Document:

Exhibit 10.36

 

OPTION TO ACQUIRE
SHARES

OF COMMON STOCK OF
NATIONAL HEALTH PARTNERS, INC.

 

WHEREAS, National Health
Partners, Inc., an Indiana corporation (the “Company”) wishes to grant
this option to Patricia S. Bathurst (the “Holder”).

 

NOW, THEREFORE, in
consideration of the foregoing, the agreement set forth below and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereby
agree as follows:

 

1.                                       Grant of Option.  The Company hereby grants to
the Holder on this 30th day of December, 2008 (the “Grant Date”) an
option (this “Option”) to purchase 286,500 shares (“Shares”) of the Company’s
common stock, $.001 par value per share (“Common Stock”), on the terms and
subject to the conditions set forth herein.

 

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

 

3.                                       Right to Exercise. 
This Option may be exercised in whole or in part commencing on the Grant
Date.

 

4.                                       Exercise Price.  The exercise price per Share (“Exercise Price”)
at which this Option may be exercised shall be five and one-half cents ($0.055)
per Share.

 

5.                                       Method of Exercise.

 

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

 

(b)                                 No Shares shall be issued pursuant to the
exercise of this Option unless such issuance and such exercise shall comply
with all relevant provisions of applicable law, including the requirements of
any stock exchange upon which the Shares may then be listed.  Assuming such compliance, for income tax
purposes the Shares shall be considered transferred to the Holder on the date
on which this Option is exercised with respect to such Shares.

 

(c)                                  This Option may not be exercised for a
fractional Share or scrip representing a fractional Share.  In lieu of any fractional Share to which the
Holder would 

 

 

 

otherwise be entitled,
the Company shall make a cash payment equal to the Exercise Price multiplied by
such fraction.

 

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

 

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

 

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

 

(b)                                 if the shares of
Common Stock underlying the Option are registered under the Securities Act of
1933, as amended (the “Securities Act”), by: (i) delivery by the Holder to
the Company of an irrevocable and unconditional undertaking by a creditworthy
broker to deliver promptly to the Company sufficient funds to pay the exercise
price and any required tax withholding, or (ii) delivery by the Holder to
the Company of a copy of irrevocable and unconditional instructions to a
creditworthy broker to deliver promptly to the Company the exercise price and
any required tax withholding;

 

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

 

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

 

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

 

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

 

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

 

(i)                                     If the Common Stock is admitted to
quotation on the National Association of Securities Dealers Automated Quotation
System (“NASDAQ”), the Fair Market Value on any given date shall be the average
of the highest bid and lowest ask prices of the Common Stock as reported for
such date or, if no bid and ask prices were reported for such date, for the
last day preceding such date for which such prices were reported;

 

(ii)                                  If the Common Stock is admitted to
trading on a United States national securities exchange or the NASDAQ National
Market System, the Fair Market Value on 

 

 

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any given date shall be
the closing price reported for the Common Stock on such exchange
or system for such date or, if no sales were reported for such date, for the
last day preceding such date for which a sale was reported;

 

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

 

(iv)                              If the Fair Market Value of
the Common Stock cannot be determined on the basis previously set forth in this
definition on the date that the Fair Market Value is to be determined, the
Board shall in good faith determine the Fair Market Value of the Common Stock
on such date.

 

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

 

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

 

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

 

(a)                                  Subdivisions, Combinations
and Other Issuances.  If the
Company shall at any time prior to the expiration 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 or any preferred stock as a dividend with
respect to any shares of its Common Stock, then the number of Shares issuable
on the exercise of this Option shall forthwith be proportionately increased in
the case of a subdivision or stock dividend, or proportionately decreased in
the case of a combination.  Appropriate
adjustments shall also be made to the Exercise Price, but the aggregate
purchase price payable for the total number of Shares purchasable under this
Option (as adjusted) shall remain the same. 
Any adjustment under this Section 8(a) shall become effective
at the close of business on the date the subdivision or combination becomes
effective, or as of the record date of such dividend, or in the event that no
record date is fixed, upon the making of such dividend.

