Document:

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                                                                   Exhibit 10.27

EXECUTIVE EMPLOYMENT AGREEMENT

        This EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made as of
December 21, 2001 between Vicente Anido, Jr., Ph.D. (the "Executive"), and ISTA
Pharmaceuticals, Inc., a Delaware corporation (the "Company").

        WHEREAS, the Company desires to employ Executive and Executive desires
to be employed by the Company, upon the terms and conditions hereinafter set
forth;

        NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained herein, and intending to be legally bound, the parties agree as
follows:

        1. EMPLOYMENT AND TERM. The Company hereby employs Executive, and
Executive hereby accepts employment with the Company at its offices in Irvine,
California, commencing on December 17, 2001 (the "Effective Date").

        2. POSITION AND DUTIES.

           (a) PRESIDENT AND CEO. Executive will hold the office of President
and Chief Executive Officer of the Company, reporting to the Board of Directors
of the Company (the "Board"), serving the Company faithfully and to the best of
his ability, whereby he shall devote his full work time, attention, skill and
efforts to the performance of his duties. Such duties shall be carried out
principally at the Company's headquarters in Irvine, California, and such other
locations upon which Executive and the Board may agree. Executive shall have
such duties and responsibilities as are normal for such position, and will work
in close cooperation with the Board who may from time to time set reasonable
specific performance objectives in conjunction with Executive.

           (b) DIRECTOR. Executive will be elected to the Company's Board no
later than the first Board meeting or action by written consent following the
Effective Date.

        3. COMPENSATION. The Company shall pay Executive, and Executive hereby
agrees to accept, as compensation for all services to be rendered to the Company
and for Executive's agreements concerning intellectual property covenants
described by Sections within this Agreement hereof and attachments to this
Agreement, the compensation set forth in this Section 3.

           (a) SALARY. Beginning on the Effective Date, the Company shall pay
Executive a base salary at the annual rate of Three Hundred Seventy Thousand
Dollars ($370,000) (as the same may hereafter be adjusted by the Compensation
Committee, the "Salary"). The Salary shall be inclusive of all applicable
income, social security and other taxes and charges that are required by law to
be withheld by the Company and shall be paid and withheld in accordance with the
Company's normal payroll practices for its executive employees.

           (b) STOCK OPTIONS.

                (i) Executive will be granted a stock option to purchase the
greater of (i) 1,000,000 shares of the Company's Common Stock or (ii) 5% of the
current outstanding shares on a

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"fully diluted" basis (the "Shares"). The exercise price for the Shares shall be
$2 per share or the fair market value of the Company's Common Stock at the time
of grant, which ever is less (the "Option"). The Option will have an early
exercise feature. Subject to the accelerated vesting provisions set forth
herein, the Option will vest as to 25% of the shares subject to the Option on
the one year anniversary of the Effective Date, and as to 1/48th of the shares
subject to the Option monthly thereafter, so that the Option will be fully
vested and exercisable on the fourth anniversary of the Effective Date.

                (ii) For purposes of this Agreement, "fully diluted" shall mean
the aggregate number of shares of Common Stock outstanding on an as converted
basis plus the aggregate number of shares of Common Stock that could be obtained
through the exercise or conversion of rights, options, warrants and convertible
securities.

           (c) REIMBURSEMENT OF EXPENSES. During the course of employment,
Executive shall be reimbursed for items of travel, food and lodging and
miscellaneous expenses reasonably incurred by him on behalf of the Company,
provided that such expenses are incurred, documented and submitted to the
Company, all in accordance with the reimbursement policies of the Company in
effect at the time the expenses were incurred.

           (d) BONUS. Executive shall be eligible to receive an annual
performance bonus of up to 50% of his Salary upon the completion of performance
goals established by the Board.

           (e) COMPANY BENEFITS. While employed by the Company, Executive shall
be entitled to receive the benefits of employment described in the Company's
Employee Handbook, when and as Executive becomes eligible for them. The
Company's Employee Handbook may be revised from time to time at the sole
discretion of the Company. Executive will be entitled to medical insurance for
Executive, Executive's spouse and minor children and four weeks paid vacation
per year. Additionally, the Company will pay for the costs of a long-term
disability insurance policy for the benefit of the executive with coverage and
premiums to be approved by the Board.

        4. PROPRIETARY INFORMATION AND INVENTIONS AND AGREEMENT. Executive
agrees to enter into and be bound by the provisions of the Company's Proprietary
Information and Inventions Agreement (the "Proprietary Agreement"), attached
hereto as Exhibit A. Notwithstanding any termination of this Agreement or
Executive's employment by the Company, Executive agrees to continue to be bound
by the Proprietary Agreement. Executive agrees to comply with any and all
current and future Company policies governing employees generally, and to
execute and be bound by any future agreements required of executives, as a
condition of employment, by the Board.

        5. OUTSIDE ACTIVITIES.

           (a) OTHER EMPLOYMENT. Executive currently serves as the Chairman of
the Board of Directors of AdaptiveInfo and MDEdge, Inc., and as a director of
Ferex and Avera Pharma. Except with the prior written consent of the Board or as
set forth above, Executive will not serve on any other company's Board of
Directors or undertake or engage in any other employment, occupation or business
enterprise, other than ones in which Executive is a passive investor. Executive
may engage

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in civic and not-for-profit activities so long as such activities do not
materially interfere with the performance of his duties hereunder.

                (b) PROFESSIONAL ACTIVITIES. Executive from time to time may
engage in certain professional activities including seminars, speaking
engagements, and authoring of publications so long as such activities do not
materially interfere with the performance of his duties hereunder. Whenever
possible, Executive's expenses should be reimbursed by the other party.
Executive may retain all honoraria or payments received from such activities
provided that the Company is not required to reimburse Executive for any
expenses incurred by such activities.

                (c) CONFLICT OF INTEREST. While employed by the Company,
Executive shall not engage in any activity in competition with or against the
best interest of the Company and agrees to inform the Company of any potential
conflict of interest as required in the Proprietary Agreement. This shall
include assuming or maintaining any outside business relationship that might
inhibit or prejudice the exercise of sound ethical judgment or that might
otherwise adversely affect the Company such as: (i) employment or providing
services with another firm while in the employment of the Company if the firm is
a competitor, a supplier, or one that will likely become a competitor or
supplier in the future, (ii) holding a substantial financial interest in a firm
to which the Company makes sales, or that provides services, materials or
equipment to the Company, and (iii) the acceptance of gifts or favors from an
outside organization that are substantial enough to cause undue influence in
conducting business for the Company.

