermination of this Agreement or at any other time on request.  

 

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6.4 Covenant Not To Recruit.  EMPLOYEE shall not, during the term of thisAgreement and for a period of one (1) year following termination of thisAgreement, directly or indirectly, either on EMPLOYEE's own behalf, or onbehalf of any other individual or entity, solicit, interfere with, induce (orattempt to induce) or endeavor to entice away any employee associated withCOMPANY to become affiliated with him or any other individual or entity.  

7.         CERTAIN RIGHTSOF COMPANY

7.1 Announcement.  COMPANY shall have the right to make public announcementsconcerning the execution of this Agreement and certain terms thereof.  

7.2 Use of Name, Likeness and Biography.  COMPANY shall have the right (butnot the obligation) to use, publish and broadcast, and to authorize others todo so, the name, approved likeness and approved biographical material ofEMPLOYEE to advertise, publicize and promote the business of COMPANY and itsaffiliates, but not for the purposes of direct endorsement without EMPLOYEE'sconsent.  An "approved likeness" and "approved biographicalmaterial" shall be, respectively, any photograph or other depiction ofEMPLOYEE, or any biographical information or life story concerning theprofessional career of EMPLOYEE.  

7.3 Right to Insure.  COMPANY shall have the right to secure in its ownname, or otherwise, and at its own expense, life, health, accident or otherinsurance covering EMPLOYEE, and EMPLOYEE shall have no right, title orinterest in and to such insurance.  EMPLOYEE shall assist COMPANY in procuringsuch insurance by submitting to examinations and by signing such applicationsand other instruments as may be required by the insurance carriers to whichapplication is made for any such insurance.

8.         ASSIGNMENT

Neitherparty may assign or otherwise dispose of its rights or obligations under thisAgreement without the prior written consent of the other party except asprovided in this Section.  COMPANY may assign and transfer this Agreement, orits interest in this Agreement, to any affiliate of COMPANY or to any entitythat is a party to a merger, reorganization, or consolidation with COMPANY, orto a subsidiary of COMPANY, or to any entity that acquires substantially all ofthe assets of COMPANY or of any division with respect to which EMPLOYEE isproviding services (providing such assignee assumes COMPANY's obligations underthis Agreement).  EMPLOYEE shall, if requested by COMPANY, perform EMPLOYEE'sduties and Services, as specified in this Agreement, for the benefit of anysubsidiary or other affiliate of COMPANY.  Upon assignment, acquisition,merger, consolidation or reorganization, the term "COMPANY" as used hereinshall be deemed to refer to such assignee or successor entity.  EMPLOYEE shallnot have the right to assign EMPLOYEE's interest in this Agreement, any rightsunder this Agreement, or any duties imposed under this Agreement, nor shallEMPLOYEE or his spouse, heirs, beneficiaries, executors or administrators havethe right to pledge, hypothecate or otherwise encumber EMPLOYEE's right toreceive compensation hereunder without the express written consent ofCOMPANY.   

 

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9.         RESOLUTION OFDISPUTES

Inthe event of any dispute arising out of or in connection with this Agreement orin any way relating to the employment of EMPLOYEE which leads to the filing ofa lawsuit, the parties agree that venue and jurisdiction shall be in SantaBarbara County, California.  The prevailing party in any such litigation shallbe entitled to an award of costs and reasonable attorneys' fees to be paid bythe losing party.

10.       GENERALPROVISIONS

10.1 Notices.  Notice under this Agreement shall be sufficient only ifpersonally delivered by a major commercial paid delivery courier service ormailed by certified or registered mail (return receipt requested and postagepre-paid) to the other party at its address set forth in the signature blockbelow or to such other address as may be designated by either party inwriting.  If not received sooner, notices by mail shall be deemed received five(5) days after deposit in the United States mail. 

10.2 Agreement Controls.  Unless otherwise provided for in this Agreement,the COMPANY's policies, procedures and practices shall govern the relationshipbetween EMPLOYEE and COMPANY.  If, however, any of COMPANY's policies,procedures and/or practices conflict with this Agreement (together with anyamendments hereto), this Agreement (and any amendments hereto) shall control.

10.3 Amendment and Waiver.  Any provision of this Agreement may be amended ormodified and the observance of any provision may be waived (eitherretroactively or prospectively) only by written consent of the parties.  Eitherparty's failure to enforce any provision of this Agreement shall not beconstrued as a waiver of that party's right to enforce such provision.

10.4 Governing Law.  This Agreement and the performance hereunder shall beinterpreted under the substantive laws of the State of California.

10.5 Force Majeure.  Either party shall be temporarily excused fromperforming under this Agreement if any force majeure or other occurrence beyondthe reasonable control of either party makes such performance impossible,except a Disability as defined in this Agreement, provided that the partysubject to the force majeure provides notice of such force majeure at the firstreasonable opportunity.  Under such circumstances, performance under thisAgreement which related to the delay shall be suspended for the duration of thedelay provided the delayed party shall resume performance of its obligationswith due diligence once the delaying event subsides.  In case of any suchsuspension, the parties shall use their best efforts to overcome the cause andeffect of such suspension.