 

(b)                                 Reclassification, Reorganization
and Consolidation.  In the case
of any reclassification, capital reorganization or change in the Common Stock
of the Company (other 

 

 

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than as a result of a subdivision, combination or stock dividend
provided for in Section 8(a) above or as a result of any “Fundamental
Transaction” described in Section 8(c) below), then, as a condition
of such reclassification, reorganization or change, lawful provision shall be
made, and duly executed documents evidencing the same from the Company or its
successor shall be delivered to the Holder, so that the Holder shall have the
right at any time prior to the expiration of this Option to purchase, at a
total price equal to that payable upon the exercise of this Option, the kind
and amount of shares of stock and other securities and property receivable in
connection with such reclassification, reorganization or change by a holder of
the same number of shares of Common Stock as were purchasable by the Holder
immediately prior to such reclassification, reorganization or change.  In any such case, appropriate provisions
shall be made with respect to the rights and interest of the Holder so that the
provisions hereof shall thereafter be applicable with respect to any shares of
stock or other securities and property deliverable upon exercise hereof, and
appropriate adjustments shall be made to the Exercise Price payable hereunder,
provided the aggregate purchase price shall remain the same.

 

(c)                                  Corporate Reorganizations, Consolidations
or Mergers.  In the event of: (i) any reorganization,
consolidation or merger of the Company with or into another entity (other than
a merger in which the Company is the successor entity that does not result in
any capital reclassification, reorganization or consolidation, or other
change, in the Common Stock of the Company, or a consolidation or merger
between the Company and a wholly-owned subsidiary of the Company), (ii) any sale, lease, transfer or
conveyance to another entity of all or substantially all of the stock, property
and assets of the Company (other than a transfer to a wholly-owned subsidiary
of the Company), or (iii) a liquidation or dissolution 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 made by the Company and the successor
entity in connection
with such Fundamental Transaction for the assumption of this Option by the
successor entity or for the substitution of new like-kind options by the
successor entity as a result of such Fundamental Transaction, with appropriate
adjustment as to the number and kind of shares issuable upon exercise of the
Option, and, if appropriate, the per share exercise price, so as to enable the
Holder after such Fundamental Transaction to purchase the kind and amount of
shares of stock and other securities and property (including cash) receivable
upon such consolidation, merger, sale or conveyance by a holder of the number
of shares of Common Stock that would have been received upon the exercise or
exchange of this Option immediately prior to such Fundamental Transaction.

 

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

 

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

 

 

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9.                                       Termination of Option.

 

(a)                                  Termination by Death.  If Holder’s employment by, or other
relationship with, the Company terminates by reason of death, this Option may
thereafter be exercised, in whole or in part to the extent exercisable on the
date of such termination of employment, by the legal representative or legatee
of the Holder until the earlier of the date that is one year after the date of
such termination of employment or the Expiration Date.

 

(b)                                 Termination by Reason
of Disability or Retirement.

 

(i)                                     Disability.  If Holder’s employment by, or other
relationship with, the Company terminates by reason of disability as set forth
in Section 22(e)(3) of the Internal Revenue Code (“Disability”), this
Option may thereafter be exercised, in whole or in part to the extent
exercisable on the date of such termination of employment, until the earlier of
the date that is one year after the date of such termination of employment or
the Expiration Date.

 

(ii)                                  Retirement.  If Holder retires in good standing from
active employment or service with the Company in accordance with the retirement
policies of the Company then in effect (“Retirement”), this Option may
thereafter be exercised, in whole or in part to the extent exercisable on the
date of such termination of employment, until the earlier of the date that is
90 days after the date of such termination of employment or the Expiration Date

 

(iii)                               Disability and
Retirement Determination.  The Board
shall have sole authority and discretion to determine whether the Holder’s
employment or services has been terminated by reason of Disability or
Retirement.

 

(c)                                  Termination for Cause.  If Holder’s employment by, or other
relationship with, the Company terminates for “Cause,” this Option shall
immediately terminate and be of no further force and effect; provided, however,
that the Board may, in its sole discretion, provide that this Option may be
exercised until the earlier of the date that is 90 days after the date of such
termination of employment or the Expiration Date.  Termination for “Cause” shall have the
meaning ascribed to such term in the Amended and Restated Employment Agreement
dated December 30, 2008 by and between the Company and Holder (the “Employment
Agreement”).

