**Exhibit 10.34**

 

OPTION TO ACQUIRESHARES

OF COMMON STOCK OFNATIONAL HEALTH PARTNERS, INC.

 

WHEREAS, National HealthPartners, Inc., an Indiana corporation (the “Company”) wishes to grantthis option to Alex Soufflas (“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 Company hereby grants to the Holder onthis 25th day of March, 2008 (the “Grant Date”) an option (this “Option”)to purchase 400,000 shares (“Shares”) of the Company’s common stock, $.001 parvalue per share (“Common Stock”), on the terms and subject to the conditionsset forth herein.

 

2.            Term of Option.  This option shall have a maximum term of ten (10) yearsmeasured from the Grant Date (the “Expiration Date”) and shall accordinglyexpire at 5:00 p.m. eastern standard time on the Expiration Date.

 

3.            Right to Exercise.  This Option may be exercised in whole or inpart in accordance with the following schedule:

 

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

 

(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 shares on the fourth anniversary of the date hereof.

 

4.            ExercisePrice.  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 beexercised by execution and delivery of the Notice of Exercise attached heretoas Appendix A (“Notice of Exercise”) or any other written noticeapproved for such purpose by the Company that shall state the election of theHolder to exercise this Option, the number of Shares in respect of which thisOption is being exercised, and such other representations and agreements as tothe holder’s investment intent with respect to such Shares as may be requiredby the Company.  The Notice of Exerciseshall be accompanied by payment of the Exercise Price.  This Option shall be deemed to be exercisedupon receipt by the Company of the Notice of Exercise accompanied by payment ofthe Exercise Price.

 

(b)          No Shares shall beissued pursuant to the exercise of this Option unless such issuance and suchexercise shall comply with all relevant provisions of applicable law, 

 

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including the requirements of any stock exchange uponwhich the Shares may then be listed. Assuming such compliance, for income tax purposes the Shares shall beconsidered transferred to the Holder on the date on which this Option isexercised with respect to such Shares.

 

(c)          This Option may not beexercised for a fractional Share or scrip representing a fractional Share.  In lieu of any fractional Share to which theHolder would otherwise be entitled, the Company shall make a cash payment equalto the Exercise Price multiplied by such fraction.

 

(d)          In no event may thisOption be exercised after the Expiration Date.

 

6.            Methods of Payment.  Shares of Common Stock purchased upon theexercise of this Option may be paid for as follows:

 

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

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### **(b)**          if the shares of Common Stock underlying the Option are registeredunder the Securities Act of 1933, as amended (the “Securities Act”), by: (i) deliveryby the Holder to the Company of an irrevocable and unconditional undertaking bya creditworthy broker to deliver promptly to the Company sufficient funds topay the exercise price and any required tax withholding, or (ii) deliveryby the Holder to the Company of a copy of irrevocable and unconditionalinstructions to a creditworthy broker to deliver promptly to the Company theexercise price and any required tax withholding;

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### **(c)**          if the shares of Common Stock underlying the Option are registeredunder the Securities Act, by delivery of such shares of Common Stock owned bythe Holder valued at their Fair Market Value (as defined below), provided: (i) suchmethod of payment is then permitted under applicable law, (ii) such sharesof Common Stock have been owned by the Holder at least six months prior to thedate of such delivery, and (iii) such shares of Common Stock are notsubject to any repurchase, forfeiture, unfulfilled vesting or other similarrequirements or restrictions;

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### **(d)**          by reducing the number of shares of Common Stock otherwise issuableunder this Option to the Holder upon the exercise of this Option by a number ofshares of Common Stock having a Fair Market Value equal to such aggregatedexercise price; provided, however, that such method of payment is thenpermitted under applicable law;

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### **(e)**          to the extent permitted by applicable law and by the board of directorsof the Company (the “Board”), in its sole discretion, by: (i) delivery ofa promissory note of the Holder to the Company on terms determined by theBoard, or (ii) payment of such other lawful consideration as the Board maydetermine; or

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

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

 

(i)            If the Common Stock isadmitted to quotation on the National Association of Securities DealersAutomated Quotation System (“NASDAQ”), the Fair Market 

 

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Value on any given dateshall be the average of the highest bid and lowest ask prices of the CommonStock as reported for such date or, if no bid and ask prices were reported forsuch date, for the last day preceding such date for which such prices werereported;

 

(ii)           If the Common Stock isadmitted to trading on a United States national securities exchange or theNASDAQ National Market System, the Fair Market Value on any given date shall bethe closing price reported for theCommon Stock on such exchange or system for such date or, if no sales werereported for such date, for the last day preceding such date for which a salewas reported;

 

(iii)          If the Common Stock is traded in theover-the-counter market and not on NASDAQ, the NASDAQ National Market System orany United States national securities exchange, the Fair Market Value on anygiven date shall be the average of the mean between the last bid and ask pricesper share as reported by the National Quotation Bureau, Inc. or anequivalent generally accepted reporting service for such date or, or if not soreported, the average of the closing bid and ask prices of the Common Stock forsuch date as furnished to the Company by any member of the National Associationof Securities Dealers, Inc. selected by the Company for that purpose; or

 

(iv)         If the Fair Market Value of the Common Stock cannot be determined onthe basis previously set forth in this definition on the date that the FairMarket Value is to be determined, the Board shall in good faith determine theFair 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 ofStockholder.  The Holder shall nothave any stockholder rights with respect to any Shares until such Holder shallhave exercised this Option, paid the Exercise Price and become a holder ofrecord of the purchased Shares.

