10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ______ TO _____

COMMISSION FILE NUMBER 000-551030

OccuLogix, Inc.

(Exact name of Registrant as specified in its charter)

DELAWARE	59 343 4771
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2600 Skymark Avenue, Unit 9, Suite 201

Mississauga, Ontario L4W 5B2

(Address of principal executive offices)

(905) 602-0887

(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

COMMON STOCK, $0.001 PAR VALUE

(Title of Class)

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:  NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  ¨  No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  ¨  No  x

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Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  x  No  ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  ¨	Accelerated filer  x
Non-accelerated filer  ¨  (Do not check if a smaller reporting company)	Smaller reporting company ¨

Indicate by check mark if the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ¨  No  x

The aggregate market value of the voting common stock held by non-affiliates of the Registrant (assuming officers, directors and 10% stockholders are affiliates), based on the last sale price for such stock on June 30, 2007: $36,025,308. The Registrant has no non-voting common stock.

As of March 13, 2008, there were 57,306,145 shares of the Registrant’s Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Proxy Statement for the 2008 Annual Meeting of Stockholders of the Registrant to be held on June 20, 2008 are incorporated by reference into Part III of this Form 10-K.

The Registrant makes available free of charge on or through its website (http://www.occulogix.com) its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. The material is made available through the Registrant’s website as soon as reasonably practicable after the material is electronically filed with or furnished to the U.S. Securities and Exchange Commission, or SEC. All of the Registrant’s filings may be read or copied at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington D.C. 20549. Information on the hours of operation of the SEC’s Public Reference Room can be obtained by calling the SEC at 1-800-SEC-0330. The SEC maintains a website (http://www.sec.gov) that contains reports and proxy and information statements of issuers that file electronically.

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PART I

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements relating to future events and our future performance within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In some cases, you can identify forward-looking statements by terms such as “may”, “will”, “should”, “could”, “would”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “projects”, “predicts”, “potential” and similar expressions intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performances, time frames or achievements expressed or implied by the forward-looking statements.

Given these risks, uncertainties and other factors, you should not place undue reliance on these forward-looking statements. Information regarding market and industry statistics contained in this Annual Report on Form 10-K is included based on information available to us that we believe is accurate. It is generally based on academic and other publications that are not produced for purposes of securities offerings or economic analysis. We have not reviewed or included data from all sources and cannot assure you of the accuracy of the market and industry data we have included.

Unless the context indicates or requires otherwise, in this Annual Report on Form 10-K, references to the “Company” shall mean OccuLogix, Inc. and its subsidiaries. References to “$” or “dollars” shall mean U.S. dollars unless otherwise indicated. References to “C$” shall mean Canadian dollars.

ITEM 1. BUSINESS.

Overview

We are an ophthalmic therapeutic company founded to commercialize innovative treatments for age-related eye diseases. Until recently, the Company operated two business divisions, being Retina and Glaucoma.

Retina Division

Until recently, the Company’s Retina division was in the business of developing and commercializing a treatment for dry age-related macular degeneration, or Dry AMD. Age-related macular degeneration, or AMD, is the leading cause of late onset visual impairment and legal blindness in people over the age of 50 in the United States and other Western industrialized societies.

We believe that Dry AMD, the most common form of the disease, afflicts approximately 13.0 to 13.5 million people in the United States, representing approximately 85% to 90% of all AMD cases. Although the exact cause of AMD is not known, researchers have identified several factors that are associated with AMD, including poor microcirculation and the gradual build-up of cellular waste material in the retina. We believe that improved microcirculation increases the supply of oxygen and nutrients to the compromised retina and facilitates the removal of cellular waste material from the retina. We believe that a treatment that improves microcirculation in the retina can help to enhance the metabolic efficiency of the retina and the removal of waste material and thereby aid in the treatment of Dry AMD. We believe there is a significant opportunity for such a treatment.

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Our product for Dry AMD, the RHEO™ System, is designed to improve microcirculation in the eye by filtering high molecular weight proteins and other macromolecules from the patient’s plasma. The RHEO™ System is used to perform the Rheopheresis™ procedure, which we refer to under our trade name RHEO™ Therapy. The Rheopheresis™ procedure is a blood filtration process that selectively removes molecules from plasma. The RHEO™ System consists of the OctoNova Pump and a disposable treatment set, containing two filters, through which the patient’s blood circulates. We believe that the RHEO™ System is the only Dry AMD treatment to target what we believe to be the underlying cause of AMD rather than its symptoms and that, based on early data, appeared to demonstrate improved vision in some patients. The only currently accepted treatment option for persons with advanced cases of Dry AMD are over-the-counter vitamins, antioxidants and zinc supplements that can reduce the five-year risk of conversion to Wet AMD, the other form of the disease, by approximately 25%.

We conducted a pivotal clinical trial, called MIRA-1, or Multicenter Investigation of Rheopheresis for AMD, which, if successful, was expected to support our application to the U.S. Food and Drug Administration, or FDA, to obtain approval to market the RHEO™ System in the United States. On February 3, 2006, we announced that, based on a preliminary analysis of the data from MIRA-1, MIRA-1 did not meet its primary efficacy endpoint as it did not demonstrate a statistically significant difference in the mean change of Best Spectacle-Corrected Visual Acuity applying the Early Treatment Diabetic Retinopathy Scale, or ETDRS BCVA, between the treated and placebo groups in MIRA-1 at 12 months post-baseline. As expected, the treated group demonstrated a positive result. An anomalous response of the control group is the principal reason why the primary efficacy endpoint was not met. There were subgroups that did demonstrate statistical significance in their mean change of ETDRS BCVA versus control.

Subsequent to the February 3, 2006 announcement, the Company completed an in-depth analysis of the MIRA-1 study data identifying subjects that were included in the intent-to-treat, or ITT, population but who deviated from the MIRA-1 protocol as well as those patients who had documented losses or gains in vision for reasons not related to retinal disease such as cataracts. Those subjects in the ITT population who met the protocol requirements, and who did not exhibit ophthalmic changes unrelated to retinal disease, comprised the modified per-protocol population.

In light of the MIRA-1 study results, we also re-evaluated our Pre-Market Approval Application, or PMA, submission strategy and then met with representatives of the FDA, on June 8, 2006 in order to discuss the impact on our PMA submission strategy of the MIRA-1 study results. In light of MIRA-1’s failure to meet its primary efficacy endpoint, the FDA advised us that it would require an additional study of the RHEO™ System to be performed.

On January 29, 2007, the Company announced that it had obtained Investigational Device Exemption clearance from the FDA to commence the new pivotal clinical trial of the RHEO™ System, called RHEO-AMD, or Safety and Effectiveness in a Multi-center, Randomized, Sham-controlled Investigation for Dry, Non-exudative Age-Related Macular Degeneration (AMD) Using Rheopheresis.

However, on November 1, 2007, the Company announced the indefinite suspension of its RHEO™ System clinical development program. This decision was made following a comprehensive review of the respective costs and development timelines associated with the products in the Company’s portfolio and in light of the Company’s financial position. Between January 29, 2007 and November 1, 2007, the Company had prepared the RHEO-AMD protocol and had been putting into place all of the resources required for the conduct for the RHEO-AMD study, including the securing of clinical trial site commitments. The Company is in the process of winding down the RHEO-AMD study as there is no reasonable prospect that the RHEO™ System clinical development program will be relaunched in the foreseeable future. Subsequent to our  fiscal 2007 year-end, as of February 25, 2008, we have terminated our relationship with Asahi Kasei Kuraray Medical Co., Ltd. (formerly Asahi Kasei Medical Co., Ltd.), or Asahi Medical. Asahi Medical manufactures, and supplied us with, the Rheofilter filter and the Plasmaflo filter, both of which are key components of the RHEO™ System. We also are engaged in discussions with Diamed Medizintechnik GmbH, or Diamed, and MeSys GmbH, or MeSys, regarding the termination of our relationship with each of them.  Diamed is the designer, and MeSys is the manufacturer, of the OctoNova pump, another key component of the RHEO™ System.

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Glaucoma Division

In anticipation of the delay in the commercialization of the RHEO™ System in the United States as a result of the MIRA-1 study’s failure to meet its primary efficacy endpoint and the FDA’s requirement of us to conduct an additional study of the RHEO™ System, the Company accelerated its diversification plans and, on September 1, 2006, acquired Solx, Inc., or SOLX, a Boston University Photonics Center-incubated company that has developed a system for the treatment of glaucoma, called the SOLX Glaucoma System.

The SOLX Glaucoma System is a next-generation glaucoma treatment platform designed to reduce intra-ocular pressure, or IOP, without a bleb (which is a surgically created flap that serves as a drainage pocket underneath the surface of the eye), thus avoiding its related complications. The SOLX Glaucoma System consists of the SOLX 790 Laser, a titanium sapphire laser used in laser trabeculoplasty procedures, and the SOLX Gold Shunt, a 24-karat gold, ultra-thin drainage device designed to bridge the anterior chamber and the suprachoroidal space in the eye, using the pressure differential that exists naturally in the eye in order to reduce IOP.

On December 20, 2007, we announced the sale of SOLX to Solx Acquisition, Inc., or Solx Acquisition, a company wholly owned by Doug P. Adams, the founder of SOLX and who, until the closing of the sale, had been serving as an executive officer of the Company in the capacity of President & Founder, Glaucoma Division.

The consideration for the purchase and sale of all of the issued and outstanding shares of the capital stock of SOLX consisted of:  (i) on December 19, 2007, the closing date of the sale, the assumption by Solx Acquisition of all of the liabilities of OccuLogix, as they related to SOLX’s business, incurred on or after December 1, 2007, and OccuLogix’s obligation to make a $5,000,000 payment to the former stockholders of SOLX due on September 1, 2008 in satisfaction of the outstanding balance of the purchase price of SOLX; (ii) on or prior to February 15, 2008, the payment by Solx Acquisition of all of the expenses that OccuLogix had paid to the closing date, as they related to SOLX’s business during the period commencing on December 1, 2007; (iii) during the period commencing on the closing date and ending on the date on which SOLX achieves a positive cash flow, the payment by Solx Acquisition of a royalty equal to 3% of the worldwide net sales of the SOLX 790 Laser and the SOLX Gold Shunt, including next-generation or future models or versions of these products; and (iv) following the date on which Solx achieves a positive cash flow, the payment by Solx Acquisition of a royalty equal to 5% of the worldwide net sales of these products. In order to secure the obligation of Solx Acquisition to make these royalty payments, SOLX granted to OccuLogix a subordinated security interest in certain of its intellectual property. In connection with the sale of SOLX, those employees of the Company, whose roles and responsibilities related mainly to SOLX’s business, ceased to be employees of the Company and became employees of Solx Acquisition or SOLX.

Prior to the sale of SOLX, we had been in the process of training and certifying physicians in the use of the SOLX Gold Shunt, for commercial purposes, in various European and Asian jurisdictions, including Spain, Italy, Germany, Poland, France, the United Kingdom and Thailand. In addition, in order to establish and maintain a reliable distribution network for SOLX’s products, we had been continuing to maintain our relationships with distributors in France, Germany, Spain, the United Kingdom and Canada and had been engaged in pursuing relationships with other distributors in Europe.

Both the SOLX 790 Laser and the SOLX Gold Shunt are currently the subject of randomized, multi-center clinical trials, the purposes of which are to demonstrate equivalency to the argon laser, in the case of the SOLX 790 Laser, and to the Ahmed Glaucoma Valve manufactured by New World Medical, Inc., in the case of the SOLX Gold Shunt. The results of these clinical trials will be used in support of applications to the FDA for a 510(k) clearance for each of the SOLX 790 Laser and the SOLX Gold Shunt, the receipt of which, if any, will enable the marketing and sale of these products in the United States.

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The SOLX 790 Laser received CE Mark approval in December 2004, and the SOLX Gold Shunt received CE Mark approval in October 2005. The SOLX 790 Laser has a Health Canada license, and, prior to the sale of SOLX, we had been seeking the corresponding approval for the SOLX Gold Shunt.

OcuSense, Inc.

As part of its accelerated diversification plans, on November 30, 2006, OccuLogix acquired 50.1% of the capital stock, on a fully diluted basis, of OcuSense, Inc., or OcuSense, a San Diego-based company that is in the process of developing technologies that will enable eye care practitioners to test, at the point-of-care, for highly sensitive and specific biomarkers using nanoliters of tear film.

OcuSense’s first product, which is currently under development, is a hand-held tear film test for the measurement of osmolarity, a quantitative and highly specific biomarker that has shown to correlate with dry eye disease, or DED, The test is known as the TearLab™ test for DED. The anticipated innovation of the TearLab™ test for DED will be its ability to measure precisely and rapidly certain biomarkers in nanoliter volumes of tear samples, using inexpensive hardware.  Historically, eye care researchers have relied on expensive instruments to perform tear biomarker analysis. In addition to their cost, these conventional systems are slow, highly variable in their measurement readings and not categorized as waived by the FDA under regulations promulgated under the Clinical Laboratory Improvement Amendments, or CLIA.

The TearLab™ test for DED will require the development of the following three components:  (1) the TearLab™ disposable, which is a single-use microfluidic labcard; (2) the TearLab™ pen, which is a hand-held device that interfaces with the TearLab™ disposable; and (3) the TearLab™ reader, which is a small desktop unit that allows for the docking of the TearLab™ disposable and the TearLab™ pen and provides a quantitative reading for the operator.  OcuSense is currently engaged in industrial, electrical and software design efforts for the three components of the TearLab™ test for DED and, to these ends, is working with two engineering partners, both based in Melbourne, Australia, one of which is a leader in biomedical instrument development and the other of which is a leader in customized microfluidics.

OcuSense’s objective is to complete product development of the TearLab™ test for DED during the first half of 2008. Following the completion of product development and subsequent clinical trials, OcuSense intends to seek a 510(k) clearance and a CLIA waiver from the FDA for the TearLab™ test for DED. Currently, it anticipates seeking the 510(k) clearance during the latter half of 2008 and the CLIA waiver during the latter half of 2009. In addition, OcuSense intends to seek CE Mark approval for the TearLab™ test for DED during the latter half of 2008.

OccuLogix acquired its 50.1% ownership stake, on a fully diluted basis, in OcuSense for an aggregate purchase price of up to $8,000,000. Pursuant to the Series A Preferred Stock Purchase Agreement, dated as of November 30, 2006, by and among OcuSense and the Company (which agreement was amended subsequently on October 29, 2007), or the OcuSense Stock Purchase Agreement, the Company purchased 1,754,589 shares of OcuSense’s Series A Preferred Stock, par value $0.001 per share. The Company paid $2,000,000 of the purchase price on the closing of the purchase and made another $2,000,000 payment on January 3, 2007. A third $2,000,000 payment was made in June 2007 upon the attainment by OcuSense of the first of two pre-defined milestones, and the last $2,000,000 installment of the purchase price will become due and payable upon the attainment by OcuSense of the second of these two pre-defined milestones, being the successful production and testing of Beta Lab Cards for Osmolarity and the Beta Reader for Osmolarity, or the TearLab™ disposable and the TearLab™ reader, respectively. We anticipate that OcuSense will attain this second milestone during the first half of 2008.