        6. TERMINATION. Upon termination of Executive's employment hereunder,
Executive shall be entitled to such compensation and benefits as described in
this Section.

                (a) INVOLUNTARY TERMINATION PRIOR TO A CHANGE OF CONTROL. If
Executive's employment with the Company terminates, prior to a "Change of
Control" (as defined herein), other than voluntarily or for "Cause" (as defined
herein), and Executive signs and does not revoke a standard release of claims
with the Company, then, subject to Section 9, Executive shall be entitled to
receive continuing payments of severance pay (less applicable withholding taxes)
at a rate equal to his Salary, as then in effect, for a period of nine (9)
months from the date of such termination, to be paid periodically in accordance
with the Company's normal payroll policies.

                (b) VOLUNTARY TERMINATION; TERMINATION FOR CAUSE. If Executive's
employment with the Company terminates voluntarily by Executive or for Cause by
the Company, then (i) all vesting of the Option will terminate immediately and
all payments of compensation by the Company to Executive hereunder will
terminate immediately (except as to amounts already earned), and (ii) Executive
will only be eligible for severance benefits in accordance with the Company's
established policies as then in effect.

                (c) TERMINATION FOR DEATH. This Agreement shall terminate
automatically upon Executive's death. If Executive's employment hereunder is
terminated on account of his death, the Company shall pay to Executive's estate,
as its sole right and remedy under this Agreement, all accrued and unpaid base
salary and expense reimbursements through the date of Executive's death and
Executive's estate shall also be entitled to receive any then accrued Company
stock pursuant to

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his written agreement relating thereto, insurance and other rights and benefits
to the extent, if at all, Executive was entitled to them under their respective
terms.

           (d) DISABILITY. In the event that Executive, because of accident,
disability or physical or mental illness, is incapable of performing his usual
duties hereunder, the Company shall have the right to terminate Executive's
employment hereunder upon thirty (30) days prior written notice to Executive.
For purposes of this Section (d), Executive shall be deemed to have become
incapable of performing his usual duties hereunder if the Board shall reasonably
determine that Executive is, by reason of any medically-determinable physical or
mental impairment expected to result in death or to be of a duration of not less
than six (6) months, unable to perform consistently and materially his usual
duties for the Company with or without reasonable accommodation. If Executive's
employment hereunder is terminated pursuant to this section, the Company shall
pay to Executive, as his sole and exclusive right and remedy under this
Agreement all accrued and unpaid base salary and reimbursements through the date
of Executive's termination and Executive shall also be entitled to receive any
then accrued stock pursuant to his stock option agreement, insurance and other
rights and benefits to the extent, if at all, Executive was entitled to them
under their respective terms.

        7. CHANGE OF CONTROL BENEFITS.

           (a) VESTING ACCELERATION AFTER CHANGE OF CONTROL. If Executive's
employment with the Company terminates other than voluntarily or for Cause
following a Change of Control, all of the then unvested shares subject to the
Option shall immediately vest.

           (b) SEVERANCE AFTER A CHANGE OF CONTROL. If Executive's employment
with the Company terminates, after a Change of Control, other than voluntarily
or for Cause, and Executive signs and does not revoke a standard release of
claims with the Company, then, subject to Section 9, Executive shall be entitled
to receive continuing payments of severance pay (less applicable withholding
taxes) at a rate equal to his Salary, as then in effect, for a period of
twenty-four months from the date of such termination, to be paid periodically in
accordance with the Company's normal payroll policies.

        8. DEFINITIONS.

           (a) CAUSE. For purposes of this Agreement, "cause" shall mean: (i)
any breach by Executive concerning confidential or proprietary information or
conflict of interest as detailed by Sections within this Agreement or in the
Proprietary Agreement, (ii) gross breach of fiduciary duty, (iii) material
dishonesty, misrepresentation or theft, (iv) conviction of a crime involving
moral turpitude, or (v) breach of any other material obligations under this
Agreement, which breach has not been cured within thirty (30) days of written
notice by the Company to Executive.

           (b) CHANGE OF CONTROL. For purposes of this Agreement, "Change of
Control" shall mean: (i) the date of the consummation of a merger or
consolidation of the Company with any other corporation that has been approved
by the stockholders of the Company, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than fifty
percent (50%) of the total voting power

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represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve a plan of complete liquidation of the Company, or (ii)
the date of the consummation of the sale or disposition by the Company of all or
substantially all the Company's assets.

        9. CONDITIONAL NATURE OF SEVERANCE PAYMENTS.

           (a) NONCOMPETE. Executive acknowledges that the nature of the
Company's business is such that if Executive were to become employed by, or
substantially involved in, the business of a competitor of the Company during
the nine months following the termination of Executive's employment with the
Company, it would be very difficult for Executive not to rely on or use the
Company's trade secrets and confidential information. Thus, to avoid the
inevitable disclosure of the Company's trade secrets and confidential
information, Executive agrees and acknowledges that Executive's right to receive
the severance payments set forth in Sections 6 and 7 (to the extent Executive is
otherwise entitled to such payments) shall be conditioned upon Executive not
directly or indirectly engaging in (whether as an employee, consultant, agent,
proprietor, principal, partner, stockholder, corporate officer, director or
otherwise), nor having any ownership interest in or participating in the
financing, operation, management or control of, any person, firm, corporation or
business that competes with Company or is a customer of the Company. Upon any
breach of this section, all severance payments pursuant to this Agreement shall
immediately cease.

           (b) NON-SOLICITATION. Until the date twelve months after the
termination of Executive's employment with the Company for any reason, Executive
agrees not to either directly or indirectly soliciting, inducing, attempting to
hire, recruiting, encouraging, taking away, hiring any employee of the Company
or causing an employee to leave his or her employment either for Executive or
for any other entity or person.

        10. MISCELLANEOUS.

           (a) SURVIVAL OF PROVISIONS. The provisions of this Agreement set
forth by Sections within this Agreement hereof shall survive the termination of
Executive's employment hereunder.

