**Exhibit 10.35**

 

OPTION TO ACQUIRESHARES

OF COMMON STOCK OFNATIONAL HEALTH PARTNERS, INC.

 

WHEREAS, National HealthPartners, Inc., an Indiana corporation (the “Company”) wishes to grantthis option to Patricia S. Bathurst (“Holder”) the Holder.

 

NOW, THEREFORE, inconsideration of the foregoing, the agreement set forth below and other goodand valuable consideration, the receipt and sufficiency of which are herebyacknowledged, and intending to be legally bound hereby, the parties herebyagree as follows:

 

1.             Grant of Option.  The Companyhereby grants to the Holder on this 25th day of March, 2008 (the “GrantDate”) an option (this “Option”) to purchase 400,000 shares (“Shares”) of theCompany’s common stock, $.001 par value per share (“Common Stock”), on theterms and subject to the conditions set forth herein.

 

2.             Term of Option. This option shall have a maximum term of ten (10) years measuredfrom the Grant Date (the “Expiration Date”) and shall accordingly expire at5:00 p.m. eastern standard time on the Expiration Date.

 

3.             Right to Exercise. This Option may be exercised in whole or in part in accordance with thefollowing schedule:

 

(i)            100,000 shares on the first anniversary of the datehereof;

 

(ii)           100,000 shares on the second anniversary of the date hereof;

 

(iii)          100,000 shares on the third anniversary of the date hereof; and

 

(iv)          100,000 shareson the fourthanniversary of the date hereof.

 

4.             Exercise Price.  The exercise price per Share (“Exercise Price”)at which this Option may be exercised shall be [                        ]($[        ])per Share.

 

5.             Method of Exercise.

 

(a)           This Option shall be exercised by execution anddelivery of the Notice of Exercise attached hereto as Appendix A (“Noticeof Exercise”) or any other written notice approved for such purpose by theCompany that shall state the election of the Holder to exercise this Option,the number of Shares in respect of which this Option is being exercised, andsuch other representations and agreements as to the holder’s investment intentwith respect to such Shares as may be required by the Company.  The Notice of Exercise shall be accompaniedby payment of the Exercise Price.  ThisOption shall be deemed to be exercised upon receipt by the Company of theNotice of Exercise accompanied by payment of the Exercise Price.

 

(b)           No Shares shall be issued pursuant to the exercise ofthis Option unless such issuance and such exercise shall comply with allrelevant provisions of applicable law, 

 

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including therequirements of any stock exchange upon which the Shares may then belisted.  Assuming such compliance, forincome tax purposes the Shares shall be considered transferred to the Holder onthe date on which this Option is exercised with respect to such Shares.

 

(c)           This Option may not be exercised for a fractionalShare or scrip representing a fractional Share. In lieu of any fractional Share to which the Holder would otherwise beentitled, the Company shall make a cash payment equal to the Exercise Pricemultiplied by such fraction.

 

(d)           In no event may this Option be exercised after theExpiration Date.

 

6.             Methods of Payment. Shares of Common Stock purchased upon the exercise of this Option may bepaid for as follows:

 

### **(a)**           in cash or by check, payable to theorder of the Company;

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### **(b)**           if the shares of Common Stockunderlying the Option are registered under the Securities Act of 1933, asamended (the “Securities Act”), by: (i) delivery by the Holder to theCompany of an irrevocable and unconditional undertaking by a creditworthy brokerto deliver promptly to the Company sufficient funds to pay the exercise priceand any required tax withholding, or (ii) delivery by the Holder to theCompany of a copy of irrevocable and unconditional instructions to acreditworthy broker to deliver promptly to the Company the exercise price andany required tax withholding;

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### **(c)**           if the shares of Common Stockunderlying the Option are registered under the Securities Act, by delivery ofsuch shares of Common Stock owned by the Holder valued at their Fair MarketValue (as defined below), provided: (i) such method of payment is thenpermitted under applicable law, (ii) such shares of Common Stock have beenowned by the Holder at least six months prior to the date of such delivery, and(iii) such shares of Common Stock are not subject to any repurchase,forfeiture, unfulfilled vesting or other similar requirements or restrictions;

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### **(d)**           by reducing the number of shares ofCommon Stock otherwise issuable under this Option to the Holder upon theexercise of this Option by a number of shares of Common Stock having a FairMarket Value equal to such aggregated exercise price; provided, however, thatsuch method of payment is then permitted under applicable law;

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### **(e)**           to the extent permitted byapplicable law and by the board of directors of the Company (the “Board”), inits sole discretion, by: (i) delivery of a promissory note of the Holderto the Company on terms determined by the Board, or (ii) payment of suchother lawful consideration as the Board may determine; or

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### **(f)**            by any combination of the abovepermitted forms of payment.