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The OcuSense Stock Purchase Agreement provides for an ability on the part of the Company to increase its ownership interest in OcuSense for nominal consideration if OcuSense fails to meet certain other milestones by specified dates. In addition, pursuant to the OcuSense Stock Purchase Agreement, the Company has agreed to purchase $3,000,000 of shares of OcuSense’s Series B Preferred Stock upon OcuSense’s receipt from the FDA, if any, of 510(k) clearance for the TearLab™ test for DED and to purchase another $3,000,000 of shares of OcuSense’s Series B Preferred Stock upon OcuSense’s receipt from the FDA, if any, of a CLIA waiver for the TearLab™ test for DED.

Current Situation

With the suspension of the Company’s RHEO™ System clinical development program, and the consequent winding-down of the RHEO-AMD study, and the Company’s disposition of SOLX, the Company no longer has any operating business. Its major asset is its 50.1% ownership stake, on a fully diluted basis, in OcuSense.

On October 9, 2007, we announced that our Board of Directors, or the Board, had authorized management and the Company’s advisors to explore the full range of strategic alternatives available to enhance shareholder value. These alternatives may include, but are not limited to, the raising of capital through the sale of securities, one or more strategic alliances and the combination, sale or merger of all or part of OccuLogix. In making the announcement, the Company stated that there can be no assurance that the exploration of strategic alternatives will result in a transaction. To date, we have not disclosed, nor do we intend to disclose, developments with respect to our exploration of strategic alternatives unless and until the Board, has approved a specific transaction.

For some time prior to the October 9, 2007 announcement, the Company had been seeking to raise additional capital, with the objective of securing funding sufficient to sustain its operations as it has been clear that, unless we were able to raise additional capital, the Company would not have had sufficient cash to support its operations beyond early 2008. The Board’s decisions to suspend the Company’s RHEO™ System clinical development program and to dispose of SOLX were made and implemented in order to conserve as much cash as possible while the Company continues its capital-raising efforts.

On January 9, 2008, we announced the departure, or pending departure, of seven members of our executive team and, commencing on February 1, 2008, a 50% reduction in the salary of each of Elias Vamvakas, our Chairman and Chief Executive Officer, and Tom Reeves, our President and Chief Operating Officer. By January 31, 2008, a total of 12 non-executive employees of the Company left the Company’s employment.

On February 19, 2008, we announced that the Company secured a bridge loan in an aggregate principal amount of $3,000,000 from a number of private parties. The loan bears interest at a rate of 12% per annum and has a 180-day term, which may be extended to 270 days under certain circumstances. The repayment of the loan is secured by a pledge by the Company of its shares of the capital stock of OcuSense.

Under the terms of the loan agreement, the Company has two pre-payment options available to it, should it decide to not wait until the maturity date to repay the loan. Under the first pre-payment option, the Company may repay the loan in full by paying the lenders, in cash, the amount of outstanding principal and accrued interest and issuing to the lenders five-year warrants in an aggregate amount equal to approximately 19.9% of the issued and outstanding shares of the Company’s common stock (but not to exceed 20% of the issued and outstanding shares of the Company’s common stock). The warrants would be exercisable into shares of the Company’s common stock at an exercise price of $0.10 per share and would not become exercisable until the 180th day following their issuance. Under the second pre-payment option, provided that the Company has closed a private placement of shares of its common stock for aggregate gross proceeds of at least $4,000,000, the Company may repay the loan in full by issuing to the lenders shares of its common stock, in an aggregate amount equal to the amount of outstanding principal and accrued interest, at a 15% discount to the price paid by the private placement investors. Any exercise by the Company of the second pre-payment option would be subject to stockholder and regulatory approval.

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Currently, we anticipate that the net proceeds of the loan, together with the Company’s other cash and cash-equivalents, will be sufficient to sustain the Company’s operations only until approximately the end of April 2008 (assuming that the outstanding obligation of OccuLogix to pay $2,000,000 to OcuSense becomes due and payable prior to the end of April 2008).

Our History and Major Relationships

Shortly after our inception, we began commercialization of therapeutic apheresis by opening a therapeutic apheresis center in Florida. This site generated revenues of $900,200 and $1,277,800 for the years ended June 30, 1999 and 1998, respectively. The therapeutic apheresis center was closed in 1999 pursuant to a directive issued by the FDA. After obtaining an FDA investigational device exemption in 1999, we initiated the MIRA-1 pivotal clinical trial to support an application to the FDA for approval to market the RHEO™ System and completed this trial in 2005.

  Relationship with TLC Vision Corporation

TLC Vision Corporation, or TLC Vision, beneficially owns approximately 32.8% of our outstanding common stock, or 28.9% on a fully diluted basis. Elias Vamvakas, formerly a director of TLC Vision and its past Chairman and CEO, became our Chairman in 2003 and is also our CEO. In addition, one of our other directors, Richard L. Lindstrom, is also a director of TLC Vision. One of our other directors, Thomas N. Davidson, also was a director of TLC Vision until December 2007. Mr. Vamvakas beneficially owns 1,041,795 common shares of TLC Vision, representing approximately 2.08% of TLC Vision’s outstanding shares. Mr. Davidson beneficially owns 67,127 common shares of TLC Vision, representing approximately 0.14% of TLC Vision’s outstanding shares, and Dr. Lindstrom beneficially owns 29,500 common shares of TLC Vision, representing approximately 0.06% of TLC Vision’s outstanding shares.

On December 8, 2004, we purchased TLC Vision’s 50% interest in OccuLogix, L.P. in exchange for which we issued 19,070,234 shares of our common stock to TLC Vision. This resulted in OccuLogix, L.P. becoming our wholly-owned subsidiary. Accordingly, 100% of the results of OccuLogix, L.P.’s operations are included in the consolidated financial statements since that date. We licensed to OccuLogix, L.P. all of the distribution and marketing rights for the RHEO™ System for ophthalmic indications to which we are entitled. Prior to the acquisition, our only profit stream had come from our share of OccuLogix, L.P.’s earnings. Our acquisition of TLC Vision’s 50% ownership interest in OccuLogix, L.P. transferred the earnings potential for sales of the RHEO™ System entirely to us.

As part of the formation of OccuLogix, L.P. in July 2002, we licensed certain patent rights, trademark rights and know-how rights to OccuLogix, L.P. We also provided OccuLogix, L.P. with licenses to our in-house software as well as sublicensing software that we have licensed from TLC Vision. TLC Vision agreed to provide OccuLogix, L.P., upon request, with $200,000 in funding at an annual interest rate equal to the Bank of America prime rate of interest on the date the loan is made, plus two percent. As at December 8, 2004, Occulogix, L.P. had not requested funding from TLC Vision.

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On December 31, 2005, OccuLogix, L.P. transferred all of its assets and liabilities, including the licensed patent, trademark and know-how rights and the licensed distribution and marketing rights for the RHEO™ System, to our then newly incorporated subsidiary, OccuLogix Canada Corp. We completed the wind-up of OccuLogix, L.P. on February 6, 2006. Whatever residual value exists with respect to the RHEO™ System resides solely in OccuLogix Canada Corp.

On June 22, 2007, TLC Vision sold 1,904,762 shares of OccuLogix’s common stock to JEGC OCC Corp., or JEGC. JEGC is owned by Greybrook Corporation, a private equity firm controlled by Mr. Vamvakas, and by Jefferson Equicorp Ltd., a private equity firm controlled by David Folk, Managing General Partner of Jefferson Partners.

  Other Major Relationships

The components of the RHEO™ System were developed by our suppliers, Diamed and Asahi Medical.

Prior to the Company’s acquisition of SOLX, Doug P. Adams served as the President and Chief Executive Officer of SOLX and was a significant stockholder of SOLX. Between September 1, 2006, the closing date of the acquisition, and December 19, 2007, the closing date of OccuLogix’s sale of SOLX to Solx Acquisition, Mr. Adams served as an executive officer of the OccuLogix. OccuLogix paid Mr. Adams a total of $1,615,930 and issued to him 1,309,329 shares of our common stock in consideration of his proportionate share of the purchase price of SOLX. Until the assumption, on December 19, 2007, by Solx Acquisition of OccuLogix’s obligation to pay $5,000,000 to the former stockholders of SOLX on September 1, 2008 in satisfaction of the outstanding balance of the purchase price of SOLX, Mr. Adams was owed $1,024,263by OccuLogix in consideration of his proportionate share of the outstanding balance of the purchase price of SOLX.

In addition, in connection with the Company’s acquisition of SOLX, OccuLogix paid Peter M. Adams, Doug P. Adams’ brother, a total of $371,095and issued to him and his spouse an aggregate of 300,452 shares of our common stock in consideration of his proportionate share of the purchase price of SOLX. Until the assumption, on December 19, 2007, by Solx Acquisition of OccuLogix’s obligation to pay $5,000,000 to the former stockholders of SOLX on September 1, 2008 in satisfaction of the outstanding balance of the purchase price of SOLX, OccuLogix owed Mr. Adams $236,917 in consideration of his proportionate share of the outstanding balance of the purchase price of SOLX.

On November 30, 2006, Mr. Vamvakas agreed to provide the Company with a standby commitment to purchase convertible debentures of the Company in an aggregate maximum principal amount of up to $8 million. When the Company raised gross proceeds in the amount of $10,016,000 on February 6, 2007 in a private placement of shares of its common stock and warrants, the commitment amount under Mr. Vamvakas’ standby commitment was reduced to zero, thus effectively terminating the standby commitment. No portion of the standby commitment was ever drawn down by the Company, and the Company has paid Mr. Vamvakas a total of $29,808 in commitment fees.

On December 19, 2007, we sold SOLX to Solx Acquisition, Inc., a company wholly owned by Doug P. Adams. The consideration for the purchase and sale of all of the issued and outstanding shares of the capital stock of SOLX consisted of:  (i) on December 19, 2007, the closing date of the sale, the assumption by Solx Acquisition of all of the liabilities of OccuLogix, as they related to SOLX’s business, incurred on or after December 1, 2007, and OccuLogix’s obligation to make a $5,000,000 payment to the former stockholders of SOLX due on September 1, 2008 in satisfaction of the outstanding balance of the purchase price of SOLX; (ii) on or prior to February 15, 2008, the payment by Solx Acquisition of all of the expenses that OccuLogix had paid to the closing date, as they related to SOLX’s business during the period commencing on December 1, 2007; (iii) during the period commencing on the closing date and ending on the date on which SOLX achieves a positive cash flow, the payment by Solx Acquisition of a royalty equal to 3% of the worldwide net sales of the SOLX 790 Laser and the SOLX Gold Shunt, including next-generation or future models or versions of these products; and (iv) following the date on which Solx achieves a positive cash flow, the payment by Solx Acquisition of a royalty equal to 5% of the worldwide net sales of these products. In order to secure the obligation of Solx Acquisition to make these royalty payments, SOLX granted to OccuLogix a subordinated security interest in certain of its intellectual property.

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Marchant Securities Inc., or Marchant, a firm indirectly beneficially owned as to approximately 32% by Mr. Vamvakas and members of his family, introduced the Company to the lenders of the $3,000,000 aggregate principal amount bridge loan that the Company secured and announced on February 19, 2008. For such service, Marchant will be paid a commission of $180,000, being 6% of the aggregate principal amount of the loan. Subject to obtaining any and all requisite stockholder and regulatory approvals, half of the commission will be paid to Marchant in the form of equity securities of the Company.

Industry (OcuSense)

Point-of-care Testing and Dry Eye Disease, or DED

The global market for point-of-care testing is currently $4.5 billion annually or 15% of the $30 billion global market for in-vitro diagnostic products. Approximately 75% of all laboratory tests today are performed at centralized clinical laboratories. However, there is an increasing frequency of diagnostic testing being performed at the point-of-care due to several factors, including a need for rapid testing in acute care situations, the benefits of patient monitoring and disease management, streamlining therapeutic decision making and the overall trend toward personalized medicine. Advances in biodetection technologies that can simplify and accelerate the rate of performing complex diagnostic tests at the point-of-care, and that are reimbursed, will drive utilization and overall point-of-care testing market growth.

OcuSense’s first product, currently under development, is the TearLab™ test for DED which is a test that can be performed at the point-of-care for the measurement of osmolarity, a quantitative and highly specific biomarker that has shown to correlate with DED. There are estimated to be more than 30 million people with DED in the U.S. alone, and this condition is estimated to account for up to one-third of all visits to U.S. doctors.

Each time a person blinks, his or her eyes are resurfaced with a thin layer of a complex fluid known as the tear film. The tear film works to protect eyes from the outside world. Bacteria, viruses, sand, freezing winds and salt water will not damage eyes when the tear film is intact. However, when compromised, a deficient tear film can be an exceedingly painful and disruptive experience. The tear film consists of three components:  (i) an innermost mucin layer (produced by the surface cells); (ii) the aqueous layer (the water in tears, produced by the lacrimal gland); and (iii) an oily lipid layer which limits evaporation of the tears (produced by the meibomian glands, located at the margins of the eyelids). The apparatus of the ocular surface forms an integrated unit. When working correctly, the tear film presents a smooth optical surface essential for clear vision and proper immunity. However, when the tear film is disrupted, it leads to the condition known as DED.

DED is often seen as a result of aging, diabetes, prostate cancer therapy, HIV, autoimmune diseases such as Sjögren’s syndrome and rheumatoid arthritis, LASIK surgery, contact lens wear and menopause and as a side effect of hormone replacement therapy. Numerous commonly prescribed and over-the-counter medications also can cause, or contribute to, the manifestation of DED.

As an individual’s lacrimal glands deteriorate with age or disease, the quantity of tears is drastically reduced, resulting in an aqueous deficiency. Other forms of DED are linked to meibomian gland (lid) dysfunction, where a patient’s tears evaporate so quickly that he or she is unable to retain any moisture on the surface of his or her eye. The end effect in both cases, aqueous deficiency and evaporative dry eye, is a very debilitating condition that results in pain, decreased vision and, in severe cases, even blindness. Consequently, DED has a significant negative impact on one’s quality of life.

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There are approximately 15 million Americans who suffer from contact lens-induced DED, and 10-15% of these patients revert to frame wear annually due to dryness and discomfort. There are approximately 1.2 million LASIK procedures performed in the U.S each year, and about 50% of patients experience DED post-operatively. Osmolarity testing could provide optometrists with a tool to identify patients at risk for dropping out of contact lens wear early in disease progression so that they may be treated, and osmolarity testing could be an invaluable pre-operative screen used to determine which LASIK patients should be treated prior to surgery in order to improve post-operative outcomes.

Diagnostic Alternatives for DED

Existing diagnostic assays are highly subjective, do not correlate well with symptoms, are invasive for patients and may require up to an hour of operator time to perform. All of these factors have constrained the diagnosis and treatment of the DED patient population. As physicians have not had access to objective, quantitative diagnostic assays that correlate well with symptoms and disease pathogenesis, it has been difficult for them to differentiate DED symptoms from other eye diseases that present with very similar symptoms, such as non-infectious ocular allergies or infectious bacterial or viral diseases. To treat DED effectively and to mitigate the emotional and physical effects of this disease, it will be critical to equip physicians with objective, quantitative measurements of disease pathogenesis so they can determine more accurately the most efficacious treatments for their patients.