           (b) SUCCESSOR AND ASSIGNS. This Agreement shall insure to the benefit
of and be binding upon the Company and Executive and their respective
successors, executors, administrators, heirs, and or assigns; provided that
neither party shall make any assignments of the Agreement or any interest
herein, by operation of law or otherwise, without the prior written consent of
the other party, except that the Company may assign its rights and obligations
under this Agreement to a successor or affiliate of the Company without such
consent.

           (c) NOTICES. Any notice hereunder by either party shall be given by
personal delivery or by sending such notice by certified mail, or telecopied to
the other party at its address set forth below or at such other address
designated by notice in the manner provided in this section. Such notice shall
be deemed to have been received upon the date of actual delivery if personally
delivered or, in the case of mailing in two business days after deposit with the
US mail, or in the case of facsimile transmission, during the business day when
confirmed by the facsimile machine report or the next business day if received
after normal business hours by the recipient.

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                (i)  If to the Company, to:

                     Chairman of the Board
                     ISTA Pharmaceuticals
                     15279 Alton Pkwy., Bldg. 100
                     Irvine, CA 92618

                (ii) If to Executive, to:

                     Vicente Anido, Jr., Ph.D.
                     1621 Bayside Drive
                     Corona del Mar, CA 92625

           (d) ENTIRE AGREEMENT; ATTACHMENTS. This Agreement and the Proprietary
Agreement contain the entire agreement and understanding of the parties hereto
relating to the subject matter hereof and supersedes all prior and
contemporaneous discussions, agreements and understandings of every nature
between the parties hereto relating to the employment of Executive with the
Company. This Agreement may not be changed or modified, except by an agreement
in writing signed by each of the parties hereto.

           (e) WAIVER. The waiver of the breach of any term or provision of this
Agreement shall not operate as or be construed to be a waiver of any other or
subsequent breach of this Agreement.

           (f) GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with laws of California.

           (g) SEVERABILITY. Whenever possible, each provision of the Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal, or
unenforceable, in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as closely as possible to
conform to the intentions of the parties.

           (h) SECTION HEADINGS. The section headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.

        IN WITNESS WHEREOF, parties have caused this Executive Employment
Agreement to be executed the day and year first written above.

                                          ISTA PHARMACEUTICALS, INC.

                                          ------------------------------------
                                          Robert G. McNeil, Ph.D.
                                          Chairman of the Board

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                                          EXECUTIVE

                                          ------------------------------------
                                          Vicente Anido, Jr., Ph.D.

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                                                                  Exhibit 10.28

                           ISTA PHARMACEUTICALS, INC.

                       STAND-ALONE STOCK OPTION AGREEMENT -- EARLY EXERCISE

I.      NOTICE OF STOCK OPTION GRANT

        VICENTE ANIDO, JR., PH.D.

        [ADDRESS]

        You have been granted a Nonstatutory Stock Option to purchase Common
Stock of the Company, subject to the terms and conditions of this Agreement, as
follows:

        Date of Grant                       December 21, 2001

        Vesting Commencement Date           December 17, 2001

        Exercise Price per Share            $2.00

        Total Number of Shares Granted      1,004,609

        Total Exercise Price                $2,009,218

        Term/Expiration Date:                December 21, 2011

        Vesting Schedule:

        This Option shall vest and may be exercised, in whole or in part, in
accordance with the following schedule:

        25% of the Shares subject to the Option shall vest one year after the
Vesting Commencement Date, and 1/48th of the Shares subject to the Option shall
vest each month thereafter, so that the Option shall be fully vested four (4)
years from the Vesting Commencement Date, subject to the Optionee continuing to
be a Service Provider on such dates.

        Notwithstanding the foregoing, if Optionee's employment with the Company
is terminated other than voluntarily or for "Cause" (as defined below) following
a "Change of Control" (as defined below), then 100% of the Shares subject to
this Option shall immediately vest and become exercisable.

        For purposes of this Agreement, "Cause" shall mean: (i) any breach by
Optionee concerning confidential or proprietary information or conflict of
interest as detailed by Sections within Optionee's employment agreement with the
Company dated December 21, 2001 (the "Employment Agreement"), which is hereby
incorporated by reference, or in the Proprietary Information and Inventions
Agreement executed by Optionee in connection with the Employment Agreement,

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(ii) Optionee's gross breach of fiduciary duty, (iii) Optionee's material
dishonesty, misrepresentation or theft, (iv) Optionee's conviction of a crime
involving moral turpitude, or (v) Optionee's breach of any other material
obligations under the Employment Agreement, which breach has not cured within
thirty (30) days of written notice by the Company to Optionee.

        For purposes of this Agreement, "Change of Control" shall mean: (i) the
date of the consummation of a merger or consolidation of the Company with any
other corporation that has been approved by the stockholders of the Company,
other than a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of the Company approve a plan of complete liquidation of the Company, or (ii)
the date of the consummation of the sale or disposition by the Company of all or
substantially all the Company's assets.

        Termination Period

        This Option may be exercised for three (3) months after Optionee ceases
to be a Service Provider in accordance with Section 8 of this Agreement. Upon
the death or Disability of the Optionee, this Option may be exercised for one
year after the Optionee ceases to be a Service Provider in accordance with
Sections 9 and 10 of this Agreement. In no event shall this Option be exercised
later than the Term/Expiration Date provided above.

II.     AGREEMENT

        1. Definitions. As used herein, the following definitions shall apply:

           (a) "Agreement" means this stock option agreement between the Company
and Optionee evidencing the terms and conditions of this Option.

           (b) "Applicable Laws" means the requirements relating to the
administration of stock options under U.S. state corporate laws, U.S. federal
and state securities laws, the Code, any stock exchange or quotation system on
which the Common Stock is listed or quoted and the applicable laws of any
foreign country or jurisdiction that may apply to this Option.

           (c) "Board" means the Board of Directors of the Company or any
committee of the Board that has been designated by the Board to administer this
Agreement.

           (d) "Code" means the Internal Revenue Code of 1986, as amended.

           (e) "Common Stock" means the common stock of the Company.

           (f) "Company" means ISTA Pharmaceuticals, Inc., a Delaware
corporation.

           (g) "Consultant" means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity.

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           (h) "Director" means a member of the Board.

           (i) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.

           (j) "Employee" means any person, including Officers and Directors,
employed by the Company or any Parent or Subsidiary of the Company. An Employee
shall not cease to be such in the case of (i) any leave of absence approved by
the Company or (ii) transfers between locations of the Company or between the
Company, its Parent, any Subsidiary, or any successor. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.