 

(d)                                 Termination Without
Cause or Termination for Good Reason. 
If Holder’s employment by, or other relationship with, the Company
terminates for any reason other than death, Disability, Retirement or for
Cause, or if Holder’s employment by, or other 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 such term in the Employment
Agreement.

 

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

 

 

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10.                                 Investment Intent.

 

(a)                                  The Holder of this Option, by acceptance
hereof, acknowledges that this Option and the Shares to be issued upon exercise
hereof (collectively, the “Securities”) are being acquired for the Holder’s own
account for investment purposes only and not with a view to, or with any
present intention of, distributing or reselling any of such Securities.  The Holder acknowledges and agrees that the
Securities have not been registered under the Securities Act 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 Securities Act and registration or
qualification under applicable state securities laws, except pursuant to an
available exemption from such registration. 
The Holder also acknowledges and agrees that neither the Securities
Exchange Commission (“SEC”) nor any securities commission or other governmental
authority has: (i) approved the transfer of the Securities or passed upon
or endorsed the merits of the transfer of the Securities; or (ii) confirmed
the accuracy of, determined the adequacy of, or reviewed this Option.  The Holder has such knowledge, sophistication
and experience in financial, tax and business matters in general, and
investments in securities in particular, that it is capable of evaluating the
merits and risks of this investment in the Securities, and the Holder has made
such investigations in connection herewith as it deemed necessary or desirable
so as to make an informed investment decision without relying upon the Company
for legal or tax advice related to this investment.

 

(b)                                 The certificates evidencing any Shares
issued upon the exercise of this Option shall have endorsed thereon (except to
the extent that the restrictions described in any such legend are no longer
applicable) the following legend, appropriate notations thereof will be made in
the Company’s stock transfer books, and stop transfer instructions reflecting
these restrictions on transfer will be placed with the transfer agent of the
Shares.

 

THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED 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 DISPOSED OF EXCEPT PURSUANT TO REGISTRATION
UNDER THE SECURITIES ACT AND REGISTRATION OR QUALIFICATION UNDER APPLICABLE
STATE SECURITIES LAWS, OR PURSUANT TO AN AVAILABLE EXEMPTION THEREFROM.  NO TRANSFER OF THE SECURITIES REPRESENTED
HEREBY MAY BE MADE IN THE ABSENCE OF SUCH REGISTRATION OR QUALIFICATION
UNLESS THERE SHALL HAVE BEEN DELIVERED TO THE ISSUER A WRITTEN OPINION OF
UNITED STATES COUNSEL OF RECOGNIZED STANDING, IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER, TO THE EFFECT THAT SUCH TRANSFER MAY BE MADE
WITHOUT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND
REGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.

 

 

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

 

12.                                 Replacement of Option. 
On receipt of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Option and, in the case of loss,
theft or destruction, on delivery of an indemnity agreement reasonably
satisfactory in form and substance to the Company or, in the case of
mutilation, on surrender and cancellation of this Option, the Company at its
expense shall execute and deliver, in lieu of this Option, a new Option of like
tenor and amount.

 

13.                                 Notices.  All notices hereunder shall be sufficiently
given for all purposes hereunder if in writing and delivered personally, sent
by documented overnight delivery service or, to the extent receipt is
confirmed, telecopy, telefax or other electronic transmission service to the
appropriate address or number as set forth below:

 

If to the Company:

 

National Health Partners, Inc.

120 Gibraltar Road

Suite 107

Horsham, PA 19044

Attention: 
Chief Financial Officer

 

If to the Holder:

 

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

 

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

 

15.                                 Headings; Definitions. 
The section headings contained in this Option are inserted for convenience
of reference only and will not affect the meaning or interpretation of this
Option.  All references to sections
contained herein mean sections of this Option unless otherwise stated.  All capitalized terms defined herein are
equally applicable to both the singular and plural forms of such terms.