DED presents itself as an increase in the salt concentration of the tear film. For approximately 50 years, studies have shown that tear film osmolarity is an ideal clinical marker for diagnosing DED, because it provides an objective, quantitative measurement of disease pathogenesis. Moreover, measuring osmolarity could serve as an effective disease management tool by providing physicians with an ability to personalize therapeutic intervention and to track patient outcomes quantitatively. However, measuring tear biomarkers, such as osmolarity, at the point-of-care requires a reduction in sample volume to the nanoliter scale in order to mitigate the risk of reflex tearing, which results in a dilution of the tear sample and a variability in the test results. Moreover, a point-of-care system in the U.S. market most likely would require a CLIA waiver classification in order to gain broad market adoption since most U.S. eye care practitioners do not possess CLIA certification for their offices. In order to be given CLIA waiver classification, the user interface of the test would have to be extremely simple in order to minimize the likelihood of operator error and the risk of harm to the patient. Conventional technologies for the measurement of osmolarity are not suitable for the point-of-care market as they are too expensive, too complex for CLIA waiver classification and unable to measure precisely tear film osmolarity in nanoliter sample volumes. OcuSense is striving to meet the needs of the point-of-care market with the TearLab™ test for DED.

Existing osmometry technologies have proven unable to measure consistently tear samples in the low nanoliter range, which has presented a critical barrier to their entry into the DED diagnostic markets. In addition, these instruments are not particularly suitable for use in a physician’s office, since they require continual calibration, cleaning and maintenance. Existing osmometers currently are marketed primarily to reference and hospital laboratories for the measurement of osmolarity in blood, urine and other serum samples.

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OcuSense’s Product

OcuSense’s first product, the TearLab™ test for DED, which is currently under development, is an integrated testing system comprised of:  (1) the TearLab™ disposable, which is a single-use microfluidic labcard; (2) the TearLab™ pen, which is a hand-held device that interfaces with the TearLab™ disposable; and (3) the TearLab™ reader, which is a small desktop unit that allows for the docking of the TearLab™ disposable and the TearLab™ pen and provides a quantitative reading for the operator. The anticipated innovation of the TearLab™ test for DED will be its ability to measure precisely and rapidly, and inexpensively, certain biomarkers in nanoliter volumes of tear samples. Current in-lab testing technologies require a minimum of one microliter volume tear film sample, or approximately 10 to 100 times more than the tear film volume typically available before reflex tearing occurs.

The operator of the TearLab™ test for DED, most likely a technician, will collect the tear sample from the patient’s eye in the TearLab™ disposable, using the TearLab™ pen, and then place the TearLab™ disposable into the TearLab™ reader. The TearLab™ reader then will display an osmolarity reading to the operator. Following the completion of the test, the TearLab™ disposable will be discarded and a new TearLab™ disposable will be readied for the next test. The entire process, from sample to answer, should require approximately two minutes or less to complete.

OcuSense is currently engaged in industrial, electrical and software design efforts for the three components of the TearLab™ test for DED and, to these ends, is working with two engineering partners, both based in Melbourne, Australia, one of which is a leader in biomedical instrument development and the other of which is a leader in customized microfluidics. In June 2007, OcuSense successfully produced and tested Alpha prototypes of the TearLab™ disposable, pen and reader in order to demonstrate the viability of the integrated system. OcuSense is working to achieve the successful production and testing of Beta prototypes of the TearLab™ disposable, pen and reader in order to validate system performance further and to prepare for commercial manufacturing. We anticipate that this milestone will be attained during the first half 2008.

OcuSense’s objective is to complete product development of the TearLab™ test for DED during the first half of 2008. Following the completion of product development and subsequent clinical trials, OcuSense intends to seek a 510(k) clearance and a CLIA waiver from the FDA for the TearLab™ test for DED. Currently, it anticipates seeking the 510(k) clearance during the latter half of 2008 and the CLIA waiver during the latter half of 2009.In addition, OcuSense intends to seek CE Mark approval for the TearLab™ test for DED during the latter half of 2008.

In December 2007, OcuSense entered into a research agreement with a large ophthalmic company, pursuant to which that company is sponsoring OcuSense’s clinical studies of the TearLab™ test for DED. Pursuant to this research agreement, that company has paid for the future acquisition of a number of units of the beta version of the TearLab™ test for DED and has secured limited exclusive access to the beta version of the TearLab™ test for DED until OcuSense obtains a 510(k) clearance for it from the FDA.

Competition (OcuSense)

To date, OcuSense has identified one emerging technology that claims to be able to measure the osmolarity of nanoliter tear samples. This technology is being developed at the Aborn Eye Clinic in New York. Based on patent claims, it would appear that this technology uses surface plasmon resonance, an optical technology, to measure tear film osmolarity.

As there are no commercially available instruments to measure tear film osmolarity at the point-of-care, OcuSense views existing DED diagnostic tests, such as the Schirmer Test and ocular surface staining, as its primary source of competition.

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Tear film break-up time, or TBUT, is another assay meant as an indication of tear film stability.  However, it is subjective, requires a physician to instill a carefully controlled amount of fluorescein dye into the eye and requires a stopwatch to determine the endpoint. TBUT has been shown to be unreliable as a determinant of DED since shortened TBUT doesn’t always correlate well with other signs or symptoms.

Tests like impression cytology and corneal staining, although indicative of relatively late stage phenomena in DED, are subjective, qualitative and generally don’t correlate to disease pathogenesis.  The Schirmer Test is an imprecise marker of tear function since its diagnostic results vary significantly.

Although, at the present time, there does not appear to be a direct competitor to the TearLab™ test for DED, many industry participants have much greater resources than OcuSense has, thus enabling them, among other things, to make greater research and development investments, and to make more significant investments in marketing, promotion and sales, than OcuSense is capable of right now or will be capable of during the foreseeable future.

Patents and Proprietary Rights (OcuSense)

OcuSense owns or has exclusive licenses to five U.S. patents relating to the TearLab™ test for DED and related technology and processes and has applied for a number of other patents in the United States and other jurisdictions.

OcuSense intends to rely on know-how, continuing technological innovation and in-licensing opportunities to develop further its proprietary position. OcuSense’s ability to obtain intellectual property protection for the TearLab™ test for DED and related technology and processes, and its ability to operate without infringing the intellectual property rights of others and to prevent others from infringing its intellectual property rights, will have a substantial impact on its ability to succeed in its business. Although OcuSense intends to seek to protect its proprietary position by, among other methods, continuing to file patent applications, the patent position of companies like OcuSense is generally uncertain and involves complex legal and factual questions. OcuSense’s ability to maintain and solidify a proprietary position for its technology will depend on its success in obtaining effective claims and enforcing those claims once granted. Neither OcuSense nor we know whether any part of its patent applications will result in the issuance of any patents. Its issued patents or those that may issue in the future, or those licensed to OcuSense, may be challenged, invalidated or circumvented, which could limit OcuSense’s ability to stop would-be competitors from marketing tests identical to the TearLab™ test for DED.

In addition to patent protection, OcuSense has registered the TearLab™ trademark in the U.S.

Government Regulation

Government authorities in the United States and other countries extensively regulate, among other things, the research, development, testing, manufacture, labeling, promotion, advertising, distribution and marketing of OcuSense’s product, which is a medical device. In the United States, the FDA regulates medical devices under the Federal Food, Drug, and Cosmetic Act and implementing regulations. Failure to comply with the applicable FDA requirements, both before and after approval, may subject us to administrative and judicial sanctions, such as a delay in approving or refusal by the FDA to approve pending applications, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, administrative fines and/or criminal prosecution.

Unless exempted by regulation, medical devices may not be commercially distributed in the United States unless they have been cleared or approved by the FDA. Medical devices are classified into one of the three classes, Class I, II or III, on the basis of the controls necessary to reasonably assure their safety and effectiveness. Class I devices are subject to general controls, such as labeling, pre-market notification and adherence to good manufacturing practices. Class II devices are subject to general and specific controls, such as performance standards, pre-market notification, patient registries and FDA guidelines. Generally, Class III devices are those which must receive approval of a PMA by the FDA to provide reasonable assurance of their safety and effectiveness. For example, life-sustaining, life-supporting and implantable devices, or new devices which have not been found substantially equivalent to legally marketed devices, generally require approval of a PMA by the FDA.

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There are two review procedures by which medical devices can receive clearance or approval. Some products may qualify for clearance under a Section 510(k) procedure, in which the manufacturer provides a pre-market notification that it intends to begin marketing the product, and shows that the product is substantially equivalent to another legally marketed product, that it has the same intended use and is as safe and effective as a legally marketed device and does not raise different questions of safety and effectiveness than does a legally marketed device. In some cases, the submission must include data from human clinical studies. Marketing may commence when the FDA issues a clearance letter finding substantial equivalence.

By statute and regulation, the FDA is required to clear, deny or request additional information on a 510(k) pre-market notification within 90 days of its submission. However, as a practical matter, 510(k) clearance often takes significantly longer. The FDA may require additional information, including clinical data, to make a determination regarding substantial equivalence. In addition, after a device receives 510(k) clearance, any modification to the device that could significantly affect its safety or effectiveness, or that would constitute a major change in its intended use, would require a new 510(k) clearance or an approval of a PMA. Although the FDA requires the manufacturer to make the initial determination regarding the effect of a modification to the device that is subject to 510(k) clearance, the FDA can review the manufacturer’s determination at any time and require the manufacturer to seek another 510(k) clearance or an approval of a PMA.

The TearLab™ test for DED is a Class I, non-exempt device and qualifies for the 510(k) procedure.

CLIA is intended to ensure the quality and reliability of clinical laboratories in the United States by mandating specific standards in the areas of personnel qualifications, administration, participation in proficiency testing, patient test management, quality control, quality assurance and inspections. The regulations promulgated under CLIA establish three levels of in vitro diagnostic tests:  (1) waiver; (2) moderately complex; and (3) highly complex. The standards applicable to a clinical laboratory depend on the level of diagnostic tests it performs. A CLIA waiver is available to clinical laboratory test systems if they meet certain requirements established by the statute. Waived tests are simple laboratory examinations and procedures employing methodologies that are so simple and accurate as to render the likelihood of erroneous results negligible or to pose no reasonable risk of harm to patients if the examinations or procedures are performed incorrectly. These tests are waived from regulatory oversight of the user other than the requirement to follow the manufacturer’s labeling and directions for use.

We cannot be sure of when, or whether, OcuSense will be successful in obtaining a 510(k) clearance or a CLIA waiver for the TearLab™ test for DED.

If the medical device does not qualify for the 510(k) procedure, either because it is not substantially equivalent to a legally marketed device or because it is a Class III device required to have an approved PMA, then the FDA must approve a submitted PMA before marketing can begin. A PMA must demonstrate, among other matters, that the medical device is safe and effective. A PMA is typically a complex submission, usually including the results of preclinical and clinical studies, and preparing an application is a detailed and time-consuming process. The PMA must be accompanied by the payment of user fees which currently exceed $200,000 for most submissions. When modular submissions are used, the entire fee is due when the first module is submitted to the FDA. Once a PMA has been submitted, the FDA’s review may be lengthy and may include requests for additional data. The FDA usually inspects device manufacturers before approval of a PMA, and the FDA will not approve the PMA unless the manufacturer’s compliance with the quality systems regulation is satisfactory.

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Regardless of whether a medical device requires FDA clearance or approval, a number of other FDA requirements apply to the device, its manufacturer and those who distribute it. Device manufacturers must be registered and their products listed with the FDA, and certain adverse events and product malfunctions must be reported to the FDA. The FDA also regulates the product labeling, promotion and, in some cases, advertising, of medical devices. In addition, manufacturers and their suppliers must comply with the FDA’s quality system regulation which establishes extensive requirements for quality and manufacturing procedures. Thus, suppliers, manufacturers and distributors must continue to spend time, money and effort to maintain compliance, and failure to comply can lead to enforcement action. The FDA periodically inspects facilities to ascertain compliance with these and other requirements.

Employees

On December 31, 2007, we had 24 full-time employees. Of our full-time workforce at that time, 12 employees were engaged in clinical trial activities and 12 were engaged in business development, finance and administration. With the suspension of the Company’s RHEO System clinical development program, and the consequent winding-down of the RHEO-AMD study, and the Company’s disposition of SOLX, the Company has reduced its workforce considerably. At the present time, we have 7 full-time employees. However, we continue to retain outside consultants, some of whom are our former employees. None of our employees are covered by collective bargaining arrangements, and our management considers its relationship with our employees to be good.

We continue to rely on the resources of one of our major stockholders, TLC Vision, to provide us with infrastructure support.

Risk Factors

Risks Relating to Our Business

Our financial condition and history of losses have caused our auditors to express doubt as to whether we will be able to continue as a going concern.

We have prepared our consolidated financial statements on the basis that we will continue as a going concern. However, the Company has sustained substantial losses for each of the years ended December 31, 2007, 2006 and 2005. The Company’s working capital deficiency at December 31, 2007 is $996,862, which represents a $14,535,888 reduction in its working capital of $13,539,026 at December 31, 2006. As a result of the Company’s history of losses and current financial condition, there is substantial doubt about the Company’s ability to continue as a going concern.

The Company realized gross proceeds of $10,016,000 (less transaction costs of $871,215) on February 6, 2007 from the private placement of shares of its common stock and warrants. Management believed that these proceeds, together with the Company’s then existing cash, would be only sufficient to cover its operating activity and other demands until early 2008. On February 19, 2008, the Company secured a bridge loan in an aggregate principal amount of $3,000,000 from a number of private parties and, taking into account transactions costs of approximately $200,000, realized net proceeds of approximately $2,800,000. The loan bears interest at a rate of 12% per annum and has a 180-day term, which may be extended to 270 days under certain circumstances. The repayment of the loan is secured by a pledge by OccuLogix of its shares of the capital stock of OcuSense. Management believes that these net proceeds, together with the Company’s existing cash and cash-equivalents, will be sufficient to cover its operating activities and other demands only until approximately the end of April 2008 (assuming that the outstanding obligation of OccuLogix to pay $2,000,000 to OcuSense becomes due and payable prior to the end of April 2008).

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Our consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary if the Company were not able to continue as a going concern.

We have incurred losses since inception and anticipate that we will incur continued losses for the foreseeable future.

We have incurred losses in each year since our inception in 1996. Our net loss for the fiscal years ended December 31, 2007, 2006, 2005, 2004 and 2003 was $68.1 million, $82.2 million, $162.8 million, $21.8 million and $2.5 million, respectively. The losses in 2007, 2006 and 2005 include a charge for impairment of goodwill of $14.4 million, $65.9 million and $147.5 million, respectively. As of December 31, 2007, we had an accumulated deficit of $356.6 million. These losses, among other things, have had and will continue to have an adverse effect on our stockholders’ equity and working capital. We remain indebted to OcuSense in an aggregate amount of $2 million for the outstanding portion of the purchase price of the capital stock of OcuSense that we acquired on November 30, 2006. Currently, we anticipate that that amount will become due and payable during the first half of 2008. Furthermore, we are legally committed to make an additional equity investment of $3 million upon receipt, if any, from the FDA of a 510(k) clearance for the TearLab™ test for DED and another additional equity investment of $3 million upon receipt, if any, from the FDA of a CLIA waiver for the TearLab™ test for DED. Because of the numerous risks and uncertainties facing us, we are unable to predict the extent of any future losses or when we will become profitable, if ever, or even if we will be able to continue as a going concern.

We may not be able to raise the capital necessary to fund our operations.