           (k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

           (l) "Fair Market Value" means, as of any date, the value of Common
Stock determined as follows:

               (1) If the Common Stock is listed on any established stock
exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such exchange or system on
the day of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable;

               (2) If the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value
shall be the mean between the high bid and low asked prices for the Common Stock
on the day of determination; or

               (3) In the absence of an established market for the Common Stock,
the Fair Market Value thereof shall be determined in good faith by the Board.

           (m) "Nonstatutory Stock Option" means an Option not intended to
qualify as an incentive stock option within the meaning of Section 422 of the
Code and the regulations promulgated thereunder.

           (n) "Notice of Grant" means a written notice, in Part I of this
Agreement, evidencing certain the terms and conditions of this Option grant. The
Notice of Grant is part of the Option Agreement.

           (o) "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

           (p) "Option" means this stock option.

           (q) "Optioned Stock" means the Common Stock subject to this Option.

           (r) "Optionee" means the person named in the Notice of Grant or such
person's successor.

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           (s) "Parent" means a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.

           (t) "Service Provider" means an Employee, Director or Consultant.

           (u) "Share" means a share of the Common Stock, as adjusted in
accordance with Section 11 of this Agreement.

           (v) "Subsidiary" means a "subsidiary corporation", whether now or
hereafter existing, as defined in Section 424(f) of the Code.

        2. Grant of Option. The Board hereby grants to the Optionee named in the
Notice of Grant attached as Part I of this Agreement the Option to purchase the
number of Shares, as set forth in the Notice of Grant, at the exercise price per
share set forth in the Notice of Grant (the "Exercise Price"), subject to the
terms and conditions of this Agreement.

         3. Exercise of Option.

            (a) Right to Exercise.

                (1) Subject to subsections 3(a)(2) and 3(a)(3) below, this
Option shall be exercisable cumulatively according to the vesting schedule set
forth in the Notice of Grant. Alternatively, at the election of the Optionee,
this Option may be exercised in whole or in part at any time as to Shares that
have not yet vested. For purposes of this Agreement, Shares subject to the
Option shall vest based on Optionee continuing as a Service Provider. Vested
Shares shall not be subject to the Company's repurchase right (as set forth in
the Restricted Stock Purchase Agreement, attached hereto as Exhibit B-1).

                (2) As a condition to exercising this Option for unvested
Shares, the Optionee shall execute the Restricted Stock Purchase Agreement.

                (3) This Option may not be exercised for a fraction of a Share.

            (b) Method of Exercise. This Option is exercisable by delivery of an
exercise notice, in the form attached as Exhibit A (the "Exercise Notice"),
which shall state the election to exercise the Option, the number of Shares in
respect of which the Option is being exercised (the "Exercised Shares"), and
such other representations and agreements as may be required by the Company. The
Exercise Notice shall be completed by the Optionee and delivered to Secretary of
the Company. The Exercise Notice shall be accompanied by payment of the
aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed
to be exercised upon receipt by the Company of such fully executed Exercise
Notice accompanied by such aggregate Exercise Price.

            (c) Legal Compliance. No Shares shall be issued pursuant to the
exercise of this Option unless such issuance and exercise complies with
Applicable Laws. Assuming such compliance, for income tax purposes the Exercised
Shares shall be considered transferred to the Optionee on the date the Option is
exercised with respect to such Exercised Shares.

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        4. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the
Optionee:

           (a) cash or check;

           (b) consideration received by the Company under a cashless exercise
program implemented by the Company; or

           (c) surrender of other Shares, provided Shares acquired from the
Company, (i) have been owned by the Optionee for more than six (6) months on the
date of surrender, AND (ii) have a Fair Market Value on the date of surrender
equal to the aggregate Exercise Price of the Exercised Shares.

        5. Non-Transferability of Option. This Option may not be transferred in
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of Optionee only by the Optionee. The terms
of this Agreement shall be binding upon the executors, administrators, heirs,
successors and assigns of the Optionee.

        6. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the terms of this Agreement.

        7. Termination of Relationship as a Service Provider. If the Optionee
ceases to be a Service Provider (other than for death or Disability), this
Option may be exercised for a period of three (3) months after the date of such
termination (but in no event later than the expiration date of this Option as
set forth in the Notice of Grant) to the extent that the Option is vested on the
date of such termination. To the extent that the Optionee does not exercise this
Option within the time specified herein, the Option shall terminate.

        8. Disability of Optionee. If the Optionee ceases to be a Service
Provider as a result of the Optionee's Disability, this Option may be exercised
for a period of twelve (12) months after the date of such termination (but in no
event later than the expiration date of this Option as set forth in the Notice
of Grant) to the extent that the Option is vested on the date of such
termination. To the extent that Optionee does not exercise this Option within
the time specified herein, the Option shall terminate.

        9. Death of Optionee. If the Optionee dies while a Service Provider, the
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration date of this Option as set
forth in the Notice of Grant), by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent that the Optionee was entitled to exercise the Option at the date of
death. If, after death, the Optionee's estate or a person who acquired the right
to exercise the Option by bequest or inheritance does not exercise the Option
within the time specified herein, the Option shall terminate.

        10. Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.

           (a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
this Option, as well as the price

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per share of Common Stock covered by this Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without receipt
of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to this Option.

           (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Board shall notify Optionee as
soon as practicable prior to the effective date of such proposed transaction. To
the extent it has not been previously exercised, the Option will terminate
immediately prior to the consummation of such proposed

           (c) Merger or Asset Sale. In the event of a merger of the Company
with or into another corporation, or the sale of substantially all of the assets
of the Company, the Option shall be assumed or an equivalent option substituted
by the successor corporation or a Parent or Subsidiary of the successor
corporation. In the event that the successor corporation refuses to assume or
substitute for the Option, the Optionee shall fully vest in and have the right
to exercise the Option as to all of the Optioned Stock, including Shares as to
which it would not otherwise be vested or exercisable. If the Option becomes
fully vested and exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Board shall notify the Optionee in writing or
electronically that the Option shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the Option shall terminate
upon the expiration of such period. For the purposes of this paragraph, the
Option shall be considered assumed if, following the merger or sale of assets,
the option confers the right to purchase or receive, for each Share subject to
the Option immediately prior to the merger or sale of assets, the consideration
(whether stock, cash, or other securities or property) received in the merger or
sale of assets by holders of Common Stock for each Share held on the effective
date of the transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger or
sale of assets is not solely common stock of the successor corporation or its
Parent, the Administrator may, with the consent of the successor corporation,
provide for the consideration to be received upon the exercise of the Option,
for each Share subject to the Option, to be solely common stock of the successor
corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.

