CEO Employment Agreement

ISTA PHARMACEUTICALS, INC.

EXECUTIVE EMPLOYEE AGREEMENT

This Executive Employee Agreement (" Agreement" ) is entered into as of March 13, 2006 (the " Effective Date" ), by and between Vicente Anido, Jr. Ph.D. (" Executive" ) and ISTA Pharmaceuticals, Inc., a Delaware corporation (the " Company" ).

WHEREAS , the Company desires to continue to employ Executive to provide personal services to the Company, and wishes to provide Executive with certain compensation and benefits in return for these services; and

WHEREAS , Executive wishes to continue to be employed by the Company and provide personal services to the Company in return for certain compensation and benefits, including the benefits provided under this Agreement; and WHEREAS, Executive and the Company wish this Agreement to replace and supercede any other agreements or arrangements existing as of the Effective Date between Executive and the Company providing for severance or other benefits upon termination of employment including but not limited to the Employment Agreement dated December 21, 2001 (collectively, the " Prior Security Agreements" ).

NOW, THEREFORE , in consideration of the mutual promises and covenants contained herein, it is hereby agreed by and between the parties hereto as follows:

1. EMPLOYMENT BY THE COMPANY . Subject to the terms and conditions set forth herein, the Company agrees to employ Executive to render full time services as the Company' s Chief Executive Officer and President and in such other capacities as the Company' s Board of Directors (" Board" ) may assign. Executive hereby accepts employment based on the terms and conditions set forth herein effective as of the Effective Date. In this position, Executive shall perform such duties as are assigned by the Board. During Executive' s employment with the Company, Executive will devote Executive' s best efforts and substantially all of Executive' s business time and attention to the business of the Company. Executive shall abide by the general employment policies and procedures of the Company, except that wherever the terms of this Agreement may differ from or are in conflict with the Company' s general employment policies or procedures, this Agreement shall control. 2. COMPENSATION .

2.1 Salary . For services to be rendered hereunder, Executive shall receive a base annual salary as set forth in Section 1 of the Compensation and Severance Terms Schedule, attached hereto as Exhibit A . Executive will be considered annually for adjustments in base salary. Any such adjustments will be subject to review and approval by the Compensation Committee of the Board and/or the Board, as appropriate. 2.2 Bonus . Executive shall be eligible to participate in the Company' s bonus plan at the executive level. Notwithstanding the foregoing, no bonus is guaranteed to Executive. The Company shall have the sole discretion to determine whether Executive is entitled to any such


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bonus and to determine the amount of the bonus. Any bonus is subject to the approval of the Compensation Committee of the Board and/or the Board, as appropriate. To be eligible to receive any bonus, Executive must be employed by the Company throughout the entire fiscal year or as otherwise set forth in the applicable bonus plan and be employed at the time the bonus is paid out. The current target level of such discretionary bonus for Executive is set forth in Section 2 of Exhibit A attached hereto. The Company retains the authority to review, grant, deny or revise any bonus or target level in its sole discretion.

2.3 Equity Awards . Subject to approval of the Board or the Compensation Committee of the Board, as appropriate, Executive will be eligible to receive grants of stock options, restricted stock or other equity awards as may from time to time be granted or awarded, pursuant to the terms and conditions set forth in the applicable equity award agreement and plan documents, copies of which will be made available upon Executive' s request. For the purposes of this Agreement, all stock options, restricted stock or other equity awards granted to Executive by the Company hereunder, or granted in the future, shall be referred to hereinafter as the " Equity Awards."

2.4 Vacation, Holiday Pay and Sick Leave . Executive shall be entitled to four (4) weeks of paid vacation each year. Any earned but unused vacation shall be accrued and may be used by Executive in any subsequent year. Upon termination of Executive' s employment for any reason, Executive shall receive vacation pay for all earned but unused vacation, calculated at his base salary rate in effect at the time of termination. The Company shall also provide Executive with holiday pay and paid sick leave as provided by the Company to its other executive employees of comparable stature. Any earned but unused sick leave shall be accrued and may be used by Executive in any subsequent year; provided that, upon termination of Executive' s employment for any reason, Executive shall receive no pay or other compensation for any accrued but unused sick leave. Notwithstanding the foregoing, vacation, holiday pay and sick leave do not accrue while Executive is on unpaid leave. 2.5 Standard Company Benefits . Executive shall receive all other employment benefits for which Executive is eligible under the terms and conditions of the standard Company benefits plans (e.g., health and disability insurance, 401(k) retirement plan, etc.) and other benefits and incentives which may be in effect from time to time and provided by the Company to employees at levels similar to Executive. Employment benefits, including but not limited to vacation, holiday pay, sick leave, paid insurance premiums, and other benefits do not accrue or continue during an unpaid leave, unless otherwise required by law.