 

8.            Adjustment ofExercise Price and Number of Shares. The number and kind of securities purchasable upon exercise of thisOption and the Exercise Price shall be subject to adjustment from time to timeas follows:

 

(a)          Subdivisions, Combinations and OtherIssuances.  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 andConsolidation.  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 orMergers.  In the event of: (i) any reorganization,consolidation or merger of the Company with or into another entity (other thana merger in which the Company is the successor entity that does not result inany 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) anysale, lease, transfer or conveyance to another entity of all or substantiallyall of the stock, property and assets of the Company (other than a transfer toa wholly-owned subsidiary of the Company), or (iii) a liquidation ordissolution of the Company (the events in subsections (i), (ii) and (iii) collectively,a “Fundamental Transaction”), then,as a condition of such Fundamental Transaction, lawful provision shall be madeby the Company and the successor entity 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.  Whenany adjustment is required to be made in the number or kind of sharespurchasable upon exercise of this Option or in the Exercise Price, the Companyshall promptly notify the Holder of such event and of the number of shares ofCommon Stock or other securities or property thereafter purchasable uponexercise of this Option.

 

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(e)          No Impairment.  TheCompany and the Holder will not, by any voluntary action, avoid or seek toavoid the observance or performance of any of the terms to be observed orperformed hereunder by the Company or the Holder, respectively, but will at alltimes in good faith assist in the carrying out of all the provisions of this Section 8and in the taking of all such action as may be necessary or appropriate inorder to protect the rights or the Company and the Holder against impairment.

 

# **9.**            Terminationof Option.

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## **(a)**          Terminationby 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 Disability or Retirement.

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### **(i)**            Disability.  If Holder’semployment by, or other relationship with, the Company terminates by reason ofdisability as set forth in Section 22(e)(3) of the Internal RevenueCode (“Disability”), this Option may thereafter be exercised, in whole or inpart to the extent exercisable on the date of such termination of employment, untilthe earlier of the date that is one year after the date of such termination ofemployment or the Expiration Date.

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### **(ii)**           Retirement.  If Holderretires in good standing from active employment or service with the Company inaccordance with the retirement policies of the Company then in effect (“Retirement”),this Option 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 90 days after the date of such termination of employment orthe Expiration Date

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### **(iii)**          Disabilityand Retirement Determination.  The Board shall have sole authority anddiscretion to determine whether the Holder’s employment or services has beenterminated by reason of Disability or Retirement.

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## **(c)**          Terminationfor 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 March 29,2006 by and between the Company and Holder (the “Employment Agreement”).

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## **(d)**          TerminationWithout Cause or Termination for Good Reason.  If Holder’s employment by, orother relationship with, the Company terminates for any reason other thandeath, Disability, Retirement or for Cause, or if Holder’s employment by, orother relationship with, the Company is terminated by Holder for “Good Reason,”this Option shall vest in full immediately. Termination for “Good Reason” shall have the meaning ascribed to suchterm in the Employment Agreement.

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(e)          Transfer and Leave ofAbsence.  For purposes of thisOption, the following events shall not be deemed a termination of employment: (i) atransfer of employment between any of the Company, a parent, a subsidiary orany other affiliate of the Company, and (ii) an approved leave of absencefor military service or sickness, or for any other purpose approved by theBoard, if the Holder’s right to re-employment is guaranteed by a statute, bycontract or under the policy pursuant to which the leave of absence wasgranted, or if the Board otherwise so provides in writing.

 

10.          Investment Intent.

 

(a)          The Holder of thisOption, by acceptance hereof, acknowledges that this Option and the Shares tobe issued upon exercise hereof (collectively, the “Securities”) are beingacquired for the Holder’s own account for investment purposes only and not witha view to, or with any present intention of, distributing or reselling any ofsuch Securities.  The Holder acknowledgesand agrees that the Securities have not been registered under the SecuritiesAct or under any state securities laws, and that the Securities may not be,directly or indirectly, sold, transferred, offered for sale, pledged,hypothecated or otherwise disposed of without registration under the SecuritiesAct and registration or qualification under applicable state securities laws,except pursuant to an available exemption from such registration.  The Holder also acknowledges and agrees thatneither the Securities Exchange Commission (“SEC”) nor any securitiescommission or other governmental authority has: (i) approved the transferof the Securities or passed upon or endorsed the merits of the transfer of theSecurities; or (ii) confirmed the accuracy of, determined the adequacy of,or reviewed this Option.  The Holder hassuch knowledge, sophistication and experience in financial, tax and businessmatters in general, and investments in securities in particular, that it iscapable of evaluating the merits and risks of this investment in the Securities,and the Holder has made such investigations in connection herewith as it deemednecessary or desirable so as to make an informed investment decision withoutrelying upon the Company for legal or tax advice related to this investment.