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For the purpose of thisAgreement, “Fair Market Value” shall mean:

 

(i)            If the Common Stock is admitted to quotation on theNational Association of Securities Dealers Automated Quotation System (“NASDAQ”),the Fair Market 

 

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Value on any givendate shall be the average of the highest bid and lowest ask prices of theCommon Stock as reported for such date or, if no bid and ask prices werereported for such date, for the last day preceding such date for which suchprices were reported;

 

(ii)           If the Common Stock is admitted to trading on a UnitedStates national securities exchange or the NASDAQ National Market System, theFair Market Value on any given date shall be the closing price reportedfor the Common Stock on such exchange or system for such date or, if no saleswere reported for such date, for the last day preceding such date for which asale was reported;

 

(iii)          If the Common Stock istraded in the over-the-counter market and not on NASDAQ, the NASDAQ NationalMarket System or any United States national securities exchange, the FairMarket Value on any given date shall be the average of the mean between thelast bid and ask prices per share as reported by the National Quotation Bureau, Inc.or an equivalent generally accepted reporting service for such date or, or ifnot so reported, the average of the closing bid and ask prices of the CommonStock for such date as furnished to the Company by any member of the NationalAssociation of Securities Dealers, Inc. selected by the Company for thatpurpose; or

 

(iv)          If the Fair Market Value of the Common Stock cannotbe determined on the basis previously set forth in this definition on the datethat the Fair Market Value is to be determined, the Board shall in good faithdetermine the Fair Market Value of the Common Stock on such date.

 

The delivery of certificates representing the shares of Common Stock tobe purchased pursuant to the exercise of this Option will be contingent uponreceipt from the Holder (or a purchaser acting in his stead in accordance withthe provisions of this Option) by the Company of the full purchase price forthe Shares and the fulfillment of any other requirements contained in thisOption or imposed by applicable law.

 

7.             Rights of Stockholder. The Holder shall not have any stockholder rights with respect to anyShares until such Holder shall have exercised this Option, paid the ExercisePrice and become a holder of record of the purchased Shares.

 

8.             Adjustment of Exercise Price and Numberof Shares.  The number and kind of securities purchasableupon exercise of this Option and the Exercise Price shall be subject toadjustment from time to time as follows:

 

(a)           Subdivisions, Combinations and Other Issuances.  If the Company shall at any time prior to theexpiration of this Option subdivide its Common Stock, by split-up or otherwise,or combine its Common Stock, or issue additional shares of its Common Stock orany preferred stock as a dividend with respect to any shares of its CommonStock, then the number of Shares issuable on the exercise of this Option shallforthwith be proportionately increased in the case of a subdivision or stockdividend, or proportionately decreased in the case of a combination.  Appropriate adjustments shall also be made tothe Exercise Price, but the aggregate purchase price payable for the totalnumber of Shares purchasable under this Option (as adjusted) shall remain thesame.  Any adjustment under this Section 8(a) shallbecome 

 

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effective at the close of business on the date the subdivision orcombination becomes effective, or as of the record date of such dividend, or inthe event that no record date is fixed, upon the making of such dividend.

 

(b)           Reclassification,Reorganization and Consolidation.  In the case of any reclassification, capitalreorganization or change in the Common Stock of the Company (other than as aresult of a subdivision, combination or stock dividend provided for in Section 8(a) aboveor as a result of any “Fundamental Transaction” described in Section 8(c) below),then, as a condition of such reclassification, reorganization or change, lawfulprovision shall be made, and duly executed documents evidencing the same fromthe Company or its successor shall be delivered to the Holder, so that theHolder shall have the right at any time prior to the expiration of this Optionto purchase, at a total price equal to that payable upon the exercise of thisOption, the kind and amount of shares of stock and other securities andproperty receivable in connection with such reclassification, reorganization orchange by a holder of the same number of shares of Common Stock as were purchasableby the Holder immediately prior to such reclassification, reorganization orchange.  In any such case, appropriateprovisions shall be made with respect to the rights and interest of the Holderso that the provisions hereof shall thereafter be applicable with respect toany shares of stock or other securities and property deliverable upon exercisehereof, and appropriate adjustments shall be made to the Exercise Price payablehereunder, provided the aggregate purchase price shall remain the same.