3. PROPRIETARY INFORMATION AND INVENTIONS .

Executive shall comply with the terms of the Employee Proprietary Information and Inventions Agreement, between the Company and Executive, in the form currently entered into and as amended from time to time, and/or such other agreement(s) between Executive and the Company protecting the confidential and proprietary information and/or inventions of the Company as may be entered into after the date hereof (collectively, the " Employee Proprietary Information and Inventions Agreement" ). The terms of the Employee Proprietary Information and Inventions Agreement are incorporated herein by this reference. Notwithstanding any termination or expiration of this Agreement or termination of Executive' s employment, Executive agrees to continue to comply with the terms of the Employee Proprietary Information and Inventions Agreement.


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4. OUTSIDE ACTIVITIES . 4.1 Activities . Except with the prior written consent of the Board, Executive will not during Executive' s employment with the Company undertake or engage in any other employment, self-employment, occupation, consulting, or business enterprise, other than ones in which Executive is a passive investor. Without limiting the foregoing, Executive may not serve as a member of the board of directors of any public or private for-profit company, except with the prior written consent of the Board. Executive' s board memberships as of the Effective Date disclosed in writing by Executive to the Board are hereby approved. Executive may engage in civic and not-for-profit activities so long as such activities do not materially interfere with the performance of Executive' s duties hereunder. Executive will not during Executive' s employment with the Company or thereafter publicly or privately disparage the Company or any of its subsidiaries, or their respective past or present products, officers, directors, employees, agents or customers. 4.2 Investments and Interests . During Executive' s employment by the Company, Executive agrees not to acquire, assume or participate in, directly or indirectly, any position, investment or interest which is adverse to or in conflict with the interests of the Company, its current and anticipated business or prospects, financial or otherwise. By way of clarification, nothing contained in this Agreement shall prevent Executive from holding, for investment purposes only, no more than one percent (1%) of the capital stock of any publicly traded company. 4.3 Non-Competition . During Executive' s employment by the Company, except on behalf of the Company, Executive will not directly or indirectly, whether as an officer, director, employee, stockholder, partner, proprietor, associate, representative, consultant, contractor, or in any other capacity whatsoever engage in, become financially interested in, be employed by or have any business connection with any other person, corporation, firm, partnership or other entity whatsoever that competes with the Company, anywhere in the world, in any line of business engaged in (or planned to be engaged in) by the Company.

5. OTHER AGREEMENTS .

Executive represents and warrants that Executive' s employment by the Company will not conflict with and will not be constrained by any prior agreement or relationship with any third party. Executive represents and warrants that Executive will not disclose to the Company or use on behalf of the Company any trade secrets or other confidential information of any third party except in accordance with an agreement between the Company and any such third party. During Executive' s employment by the Company, Executive may use, in the performance of Executive' s duties, all information generally known and used by persons with training and experience comparable to Executive' s own and all information which is common knowledge in the industry or otherwise legally in the public domain.

6. TERMINATION OF EMPLOYMENT . 6.1 At Will Employment . Executive' s relationship with the Company is at will. The Company shall have the right to terminate Executive' s employment with the Company at any time with or without Cause and with or without advance notice.

6.2 Termination by Company for Cause . The Company may terminate Executive' s employment for Cause at any time effective on written notice to Executive. In the event


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of a termination for Cause, the Company' s sole obligation and liability to Executive shall be to pay Executive any unpaid salary, together with any unused vacation accrued to the effective date of such termination. Executive will not be entitled to severance benefits or any other compensation of any kind resulting from Executive' s termination for Cause. For purposes of this Agreement, " Cause" shall mean any of the following events, as determined by the Company: (i) Executive' s conviction of any felony; (ii) Executive' s deliberate attempt to do injury to the Company; (iii) dishonest or fraudulent conduct by Executive; (iv) Executive' s misconduct, gross negligence, material violation of Company policy, or material breach of this Agreement; or (v) Executive' s unsatisfactory performance of Executive' s duties to the Company which, with respect to this clause (v), Executive fails to correct within thirty (30) days after Executive is given written notice by the Board. 6.3 Termination by Company Without Cause . The Company shall be entitled at any time to terminate Executive' s employment without Cause, effective upon written notice to Executive. If the Company terminates Executive' s employment at any time without Cause, Executive shall be entitled to those severance benefits specifically set forth in Section 3.1 of the Compensation and Severance Terms Schedule, attached hereto as Exhibit A .

6.4 Executive' s Voluntary Resignation . Executive may terminate Executive' s employment with the Company at any time. In the event Executive voluntarily terminates Executive' s employment other than for Good Reason involving a Change in Control Termination as provided in Section 7, the Company' s sole obligation and liability to Executive shall be to pay Executive any unpaid salary, together with any accrued, unused vacation, through the effective day of resignation. Executive will not be entitled to severance benefits or any other compensation of any kind resulting from Executive' s voluntary termination.

6.5 Termination for Death or Disability . Executive' s employment with the Company will be terminated in the event ...