Since inception, we have funded our operations through early private placements of our equity and debt securities, early stage revenues, a successful initial public offering, or IPO, a private placement of shares of our common stock and warrants on February 6, 2007 and, most recently, on February 19, 2008, a bridge loan. Prior to the IPO, our cash resources were limited. We will need additional capital in the future, and our prospects for obtaining it are uncertain. On October 9, 2007, we announced that the Board had authorized management and the Company’s advisors to explore the full range of strategic alternatives available to enhance shareholder value, including, but not limited to, the raising of capital through the sale of securities, one or more strategic alliances and the combination, sale or merger of all or part of the Company. For some time prior to the October 9, 2007 announcement, the Company had been seeking to raise additional capital, with the objective of securing funding sufficient to sustain its operations as it had been clear that, unless we were able to raise additional capital, the Company would not have had sufficient cash to support its operations beyond early 2008. Although the Company secured a bridge loan in an aggregate principal amount of $3,000,000 from a number of private parties on February 19, 2008, management believes that these net proceeds, together with the Company’s existing cash and cash-equivalents, will be sufficient to cover its operating activities and other demands only until approximately the end of April 2008 (assuming that the outstanding obligation of OccuLogix to pay $2,000,000 to OcuSense becomes due and payable prior to the end of April 2008). Additional capital may not be available on terms favorable to us, or at all. In addition, future financings could result in significant dilution of existing stockholders. However, unless we succeed in raising additional capital, we will be unable to continue our operations. See “Risk Factors—Risks Relating to Our Business—Our financial condition and history of losses have caused our auditors to express doubt as to whether we will be able to continue as a going concern.”

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We no longer operate any business.

With the suspension of the Company’s RHEO™ System clinical development program, and the consequent winding-down of the RHEO-AMD study, and the Company’s disposition of SOLX, the Company no longer has any operating business. Its major asset is its 50.1% ownership stake, on a fully diluted basis, in OcuSense. Accordingly, unless we acquire other businesses (which, in light of the Company’s financial condition, is unlikely to occur), our ability to generate any revenues will be dependent almost entirely upon the success of OcuSense.

The Company’s major asset is encumbered.

The repayment of the bridge loan, in the aggregate principal amount of $3,000,000, which the Company secured on February 19, 2008 from a number of private parties, is secured by a pledge by OccuLogix of its shares of the capital stock of OcuSense. If the Company fails to repay this loan and accrued interest by the loan’s maturity date, which will occur on the 180th day following February 19, 2008 or, under certain circumstances, the 270th day following February 19, 2008, the lenders may realize upon their collateral and seize OccuLogix’s shares of the capital of OcuSense, thus causing the Company to lose its major asset. Accordingly, the Company may lose its major asset unless it succeeds in raising additional capital in an amount sufficient to repay the loan and accrued interest by the loan’s maturity date—which the Company is permitted to do through a sale of the collateral, provided that the sale generates proceeds in an amount sufficient to repay the loan and accrued interest if full.

The $3,000,000 aggregate principal amount bridge loan represents a significant dilution risk for existing stockholders.

Under the terms of the loan agreement pursuant to which the Company secured a bridge loan, in the aggregate principal amount of $3,000,000, on February 19, 2008 from a number of private parties, the Company has two pre-payment options available to it, should it decide to not wait until the maturity date to repay the loan. Under the first pre-payment option, the Company may repay the loan in full by paying the lenders, in cash, the amount of outstanding principal and accrued interest and issuing to the lenders five-year warrants in an aggregate amount equal to approximately 19.9% of the issued and outstanding shares of the Company’s common stock (but not to exceed 20% of the issued and outstanding shares of the Company’s common stock). The warrants would be exercisable into shares of the Company’s common stock at an exercise price of $0.10 per share and would not become exercisable until the 180th day following their issuance. Under the second pre-payment option, provided that the Company has closed a private placement of shares of its common stock for aggregate gross proceeds of at least $4,000,000, the Company may repay the loan in full by issuing to the lenders shares of its common stock, in an aggregate amount equal to the amount of outstanding principal and accrued interest, at a 15% discount to the price paid by the private placement investors. An exercise by the Company of either pre-payment option will result in significant dilution of the holdings of existing stockholders. Any exercise by the Company of the second pre-payment option would be subject to stockholder and regulatory approval.

OcuSense will face challenges in bringing the TearLab™ test for DED to market and may not succeed in executing its business plan.

At the present time, OcuSense is relying almost entirely on OccuLogix to fund its business. Following the payment by OccuLogix of $2,000,000 upon OcuSense’s successful production and testing of the beta version of the TearLab™ test for DED, there can be no assurance that OccuLogix will be a reliable source of future funding for OcuSense, notwithstanding its agreement to purchase $3,000,000 of shares of OcuSense’s Series B Preferred Stock upon OcuSense’s receipt from the FDA, if any, of 510(k) clearance for the TearLab™ test for DED and to purchase another $3,000,000 of shares of OcuSense’s Series B Preferred Stock upon OcuSense’s receipt from the FDA, if any, of a CLIA waiver for the TearLab™ test for DED.

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There are numerous risks and uncertainties inherent in the development of new medical technologies. In addition to OcuSense’s eventual requirement for additional capital, OcuSense’s ability to bring the TearLab™ test for DED to market and to execute its business plan successfully is subject to the following risks, among others:

· OcuSense’s clinical trials may not succeed. Clinical testing is expensive and can take longer than originally anticipated. The outcomes of clinical trials are uncertain, and failure can occur at any stage of the testing. OcuSense could encounter unexpected problems, which could result in a delay in the submission of its applications for the sought-after FDA approvals or prevent their submission altogether.

· OcuSense may not receive either the 510(k) clearance or the CLIA waiver for the TearLab™ test for DED that it will be seeking from the FDA, in which case OcuSense’s ability to market the TearLab™ test for DED in the United States will be hindered severely, if not eliminated altogether.

· OcuSense and its suppliers will be subject to numerous FDA requirements covering the design, testing, manufacturing, quality control, labeling, advertising, promotion and export of the TearLab™ test for DED and other matters. If OcuSense or its suppliers fail to comply with these regulatory requirements, the TearLab™ System could be subject to restrictions or withdrawals from the market and OcuSense could become subject to penalties.

· Even if it succeeds in obtaining the sought-after FDA approvals, OcuSense may be unable to commercialize the TearLab™ test for DED successfully in the United States. Successful commercialization will depend on a number of factors, including, among other things, achieving widespread acceptance of the TearLab™ test for DED among physicians, establishing adequate sales and marketing capabilities, addressing competition effectively, the ability to obtain and enforce patents to protect proprietary rights from use by would-be competitors, key personnel retention and ensuring sufficient manufacturing capacity and inventory to support commercialization plans.

OcuSense’s patents may not be valid, and OcuSense may not be able to obtain and enforce patents to protect its proprietary rights from use by would-be competitors. Patents of other companies could require OcuSense to stop using or pay to use required technology.

OcuSense’s owned and licensed patents may not be valid, and it may not be able to obtain and enforce patents and to maintain trade secret protection for its technology. The extent to which OcuSense is unable to do so could materially harm its business.

OcuSense has applied for, and intends to continue to apply for, patents relating to the TearLab™ test for DED and related technology and processes. Such applications may not result in the issuance of any patents, and any patents now held or that may be issued may not provide adequate protection from competition. Furthermore, it is possible that patents issued or licensed to OcuSense may be challenged successfully. In that event, if OcuSense has a preferred competitive position because of any such patents, any preferred position held by OcuSense would be lost. If OcuSense is unable to secure or to continue to maintain a preferred position, the TearLab™ test for DED could become subject to competition from the sale of generic products.

Patents issued or licensed to OcuSense may be infringed by the products or processes of others. The cost of enforcing patent rights against infringers, if such enforcement is required, could be significant and the time demands could interfere with OcuSense’s normal operations. There has been substantial litigation and other proceedings regarding patent and other intellectual property rights in the pharmaceutical, biotechnology and medical technology industries. OcuSense could become a party to patent litigation and other proceedings. The cost to it of any patent litigation, even if resolved in its favor, could be substantial. Some of OcuSense’s would-be competitors may be able to sustain the costs of such litigation more effectively than it can because of their substantially greater financial resources. Litigation may also absorb significant management time.

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Unpatented trade secrets, improvements, confidential know-how and continuing technological innovation are important to OcuSense’s future scientific and commercial success. Although it attempts to, and will continue to attempt to, protect its proprietary information through reliance on trade secret laws and the use of confidentiality agreements with corporate partners, collaborators, employees and consultants and other appropriate means, these measures may not effectively prevent disclosure of OcuSense’s proprietary information, and, in any event, others may develop independently, or obtain access to, the same or similar information.

Certain of OcuSense’s patent rights are licensed to it by third parties. If OcuSense fails to comply with the terms of these license agreements, its rights to those patents may be terminated, and OcuSense will be unable to conduct its business.

It is possible that a court may find OcuSense to be infringing upon validly issued patents of third parties. In that event, in addition to the cost of defending the underlying suit for infringement, OcuSense may have to pay license fees and/or damages and may be enjoined from conducting certain activities. Obtaining licenses under third-party patents can be costly, and such licenses may not be available at all.

Our common stock may be delisted from The Nasdaq Global Market.

On September 18, 2007, OccuLogix received a letter from The Nasdaq Stock Market, or Nasdaq, indicating that, for the previous 30 consecutive business days, the bid price of the Company’s common stock closed below the minimum $1.00 per share requirement for continued inclusion under Marketplace Rule 4450(e)(5), or the Minimum Bid Price Rule. Therefore, in accordance with Marketplace Rule 4450(e)(2), the Company was provided 180 calendar days, or until March 17, 2008, to regain compliance. The Nasdaq letter stated that, if, at any time before March 17, 2008, the bid price of the Company’s common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, Nasdaq staff will provide written notification that it has achieved compliance with the Minimum Bid Price Rule. The Nasdaq letter also stated that, if the Company does not regain compliance with the Minimum Bid Price Rule by March 17, 2008, Nasdaq staff will provide written notification that the Company’s securities will be delisted, at which time the Company may appeal the Nasdaq staff’s determination to delist its securities to a Nasdaq Listing Qualifications Panel.

On February 1, 2008, OccuLogix received a letter from Nasdaq indicating that, for the previous 30 consecutive trading days, the Company’s common stock did not maintain a minimum market value of publicly held shares of $5,000,000 as required for continued inclusion by Marketplace Rule 4450(a)(2), or the MVPHS Rule. Therefore, in accordance with Marketplace Rule 4450(e)(1), the Company was provided 90 calendar days, or until May 1, 2008, to regain compliance. The Nasdaq letter stated that, if at any time before May 1, 2008, the minimum market value of publicly held shares of the Company’s common stock is $5,000,000 or greater for a minimum of ten consecutive trading days, Nasdaq staff will provide written notification that the Company complies with the MVPHS Rule. The Nasdaq letter also stated that, if the Company does not regain compliance with the MVPHS Rule by May 1, 2008, Nasdaq staff will provide written notification that the Company’s securities will be delisted, at which time the Company may appeal the Nasdaq staff’s determination to delist its securities to a Nasdaq Listing Qualifications Panel.

The Company will not have become compliant with the Minimum Bid Price Rule by March 17, 2008. Although we intend to appeal any determination by Nasdaq staff to delist our common stock to a Nasdaq Listing Qualifications Panel, we may not be successful in our appeal, in which case our common stock may be transferred to The Nasdaq Capital Market or be delisted altogether. Should either occur, existing stockholders will suffer decreased liquidity.

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OcuSense and we may face future product liability claims.

The testing, manufacturing, marketing and sale of therapeutic and diagnostic products entail significant inherent risks of allegations of product liability. Our past use of the RHEO™ System and the components of the SOLX Glaucoma System in clinical trials and the commercial sale of those products may have exposed us to potential liability claims. OcuSense’s future use of the TearLab™ test for DED and its commercial sale could expose it to liability claims also. All of such claims might be made directly by patients, health care providers or others selling the products. We carry clinical trials and product liability insurance to cover certain claims that could arise, or that could have arisen, during our clinical trials or during the commercial use of our products. We currently maintain clinical trials and product liability insurance with coverage limits of $5,000,000 in the aggregate annually. Such coverage, and any coverage obtained in the future, may be inadequate to protect OcuSense or us in the event of successful product liability claims, and neither OcuSense nor we may be able to increase the amount of such insurance coverage or even renew it. A successful product liability claim could materially harm our business. In addition, substantial, complex or extended litigation could result in the incurrence of large expenditures and the diversion of significant resources.

For as long as TLC Vision owns a substantial portion of our common stock, our other stockholders may be effectively unable to affect the outcome of stockholder voting.

 TLC Vision beneficially owns approximately 32.8%of our outstanding common stock, or 28.9%on a fully diluted basis. Accordingly, TLC Vision, in conjunction with other stockholders, could possess an effective controlling vote on matters submitted to a vote of the holders of our common stock.

While it owns a substantial portion of our common stock, TLC Vision could effectively control decisions with respect to:

• our business direction and policies, including the election and removal of our directors;

• mergers or other business combinations involving us;

• the acquisition or disposition of assets by us;

• our financing; and

• amendments to our certificate of incorporation and bylaws.

Furthermore, TLC Vision may be able to cause or prevent a change of control of the Company, and this concentration of ownership may have the effect of discouraging others from pursuing transactions involving a potential change of control of the Company, in either case regardless of whether a premium is offered over then-current market prices.

Conflicts of interest may arise between us and TLC Vision, which, until December 2007, had two directors on our board and currently has one director on our board. Our Chief Executive Officer and Chairman served as Chairman of TLC Vision until June 2006.

TLC Vision beneficially owns approximately 32.8% of our outstanding common stock, or 28.9% on a fully diluted basis. Our director, Richard Lindstrom, is also a director of TLC Vision. Until June 2007 and December 2007, respectively, our directors, Elias Vamvakas and Thomas Davidson, also served as directors of TLC Vision. Mr. Vamvakas beneficially owns 1,041,795 common shares of TLC Vision, representing approximately 2.08% of TLC Vision’s outstanding shares. Mr. Davidson beneficially owns 67,127 common shares of TLC Vision, representing approximately 0.14% of TLC Vision’s outstanding shares, and Dr. Lindstrom beneficially owns 29,500 common shares of TLC Vision, representing approximately 0.06% of TLC Vision’s outstanding shares. Because Dr. Lindstrom is a director of TLC Vision, a conflict of interest could arise. Conflicts may arise between TLC Vision and us as a result of our ongoing agreements. We may not be able to resolve all potential conflicts with TLC Vision, and even if we do, the resolution may be less favorable to us than if we were dealing with an unaffiliated third party.

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We have entered into a number of related party transactions with suppliers, creditors, stockholders, officers and other parties, each of which may have interests which conflict with those of our public stockholders.

We have entered into several related party transactions with our suppliers, creditors, stockholders, officers and other parties, each of which may have interests which conflict with those of our public stockholders.

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ITEM 2. PROPERTIES.

In December 2004, we moved from our previous headquarters which we subleased from TLC Vision to our current headquarters, which are also in Mississauga. Until January 31, 2006, we subleased our current headquarters from Echo Online Internet, Inc. and, between February 1, 2006 to July 31, 2007, leased them from Penyork Properties III Inc. Since August 1, 2007, we have been leasing them from 2600 Skymark Investments Inc., the successor in interest to Penyork Properties III Inc. The facility presently consists of approximately 6,600 square feet of office space utilized for management personnel. Our current arrangement expires on July 31, 2010. Our current monthly lease obligation for rent for this facility is approximately C$13,283. The future minimum obligation under this lease is C$159,390 for 2008. TLC Vision has advised us that it does not have any ownership interest in our current headquarters.