        11. Notices. Any notice to be given to the Company hereunder shall be in
writing and shall be addressed to the Company. at its then current principal
executive office or to such other address as the Company may hereafter designate
to the Optionee by notice as provided in this Section. Any notice to be given to
the Optionee hereunder shall be addressed to the Optionee at the address set
forth beneath his signature hereto, or at such other address as the Optionee may
hereafter designate to the Company by notice as provided herein. A notice shall
be deemed to have been duly

                                                                             -6-
<PAGE>

given when personally delivered or mailed by registered or certified mail to the
party entitled to receive it.

        12. Tax Obligations.

           (a) Withholding Taxes. Optionee agrees to make appropriate
arrangements with the Company (or the Parent or Subsidiary employing or
retaining Optionee) for the satisfaction of all Federal, state, local and
foreign income and employment tax withholding requirements applicable to the
Option exercise. Optionee acknowledges and agrees that the Company may refuse to
honor the exercise and refuse to deliver the Shares if such withholding amounts
are not delivered at the time of exercise.

           (b) Section 83(b) Election for Unvested Shares Purchased Pursuant to
Options. With respect to the exercise of an Option for unvested Shares, an
election (the "Election") may be filed by the Optionee with the Internal Revenue
Service, within 30 days of the purchase of the Shares, electing pursuant to
Section 83(b) of the Code to be taxed currently on any difference between the
purchase price of the Shares and their Fair Market Value on the date of
purchase. Optionee is strongly encouraged to seek the advice of his or her own
tax consultants in connection with the purchase of the Shares and the
advisability of filing of the Election under Section 83(b) of the Code. A form
of Election under Section 83(b) is attached hereto as Exhibit C-4 for reference.

               OPTIONEE ACKNOWLEDGES THAT IT IS OPTIONEE'S SOLE RESPONSIBILITY
AND NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF
OPTIONEE REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON
OPTIONEE'S BEHALF.

        13. Entire Agreement; Governing Law. This Agreement, together with the
Employment Agreement, constitute the entire agreement of the parties with
respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and Optionee with respect to the
subject matter hereof, and may not be modified adversely to the Optionee's
interest except by means of a writing signed by the Company and Optionee. This
agreement is governed by the internal substantive laws, but not the choice of
law rules, of California.

        14. NO GUARANTEE OF CONTINUED SERVICE. OPTIONEE ACKNOWLEDGES AND AGREES
THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED
ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (AND NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED AN OPTION OR PURCHASING SHARES
HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE
TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO
NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUES ENGAGEMENT AS A
SERVICE PROVIDER FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL
NOT INTERFERE WITH OPTIONEE'S RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
OPTIONEE'S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT
CAUSE.

                                      -7-
<PAGE>

        By Optionee's signature and the signature of the Company's
representative below, Optionee and the Company agree that this Option is granted
under and governed by the terms and conditions of this Agreement. Optionee has
reviewed this Agreement in its entirety, has had an opportunity to obtain the
advice of counsel prior to executing this Agreement and fully understands all
provisions of this Agreement. Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Board upon any
questions relating to this Agreement. Optionee further agrees to notify the
Company upon any change in the residence address indicated below.

OPTIONEE                                  ISTA PHARMACEUTICAL, INC.

----------------------------              -------------------------------
Signature                                 By

----------------------------              -------------------------------
Print Name                                Title

----------------------------
Residence Address

----------------------------

----------------------------

                                                                             -8-
<PAGE>

                                    EXHIBIT A

                            ISTA PHARMACEUTICAL, INC.

                                 EXERCISE NOTICE

ISTA Pharmaceutical, Inc.
15279 Alton Parkway, Suite 100
Irvine, CA 92618

Attention:

        1. Exercise of Option. Effective as of today, ________________, 20__,
the undersigned ("Purchaser") hereby elects to purchase ______________ shares
(the "Shares") of the Common Stock of ISTA Pharmaceutical, Inc. (the "Company")
under and pursuant to the Stock Option Agreement dated [_____________] (the
"Option Agreement"). The purchase price for the Shares shall be [$_______], as
required by the Option Agreement.

        2. Delivery of Payment. Purchaser herewith delivers to the Company the
full purchase price for the Shares together with any required withholding taxes
to be paid in connection with the exercise of the Option.

        3. Representations of Purchaser. Purchaser acknowledges that Purchaser
has received, read and understood the Option Agreement and agrees to abide by
and be bound by their terms and conditions.

        4. Rights as Shareholder. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the Shares, no right to vote or receive dividends or
any other rights as a stockholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. The Shares so acquired shall
be issued to the Optionee as soon as practicable after exercise of the Option.
No adjustment will be made for a dividend or other right for which the record
date is prior to the date of issuance, except as provided in Section 11 of the
Option Agreement.

        5. Tax Consultation. Purchaser understands that Purchaser may suffer
adverse tax consequences as a result of Purchaser's purchase or disposition of
the Shares. Purchaser represents that Purchaser has consulted with any tax
consultants Purchaser deems advisable in connection with the purchase or
disposition of the Shares and that Purchaser is not relying on the Company for
any tax advice.

        6. Successors and Assigns. The Company may assign any of its rights
under this Exercise Notice to single or multiple assignees, and this Exercise
Notice shall inure to the benefit of the successors and assigns of the Company.
Subject to the restrictions on transfer herein set forth, this Exercise Notice
shall be binding upon Optionee and his or her heirs, executors, administrators,
successors and assigns.

<PAGE>

        7. Interpretation. Any dispute regarding the interpretation of this
Exercise Notice shall be submitted by Optionee or by the Company forthwith to
the Board, which shall review such dispute at its next regular meeting. The
resolution of such a dispute by the Board shall be final and binding on all
parties.