 

(c)           Corporate Reorganizations,Consolidations or Mergers.  In theevent of: (i) any reorganization, consolidation or merger of the Companywith or into another entity (other than a merger in which the Company is thesuccessor entity that does not result in any capital reclassification,reorganization or consolidation, or other change, in the Common Stock of theCompany, or a consolidation or merger between the Company and a wholly-ownedsubsidiary of the Company), (ii) any sale, lease, transfer or conveyanceto another entity of all or substantially all of the stock, property and assetsof the Company (other than a transfer to a wholly-owned subsidiary of theCompany), or (iii) a liquidation or dissolution of the Company (the eventsin subsections (i), (ii) and (iii) collectively, a “FundamentalTransaction”), then, as a condition of such FundamentalTransaction, lawful provision shall be made by the Company and the successorentity in connection with such Fundamental Transaction for the assumption ofthis Option by the successor entity or for the substitution of new like-kind optionsby the successor entity as a result of such Fundamental Transaction, withappropriate adjustment as to the number and kind of shares issuable uponexercise of the Option, and, if appropriate, the per share exercise price, soas to enable the Holder after such Fundamental Transaction to purchase the kindand amount of shares of stock and other securities and property (includingcash) receivable upon such consolidation, merger, sale or conveyance by aholder of the number of shares of Common Stock that would have been receivedupon the exercise or exchange of this Option immediately prior to suchFundamental Transaction.

 

(d)           Notice of Adjustment.  When any adjustment is required to be made inthe number or kind of shares purchasable upon exercise of this Option or in theExercise Price, the Company shall promptly notify the Holder of such event andof the number of shares of Common Stock or other securities or propertythereafter purchasable upon exercise of this Option.

 

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(e)           No Impairment.  The Company and the Holder will not, by anyvoluntary action, avoid or seek to avoid the observance or performance of anyof the terms to be observed or performed hereunder by the Company or theHolder, respectively, but will at all times in good faith assist in thecarrying out of all the provisions of this Section 8 and in the taking ofall such action as may be necessary or appropriate in order to protect therights or the Company and the Holder against impairment.

 

# **9.**             Termination of Option.

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## **(a)**           Termination by Death.  If Holder’s employment by, or otherrelationship with, the Company terminates by reason of death, this Option maythereafter be exercised, in whole or in part to the extent exercisable on thedate of such termination of employment, by the legal representative or legateeof the Holder until the earlier of the date that is one year after the date ofsuch termination of employment or the Expiration Date.

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## **(b)**           Termination by Reason of Disabilityor Retirement.

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### **(i)**            Disability.              If Holder’s employment by, or otherrelationship with, the Company terminates by reason of disability as set forthin Section 22(e)(3) of the Internal Revenue Code (“Disability”), thisOption may thereafter be exercised, in whole or in part to the extentexercisable on the date of such termination of employment, until the earlier ofthe date that is one year after the date of such termination of employment orthe Expiration Date.

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### **(ii)**           Retirement.            If Holder retires in good standingfrom active employment or service with the Company in accordance with theretirement policies of the Company then in effect (“Retirement”), this Optionmay thereafter be exercised, in whole or in part to the extent exercisable onthe date of such termination of employment, until the earlier of the date thatis 90 days after the date of such termination of employment or the ExpirationDate

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### **(iii)**          Disability and RetirementDetermination.  The Board shallhave sole authority and discretion to determine whether the Holder’s employmentor services has been terminated by reason of Disability or Retirement.

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## **(c)**           Termination for Cause.  If Holder’s employment by, or otherrelationship with, the Company terminates for “Cause,” this Option shallimmediately terminate and be of no further force and effect; provided, however,that the Board may, in its sole discretion, provide that this Option may beexercised until the earlier of the date that is 90 days after the date of suchtermination of employment or the Expiration Date.  Termination for “Cause” shall have themeaning ascribed to such term in the employment agreement dated May 13,2005 by and between the Company and Holder (the “Employment Agreement”).

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## **(d)**           Termination Without Cause orTermination for Good Reason. If Holder’s employment by, or other relationship with, the Companyterminates for any reason other than death, Disability, Retirement or forCause, or if Holder’s employment by, or other relationship with, the Company isterminated by Holder for “Good Reason,” this Option shall vest in fullimmediately.  Termination for “GoodReason” shall have the meaning ascribed to such term in the EmploymentAgreement.