 

(b)          The certificatesevidencing any Shares issued upon the exercise of this Option shall haveendorsed thereon (except to the extent that the restrictions described in anysuch legend are no longer applicable) the following legend, appropriatenotations thereof will be made in the Company’s stock transfer books, and stop transfer instructions reflecting theserestrictions on transfer will be placed 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 theCompany.  The Company covenants andagrees that the Shares have been duly authorized and, when issued and paid forin accordance with the terms of this Agreement, will be validly issued, fullypaid and non-assessable shares of Common Stock with no personal liabilityresulting solely from the ownership of such shares and will be free and clearof all liens, charges, restrictions, claims and encumbrances imposed by orthrough the Company.

 

12.          Replacement of Option.  On receipt of evidence reasonablysatisfactory to the Company of the loss, theft, destruction or mutilation ofthis Option and, in the case of loss, theft or destruction, on delivery of anindemnity agreement reasonably satisfactory in form and substance to theCompany or, in the case of mutilation, on surrender and cancellation of thisOption, the Company at its expense shall execute and deliver, in lieu of thisOption, 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:

 

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

 

14.          Amendment and Waiver.  This Option may not be amended, modified orsupplemented except by an instrument or instruments in writing signed by theparty against whom enforcement of any such amendment, modification orsupplement is sought.  The parties heretoentitled to the benefits of a term or provision may waive compliance with anyobligation, covenant, agreement or condition contained herein.  Any agreement on the part of a party to anysuch waiver shall be valid only if set forth in an instrument or instruments inwriting signed by the party against whom enforcement of any such waiver issought.   No failure or delay on the partof any party hereto in the exercise of any right hereunder shall impair suchright or be construed 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 Optionare inserted for convenience of reference only and will not affect the meaningor interpretation of this Option.  Allreferences to sections contained herein mean sections of this Option unlessotherwise stated.  All capitalized termsdefined herein are equally applicable to both the singular and plural forms ofsuch terms.

 

16.          Successors andAssigns.  This Option shall bebinding upon and inure to the benefit of the parties hereto and theirrespective successors and assigns, provided, however, that no party hereto mayassign its rights or delegate its obligations under this Option without theexpress prior written consent of the other party hereto.  Nothing in this Option is intended to conferupon any person not a party hereto (and their successors and assigns) anyrights, remedies, obligations or liabilities under or by reason of this Option.

 

17.          Severability.  If any provision of this Option or theapplication thereof to any person or circumstance is held to be invalid or unenforceableto any extent, the remainder of this Option shall remain in full force andeffect and shall be reformed to render this Option valid and enforceable whilereflecting to the greatest extent permissible the intent of the parties.

 

18.          Governing Law.  This Agreement shall be governed by andconstrued in accordance with the laws of the Commonwealth of Pennsylvania,without regard to the laws that might otherwise govern under applicableprinciples of conflicts of laws thereof.

 

19.          Counterparts.  This Agreement may be executed and deliveredby facsimile in two or more counterparts, each of which shall be deemed to bean original, but all of which together shall constitute one and the sameagreement.

 

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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/ Alex Soufflas               |   |   |
|                  | Alex Soufflas                   |   |   |

 

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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)           Theundersigned 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                                  incash or by check;

 

o                                  anirrevocable and unconditional undertaking by a creditworthy broker to deliversufficient funds to pay the exercise price and any required tax withholding;

 

o                                  acopy of irrevocable and unconditional instructions to a creditworthy broker todeliver the exercise price and any required tax withholding;

 

o                                  apromissory note;

 

o                                  areduction of the number of shares of Common Stock otherwise issuable under theOption by a number of shares of Common Stock having a Fair Market Value equalto such aggregated exercise price; or

 

o                                  thefollowing consideration:                                                                         .

 

(2)           In exercising theOption, the undersigned hereby confirms and acknowledges that the shares ofCommon Stock to be issued upon conversion thereof are being acquired solely forthe account of the undersigned for investment purposes only (unless such sharesare subject to resale pursuant to an effective registration statement or anexemption from registration under applicable federal and state securities laws),and that the undersigned will not offer, sell or otherwise dispose of any suchshares of Common Stock except under circumstances that will not result in aviolation of the Securities Act or any state securities laws.

 

(3)           Terms not otherwisedefined in this Notice of Exercise shall have the meanings ascribed to suchterms in the attached Option.

 

(4)           Please issue acertificate or certificates representing said shares of Common Stock in thename of the undersigned.

 
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| (Date) |   | (Signature) |

 

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