        8. Entire Agreement; Governing Law. The Option Agreement is incorporated
herein by reference together with any documents incorporated by reference
therein. This Agreement, and the Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede
in their entirety all prior undertakings and agreements of the Company and
Purchaser with respect to the subject matter hereof, and may not be modified
adversely to the Purchaser's interest except by means of a writing signed by the
Company and Purchaser. This agreement is governed by the internal substantive
laws, but not the choice of law rules, of California.

Submitted by:                             Accepted by:

OPTIONEE                                  ISTA PHARMACEUTICAL, INC.

-----------------------------             ------------------------------
Signature

-----------------------------             ------------------------------
Print Name

-----------------------------             ------------------------------
Address                                   Address

-----------------------------             ------------------------------

-----------------------------             ------------------------------

                                          Date Received:
                                                        ----------------

                                                                             -2-
<PAGE>

                                   EXHIBIT B-1

                            ISTA PHARMACEUTICAL, INC.

              STAND-ALONE STOCK OPTION AGREEMENT -- EARLY EXERCISE

                       RESTRICTED STOCK PURCHASE AGREEMENT

        THIS AGREEMENT is made between ____________________________________ (the
"Purchaser") and ISTA Pharmaceutical, Inc. (the "Company") as of
__________________, ____. Unless otherwise defined herein, the terms defined in
the Stand-Alone Stock Option Agreement -- Early Exercise dated ____________,
20__, by and between the Company and Purchaser (the "Option Agreement") shall
have the same defined meanings in this Restricted Stock Purchase Agreement (the
"Agreement").

                                    RECITALS

        (1) Pursuant to the exercise of the stock option granted to Purchaser
pursuant to the Option Agreement, which Option Agreement is hereby incorporated
by reference, Purchaser has elected to purchase _________ of those shares which
have not become vested under the vesting schedule set forth in the Option
Agreement ("Unvested Shares"). The Unvested Shares and the shares subject to the
Option Agreement which have become vested are sometimes collectively referred to
herein as the "Shares".

        (2) As required by the Option Agreement, as a condition to Purchaser's
election to exercise the option, Purchaser must execute this Restricted Stock
Purchase Agreement, which sets forth the rights and obligations of the parties
with respect to Shares acquired upon exercise of the Option.

        1. Repurchase Option.

           (a) If Purchaser's status as a Service Provider is terminated for any
reason, including for death or Disability, the Company shall have the right and
option to purchase from Purchaser, or Purchaser's personal representative, as
the case may be, all of the Purchaser's Unvested Shares as of the date of such
termination at the price paid by the Purchaser for such Shares (the "Repurchase
Option").

           (b) Upon the occurrence of such termination, the Company may exercise
its Repurchase Option by delivering personally or by registered mail, to
Purchaser (or his transferee or legal representative, as the case may be) with a
copy to the escrow agent described in Section 2 below, a notice in writing
indicating the Company's intention to exercise the Repurchase Option AND, at the
Company's option, (i) by delivering to the Purchaser (or the Purchaser's
transferee or legal representative) a check in the amount of the aggregate
repurchase price, or (ii) by the Company canceling an amount of the Purchaser's
indebtedness to the Company equal to the aggregate

<PAGE>

repurchase price, or (iii) by a combination of (i) and (ii) so that the combined
payment and cancellation of indebtedness equals such aggregate repurchase price.
Upon delivery of such notice and payment of the aggregate repurchase price in
any of the ways described above, the Company shall become the legal and
beneficial owner of the Unvested Shares being repurchased and the rights and
interests therein or relating thereto, and the Company shall have the right to
retain and transfer to its own name the number of Unvested Shares being
repurchased by the Company.

           (c) Whenever the Company shall have the right to repurchase Unvested
Shares hereunder, the Company may designate and assign one or more employees,
officers, directors or shareholders of the Company or other persons or
organizations to exercise all or a part of the Company's Repurchase Option under
this Agreement and purchase all or a part of such Unvested Shares.

           (d) If the Company does not elect to exercise the Repurchase Option
conferred above by giving the requisite notice within ninety (90) days following
the termination, the Repurchase Option shall terminate.

           (e) The Repurchase Option shall terminate in accordance with the
Vesting Schedule in Purchaser's Option Agreement.

        2. Transferability of the Shares; Escrow.

           (a) Purchaser hereby authorizes and directs the secretary of the
Company, or such other person designated by the Company, to transfer the
Unvested Shares as to which the Repurchase Option has been exercised from
Purchaser to the Company.

           (b) To insure the availability for delivery of Purchaser's Unvested
Shares upon repurchase by the Company pursuant to the Repurchase Option under
Section 1, Purchaser hereby appoints the secretary, or any other person
designated by the Company as escrow agent (the "Escrow Agent"), as its
attorney-in-fact to sell, assign and transfer unto the Company, such Unvested
Shares, if any, repurchased by the Company pursuant to the Repurchase Option and
shall, upon execution of this Agreement, deliver and deposit with the Escrow
Agent the share certificates representing the Unvested Shares, together with the
stock assignment duly endorsed in blank, attached hereto as Exhibit B-2. The
Unvested Shares and stock assignment shall be held by the Escrow Agent in
escrow, pursuant to the Joint Escrow Instructions of the Company and Purchaser
attached as Exhibit B-3 hereto, until the Company exercises its Repurchase
Option as provided in Section 1, until such Unvested Shares are vested, or until
such time as this Agreement no longer is in effect. Upon vesting of the Unvested
Shares, the Escrow Agent shall promptly deliver to the Purchaser the certificate
or certificates representing such Shares in the Escrow Agent's possession
belonging to the Purchaser, and the Escrow Agent shall be discharged of all
further obligations hereunder; provided, however, that the Escrow Agent shall
nevertheless retain such certificate or certificates as Escrow Agent if so
required pursuant to other restrictions imposed pursuant to this Agreement.

           (c) The Company, or the Escrow Agent, shall not be liable for any act
it may do or omit to do with respect to holding the Shares in escrow and while
acting in good faith and in the exercise of its judgment.

                                                                             -2-
<PAGE>

           (d) Transfer or sale of the Shares is subject to restrictions on
transfer imposed by any applicable state and federal securities laws. Any
transferee shall hold such Shares subject to all the provisions hereof and the
Exercise Notice executed by the Purchaser with respect to any Unvested Shares
purchased by Purchaser and shall acknowledge the same by signing a copy of this
Agreement.

        3. Ownership, Voting Rights, Duties. This Agreement shall not affect in
any way the ownership, voting rights or other rights or duties of Purchaser,
except as specifically provided herein.