 

 

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

 

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

 

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

 

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

 

[Remainder of page intentionally
left blank]

 

 

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

 

	
   

  	
  NATIONAL HEALTH
  PARTNERS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David M. Daniels

  	
   

  
	
   

  	
   

  	
  David M. Daniels

  
	
   

  	
   

  	
  Chief Executive
  Officer

  

 

AGREED AND
ACCEPTED:

 

 

	
  By: 

  	
  /s/ Patricia S. Bathurst

  	
   

  	
   

  	
   

  

 

 

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APPENDIX A

 

NOTICE OF EXERCISE

 

	
  To:

  	
  National Health Partners, Inc.

  120 Gibraltar Road

  Suite 107

  Horsham, PA 19044

  Attention: Chief Financial
  Officer

  	
   

  	
   

  	
   

  

 

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

 

o                                    in cash or by check;

 

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

 

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

 

o                                    a promissory note;

 

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

 

o                                    the following consideration:                                                                         .

 

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

 

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

 

(4)                                  Please issue a certificate or
certificates representing said shares of Common Stock in the name of the
undersigned.

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Date)

  	
   

  	
  (Signature)Exhibit 10.11

 

EMPLOYMENT
AGREEMENT

 

THIS EMPLOYMENT AGREEMENT
is made as of September 22, 2008, at San Diego, California among Lpath, Inc., a Nevada corporation (the
“Company”), and John Bender, Pharm.D.  (the
“Employee”) with reference to the following facts:

 

In consideration of their respective promises contained herein, the
parties hereto agree as follows:

 

1.    EMPLOYMENT

 

Company hired Employee, effective September 22, 2008, as its
Senior Vice President R&D.  Employee
and Company now desire to memorialize the terms and conditions associated with
such hiring, which terms and conditions shall be contained in this Agreement.

 

2.    EMPLOYEE’S DUTIES

 

The Employee shall, while contributing his services hereunder:

 

(a) Serve the Company in the capacity set forth in Section 1,
or in such other similar capacity as Company’s Chief Executive Officer (“CEO”)
or the Board of Directors (hereinafter, referred to as “the Board”) may direct,
on a full-time basis and exclusive to the Company, using his best efforts, skills,
and diligence in the performance of such duties, at such place or places as may
be required for valid business reasons and as determined in the reasonable
determination of the Board;

 

(b) Report to the Chief Executive Officer and perform the duties and
exercise the powers assigned or vested in him by the CEO or the Board;

 

(c) Comply with and conform to any lawful instructions or
directions given or made by the CEO and the Board, and faithfully,
industriously, diligently, and to the best of the Employee’s ability,
experience, and talents, serve the Company and perform all of the duties that
may be required by the terms and conditions of this Agreement to the reasonable
satisfaction of the CEO and the Board, so as to promote the Company’s business
interests; and

 

(d) Devote himself diligently to the business interests of the
Company and personally attend thereto at all times during usual business hours
and during such other times as the Board may reasonably require, except in case
of incapacity through illness or accident, in which case he shall furnish to
the CEO such evidence thereof as it may reasonably require.

 

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3.    COMPENSATION

 

In consideration of the performance by the Employee of his duties hereunder,
the remuneration of the Employee shall be (and the Company shall pay to the
Employee):

 

(a)          Effective on the date of
hire, a base salary (“Salary”) of $280,000 per annum payable in accordance with
the Company’s normal payroll procedure, subject to normal payroll deductions,
with an increase to $290,000 at that point in time that merit increases are
given generally at the Company (expected to be around February, 2009),

 

(b)         Paid vacation, which
shall accrue at the rate of four weeks per year,

 

(c)          Other benefits and
perquisites normally available to executives of the Company, as may be changed
from time to time,

 

(d)         Annual bonuses of up to
30% of base pay, to be based on individual and Company performance, all at the
sole discretion of the Company’s Board of Directors, with it being agreed that
for the “stub” year of 2008, a bonus of $20,000 will be paid early in the 2009
year, and

 

(e)          Effective on the date of
hire, a grant of Restricted Stock Units (“RSUs”) to purchase up to 480,000
shares of Lpath Class A Common Stock. 
RSUs representing 240,000 shares will time-vest on a quarterly basis
over 16 quarters, with a four-quarter “cliff.” 
RSUs representing an additional 240,000 shares will vest based upon the
achievement of specific milestones, which are expected to be similar to those
described in the offer letter.