 

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(e)           Transfer and Leave of Absence. For purposes of this Option, the following events shall not be deemed atermination of employment: (i) a transfer of employment between any of theCompany, a parent, a subsidiary or any other affiliate of the Company, and (ii) anapproved leave of absence for military service or sickness, or for any otherpurpose approved by the Board, if the Holder’s right to re-employment isguaranteed by a statute, by contract or under the policy pursuant to which theleave of absence was granted, or if the Board otherwise so provides in writing.

 

10.           Investment Intent.

 

(a)           The Holder of this Option, by acceptance hereof,acknowledges that this Option and the Shares to be issued upon exercise hereof(collectively, the “Securities”) are being acquired for the Holder’s ownaccount for investment purposes only and not with a view to, or with anypresent intention of, distributing or reselling any of such Securities.  The Holder acknowledges and agrees that theSecurities have not been registered under the Securities Act or under any statesecurities laws, and that the Securities may not be, directly or indirectly,sold, transferred, offered for sale, pledged, hypothecated or otherwisedisposed of without registration under the Securities Act and registration orqualification under applicable state securities laws, except pursuant to anavailable exemption from such registration. The Holder also acknowledges and agrees that neither the SecuritiesExchange Commission (“SEC”) nor any securities commission or other governmentalauthority has: (i) approved the transfer of the Securities or passed uponor endorsed the merits of the transfer of the Securities; or (ii) confirmedthe accuracy of, determined the adequacy of, or reviewed this Option.  The Holder has such knowledge, sophisticationand experience in financial, tax and business matters in general, andinvestments in securities in particular, that it is capable of evaluating themerits and risks of this investment in the Securities, and the Holder has madesuch investigations in connection herewith as it deemed necessary or desirableso as to make an informed investment decision without relying upon the Companyfor legal or tax advice related to this investment.

 

(b)           The certificates evidencing any Sharesissued upon the exercise of this Option shall have endorsed thereon (except tothe extent that the restrictions described in any such legend are no longerapplicable) the following legend, appropriate notations thereof will be made inthe Company’s stock transfer books, andstop transfer instructions reflecting these restrictions on transfer will beplaced with the transfer agent of the Shares.

 

**THE SECURITIES REPRESENTED HEREBY HAVE NOT BEENREGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSEDOF EXCEPT PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT AND REGISTRATION ORQUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO ANAVAILABLE EXEMPTION THEREFROM.  NOTRANSFER OF THE SECURITIES REPRESENTED HEREBY MAY BE MADE IN THE ABSENCEOF SUCH REGISTRATION OR QUALIFICATION UNLESS THERE SHALL HAVE BEEN DELIVERED TOTHE ISSUER A WRITTEN OPINION OF UNITED STATES**

 

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**COUNSEL OF RECOGNIZED STANDING, IN FORM ANDSUBSTANCE SATISFACTORY TO THE ISSUER, TO THE EFFECT THAT SUCH TRANSFER MAY BEMADE WITHOUT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT ANDREGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.**

 

11.           Covenants of the Company. The Company covenants and agrees that the Shares have been dulyauthorized and, when issued and paid for in accordance with the terms of thisAgreement, will be validly issued, fully paid and non-assessable shares ofCommon Stock with no personal liability resulting solely from the ownership ofsuch shares and will be free and clear of all liens, charges, restrictions,claims and encumbrances imposed by or through the Company.

 

12.           Replacement of Option.  On receipt ofevidence reasonably satisfactory to the Company of the loss, theft, destructionor mutilation of this Option and, in the case of loss, theft or destruction, ondelivery of an indemnity agreement reasonably satisfactory in form andsubstance to the Company or, in the case of mutilation, on surrender andcancellation of this Option, the Company at its expense shall execute anddeliver, in lieu of this Option, a new Option of like tenor and amount.

 

### **13.**           Notices.  All notices hereunder shall be sufficientlygiven for all purposes hereunder if in writing and delivered personally, sentby documented overnight delivery service or, to the extent receipt isconfirmed, telecopy, telefax or other electronic transmission service to theappropriate address or number as set forth below:

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If to the Company:

 

National Health Partners, Inc.

120 Gibraltar Road

Suite 107

Horsham, PA 19044

Attention: Chief Financial Officer

 

If to the Holder:

 

To the address specified for Holder in the Company’s records.