We also leased space in a facility in Palm Harbor, Florida consisting of 5,020 square feet of space used for warehousing the RHEO™ System components and providing office space for certain members of our clinical trial personnel and John Cornish, who was formerly our Vice President, Operations, and records. The facility consisted of office and working space and an approximately 1,700 square foot warehouse in the back. Our lease on this property expired on December 31, 2007 and has not been renewed. Our monthly lease obligation for rent for this facility was approximately $2,168. The future minimum obligation under this lease is therefore nil for 2008. The landlord under this lease was Cornish Properties, which is owned by Mr. Cornish. Mr. Cornish was also one of our directors from April 1997 to September 2004.

In addition, OcuSense leases office space in facilities owned by parties unrelated to us. The total future minimum obligation under these leases is $40,851 for 2008.

We believe that if our existing facilities are not adequate to meet our business requirements for the near-term, additional space will be available on commercially reasonable terms.

ITEM 3. LEGAL PROCEEDINGS.

We are not aware of any material litigation involving us that is outstanding, threatened or pending.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matter was submitted during the fourth quarter of the Company’s 2007 fiscal year to a vote of security holders, through the solicitation of proxies or otherwise.

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PART II

ITEM 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Market for Common Equity

Our Common Stock trades on the NASDAQ Global Market (“NASDAQ”) under the symbol “OCCX” and the Toronto Stock Exchange (“TSX”) under the symbol “OC”.

The following table sets forth the range of high and low sales prices per share of our Common Stock on both the NASDAQ and the TSX for the fiscal periods indicated.

	Common Stock Prices
	Fiscal 2007				Fiscal 2006
	High		Low		High		Low
NASDAQ
First Quarter	$	1.98	$	1.48	$	12.85	$	3.25
Second Quarter		1.68		0.76		3.70		1.86
Third Quarter		1.20		0.57		2.90		1.56
Fourth Quarter		0.62		0.08		2.68		1.55
TSX
First Quarter	$	C2.35	$	C1.75	$	C14.99	$	C3.76
Second Quarter		1.82		0.90		4.33		2.12
Third Quarter		1.25		0.57		3.00		1.69
Fourth Quarter		0.57		0.07		3.00		1.80

The closing share price for our Common Stock on March 13, 2008 as reported by NASDAQ, was $0.07. The closing share price for our Common Stock on March 13, 2008, as reported by TSX was C$0.08.

As of March 13, 2008, there were approximately 92 stockholders of record of our Common Stock.

We have never declared or paid any cash dividends on shares of our capital stock. We currently intend to retain all available funds to support operations and to finance the growth and development of our business. Any determination related to payments of future dividends will be at the discretion of our board of directors after taking into account various factors that our board of directors deems relevant, including our financial condition, operating results, current and anticipated cash needs, plans for expansion and debt restrictions, if any.

Unregistered Issuances of Capital Stock

On February 6, 2007, we issued an aggregate of 6,677,333 shares of Common Stock and 2,670,933 five-year stock purchase warrants to certain institutional investors for gross cash proceeds of $10,016,000 (less transaction costs of $871,215). In part payment of the placement fee payable to Cowen and Company, LLC for the services it had rendered as the placement agent in connection with the aforementioned issuances of securities, on February 6, 2007, we also issued 93,483 five-year stock purchase warrants to Cowen and Company, LLC.

On June 25, 2007, we issued an aggregate of 2,250 shares of Common Stock to Carol Jones as a result of the exercise of options to purchase common shares at an exercise price per share of $0.99 in consideration for cash.

Each of the above issuances was exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D promulgated thereunder.

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ITEM 6. SELECTED FINANCIAL DATA.

The following tables set forth our selected historical consolidated financial data for the years ended December 31, 2007, 2006, 2005, 2004 and 2003 which have been derived from our consolidated financial statements included elsewhere in this Annual Report on Form 10-K and our consolidated financial statements included on Form S-1 for the years ended December 31, 2004 and 2003. The following tables should be read in conjunction with our financial statements, the related notes thereto and the information contained in “Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

	Year Ended December 31,
	2003			2004			2005(ii)			2006(i)(ii)			2007
	(in thousands except per share amounts)
Consolidated Statements of Operations Data:
Revenue
Revenue from related parties	$	390		$	732		$	81		$	—		$	—
Revenue from unrelated parties		—			238			1,759			174			92
Total revenue		390			970			1,840			174			92
Cost of goods sold
Cost of goods sold to related parties		373			689			43			—			—
Cost of goods sold to unrelated parties		—			134			3,251			3,429			2,298
Royalty costs		109			135			100			100			100
Gross margin (loss)		(92	)		12			(1,554	)		(3,355	)		(2,306	)
Operating expenses
General and administrative		1,565			17,530			8,670			8,407			7,374
Clinical and regulatory		731			3,995			5,168			4,922			8,676
Sales and marketing		—			220			2,165			1,625			1,413
Impairment of goodwill		—			—			147,452			65,946			—
Impairment of intangible asset		—			—			—			—			20,923
Restructuring charges		—			—			—			820			1,313
		2,296			21,745			163,455			81,720			39,699
Other income (expense)		(82	)		(110	)		1,536			1,544			3,640
Loss from continuing operations before income taxes		(2,470	)		(21,843	)		(163,473	)		(83,531	)		(38,365	)
Recovery of income taxes		—			24			643			2,888			5,655
Loss from continuing operations		(2,470	)		(21,819	)		(162,830	)		(80,643	)		(32,710	)
Loss from discontinued operations		—			—			—			(1,542	)		(35,429	)
Net loss for the year	$	(2,470	)	$	(21,819	)	$	(162,830	)	$	(82,185	)	$	(68,139	)
Per Share Data:
Loss from continuing operations per share — basic and diluted	$	(0.62	)	$	(2.96	)	$	(3.88	)	$	(1.79	)	$	(0.58	)
Loss from discontinued operations per share — basic and diluted		—			—			—			(0.04	)		(0.62	)
Net loss per share — basic and diluted	$	(0.62	)	$	(2.96	)	$	(3.88	)	$	(1.83	)	$	(1.20	)
Weighted average number of shares used in per share calculations — basic and diluted		3,977			7,370			41,931			44,980			56,628

(i) The comparative figures for the year ended December 31, 2006 have been reclassified to reflect the effect of discontinued operations.

(ii) The comparative figures for the years ended December 31, 2006 and 2005 have been corrected to reflect the Company’s accounting for stock options issued to non-employees that were subject to performance conditions.

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	As at December 31,
	2003			2004			2005(ii)			2006(i)(ii)			2007
	(in thousands)
Consolidated Balance Sheet Data:
Cash and cash equivalents of continuing operations	$	1,237		$	17,531		$	9,600		$	5,705		$	2,236
Cash and cash equivalents of discontinued operations		—			—			—			36			—
Short-term investments		—			42,500			31,663			9,785			—
Working capital (deficiency) of continuing operations		(2,538	)		58,073			44,415			13,407			(997	)
Working capital (deficiency) of discontinued operations		—			—			—			132			—
Total assets of continuing operations		1,868			301,601			137,806			46,246			9,998
Total assets of discontinued operations		—			—			—			44,158			—
Long-term debt (including current portion due to stockholders)		3,694			517			158			152			33
Other long-term obligations (including amount classified as current portion of other liability)		―			―			―			6,421			—
Total liabilities of continuing operations		4,134			13,502			11,765			16,425			4,099
Total liabilities of discontinued operations		—			—			—			11,574
Minority interest		―			―			―			1,185			—
Common stock		5			42			42			51			57
Series A Convertible Preferred Stock		2			―			―			―			―
Series B Convertible Preferred Stock		1			―			―			―			―
Additional paid-in capital		23,915			336,064			336,836			354,191			362,403
Accumulated deficit		(26,188	)		(48,007	)		(210,837	)		(293,022	)		(356,561	)
Total stockholders’ equity (deficiency)		(2,266	)		288,098			126,041			61,220			5,899

(i) The balance sheet as at December 31, 2006 has been reclassified to reflect the assets and liabilities of discontinued operations.

(ii) The comparative figures as at December 31, 2006 and 2005 have been corrected to reflect the Company’s accounting for stock options issued to non-employees that were subject to performance conditions.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes, included in Item 8 of this Form 10-K. Unless otherwise specified, all dollar amounts are U.S. dollars.

Overview

We are an ophthalmic therapeutic company founded to commercialize innovative treatments for age-related eye diseases. Until recently, the Company operated two business divisions, being Retina and Glaucoma. Until recently, the Company’s Retina division was in the business of developing and commercializing a treatment for dry age-related macular degeneration, or Dry AMD. The Company’s product for Dry AMD, the RHEO™ System contains a pump that circulates blood through two filters and is used to perform the Rheopheresis™ procedure, which is referred to under the Company’s trade name RHEO™ Therapy. The Rheopheresis™ procedure is a blood filtration procedure that selectively removes molecules from plasma, which is designed to treat Dry AMD, the most common form of the disease.

We conducted a pivotal clinical trial, called MIRA-1, or Multicenter Investigation of Rheopheresis for AMD, which, if successful, was expected to support our application to the U.S. Food and Drug Administration, or FDA, to obtain approval to market the RHEO™ System in the United States. On February 3, 2006, we announced that, based on a preliminary analysis of the data from MIRA-1, MIRA-1 did not meet its primary efficacy endpoint as it did not demonstrate a statistically significant difference in the mean change of Best Spectacle-Corrected Visual Acuity applying the Early Treatment Diabetic Retinopathy Scale, or ETDRS BCVA, between the treated and placebo groups in MIRA-1 at 12 months post-baseline. As expected, the treated group demonstrated a positive result. An anomalous response of the control group is the principal reason why the primary efficacy endpoint was not met. There were subgroups that did demonstrate statistical significance in their mean change of ETDRS BCVA.

Subsequent to the February 3, 2006 announcement, the Company completed an in-depth analysis of the MIRA-1 study data identifying subjects that were included in the intent-to-treat, or ITT, population but who deviated from the MIRA-1 protocol as well as those patients who had documented losses or gains in vision for reasons not related to retinal disease such as cataracts. Those subjects in the ITT population who met the protocol requirements, and who did not exhibit ophthalmic changes unrelated to retinal disease, comprised the modified per-protocol population.

In light of the MIRA-1 study results, we also re-evaluated our Pre-market Approval Application, or PMA, submission strategy and then met with representatives of the FDA on June 8, 2006 in order to discuss the impact the MIRA-1 results would have on our PMA to market the RHEO™ System in the United States.  In light of MIRA-1’s failure to meet its primary efficacy endpoint, the FDA advised us that it will require an additional study of the RHEO™ System to be performed.

On January 29, 2007, the Company announced that it had obtained Investigational Device Exemption clearance from the FDA to commence the new pivotal clinical trial of the RHEO™ System, called RHEO-AMD, or Safety and Effectiveness in a Multi-center, Randomized, Sham-controlled Investigation for Dry, Non-exudative Age-Related Macular Degeneration (AMD) Using Rheopheresis.

However, on November 1, 2007, the Company announced the indefinite suspension of its RHEO™ System clinical development program. This decision was made following a comprehensive review of the respective costs and development timelines associated with the products in the Company’s portfolio and in light of the Company’s financial position. Between January 29, 2007 and November 1, 2007, the Company had prepared the RHEO-AMD protocol and had been putting into place all of the resources required for the conduct for the RHEO-AMD study, including the securing of clinical trial site commitments. The Company is in the process of winding down the RHEO-AMD study as there is no reasonable prospect that the RHEO™ System clinical development program will be relaunched in the foreseeable future. Subsequent to our fiscal 2007 year-end, as of February 25, 2008, we have terminated our relationship with Asahi Kasei Kuraray Medical Co., Ltd. (formerly Asahi Kasei Medical Co., Ltd.), or Asahi Medical. Asahi Medical manufactures, and supplied us with, the Rheofilter filter and the Plasmaflo filter, both of which are key components of the RHEO™ System. We also are engaged in discussions with Diamed Medizintechnik GmbH, or Diamed, and MeSys GmbH, or MeSys, regarding the termination of our relationship with each of them.  Diamed is the designer, and MeSys is the manufacturer, of the OctoNova pump, another key component of the RHEO™ System.

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As a result of the announcement on February 3, 2006, the per share price of our common stock as traded on the NASDAQ Global Market, or NASDAQ, decreased from $12.75 on February 2, 2006 to close at $4.10 on February 3, 2006. The 10-day average price of the stock immediately following the announcement was $3.65 and reflected a decrease in our market capitalization from $536.6 million on February 2, 2006 to $153.6 million based on the 10-day average share price subsequent to the announcement. On June 12, 2006, we announced that the FDA will require us to perform an additional study of the RHEO™ System. In addition, on June 30, 2006, we announced that we had terminated negotiations with Sowood Capital Management LP (“Sowood”) in connection with a proposed private purchase of approximately $30,000,000 of zero-coupon convertible notes of the Company. The per share price of our common stock decreased subsequent to the June 12, 2006 announcement and again after the June 30, 2006 announcement. Based on the result of the analysis of the data from MIRA-1 and the events that occurred during the second quarter of fiscal 2006, we concluded that there were sufficient indicators of impairment leading to an analysis of our intangible assets and goodwill and resulting in our reporting an impairment charge to goodwill of $65,945,686 and $147,451,758 in the second quarter of 2006 and in the fourth quarter of 2005, respectively.

We considered our announcement of the indefinite suspension of the Company’s RHEO™ System clinical development program for Dry AMD to be a significant event which may affect the carrying value of our intangible assets. This led to an analysis of our intangible assets and resulted in our reporting an impairment charge to intangible assets of $20,923,028 during the third quarter of 2007. We also believe that we may not be able to sell or utilize the components of the RHEO™ System prior to their expiration dates or before the technologies become outdated, as the case may be. Accordingly, we set up a provision for obsolescence of $2,782,494 for treatment sets and OctoNova pumps that are unlikely to be utilized prior to their expiration dates, in the case of treatment sets, or before the technologies become outdated. In addition, we have recorded a reduction to the carrying values of (i) certain of our medical equipment used in the clinical trials of the RHEO™ System of $431,683 and (ii) certain of our patents and trademarks related to the RHEO™ System of $190,873. No other adjustments were made as a result of the November 1, 2007 announcement that impacts the financial results as of December 31, 2007.

On September 29, 2004, we signed a product purchase agreement with Veris Health Sciences Inc. (formerly RHEO Therapeutics, Inc.), or Veris, for the purchase and sale of 8,004 treatment sets over the period from October 2004 to December 2005, a transaction valued at $6,003,000, after introductory rebates. However, due to delays in opening its planned number of clinics throughout Canada, Veris no longer required the contracted-for number of treatment sets in the period. We agreed to the original pricing for the reduced number of treatment sets required in the period. In December 2005, by letter agreement, we agreed to the volume and other terms for the purchase and sale of treatment sets and pumps for the period ending February 28, 2006. As at December 31, 2005, the Company had received a total of $1,779,566 from Veris. Included in amounts receivable, net as at December 31, 2005 was $1,049,297 due from Veris for the purchase of additional pumps and treatment sets.

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We believed that the announcement on February 3, 2006 made it unlikely that we would be able to collect on amounts outstanding from Veris as at December 31, 2005. This resulted in a provision for bad debts of $1,049,297 during the year ended December 31, 2005, of which $518,852 related to revenue recognized prior to December 31, 2005 and $530,445 related to goods shipped to Veris in December 2005, for which revenue was not recognized. We also recognized an inventory loss of $252,071 during the year ended December 31, 2005, representing the cost of goods shipped to Veris in December 2005 which we do not anticipate will be returned by Veris.During the year ended December 31, 2005, we also fully expensed the C$195,000 advance paid to Veris in connection with clinical trial services to be provided by Veris for MIRA-PS, one of our clinical trials which we have suspended. In addition, we evaluated our ending inventories as at December 31, 2005 on the basis that Veris may not be able to increase its commercial activities in Canada in line with our initial expectations. Accordingly, we set up a provision for obsolescence of $1,990,830 during the year ended December 31, 2005 for treatment sets that will unlikely be utilized prior to their expiration dates.