        4. Legends. The share certificate evidencing the Shares issued hereunder
shall be endorsed with the following legend (in addition to any legend required
under applicable state securities laws):

           THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
           RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SET FORTH IN
           AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH
           IS ON FILE WITH THE SECRETARY OF THE COMPANY.

        5. Adjustment for Stock Split. All references to the number of Shares
and the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock split, stock dividend or other change in the
Shares that may be made by the Company after the date of this Agreement.

        6. Notices. Notices required hereunder shall be given in person or by
registered mail to the address of Purchaser shown on the records of the Company,
and to the Company at their respective principal executive offices.

        7. Survival of Terms. This Agreement shall apply to and bind Purchaser
and the Company and their respective permitted assignees and transferees, heirs,
legatees, executors, administrators and legal successors.

        8. Section 83(b) Election. Purchaser hereby acknowledges that he or she
has been informed that, with respect to the exercise of an Option for unvested
Shares, an election may be filed by the Purchaser with the Internal Revenue
Service, within 30 days of the purchase of the Shares, electing pursuant to
Section 83(b) of the Code to be taxed currently on any difference between the
purchase price of the Shares and their Fair Market Value on the date of
purchase. Purchaser is strongly encouraged to seek the advice of his or her own
tax consultants in connection with the purchase of the Shares and the
advisability of filing of the Election under Section 83(b) of the Code. A form
of Election under Section 83(b) is attached hereto as Exhibit B-4 for reference.

           PURCHASER ACKNOWLEDGES THAT IT IS PURCHASER'S SOLE RESPONSIBILITY AND
NOT THE COMPANY'S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF
PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVE TO MAKE THIS FILING ON
PURCHASER'S BEHALF.

                                                                             -3-
<PAGE>

        9. Representations. Purchaser has reviewed with his own tax advisors the
federal, state, local and foreign tax consequences of this investment and the
transactions contemplated by this Agreement. Purchaser is relying solely on such
advisors and not on any statements or representations of the Company or any of
its agents. Purchaser understands that he (and not the Company) shall be
responsible for his own tax liability that may arise as a result of this
investment or the transactions contemplated by this Agreement.

        10. Governing Law. This Agreement shall be governed by the internal
substantive laws, but not the choice of law rules, of California.

            Purchaser represents that he or she has read this Agreement and is
familiar with its terms and provisions. Purchaser hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board upon
any questions arising under this Agreement.

            [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                                                             -4-
<PAGE>

        IN WITNESS WHEREOF, this Agreement is deemed made as of the date first
set forth above.

                                  ISTA PHARMACEUTICAL, INC.

                                  -------------------------------------
                                  By

                                  -------------------------------------
                                  Title

                                  PURCHASER

                                  -------------------------------------
                                  Signature

                                  -------------------------------------
                                  Printed Name

                                  -------------------------------------
                                  Soc. Sec. No.

                                  Address:

                                  -------------------------------------

                                  -------------------------------------

                                                                             -5-
<PAGE>

                                   EXHIBIT B-2

                      ASSIGNMENT SEPARATE FROM CERTIFICATE

        FOR VALUE RECEIVED I, __________________________, hereby sell, assign
and transfer unto ISTA Pharmaceutical, Inc. (__________) shares of the Common
Stock of ISTA Pharmaceutical, Inc. standing in my name of the books of said
corporation represented by Certificate No. _____ herewith and do hereby
irrevocably constitute and appoint _____________________________ to transfer the
said stock on the books of the within named corporation with full power of
substitution in the premises.

        This Stock Assignment may be used only in accordance with the Restricted
Stock Purchase Agreement between ISTA Pharmaceutical, Inc. and the undersigned
dated ______________, ____ (the "Agreement").

Dated: _______________, ____

                                   Signature:_________________________________

INSTRUCTIONS: Please do not fill in any blanks other than the signature line.
The purpose of this assignment is to enable the Company to exercise its
"repurchase option," as set forth in the Restricted Stock Purchase Agreement,
without requiring additional signatures on the part of the Purchaser.

<PAGE>

                                   EXHIBIT B-3

                            JOINT ESCROW INSTRUCTIONS

------------, ----

Corporate Secretary
ISTA Pharmaceutical, Inc.
[Address]

Dear ____________:

        As Escrow Agent for both ISTA Pharmaceutical, Inc. (the "Company"), and
the undersigned purchaser of stock of the Company (the "Purchaser"), you are
hereby authorized and directed to hold the documents delivered to you pursuant
to the terms of that certain Restricted Stock Purchase Agreement ("Agreement")
between the Company and the undersigned, in accordance with the following
instructions:

        1. In the event the Company and/or any assignee of the Company (referred
to collectively for convenience herein as the "Company") exercises the Company's
repurchase option set forth in the Agreement, the Company shall give to
Purchaser and you a written notice specifying the number of shares of stock to
be purchased, the purchase price, and the time for a closing hereunder at the
principal office of the Company. Purchaser and the Company hereby irrevocably
authorize and direct you to close the transaction contemplated by such notice in
accordance with the terms of said notice.

        2. At the closing, you are directed (a) to date the stock assignments
necessary for the transfer in question, (b) to fill in the number of shares
being transferred, and (c) to deliver same, together with the certificate
evidencing the shares of stock to be transferred, to the Company or its
assignee, against the simultaneous delivery to you of the purchase price (by
cash, a check, or some combination thereof) for the number of shares of stock
being purchased pursuant to the exercise of the Company's repurchase option.

        3. Purchaser irrevocably authorizes the Company to deposit with you any
certificates evidencing shares of stock to be held by you hereunder and any
additions and substitutions to said shares as defined in the Agreement.
Purchaser does hereby irrevocably constitute and appoint you as Purchaser's
attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities all documents necessary or appropriate to make such
securities negotiable and to complete any transaction herein contemplated,
including but not limited to the filing with any applicable state blue sky
authority of any required applications for consent to, or notice of transfer of,
the securities. Subject to the provisions of this paragraph 3, Purchaser shall
exercise all rights and privileges of a stockholder of the Company while the
stock is held by you.