 

(f)            Such additional
remuneration as Employee and the Company shall negotiate in the future.

 

4.    EXPENSES

 

The Company shall pay on behalf of the Employee or reimburse the
Employee (against the Employee’s submission to the Company of proper receipts
therefore) for all expenses properly incurred by him in the course of his
employment hereunder or otherwise in connection with the business of the
Company in accordance with Company policies, as such policies may be
established and revised by the Board from time to time.

 

5.    AT-WILL EMPLOYMENT

 

Employee and the Company understand and expressly agree that Employee’s
employment with the Company is at-will, is not for a specified term, and may be
terminated by the Company or by Employee at any time, with or without notice and
with or without cause.  While not
required, as a courtesy, the parties shall attempt if possible to give thirty
(30)

 

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days’ notice of termination. 
This clause shall not be interpreted to conflict with Employee’s at-will
employment status.  Employee and the
Company further understand and agree that no representation contrary to this
section is valid, and that this section may not be augmented, contradicted, or
modified in any way, by any representative or agent of the Company or any other
person, except by a writing signed by the Employee and by the Board.

 

6.  TERMINATION

 

6.1    Upon termination for any
reason, including voluntary resignation, Employee shall:

 

(a) Be entitled to the compensation set forth in Section 3(a) hereof,
prorated to the effective date of such termination;

 

(b) Remain subject to the provisions of the Proprietary
Information and Inventions Agreement, in the form attached hereto as Exhibit A,
signed concurrently herewith;

 

(c) Be entitled to receive a termination payment for any accrued,
unused vacation.

 

(d) Not be entitled to severance, unless as provided in Section 6.2.

 

6.2       If Company terminates the
employment of Employee without Cause (to be defined later in this section), the
Company will, in addition to the provisions of Section 6.1, and in
exchange for employee’s execution of a full and complete release of all claims
as described herein:

 

(i)  Pay Employee seven months’ base
compensation if the termination occurs before there has been a Corporate
Transaction (to be defined later in this section) or pay Employee twelve months’
base compensation if the termination occurs after there has been a Corporate
Transaction.  Such payments are to be
made in accordance with Company’s normal payroll procedures with normal payroll
deductions.

 

(ii)  Continue to provide to Employee
all heath-care benefits, and other benefits that might apply, for the remainder
of the month in which the termination occurs and reimburse Employee for
Employee’s COBRA coverage for another seven-month period beyond that, or for a
twelve-month period if the termination occurs after there has been a
Corporate Transaction.

 

(iii)  If the termination occurs within
24 months after there has been a Corporate Transaction: (a) accelerate-vest
by 24 months Employee’s unvested stock options, unvested stock grants, and any
other such assets that vest over time and (b) allow Employee up to 24 months
to exercise such options except to the extent that any such options expire
before the end of this 24-month period or to the extent that earlier exercise
is required by the Company to effect a sale or a merger.

 

3

 

(iv) The term “Cause” is defined to mean
conduct that in the good faith judgment of the Board constitutes a material
breach of duty and is to include one or more of the following: falsification of
company documents, fraud, moral turpitude, theft, embezzlement, criminal
conduct, indictment on felony criminal charges, serious violations of Company
policies, material breach of Employee’s employment agreement, extended or
repeated absence from work that in the reasonable judgment of the Board is unjustifiable,
inability to perform duties for a period of thirty (30) or more days without
reasonable excuse and notice, or insubordination (e.g., refusal to carry out the reasonable instructions of
the Board). If the material breach of duty is reasonably curable, Company shall
provide notice to Employee of such breach of duty and shall give Employee a
30-day cure period.  Refusal to relocate
to a facility more than 50 miles from the current facility is NOT considered Cause.