 

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10.6 Remedies.  EMPLOYEE acknowledges that because of the nature of COMPANY'sbusiness, and the fact that the services to be performed by EMPLOYEE pursuantto this Agreement are of a special, unique, unusual, extraordinary, and intellectualcharacter which give them a peculiar value, a breach of this Agreement shallcause substantial injury to COMPANY for which money damages cannot reasonablybe ascertained and for which money damages would be inadequate.  EMPLOYEEtherefore agrees that COMPANY shall have the right to obtain injunctive relief,including the right to have the provisions of this Agreement specificallyenforced by any court having equity jurisdiction, in addition to any otherremedies that COMPANY may have.

10.7 Severability.  If any term, provision, covenant, paragraph, or conditionof this Agreement is held to be invalid, illegal, or unenforceable by any courtof competent jurisdiction, that provision shall be limited or eliminated to theminimum extent necessary so this Agreement shall otherwise remain enforceablein full force and effect.

10.8 Construction.  Headings and captions are only for convenience and shallnot affect the construction or interpretation of this Agreement.  Whenever thecontext requires, words, used in the singular shall be construed to include theplural and vice versa, and pronouns of any gender shall be deemed to includethe masculine, feminine, or neuter gender.

10.9 Counterpart Copies.  This Agreement may be signed in counterpart copies,each of which shall represent an original document, and all of which shallconstitute a single document.

10.10No Adverse Construction.  The rule that a contract is to be construedagainst the party drafting the contract is hereby waived, and shall have noapplicability in construing this Agreement or the terms hereof.  

10.11Entire Agreement.  With respect to its subject matter, namely, theemployment by COMPANY of EMPLOYEE, this Agreement (including the documentsexpressly incorporated therein, such as the Employee ConfidentialityAgreement), contains the entire understanding between the parties, andsupersedes any prior agreements, understandings, and communications between theparties, whether oral, written, implied or otherwise, including, but notlimited to, the original offer of employment letter.

10.12Assistance of Counsel.  EMPLOYEE expressly acknowledges that he wasgiven the right to be represented by counsel of his own choosing in connectionwith the terms of this Agreement.

 

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The parties execute this Agreement as of the datestated above:

| BOBBY PURKAIT                                                                       | MENTOR CORPORATION                                                                                                                                               |
|-------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| /S/BOBBY PURKAIT             | By/s/JOSH LEVINE                         |
|                                                                                | Josh Levine                                                                                                                                                      |
|                                                                                | President and Chief Executive Officer                                                                                                                       |
|                                                                                |                                                                                                                                                        |
| NOTICE ADDRESS:                                                                     | NOTICE ADDRESS:                                                                                                                                                  |
| 2995 E. Valley Road                                                                 | 201 Mentor Drive                                                                                                                                                 |
| Santa Barbara, California 93108                                                     | Santa Barbara, California 93111                                                                                                                                  |

 

 

 

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ATTACHMENT A

**INCENTIVEBONUS**

| **TARGET MILESTONES**                               |
|-----------------------------------------------------|
| Activities                                          | Performance Indicators/Results | Estimated Completion Date | Value |
| Submit IND (if existing  data is acceptable to FDA) | Verification of  shipping of documents | October 31, 2004 | $50,000. |
| Enroll first patient in  Phase 1 Dosing Study       | Letter from enrolling  clinician or CRO | November 30, 2004 | $25,000. |
| Commission facility                                 | Production facility  ready for full validation and in compliance with all government requirements | November 30, 2004 | $40,000. |
| Validation (IQ/OQ)                                  | Completion report from  audit | December 31, 2004 | $30,000. |
| Complete Phase 1 Dosing  Study                      | Letter from CRO  verifying last patient enrolled | March 31, 2005 | $30,000. |
| Initiate Phase 2 Dosing  Study                      | Initiation letter from  CRO | May 31, 2005 | $30,000. |
| **TOTAL:**                                          | **$205,000.** |

 

| **Over-Achievement Bonus** |
|----------------------------|
| Activities                 | Performance Indicators/Results | Required Completion Date | Value |
| Over-achievement           | All milestones fully  completed by May 31, 2005 | May, 31, 2005 | $30,000. |
| **TOTAL:**                 | **$30,000.** |

 

**MAXIMUM BONUS OPPORTUNITY,INCLUDING OVER-ACHIEVEMENT:                                                   $235,000.**

 

/s/JOSH LEVINE                                                                                  7/23/04Josh Levine, President/CEO                                                                    Date

   

/s/BOBBY PURKAIT                                                                            7/27/04Bobby Purkait, Senior VicePresident                                                       Date

 

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