During the year ended December 31, 2006, we sold a number of treatment sets, with a negotiated discount, to Veris at a price lower than our cost. Accordingly, the price which we charged to Veris, net of a negotiated discount, represents the current net realizable value; therefore, we wrote down the value of our treatment sets by $1,625,000 to reflect their current net realizable value as at December 31, 2006. We also set up an additional provision for obsolescence of $1,679,124 during the year ended December 31, 2006 for treatment sets that will unlikely be utilized prior to their expiration dates. In addition, based on our November 1, 2007 announcement of the indefinite suspension of our RHEO™ System clinical development program, we wrote down the value of our pumps and clinical inventory by $2,790,209 to reflect their current net realizable value as at December 31, 2007.

As at December 31, 2007 and 2006, we had combined inventory reserves of $7,295,545 and $5,101,394, respectively.

In June 2006, Veris returned four pumps which had been sold to it in December 2005. In fiscal 2005, we did not recognize revenue on sales made to Veris in December 2005 and had recorded an inventory loss associated with all sales made to Veris in December 2005. Accordingly, as at December 31, 2006, amounts receivable and the allowance for doubtful account recorded against the amount due from Veris have been reduced by the invoiced amount for the four pumps of $143,520. In addition, the cost of the four pumps returned by Veris, valued at $85,058, was used to reduce the cost of sales in the period.

On November 6, 2006, we amended the product purchase agreement with Veris and agreed to forgive the outstanding amount receivable of $904,101 from Veris which had been owing for the purchase of treatment sets and pumps and for related services delivered or provided to Veris from September 14, 2005 to December 31, 2006. In consideration of the forgiveness of this debt, Veris agreed that we do not owe any amounts whatsoever in connection with (i) our use of the leasehold premises located at 5280 Solar Drive in Mississauga, Ontario or (ii) legal fees and expenses incurred by Veris prior to February 14, 2006 with respect to those trademarks of Veris that were assigned to us on February 14, 2006.

In November 2006, we sold a total of 348 treatment sets to Veris for $73,776, including applicable taxes, payment for which was not received by the Company within the agreed credit period. The sale of these treatment sets was not recognized as revenue during the year ended December 31, 2006 as we believe that Veris would not be able to meet its financial obligations to the Company. In January 2007, we met with the management of Veris and agreed to forgive the outstanding amount receivable of $73,776 which was owing for the purchase of the 348 treatment sets delivered to Veris in November 2006. We also recognized an inventory loss of $60,987 during the year ended December 31, 2006, representing the cost of the 348 treatment sets shipped to Veris in November 2006.

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We entered into a distributorship agreement (the “Distribution Agreement”), effective October 20, 2006, with Asahi Medical. The Distribution Agreement replaced the 2001 distributorship agreement between Asahi Medical and us, as supplemented and amended by the 2003, 2004 and 2005 Memoranda. Pursuant to the Distribution Agreement, we had distributorship rights to Asahi Medical's Plasmaflo filter and Asahi Medical's second generation polysulfone Rheofilter filter on an exclusive basis in the United States, Mexico and certain Caribbean countries, on an exclusive basis in Canada, on an exclusive basis in Colombia, Venezuela, New Zealand, Australia and on a non-exclusive basis in Italy.

On January 28, 2008, the Company disclosed that it was engaged in discussions with Asahi Medical to terminate the Distribution Agreement. Subsequent to our 2007 fiscal year end, the Company and Asahi Medical have entered into a termination agreement to terminate substantially all of their obligations under the Distribution Agreement on and as of February 25, 2008 (the “Termination Agreement”).  Pursuant to the Termination Agreement, the Company and Asahi Medical have agreed to a mutual release of claims relating to the Distribution Agreement, other than any claims relating to certain provisions of the Distribution Agreement which survived its termination.

In anticipation of the delay in the commercialization of the RHEO™ System in the United States as a result of the MIRA-1 study’s failure to meet its primary efficacy endpoint and the FDA’s requirement of us to conduct an additional study of the RHEO™ System, the Company accelerated its diversification plans and, on September 1, 2006, acquired Solx, Inc., or SOLX, for a total purchase price of $29,068,443 which included acquisition-related transaction costs of $851,279. SOLX is a Boston University Photonics Center-incubated company that has developed a system for the treatment of glaucoma, called the SOLX Glaucoma System. The SOLX Glaucoma Treatment System is a next-generation treatment platform designed to reduce intra-ocular pressure, or IOP, without a bleb, thus avoiding its related complications. The SOLX Glaucoma System consists of the SOLX 790 Laser, a titanium sapphire laser used in laser trabeculoplasty procedures, and the SOLX Gold Shunt, a 24-karat gold, ultra-thin drainage device designed to bridge the anterior chamber and the suprachoroidal space in the eye, using the pressure differential that exists naturally in the eye in order to reduce IOP.

On December 20, 2007, we announced the sale of SOLX to Solx Acquisition, Inc., or Solx Acquisition, a company wholly owned by Doug P. Adams, the founder of SOLX and who, until the closing of the sale, had been serving as an executive officer of the Company in the capacity of President & Founder, Glaucoma Division.  The results of operations of SOLX have been included in discontinued operations in the Company’s consolidated statements of operations.

The consideration for the purchase and sale of all of the issued and outstanding shares of the capital stock of SOLX consisted of:  (i) on December 19, 2007, the closing date of the sale, the assumption by Solx Acquisition of all of the liabilities of the Company, as they related to SOLX’s business, incurred on or after December 1, 2007, and OccuLogix’s obligation to make a $5,000,000 payment to the former stockholders of SOLX due on September 1, 2008 in satisfaction of the outstanding balance of the purchase price of SOLX; (ii) on or prior to February 15, 2008, the payment by Solx Acquisition of all of the expenses that the Company had paid to the closing date, as they related to SOLX’s business during the period commencing on December 1, 2007; (iii) during the period commencing on the closing date and ending on the date on which SOLX achieves a positive cash flow, the payment by Solx Acquisition of a royalty equal to 3% of the worldwide net sales of the SOLX 790 Laser and the SOLX Gold Shunt, including next-generation or future models or versions of these products; and (iv) following the date on which SOLX achieves a positive cash flow, the payment by Solx Acquisition of a royalty equal to 5% of the worldwide net sales of these products. In order to secure the obligation of Solx Acquisition to make these royalty payments, SOLX granted to OccuLogix a subordinated security interest in certain of its intellectual property. In connection with the sale of SOLX, those employees of the Company, whose roles and responsibilities related mainly to SOLX’s business, ceased to be employees of the Company and became employees of Solx Acquisition or SOLX.

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The sale transaction established fair values for the Company’s recorded goodwill and the Company’s shunt and laser technology and regulatory and other intangible assets that had been acquired by the Company upon its acquisition of SOLX on September 1, 2006. Accordingly, management was required to re-assess whether the carrying value of the Company’s shunt and laser technology and regulatory and other intangible assets was recoverable as of December 1, 2007. Based on management’s estimates of undiscounted cash flows associated with these intangible assets, we concluded that the carrying value of these intangible assets was not recoverable as of December 1, 2007. Accordingly, we recorded an impairment charge of $22,286,383 during the year ended December 31, 2007 to record the shunt and laser technology and regulatory and other intangible assets at their fair value as of December 31, 2007

Both the SOLX 790 Laser and the SOLX Gold Shunt are currently the subject of randomized, multi-center clinical trials, the purposes of which are to demonstrate equivalency to the argon laser, in the case of the SOLX 790 Laser, and to the Ahmed Glaucoma Valve manufactured by the New World Medical, Inc., in the case of the SOLX Gold Shunt. The results of these clinical trials will be used in support of applications to the FDA for a 510(k) clearance for each of the SOLX 790 Laser and the SOLX Gold Shunt, the receipt of which, if any, will enable the marketing and sale of these products in the United States.

As part of our diversification plan, on November 30, 2006, we acquired 50.1% of the capital stock of OcuSense, Inc., or OcuSense, measured on a fully diluted basis, for a total purchase price of $4,171,098 which includes acquisition-related transaction costs of $171,098. The Company agreed to make additional payments totaling $4,000,000 upon the attainment of two pre-defined milestones by OcuSense prior to May 1, 2009. In June 2007, we paid OcuSense a total of $2,000,000 upon the attainment of the first of the two pre-defined milestones. The carrying value of the intangible asset acquired upon the acquisition of OcuSense was increased by $1,663,333 which reflects the minority interest portion of the $2,000,000 paid to OcuSense in the amount of $998,000 and the additional deferred tax liability of $665,333 recorded based on the difference between the increase in the carrying value of the intangible asset and its tax basis. The balance of the contingent payment of $2,000,000 will be paid upon the attainment of the second pre-determined milestone, which currently is expected to occur during the first half of 2008.

OcuSense is a San Diego-based company that is in the process of developing technologies that will enable eye care practitioners to test, at the point-of-care, for highly sensitive and specific biomarkers using nanoliters of tear film. The results of OcuSense’s operations have been included in our consolidated financial statements since November 30, 2006. OcuSense’s first product, which is currently under development, is a hand-held tear film test for the measurement of osmolarity, a quantitative and highly specific biomarker that has shown to correlate with dry eye disease, or DED. The test is known as the TearLab™ test for DED. The anticipated innovation of the TearLab™ test for DED will be its ability to measure precisely and rapidly certain biomarkers in nanoliter volumes of tear samples, using inexpensive hardware. Historically, eye care researchers have relied on expensive instruments to perform tear biomarker analysis. In addition to their cost, these conventional systems are slow, highly variable in their measurement readings and not categorized as waived by the FDA under the regulations promulgated under the Clinical Laboratory Improvement Amendments, or CLIA.

The TearLab™ test for DED will require the development of the following three components:  (1) the TearLab™ disposable, which is a single-use microfluidic labcard; (2) the TearLab™ pen, which is a hand-held device that interfaces with the TearLab™ disposable; and (3) the TearLab™ reader, which is a small desktop unit that allows for the docking of the TearLab™ disposable and the TearLab™ pen and provides a quantitative reading for the operator. OcuSense is currently engaged in industrial, electrical and software design efforts for the three components of the TearLab™ test for DED and, to these ends, is working with two engineering partners, both based in Melbourne, Australia, one of which is a leader in biomedical instrument development and the other of which is a leader of customized microfluidics.

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OcuSense’s objective is to complete product development of the TearLab™ test for DED during the first half of 2008. Following the completion of product development and subsequent clinical trials, OcuSense intends to seek a 510(k) clearance and a CLIA waiver from the FDA for the TearLab™ test for DED. Currently, it anticipates seeking the 510(k) clearance during the latter half of 2008 and the CLIA waiver during the latter half of 2009. In addition, OcuSense intends to seek CE Mark approval for the TearLab™ test for DED during the latter half of 2008.

On November 30, 2006, we announced that Elias Vamvakas, our Chairman and Chief Executive Officer, had agreed to provide us with a standby commitment to purchase convertible debentures of the Company (“Convertible Debentures”) in an aggregate maximum amount of $8,000,000 (the “Total Commitment Amount”).  Pursuant to the Summary of Terms and Conditions, executed and delivered as of November 30, 2006 by the Company and Mr. Vamvakas, during the 12-month commitment term commencing on November 30, 2006, upon no less than 45 days’ written notice by the Company to Mr. Vamvakas, Mr. Vamvakas was obligated to purchase Convertible Debentures in the aggregate principal amount specified in such written notice. A commitment fee of 200 basis points was payable by the Company on the undrawn portion of the total $8,000,000 commitment amount. Any Convertible Debentures purchased by Mr. Vamvakas would have carried an interest rate of 10% per annum and would have been convertible, at Mr. Vamvakas’ option, into shares of the Company’s common stock at a conversion price of $2.70 per share. The Summary of Terms and Conditions of the standby commitment further provided that if the Company closed a financing with a third party, whether by way of debt, equity or otherwise and there are no Convertible Debentures outstanding, then, the Total Commitment Amount was to be reduced automatically upon the closing of the financing by the lesser of: (i) the Total Commitment Amount; and (ii) the net proceeds of the financing. On February 6, 2007, the Company raised gross proceeds in the amount of $10,016,000 in a private placement of shares of its common stock and warrants. The Total Commitment Amount was therefore reduced to zero, thus effectively terminating Mr. Vamvakas’ standby commitment. No portion of the standby commitment was ever drawn down by the Company, and the Company paid Mr. Vamvakas a total of $29,808 in commitment fees in February 2007.

Our results of operations for the years ended December 31, 2007 and 2006 were impacted by our adoption of Statement of Financial Accounting Standards (“SFAS”) No. 123R (revised 2004), “Share-Based Payments” (“SFAS No. 123R”), on January 1, 2006 which requires us to recognize a non-cash expense related to the fair value of our stock-based compensation awards. We elected to use the modified prospective transition method of adoption requiring us to include this stock-based compensation charge in our results of operations beginning on January 1, 2006 without restating prior periods to include stock-based compensation expense. Of the $480,971, $2,127,043 and $224,776 stock-based compensation expense recognized during the years ended December 31, 2007, 2006 and 2005, $65,660, $1,396,609 and $170,576 is included in general and administrative expenses, $216,246, $203,131 and $53,700 in clinical and regulatory expenses and $199,065, $527,303 and $500 in sales and marketing expenses, respectively.

At the annual meeting of stockholders of the Company held on June 23, 2006, our stockholders approved the re-pricing of all then out-of-the-money stock options of the Company.  Consequently, the exercise price of all outstanding stock options that, on June 23, 2006, was greater than $2.05, being the weighted average trading price of our common stock on NASDAQ during the five-trading day period immediately preceding June 23, 2006, was adjusted downward to $2.05. 2,585,000 of the outstanding stock options with a weighted average exercise price of $8.42 were affected by the re-pricing. SFAS No. 123R treats the re-pricing of equity awards as a modification of the original award and provides that such a modification is an exchange of the original award for a new award.  SFAS No. 123R considers the modification to be the repurchase of the old award for a new award of equal or greater value, incurring additional compensation cost for any incremental value.  This incremental difference in value is measured as the excess, if any, of the fair value of the modified award determined in accordance with the provisions of SFAS No. 123R over the fair value of the original award immediately before its terms are modified, measured based on the share price and other pertinent factors at that date.  SFAS No. 123R provides that this incremental fair value, plus the remaining unrecognized compensation cost from the original measurement of the fair value of the old option, must be recognized over the remaining vesting period.  Of the 2,585,000 options affected by the re-pricing, 1,401,073 were vested as at December 31, 2006. Therefore, additional compensation cost of $423,338 for the 1,401,073 options was recognized and is included in the stock-based compensation expense for the year ended December 31, 2006.

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In accordance with SFAS No. 123R, we also recorded a compensation expense of $3,363 in the second quarter of fiscal 2006 as our board of directors approved accelerating the vesting of 1,250 unvested stock options granted to a terminated employee on April 28, 2006.  SFAS No. 123R treats such a modification as a cancellation of the original unvested award and the grant of a new fully vested award as of that date.