        4. Upon written request of the Purchaser, but no more than once per
calendar year, unless the Company's repurchase option has been exercised, you
will deliver to Purchaser a

<PAGE>

certificate or certificates representing so many shares of stock as are not then
subject to the Company's repurchase option. Within 120 days after cessation of
Purchaser's continuous employment by or services to the Company, or any parent
or subsidiary of the Company, you will deliver to Purchaser a certificate or
certificates representing the aggregate number of shares held or issued pursuant
to the Agreement and not purchased by the Company or its assignees pursuant to
exercise of the Company's repurchase option.

        5. If at the time of termination of this escrow you should have in your
possession any documents, securities, or other property belonging to Purchaser,
you shall deliver all of the same to Purchaser and shall be discharged of all
further obligations hereunder.

        6. Your duties hereunder may be altered, amended, modified or revoked
only by a writing signed by all of the parties hereto.

        7. You shall be obligated only for the performance of such duties as are
specifically set forth herein and may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by you to be
genuine and to have been signed or presented by the proper party or parties. You
shall not be personally liable for any act you may do or omit to do hereunder as
Escrow Agent or as attorney-in-fact for Purchaser while acting in good faith,
and any act done or omitted by you pursuant to the advice of your own attorneys
shall be conclusive evidence of such good faith.

        8. You are hereby expressly authorized to disregard any and all warnings
given by any of the parties hereto or by any other person or corporation,
excepting only orders or process of courts of law and are hereby expressly
authorized to comply with and obey orders, judgments or decrees of any court. In
case you obey or comply with any such order, judgment or decree, you shall not
be liable to any of the parties hereto or to any other person, firm or
corporation by reason of such compliance, notwithstanding any such order,
judgment or decree being subsequently reversed, modified, annulled, set aside,
vacated or found to have been entered without jurisdiction.

        9. You shall not be liable in any respect on account of the identity,
authorities or rights of the parties executing or delivering or purporting to
execute or deliver the Agreement or any documents or papers deposited or called
for hereunder.

        10. You shall not be liable for the outlawing of any rights under the
Statute of Limitations with respect to these Joint Escrow Instructions or any
documents deposited with you.

        11. You shall be entitled to employ such legal counsel and other experts
as you may deem necessary properly to advise you in connection with your
obligations hereunder, may rely upon the advice of such counsel, and may pay
such counsel reasonable compensation therefor.

        12. Your responsibilities as Escrow Agent hereunder shall terminate if
you shall cease to be an officer or agent of the Company or if you shall resign
by written notice to each party. In the event of any such termination, the
Company shall appoint a successor Escrow Agent.

        13. If you reasonably require other or further instruments in connection
with these Joint Escrow Instructions or obligations in respect hereto, the
necessary parties hereto shall join in furnishing such instruments.

                                                                             -2-
<PAGE>

        14. It is understood and agreed that should any dispute arise with
respect to the delivery and/or ownership or right of possession of the
securities held by you hereunder, you are authorized and directed to retain in
your possession without liability to anyone all or any part of said securities
until such disputes shall have been settled either by mutual written agreement
of the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but you shall be under no duty whatsoever to institute or defend
any such proceedings.

        15. Any notice required or permitted hereunder shall be given in writing
and shall be deemed effectively given upon personal delivery or upon deposit in
the United States Post Office, by registered or certified mail with postage and
fees prepaid, addressed to each of the other parties thereunto entitled at the
following addresses or at such other addresses as a party may designate by ten
days' advance written notice to each of the other parties hereto.

               COMPANY:             ISTA Pharmaceutical, Inc.
                                    [Address]

                                    Attention: [TITLE]

               PURCHASER:
                                    -------------------------------------

                                    -------------------------------------

                                    -------------------------------------

               ESCROW AGENT:        Corporate Secretary
                                    ISTA Pharmaceutical, Inc.
                                    [Address]

               By signing these Joint Escrow Instructions, you become a party
hereto only for the purpose of said Joint Escrow Instructions; you do not become
a party to the Agreement.

        16. This instrument shall be binding upon and inure to the benefit of
the parties hereto, and their respective successors and permitted assigns.

        17. These Joint Escrow Instructions shall be governed by the internal
substantive laws, but not the choice of law rules, of California.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                                                             -3-
<PAGE>

                                         ISTA PHARMACEUTICAL, INC.

                                         --------------------------------
                                         By

                                         --------------------------------
                                         Title

                                         PURCHASER

                                         --------------------------------
                                         Signature

                                         --------------------------------
                                         Typed or Printed Name

                                         ESCROW AGENT

                                         --------------------------------
                                         Corporate Secretary

                                                                             -4-
<PAGE>

                                   EXHIBIT B-4

                          ELECTION UNDER SECTION 83(b)
                      OF THE INTERNAL REVENUE CODE OF 1986

        The undersigned taxpayer hereby elects, pursuant to Sections 55 and
83(b) of the Internal Revenue Code of 1986, as amended, to include in taxpayer's
gross income or alternative minimum taxable income, as the case may be, for the
current taxable year the amount of any compensation taxable to taxpayer in
connection with taxpayer's receipt of the property described below:

1.      The name, address, taxpayer identification number and taxable year of
        the undersigned are as follows:

        NAME:               TAXPAYER:               SPOUSE:

        ADDRESS:

        IDENTIFICATION NO.:  TAXPAYER:              SPOUSE:

        TAXABLE YEAR:

2.      The property with respect to which the election is made is described as
        follows: _____________ shares (the "Shares") of the Common Stock of ISTA
        Pharmaceutical, Inc. (the "Company").

3.      The date on which the property was transferred is: __________________,
        ____.

4.      The property is subject to the following restrictions:

        The Shares may not be transferred and are subject to forfeiture under
        the terms of an agreement between the taxpayer and the Company. These
        restrictions lapse upon the satisfaction of certain conditions contained
        in such agreement.

5.      The fair market value at the time of transfer, determined without regard
        to any restriction other than a restriction which by its terms will
        never lapse, of such property is: $______________________.

6.      The amount (if any) paid for such property is: $______________________.

        The undersigned has submitted a copy of this statement to the person for
whom the services were performed in connection with the undersigned's receipt of
the above-described property. The transferee of such property is the person
performing the services in connection with the transfer of said property.

        The undersigned understands that the foregoing election may not be
revoked except with the consent of the Commissioner.

Dated: _____________, _____             _______________________________________
                                        Taxpayer
The undersigned spouse of taxpayer joins in this election.

Dated: _____________, _____             _______________________________________
                                        Spouse of Taxpayer

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