 

(v) The term “Corporate Transaction” is
defined to mean (a) a transaction whereby the Company is party to a merger
or consolidation whereby the Company is NOT the surviving entity and whereby
the transaction results in the voting securities of the Company outstanding
immediately prior thereto failing to continue to represent (either by remaining
outstanding or by being converted into voting securities of the surviving or
another entity) at least fifty (50%) percent of the combined voting power of
the voting securities of the Company or such surviving or other entity
outstanding immediately after such merger or consolidation; or (b) the
sale or disposition of all or substantially all of the Company’s assets (or
consummation of any transaction having similar effect).

 

(vi) Employee will be eligible for no
other severance compensation, benefits, or vesting other than that which is
provided for in this Section 6.2 when he is terminated.  A condition precedent to the Company’s
obligation to fulfill the severance terms in this Section 6.2 shall be Employee’s
execution of a full and complete release of all claims against the Company, its
Board, officers, agents, and affiliates in reasonable form as provided by the
Company.  Nothing in this severance
provision supersedes or in any way alters the at-will provisions of Section 5
above.

 

(vii)  Employee agrees that he will
surrender to the Company, at its request, or at the conclusion of his
employment, all accounts, notes, data, sketches, drawings and reproductions,
and copies thereof, any of which (a) relate in any way to the business,
products, practices, or techniques of the Company, (b) contain
Confidential Information, whether or not created by him, or (c) come into
his possession by reason of his employment with the Company; and Employee
agrees further that all of the foregoing are the property of the Company.

 

7.  LOYAL PERFORMANCE

 

7.1  Employee shall not, during
the period of his employment by the Company, engage in any employment or
activity in any business competitive with the Company.  Employee agrees to notify the Company in
writing of any outside employment or business activity,

 

4

 

including the name of the business and the general nature of employee’s
involvement, during the period of Employee’s employment with the Company.

 

7.2   If, at any time during the
period ending two years after Employee has ceased to be an employee of the
Company (or of any subsidiary or affiliate of the Company), whether or not
pursuant to this agreement, Employee:

 

(a) directly or indirectly engages with...

 

(b) assists or has an active interest in, whether as owner,
partner, shareholder, joint venturer, corporate officer, director, employee,
consultant, principal, agent, trustee or licensor, or in any other similar capacity
whatsoever (provided that ownership of not more than two percent of the
outstanding stock of a corporation traded on a National securities exchange or
quoted on NASDAQ OTC shall not of itself be viewed as assisting or having an
active interest)...

 

or

 

(c) enters the employment of or acts as an agent for or advisor or
consultant to...

 

... any person, firm, partnership, association, corporation, business
organization, entity, or enterprise (the Business”) that is, or is about to
become, directly or indirectly, engaged in any business or program that
competes directly with or is substantially similar to any business or program
that the Company (or any subsidiary or affiliate of the Company) was involved
in (or was in the planning or development stage) during the 120-day period
immediately prior to Employee’s ceasing to provide services to the Company (or
any subsidiary or affiliate of the Company) [such business or program shall
include, but not be limited to, those that involve: (a) any composition of
matter or method that is protected by (i) any Company trade secret or (ii) any
Company intellectual property that is either issued, pending, or filed at the
time of termination or (b) the use, research or development, for any
therapeutic or diagnostic purpose, of (i) any sphingolipid, (ii) 
lysophosphatidic acid, Ceramide-1-phosphate, PAF, or HETE or (iii) any
component of their respective pathways], then Employee shall immediately notify
Company in writing of such involvement, including the name of the Business and
the nature of Employee’s involvement, and Employee agrees to fully respond to
reasonable questions by the Company regarding such involvement and to provide
such further assurances reasonably requested by Company that Employee is not
and will not be in breach of the Proprietary Information and Inventions
Agreement attached hereto as Exhibit A.

 

7.3   Employee will not, at any
time, without prior written consent of the Company:

 

(a) Directly or indirectly take any action or make or cause to be
made any statements which would disparage the reputation of the Company or any
subsidiary or affiliate of the Company, or

 

(b) Induce or attempt to influence any employee or consultant of
the Company or

 

5

 

any of its or their subsidiaries or affiliates to terminate his or her
employment.