Prior to the adoption of SFAS No. 123R, we applied the provisions of SFAS No. 123, “Accounting for Stock-Based Compensation” (“SFAS No. 123”), which allowed companies either to expense the estimated fair value of employee stock options or to follow the intrinsic value method set forth in Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB No. 25”), but required companies to disclose the pro forma effects on net loss as if the fair value of the options had been expensed. We elected to apply APB No. 25 in accounting for employee stock options. As required by SFAS No. 123, prior to the adoption of SFAS No. 123R, we provided pro forma net loss and pro forma net loss per share disclosures for stock-based awards as if the fair value of the options had been expensed.

As at December 31, 2007, $3,870,931 of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 1.85 years.

On February 1, 2007, we entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain institutional investors, pursuant to which we agreed to issue to the investors an aggregate of 6,677,333 shares of our common stock (the “Shares”) and five-year warrants exercisable into an aggregate of 2,670,933 shares of our common stock (the “Warrants”).  The per share purchase price of the Shares is $1.50, and the per share exercise price of the Warrants is $2.20, subject to adjustment.  The Warrants became exercisable on August 6, 2007. Pursuant to the Securities Purchase Agreement, on February 6, 2007, we issued the Shares and the Warrants. The gross proceeds of sale of the Shares and the Warrants totaled $10,016,000 (less transaction costs of $871,215). On February 6, 2007, we also issued to Cowen and Company, LLC a five-year warrant exercisable into an aggregate of 93,483 shares of our common stock (the “Cowen Warrant”) in part payment of the placement fee payable to Cowen and Company, LLC for the services it had rendered as the placement agent in connection with the sale of the Shares and the Warrants. All of the terms and conditions of the Cowen Warrant (other than the number of shares of our common stock into which it is exercisable) are identical to those of the Warrants. The estimated grant date fair value of the Cowen Warrant of $97,222 is included in the transaction cost of $871,215.

We account for the Warrants and the Cowen Warrant in accordance with the provisions of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”) along with related interpretation Emerging Issues Task Force (“EITF”) 00-19 “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” (“EITF 00-19”). SFAS No. 133 requires every derivative instrument within its scope (including certain derivative instruments embedded in other contracts) to be recorded on the balance sheet as either an asset or liability measured at its fair value, with changes in the derivative’s fair value recognized currently in earnings unless specific hedge accounting criteria are met. Based on the provisions of EITF 00-19, we determined that the Warrants and the Cowen Warrant do not meet the criteria for classification as equity. Accordingly, we have classified the Warrants and the Cowen Warrant as a current liability as of December 31, 2007. The estimated fair value of the Warrants and the Cowen Warrant was determined using the Black-Scholes options pricing model. We initially allocated the total proceeds received, pursuant to the Securities Purchase Agreement, to the Shares and the Warrants based on their relative fair values. This resulted in an allocation of $2,052,578 to the obligation under warrants which includes the fair value of the Cowen Warrant of $97,222. SFAS No. 133 also requires the Company to record the outstanding derivatives at fair value at the end of each reporting period resulting in an adjustment to the recorded liability of the derivative, with any gain or loss recorded in earnings of the applicable reporting period. The Company therefore estimated the fair value of the Warrants and the Cowen Warrant as at December 31, 2007 and determined the aggregate fair value to be a nominal amount, a decrease of approximately $2,052,578 over the initial measurement of the aggregate fair value of the Warrants and the Cowen Warrant on the date of issuance. Accordingly, we recognized a gain of $2,052,578 in our consolidated statements of operations for the year ended December 31, 2007 to reflect the decrease in the Company’s obligation to its warrant holders to a nominal amount at December 31, 2007. Transaction costs associated with the issuance of the Warrants of $170,081 was recorded as an expense in the Company’s consolidated statement of operations for the year ended December 31, 2007.

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On March 11, 2007, our Board of Directors approved the grant to the directors of the Company, other than Mr. Vamvakas, of a total of 165,000 options under the 2002 Stock Option Plan. In exchange for these options, each of the directors of the Company will forego the cash remuneration which he or she would have been entitled to receive from us during the financial year ending December 31, 2007 in respect of (i) his or her annual director's fee of $15,000, (ii) in the case of those directors who chair a committee of the board of directors of the Company, his or her fee of $5,000 per annum for chairing such committee and (iii) his or her fee of $2,500 per fiscal quarter for the quarterly in-person meetings of the board of directors of the Company. The number of options granted to each of the directors was determined to be 8% higher in value than the cash remuneration to which the directors would have been entitled during the financial year ending December 31, 2007 and was determined using the Black-Scholes option-pricing model. The number of options granted to each director, calculated using this methodology, was then rounded up to the nearest 1,000. These options are exercisable immediately and will remain exercisable until the tenth anniversary of the date of their grant, notwithstanding any earlier disability or death of the holder thereof or any earlier termination of his or her service to the Company. The exercise price of each option is set at $1.82, which was the per share closing price of the Company's common stock on NASDAQ on March 9, 2007, the last trading day prior to the date of grant.

On May 30, 2007, TLC Vision Corporation (“TLC Vision”) and JEGC OCC Corp. (“JEGC”) announced that JEGC had agreed to purchase TLC Vision’s ownership stake in the Company, subject to certain minimum prices and regulatory limitations and further subject to JEGC obtaining satisfactory financing and other customary closing conditions. On June 22, 2007, JEGC purchased a portion of TLC Vision’s ownership stake in the Company, consisting of 1,904,762 shares, at a price of $1.05 per share. On July 3, 2007, we announced that we had entered into discussions with JEGC for the private placement of approximately $30,000,000 of shares of the Company’s common stock at a price based upon the average trading price at the time of purchase, subject to compliance with regulatory requirements and to a minimum purchase price of $1.05 per share. On October 15, 2007, TLC Vision announced that JEGC was not able to complete the purchase of TLC Vision’s remaining ownership stake in the Company by October 12, 2007, being the deadline previously agreed by TLC Vision and JEGC.  In making that announcement, TLC Vision also stated that JEGC retains a non-exclusive right to purchase TLC Vision’s remaining ownership stake in the Company, subject to the right of each of TLC Vision and JEGC to terminate the agreement between them.  It was anticipated that JEGC would have gained a control position in the Company, if both of these transactions had been completed. Our discussions with JEGC have not resulted in any agreement. JEGC is owned by Jefferson EquiCorp Ltd. and by Greybrook Corporation, a firm controlled by Mr. Vamvakas.

As at December 31, 2007, we had investments in the aggregate principal amount of $1,900,000 which consist of investments in four separate asset-backed auction rate securities yielding an average return of 5.865% per annum.  However, as a result of market conditions, all of these investments have recently failed to settle on their respective settlement dates and have been reset to be settled at a future date with an average maturity of 46 days.  Due to the current lack of liquidity for asset-backed securities of this type, we concluded that the carrying value of these investments was higher than its fair value as of December 31, 2007. Accordingly, these auction rate securities have been recorded at their estimated fair value of $863,750. We consider this to be an other-than-temporary reduction in the fair value of these auction rate securities. Accordingly, the loss associated with these auction rate securities of $1,036,250 has been included as an impairment of investments in our consolidated statement of operations for the year ended December 31, 2007. Although we continue to receive payment of interest earned on these securities, we do not know at the present time when it will be able to convert these investments into cash.  Accordingly, management has classified these investments as a non-current asset on its consolidated balance sheet as of December 31, 2007. Management will continue to closely monitor these investments for future indications of further impairment. The illiquidity of these investments may have an adverse impact on the length of time during which we currently expect to be able to sustain its operations in the absence of an additional capital raise by the Company.

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On September 18, 2007, OccuLogix received a letter from The Nasdaq Stock Market, or Nasdaq, indicating that, for the previous 30 consecutive business days, the bid price of the Company’s common stock closed below the minimum $1.00 per share requirement for continued inclusion under Marketplace Rule 4450(e)(5), or the Minimum Bid Price Rule. Therefore, in accordance with Marketplace Rule 4450(e)(2), the Company was provided 180 calendar days, or until March 17, 2008, to regain compliance. The Nasdaq letter stated that, if, at any time before March 17, 2008, the bid price of the Company’s common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, Nasdaq staff will provide written notification that it has achieved compliance with the Minimum Bid Price Rule. The Nasdaq letter also stated that, if the Company does not regain compliance with the Minimum Bid Price Rule by March 17, 2008, Nasdaq staff will provide written notification that the Company’s securities will be delisted, at which time the Company may appeal the Nasdaq staff’s determination to delist its securities to a Nasdaq Listing Qualifications Panel.

On February 1, 2008, OccuLogix received a letter from Nasdaq indicating that, for the previous 30 consecutive trading days, the Company’s common stock did not maintain a minimum market value of publicly held shares of $5,000,000 as required for continued inclusion by Marketplace Rule 4450(a)(2), or the MVPHS Rule. Therefore, in accordance with Marketplace Rule 4450(e)(1), the Company was provided 90 calendar days, or until May 1, 2008, to regain compliance. The Nasdaq letter stated that, if at any time before May 1, 2008, the minimum market value of publicly held shares of the Company’s common stock is $5,000,000 or greater for a minimum of ten consecutive trading days, Nasdaq staff will provide written notification that the Company complies with the MVPHS Rule. The Nasdaq letter also stated that, if the Company does not regain compliance with the MVPHS Rule by May 1, 2008, Nasdaq staff will provide written notification that the Company’s securities will be delisted, at which time the Company may appeal the Nasdaq staff’s determination to delist its securities to a Nasdaq Listing Qualifications Panel.

The Company will not have become compliant with the Minimum Bid Price Rule by March 17, 2008. Although we intend to appeal any determination by Nasdaq staff to delist our common stock to a Nasdaq Listing Qualifications Panel, we may not be successful in our appeal, in which case our common stock may be transferred to The Nasdaq Capital Market or be delisted altogether. Should either occur, existing stockholders will suffer decreased liquidity.

These Nasdaq notices have no effect on the listing of the Company's common stock on the Toronto Stock Exchange.

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Recent Developments

On January 9, 2008, we announced the departure, or pending departure, of seven members of our executive team and, commencing on February 1, 2008, a 50% reduction in the salary of each of Elias Vamvakas, our Chairman and Chief Executive Officer, and Tom Reeves, our President and Chief Operating Officer. By January 31, 2008, a total of 12 non-executive employees of the Company left the Company’s employment.

On February 19, 2008, we announced that the Company secured a bridge loan in an aggregate principal amount of $3,000,000, less transaction costs of approximately $200,000, from a number of private parties. The loan bears interest at a rate of 12% per annum and has a 180-day term, which may be extended to 270 days under certain circumstances. The repayment of the loan is secured by a pledge by the Company of its shares of the capital stock of OcuSense. Under the terms of the loan agreement, the Company has two pre-payment options available to it, should it decide to not wait until the maturity date to repay the loan. Under the first pre-payment option, the Company may repay the loan in full by paying the lenders, in cash, the amount of outstanding principal and accrued interest and issuing to the lenders five-year warrants in an aggregate amount equal to approximately 19.9% of the issued and outstanding shares of the Company’s common stock (but not to exceed 20% of the issued and outstanding shares of the Company’s common stock). The warrants would be exercisable into shares of the Company’s common stock at an exercise price of $0.10 per share and would not become exercisable until the 180th day following their issuance. Under the second pre-payment option, provided that the Company has closed a private placement of shares of its common stock for aggregate gross proceeds of at least $4,000,000, the Company may repay the loan in full by issuing to the lenders shares of its common stock, in an aggregate amount equal to the amount of outstanding principal and accrued interest, at a 15% discount to the price paid by the private placement investors. Any exercise by the Company of the second pre-payment option would be subject to stockholder and regulatory approval.

Currently, we anticipate that the net proceeds of the loan, together with the Company’s other cash and cash equivalents, will be sufficient to sustain the Company’s operations only until approximately the end of April 2008 (assuming that the outstanding obligation of OccuLogix to pay $2,000,000 to OcuSense becomes due and payable prior to the end of April 2008).

RESULTS OF OPERATIONS

Correction of prior years’ comparative amounts

In accordance with the Securities and Exchange Commission (the “SEC”) Staff Accounting Bulletin (“SAB”) No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”, the following discussion on the Company’s results of operations have been corrected to reflect the Company’s accounting for stock options granted during fiscal 2005 to certain consultants that were subject to performance conditions.  The vesting of these options was contingent upon the attainment of FDA approval of the RHEO™ System.  These stock options were accounted for in accordance with SFAS No. 123 and subsequently in accordance with SFAS No. 123(R) upon the Company’s adoption of SFAS No. 123(R) on January 1, 2006. The total fair value of these options was estimated at the date of grant and was being amortized, over the Company’s estimate of the expected vesting period, as stock-based compensation expense in the Company consolidated statements of operations.  In preparing the financial statements for the year ended December 31, 2007, the Company noted that these options should have been accounted for in accordance with EITF 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, (“EITF 96-18”) which requires that if, on the measurement date of the award, the quantity or any of the terms of the equity instruments are dependent on the achievement of performance conditions which result in a range of fair values, the lowest aggregate amount should be used.

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Based on the provisions of EITF 96-18, the Company concluded that no stock-based compensation expense should have been recorded for these options. Since the effect of the error on the individual prior periods’ consolidated financial statements was immaterial, the Company has adjusted the comparative consolidated financial statements of prior years to reflect the correction of this error without undertaking a restatement of the prior periods’ consolidated financial statements. The following financial statement line items for fiscal 2006 and 2005 were affected by the correction of the error.

	Previously reported			Corrected amount			Effect of error
		$’000			$’000			$’000
Balance Sheets
As of December 31, 2006
Additional paid-in capital		354,320			354,191			(129	)
Accumulated deficit		(293,151	)		(293,022	)		129
As of December 31, 2005
Additional paid-in capital		336,978			336,836			(142	)
Accumulated deficit		(210,979	)		(210,837	)		142
Statements of Operations
Year ended December 31, 2006
General and administrative(i)		8,452			8,407			45
Clinical and regulatory(i)		4,957			4,922			35
Sales and marketing(i)		1,639			1,625			14
Loss from continuing operations		(80,736	)		(80,642	)		94
Cumulative effect of a change in accounting principle		107			—			(107	)
Net loss for the year		(82,171	)		(82,184	)		(13	)
Year ended December 31, 2005
General and administrative expenses		8,729			8,670			59
Clinical and regulatory expenses		5,251			5,168			83
Loss from continuing operations		(162,972	)		(162,830	)		142
Net loss for the year		(162,972	)		(162,830	)		142

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	Previously reported			Corrected amount		Effect of error
		$’000			$’000		$’000
Statements of Cash Flows
Year ended December 31, 2006
Operating Activities
Adjustments to reconcile net loss to cash used in operations
Stock-based compensation(i)		2,221			2,127		94
Cumulative effect of a change in accounting principle		(107	)		—		(107	)
Year ended December 31, 2005
Operating Activities
Adjustments to reconcile net loss to cash used in operations
Stock-based compensation		367			225		142

(i) The comparative figures for the year ended December 31, 2006 have been reclassified to reflect the effect of discontinued operations.