 

14.           Amendment and Waiver. This Option may not be amended, modified or supplemented except by aninstrument or instruments in writing signed by the party against whomenforcement of any such amendment, modification or supplement is sought.  The parties hereto entitled to the benefitsof a term or provision may waive compliance with any obligation, covenant,agreement or condition contained herein. Any agreement on the part of a party to any such waiver shall be validonly if set forth in an instrument or instruments in writing signed by theparty against whom enforcement of any such waiver is sought.   No failure or delay on the part of any partyhereto in the exercise of any right hereunder shall impair such right or beconstrued to be a waiver of, or acquiescence in, any breach of anyrepresentation, warranty, covenant oragreement contained herein.

 

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15.           Headings; Definitions. The section headings contained in this Option are inserted forconvenience of reference only and will not affect the meaning or interpretationof this Option.  All references tosections contained herein mean sections of this Option unless otherwisestated.  All capitalized terms definedherein are equally applicable to both the singular and plural forms of suchterms.

 

16.           Successors and Assigns. This Option shall be binding upon and inure to the benefit of theparties hereto and their respective successors and assigns, provided, however,that no party hereto may assign its rights or delegate its obligations underthis Option without the express prior written consent of the other partyhereto.  Nothing in this Option isintended to confer upon any person not a party hereto (and their successors andassigns) any rights, remedies, obligations or liabilities under or by reason ofthis Option.

 

17.           Severability. If any provision of this Option or the application thereof to any personor circumstance is held to be invalid or unenforceable to any extent, theremainder of this Option shall remain in full force and effect and shall bereformed to render this Option valid and enforceable while reflecting to thegreatest extent permissible the intent of the parties.

 

18.           Governing Law. This Agreement shall be governed by and construed in accordance with thelaws of the Commonwealth of Pennsylvania, without regard to the laws that mightotherwise govern under applicable principles of conflicts of laws thereof.

 

19.           Counterparts. This Agreement may be executed and delivered by facsimile in two or morecounterparts, each of which shall be deemed to be an original, but all of whichtogether shall constitute one and the same agreement.

 

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IN WITNESS WHEREOF, the Company and Holder have causedthis Option to be executed as of the date set forth above in Section 1 ofthis Option.

 

 
|       | NATIONAL HEALTH  PARTNERS, INC. |
|------------|---------------------------------|
|       |                            |   |
|       |                            |   |
| ** ** | **By:**                         | **/s/ David M. Daniels** |
|       |                            | David M. Daniels |
|       |                            | Chief Executive  Officer |

 

AGREED AND ACCEPTED:

 

 
| By:    | /s/ Patricia S. Bathurst |   |
|--------|--------------------------|--------|
|   | Patricia S.  Bathurst    |   |

 

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APPENDIX A

 

NOTICE OF EXERCISE

 
| To:    |   | National  Health Partners, Inc. |
|--------|--------|--------------------------------------|
|   |   | 120  Gibraltar Road                  |
|   |   | Suite 107                       |
|   |   | Horsham,  PA 19044                   |
|   |   | Attention: Chief Financial Officer   |

 

(1)           The undersigned hereby elects to purchase                          shares of Common Stock of the Company pursuant to the terms of the attachedOption, and tenders herewith payment of the purchase price for such shares infull in accordance with the terms of the Option in the following manner (pleasecheck one or more of the following choices):

 

o            in cash or by check;

 

o            an irrevocable and unconditional undertaking by acreditworthy broker to deliver sufficient funds to pay the exercise price andany required tax withholding;

 

o            a copy of irrevocable and unconditional instructionsto a creditworthy broker to deliver the exercise price and any required taxwithholding;

 

o            a promissory note;

 

o            a reduction of the number of shares of Common Stockotherwise issuable under the Option by a number of shares of Common Stockhaving a Fair Market Value equal to such aggregated exercise price; or

 

o            the following consideration:                                                                         .

 

(2)            In exercising the Option, the undersigned herebyconfirms and acknowledges that the shares of Common Stock to be issued uponconversion thereof are being acquired solely for the account of the undersignedfor investment purposes only (unless such shares are subject to resale pursuantto an effective registration statement or an exemption from registration underapplicable federal and state securities laws), and that the undersigned willnot offer, sell or otherwise dispose of any such shares of Common Stock exceptunder circumstances that will not result in a violation of the Securities Actor any state securities laws.

 

(3)           Terms not otherwise defined in thisNotice of Exercise shall have the meanings ascribed to such terms in theattached Option.

 

(4)           Please issue a certificate orcertificates representing said shares of Common Stock in the name of theundersigned.

 
|   |   |        |
|--------|--------|-------------|
|   |   |        |
|   |   |        |
| (Date) |   | (Signature) |

 

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