 

7.4  Nothing contained in this Section 7
is intended to supercede or alter in any way the provisions of the Proprietary
Information and Inventions Agreement attached hereto as Exhibit A.

 

8.    CONFIDENTIALITY MATTERS

 

8.1    It is an express condition
to the employment of Employee by Company that Employee sign and deliver a
Proprietary Information and Inventions Agreement in the form attached hereto as
Exhibit A concurrently with the execution of this Agreement.

 

8.2  .  The covenants contained in the Proprietary
Information and Inventions Agreement constitute separate covenants.  If in any judicial proceeding, a court shall
hold that any of the covenants set forth in the Proprietary Information and
Inventions Agreement is not permitted by applicable laws, Employee and Company
agree that such provision shall and is hereby reformed to the maximum time,
geographic, or occupational limitations permitted by such laws.  Further, in the event a court shall hold
unenforceable any of the separate covenants deemed included herein, then such
unenforceable covenant or covenants shall be deemed eliminated from the
provisions of this Agreement for the purpose of such proceeding to the extent necessary
to permit the remaining separate covenants to be enforced in such
proceeding.  Employee and Company further
agree that the covenants in the Proprietary Information and Inventions
Agreement shall each be construed as a separate agreement independent of any
other provisions of this Agreement, and the existence of any claim or cause of
action by Employee against the Company whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
any of the covenants set forth in the Proprietary Information and Inventions
Agreement.

 

9.    ACKNOWLEDGMENT

 

Employee acknowledges that he has been advised by Company to consult
with independent counsel of his own choice, at his expense, as to the entering
into this Agreement, that he has had the opportunity to do so, and that he has
taken advantage of the opportunity to the extent that he desires.  The Employee further acknowledges that he has
read and that he understands this Agreement, is fully aware of its legal effect,
and has entered into it freely based on his own judgment and such professional
advice as he has seen fit to obtain.

 

10.    ARBITRATION

 

Employee and the Company agree that in the event of any dispute
concerning, arising out of, or related in any way to this Agreement, such
dispute shall be submitted to arbitration. 
Except as otherwise provided for herein, the disputes subject to this
agreement to arbitrate include, to the fullest extent allowable by law, all
potential claims between

 

6

 

Employee and Company including, but not limited to, breach of contract,
tort, discrimination, harassment, wrongful termination, compensation and
benefits claims, constitutional claims and claims for the violation of any
local, state or federal statute, ordinance or regulation. Arbitration
proceedings may be commenced by either party by giving the other party written
notice thereof and proceeding thereafter in accordance with the rules and
procedures of the American Arbitration Association and California law.  Any such arbitration shall take place before
a single arbitrator only in San Diego, California.  Any such arbitration shall be governed by and
be subject to the applicable laws of the State of California and the then-prevailing
rules of the American Arbitration Association (the “AAA”).  If the parties are unable to agree on a
single neutral arbitrator, the arbitrator shall be selected pursuant to the AAA
rules.  The arbitrator’s award in any
such arbitration shall be final and binding, and a judgment upon such award may
be entered and enforced by any court of competent jurisdiction.  Each party
to this Agreement understands that by agreeing to arbitrate their disputes,
they are giving up their right to have their disputes heard in a court of law
and, if applicable, by a jury. 
Company shall bear the costs of the arbitrator, the forum, and filing
fees.  Each party shall bear its own
respective attorney’s fees and all other costs, unless otherwise required or
allowed by law and awarded by the arbitrator.

 

11.    VIOLATION OF THE
PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

 

The Employee agrees and acknowledges that the violation of any of the
provisions contained in the Proprietary Information and Inventions Agreement
attached hereto as Exhibit A would cause irreparable injury to the
Company, the remedy at law for any violation or threatened violation thereof
would be inadequate, and that the Company shall be entitled to temporary and
permanent injunctive or other equitable relief without the necessity of proving
actual damages.  The Employee agrees that
such relief shall be available in a court of law in San Diego, California,
regardless of the arbitration provisions contained in Section 10 of this
Agreement.

 

12.    MISCELLANEOUS

 

12.1    Amendment.  This Agreement may not be modified or amended
without the express prior written consent of the Company and the Employee.

 

12.2    Notices.  All notices required or permitted under this
Agreement shall be in writing, shall be sent either certified mail, return
receipt requested, or by facsimile transmission and mailed or sent to the
relevant party at its address (or facsimile number) set out below (or such
other address or facsimile number as the addressee has given to the other
parties in accordance with the terms of this Section):

 

To the Company:

Lpath, Inc.

6335 Ferris Square, Suite A

San Diego, CA 92121

Facsimile (858) 678-0900

 

7

 

To the Employee:

John F.
Bender, PharmD

2342 Casa
Hermosa CT.

Encinitas, CA
92024

 

Any notice, demand or other communication so addressed to the relevant
party shall be deemed to have been delivered (a) if given or made by
certified letter, return receipt requested, when actually delivered to the relevant
party; and (b) if given or made by facsimile, upon receipt of a
transmission report confirming receipt.

 

12.3    Entire Agreement.  This Agreement and the Exhibits attached
hereto contain the entire agreement of the parties regarding the employment of
the Employee, and there are no other promises or conditions regarding the
Employee’s employment in any other agreement, whether oral or written.  This Agreement shall terminate and supersede
any previous employment agreements or arrangements between Employee and
Company.

 

12.4    Assignment.  The rights and obligations of the Company
under this Agreement shall inure to the benefit of and shall be binding upon
the successors and assigns of the respective corporation.  Employee shall not be entitled to assign any
of his rights or obligations under this Agreement.

 

12.5    Sections.  References herein to Sections are to the
sections in this Agreement, unless the context requires otherwise.

 

12.6   Headings.   The section headings are inserted for
convenience only and shall not affect the construction of this Agreement.

 

12.7    Rules of
Construction.  Unless the context
requires otherwise, words importing the singular include the plural and vice
versa, and words importing a gender include every gender.

 

12.8    Severability.  Whenever possible, each
provision of this 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
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 if such invalid, illegal or unenforceable provision had never
been contained therein.

 

12.9    Survival.  Any variation in salary or conditions
mutually agreed upon after the effective date of this Agreement shall not
constitute a new agreement; instead, the terms and conditions of this
Agreement, except as to such variation, shall continue in force.

 

12.10   Waiver.  The failure of either party to enforce any
provision of this Agreement

 

8

 

shall not be construed as a waiver or limitation of that party’s right
to subsequently enforce and compel strict compliance with every provision of
this Agreement.

 

12.11    Interpretation.  This Agreement shall not be construed against
any party on the grounds that such party drafted the Agreement or caused it to
be drafted.

 

12.12    Governing Law.  This Agreement shall be governed by the laws
of the State of California.  Any
controversy or claim arising out of or relating to this Agreement or the breach
thereof, whether involving remedies at law or equity, shall be adjudicated in
San Diego, California.

 

12.13    No Conflicting
Agreements.  Employee represents and
warrants to the Company that he is not a party to or bound by any
confidentiality, noncompetition, nonsolicitation or other agreement or
restriction which could conflict with or be violated by the performance of
Employee’s duties to the Company under this Agreement or otherwise.  Employee agrees that he will not disclose to
the Company, use, or induce the Company to use, any invention or confidential
information belonging to any third party.

 

IN WITNESS WHEREOF,
the parties hereto have executed this Agreement on the day and year first
written above.

 

	
  LPATH, INC.

  	
   

  	
  EMPLOYEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Scott R. Pancoast

  	
   

  	
  /s/ John F. Bender

  
	
   

  	
   

  	
  Signature

  
	
  Its: President & Chief Executive Officer

  	
   

  	
  John F. Bender

  
	
   

  	
   

  	
  Print Name

  
				

 

9

 

EXHIBIT
A

 

(PROPRIETARY
INFORMATION AND INVENTIONS AGREEMENT)

 

10

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