Continuing Operations

Revenues, Cost of Goods Sold and Gross Margin

For the years ended December 31,

(in thousands)

	2007			Change			2006			Change			2005
Sales to related parties	$	—			N/M	*	$	—			N/M	*	$	81
Sales to unrelated parties		92			(47	)%		174			(90	)%		1,759
Total revenues	$	92			(47	)%	$	174			(91	)%	$	1,840
Cost of goods sold to related parties	$	—			N/M	*	$	—			N/M	*	$	43
Cost of goods sold to unrelated parties		2,298			(33	)%		3,429			5	%		3,251
Royalty costs		100			—			100			—			100
Total cost of goods sold	$	2,398			(32	)%	$	3,529			4	%	$	3,394
Gross loss		(2,306	)		31	%		(3,355	)		(116	)%		(1,554	)
Percentage of total revenue		(2,507	)%	(579) pts				(1,928	)%	(1,844) pts				(84	)%
*N/M – Not meaningful

Revenues

Revenue consists of revenue generated from the sale of components of the RHEO™ System which consists of the OctoNova pump and the disposable treatment sets, which include two disposable filters and applicable tubing.

During the year ended December 31, 2007, we sold a total of 816 treatment sets, at a price of $200 per treatment set, to Veris. The sale of these treatment sets was not recognized as revenue during the year based on Veris’ payment history with the Company and the 180-day payment terms agreed by Veris and us in March 2007. In October 2007, we met with the management of Veris and based on discussions with Veris, we believe that Veris will not be able to meet its financial obligations to the Company. Therefore, during the year ended December 31, 2007, the Company recorded an allowance for doubtful accounts against the total amount due from Veris for the purchase of the treatment sets.

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Revenues for the year ended December 31, 2007 is made up of revenue from the sale of a total of 600 treatment sets at a negotiated price of $150 per treatment set to Macumed AG, a company based in Germany. Revenues for the year ended December 31, 2006 include the sale of 859 treatment sets to Veris at a negotiated price of $200 per treatment set as payment was received by the Company in advance of shipment of the treatment sets.

During fiscal 2006, as compared with fiscal 2005, revenues decreased significantly primarily due to reduced sales of components of the RHEO™ System to Veris as a result of our February 3, 2006 announcement that MIRA-1 did not meet its primary efficacy endpoint. In addition, included in revenues in fiscal 2005 are sales made to RHEO Clinic Inc., a subsidiary of TLC Vision Corporation (“TLC Vision”) and a related party, for which we reported revenues of $81,593 in the period. RHEO Clinic Inc. has since ceased the treatment of commercial patients and is therefore no longer a source of revenue for us.

On November 1, 2007, we announced an indefinite suspension of the RHEO™ System clinical development program for Dry AMD and are in the process of winding down the RHEO-AMD study. Accordingly, we do not expect to be able to continue to generate revenue from the sale of the components of the RHEO™ System in the future.

Cost of Sales

Cost of sales includes costs of goods sold and royalty costs. Our cost of goods sold consists primarily of costs for the manufacture of the RHEO™ System, including the costs we incur for the purchase of component parts from our suppliers, applicable freight and shipping costs, fees related to warehousing, logistics inventory management and recurring regulatory costs associated with conducting business and ISO certification.

During fiscal 2006, we sold a number of treatment sets to Veris at a price, net of negotiated discounts, which was lower than our cost. As Veris was then our sole customer for the RHEO™ System treatment sets, the price at which we sold the treatment sets to Veris represented our inventory’s then current net realizable value, and therefore, we have written down the value of the treatment sets to reflect this net realizable value. Included in cost of sales for the year ended December 31, 2006, is $1,625,000 which reflects the write-down of the treatment sets to its net realizable value. In addition, we evaluated our ending inventories as at December 31, 2006 on the basis that Veris may not be able to increase its commercial activities in Canada in line with our initial expectations. Accordingly, we set up an additional provision for obsolescence of $1,679,124 during the year ended December 31, 2006 for treatment sets that will unlikely be utilized prior to their expiration dates (2005 - $1,990,830). As at December 31, 2006, the value of our commercial inventory of treatment sets was nil. On November 1, 2007, we announced an indefinite suspension of the RHEO™ System clinical development program for Dry AMD, and we are engaged in the process of winding down the RHEO-AMD study. Accordingly, we have written down the value of our commercial inventory of OctoNova pumps to nil as of December 31, 2007 since the Company may not be able to sell or utilize these pumps before their technologies become outdated. Included in cost of sales for the year ended December 31, 2007, is a charge of $2,190,666 which reflects the write-down of the value of these pumps to nil as of December 31, 2007.

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Cost of sales for the year ended December 31, 2007 includes royalty fees payable to Dr. Brunner and Mr. Stock and a charge of $2,190,666 which reflects the write-down of the value of our commercial inventory of pumps to nil as of December 31, 2007. Included in cost of sales for the year ended December 31, 2006 are royalty fees payable to Dr. Brunner and Mr. Stock and a total charge of $3,304,124 which reflect the write-down of our commercial inventory of treatment sets to nil as at December 31, 2006.

During the year ended December 31, 2006, as compared with the corresponding period in fiscal 2005, cost of sales increased due primarily to the charge of $1,625,000 which reflects the write-down of our inventory of treatment sets to its net realizable value. There was no comparative expense in fiscal 2005. Cost of sales for the years ended December 31, 2006 and 2005 includes a provision for obsolescence of $1,679,124 and 1,990,830, respectively, for treatment sets that will unlikely be utilized prior to their expiration dates.

Gross Margin

During fiscal 2007 as compared with fiscal 2006, our retina gross margin decreased 579 percentage points due to reduced sales in fiscal 2007.

During fiscal 2006 as compared with fiscal 2005, our retina gross margin decreased 1,844 percentage points due to reduced sales in fiscal 2006 and increased cost of sales due to the inventory write-down and the provision for obsolescence recorded in the period.

Operating Expenses

For the years ended December 31,

(in thousands)

	2007		Change			2006		Change			2005
General and administrative	$	7,374		(12	)%	$	8,407		(3	)%	$	8,670
Clinical and regulatory		8,676		76	%		4,922		(5	)%		5,168
Sales and marketing		1,413		(13	)%		1,625		(25	)%		2,165
Impairment of goodwill		—		(100	)%		65,946		(55	)%		147,452
Impairment of intangible asset		20,923		N/M	*		—		—			—
Restructuring charges		1,313		60	%		820		N/M	*		—
Total operating expenses	$	39,699		(51	)%	$	81,720		(50	)%	$	163,455
*N/M – Not meaningful

General and Administrative Expenses

General and administrative expenses decreased by $1,033,775 during the year ended December 31, 2007, as compared with the corresponding period of fiscal 2006 due to a decrease of $1,352,416 in stock-based compensation expense which reflects the reversal of the stock-based compensation expense recorded in prior periods associated with performance-based options granted to certain employees, directors and consultants of the Company. The vesting of these options was contingent upon meeting company-wide goals which include the attainment of FDA approval of the RHEO™ System and the achievement of a minimum amount of sales over a specified period. In light of the indefinite suspension of the RHEO™ System clinical development program and the sale of SOLX, management concluded that these goals were no longer achievable and accordingly has reversed the option expense recorded in prior periods associated with these performance-based options. Professional fees also decreased by $352,634 during the year ended December 31, 2007 as compared with the corresponding period of fiscal 2006. These decreases were partially offset by the increase in employee and related travel costs of $383,859 due to the additional cost of OcuSense employees during the period as well as the increase in amortization expense of $90,482 associated with the intangible asset acquired upon the acquisition of 50.1% of the capital stock, on a fully diluted basis, of OcuSense on November 30, 2006. General and administrative expenses for the year ended December 31, 2007 also include a charge of $190,873 which reflects the reduction to the carrying value of certain of the Company’s patents and trademarks related to the RHEO™ System as a result of our indefinite suspension of the RHEO™ System clinical development program for Dry AMD. There was no comparative charge during the year ended December 31, 2006.

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General and administrative expenses decreased by $262,893 during the year ended December 31, 2006, as compared with the corresponding period of fiscal 2005. This decrease is due to the decrease in employee and related travel costs of $537,274 due in part to the grant of options to an employee in lieu of salary. Professional fees and fees associated with compliance with Section 404 of the Sarbanes-Oxley Act of 2002 also decreased by $917,318 while directors’ fees decreased by $50,207 due to the grant of options to directors in lieu of their annual fees payable for board and committee memberships. These decreases in cost were partially offset by an increase of $1,262,292 in stock-based compensation expense associated with the adoption of SFAS No. 123R on January 1, 2006 which requires us to recognize a non-cash expense related to the fair value of our stock-based compensation awards.

We are continuing to focus our efforts on achieving additional operating efficiencies by reviewing and improving upon our existing business processes and cost structure.

Clinical and Regulatory Expenses

Clinical and regulatory expenses increased by $3,753,781 during the year ended December 31, 2007, as compared with the corresponding prior year period, due to the increase in OcuSense product development and regulatory costs of $2,564,703. OcuSense employee and related travel costs, professional fees and options expense also increased by $494,458, $328,713 and $112,360, respectively, during the year ended December 31, 2007 as compared with the corresponding period in fiscal 2006. We acquired 50.1% of the capital stock, on a fully diluted basis, of OcuSense on November 30, 2006. Therefore, clinical and regulatory expenses for the year ended December 31, 2006 include OcuSense’s cost for the month of December 2006. Clinical trial expenses associated with the RHEO-AMD trial also increased by $1,101,074. The RHEO-AMD trial was abandoned on November 1, 2007. Accordingly, we have recorded a write-down to the value of our inventory of treatment sets used for the trial and also written down the carrying value of certain of our medical equipment used in the trial. Clinical and regulatory expenses for the year ended December 31, 2007 therefore include a charge of $942,309 which reflects the write-down of our inventory and certain of our medical equipment as of December 31, 2007. Also included in clinical trial expenses for the year ended December 31, 2006 are advance payments totaling $243,644 made to various clinical trial sites for the provision of clinical trial services in connection with our RHEO-AMD trial which we have abandoned. This unrecoverable amount has been fully expensed in the year ended December 31, 2007. There was no comparative expense during the year ended December 31, 2006. These increases in cost during the year ended December 31, 2007 were offset in part by the decrease in costs associated with the MIRA-1 trial, the LEARN, or Long-term Efficacy in AMD from Rheopheresis in North America, trials and other related clinical trials of $2,200,131 since the Company completed the analysis of the MIRA-1 data during the first half of fiscal 2006 and the treatment phase of the LEARN trials was completed in December 2006.

During the year ended December 31, 2006, clinical and regulatory expenses decreased by $245,778, as compared with the corresponding period in fiscal 2005, as a result of decreased professional fees associated with the MIRA-1 clinical trial of $233,920.

Our goal is to complete product development of OcuSense’s TearLab™ test for DED. Following the completion of product development, OcuSense will have to conduct clinical trials in order to seek a 510(k) clearance and a CLIA waiver from the FDA for the TearLab™ test for DED.

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Sales and Marketing Expenses

Sales and marketing expenses decreased by $211,729 during the year ended December 31, 2007, as compared with the prior period in fiscal 2006, due to the decrease in the RHEO™ System marketing expenses of $128,420. Stock-based compensation expense also decreased by $331,038 which reflects the reversal of the stock-based compensation expense recorded in prior periods associated with performance-based options granted to certain employees, directors and consultants of the Company. The vesting of these options was contingent upon meeting company-wide goals which include the attainment of FDA approval of the RHEO™ System and the achievement of a minimum amount of sales over a specified period. In light of the indefinite suspension of the RHEO™ System clinical development program and the sale of SOLX, management concluded that these goals were no longer achievable and accordingly has reversed the option expense recorded in prior periods associated with these performance-based options. These decreases in cost were offset in part by the increase in OcuSense employee and related travel costs of $146,504 and professional fees of $61,559. During 2007, OcuSense hired a new employee and retained the use of some outside consultants to begin establishing sales and marketing efforts to increase awareness of the TearLab™ test for DED, and upon receipt of FDA approval, to promote the use of the TearLab™ test for DED in the United States.

Sales and marketing expenses decreased by $540,149 during the year ended December 31, 2006, as compared with the prior period in fiscal 2005, due to reduced employee and travel costs during the period of $422,423 and a decrease in marketing expenses of $344,067 due to reduced marketing efforts in the year following the announcement of MIRA-1 results. Bad debt expense also decreased during the year ended December 31, 2006 by $510,913 as the Company only recognized revenue on sale of treatment sets sold to its then sole customer, Veris, on receipt of payment. These decreases in costs were offset by increased stock-based compensation expense of $524,003 associated with the adoption of SFAS No. 123R beginning January 1, 2006 and increased fees and expenses of the Company’s Scientific Advisory Board members of $210,456.

The cornerstone of our sales and marketing strategy to date has been to increase awareness of our product among eye care professionals and, in particular, the key opinion leaders in the eye care professions. OcuSense will continue to develop and execute our conference and podium strategy to ensure visibility and evidence-based positioning of the TearLab™ test for DED among eye care professionals.

Impairment of Goodwill

The decrease in our stock price subsequent to the February 3, 2006 announcement of the MIRA-1 trial's failure to meet its primary efficacy endpoint, the June 12, 2006 announcement of the outcome of our meeting with the FDA and the June 30, 2006 announcement of the termination of negotiations with Sowood were identified as indicators of impairment which led to an analysis of our intangible assets and goodwill which, in turn, resulted in the reporting of an impairment charge of $65,946,686 and $147,451,758 during the years ended December 31, 2006 and 2005, respectively. The impairment of goodwill charge represents the write-down of the value of goodwill acquired on the purchase of TLC Vision's 50% interest in OccuLogix, L.P. on December 8, 2004 to nil as at December 31, 2006.

Impairment of Intangible Assets

Prior to the termination of the Distribution Agreement on February 25, 2008, the Company’s intangible assets consisted of the value of that distribution agreement with Asahi Medical and the distribution agreement the Company has with Diamed and MeSys, the designer and the manufacturer, respectively, of the OctoNova pumps. The Rheofilter filter, the Plasmaflo filter and the OctoNova pump are components of the RHEO™ System. On November 1, 2007, the Company announced an indefinite suspension of the RHEO™ System clinical development program for Dry AMD and is in the process of winding down the RHEO-AMD study as there is no reasonable prospect that the RHEO™ System clinical development program will be relaunched in the foreseeable future.  In accordance with SFAS No. 144, the Company concluded that its indefinite suspension of the RHEO™ System clinical development program for Dry AMD was a significant event which may affect the carrying value of its distribution agreements. Accordingly, management was required to re-assess whether the carrying value of the Company’s distribution agreements was recoverable as of December 31, 2007. Based on management’s estimates of undiscounted cash flows associated with the distribution agreements, the Company concluded that the carrying value of the distribution agreements was not recoverable as of December 31, 2007. Accordingly, the Company recorded an impairment charge of $20,923,028 during the year ended December 31, 2007 to record the distribution agreements at their fair value as of December 31, 2007. There was no comparable expense during the years ended December 31, 2006 and 2005.

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Restructuring Charges

In accordance with SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (“SFAS No. 146”), we recognized a total of $1,312,721 and $819,642 in restructuring charges during the years ended December 31, 2007 and 2006, respectively. With the suspension of the Company’s RHEO™ System clinical development program, and the consequent winding-down of the RHEO-AMD study, and the Company’s disposition of SOLX during the year ended December 31, 2007, the Company has reduced its workforce considerably. During 2006, the Company implemented a number of structural and management changes designed both to support the continued development of the RHEO™ System and to execute the Company’s accelerated diversification strategy within ophthalmology. The restructuring charges of $1,312,721 and $819,642, recorded in the years ended December 31, 2007 and 2006, respectively, consist solely of severance and benefit costs related to the termination of certain of the Company’s employees at the Company’s Palm Harbor and Mississauga offices. The severance and benefit costs recorded during the year ended December 31, 2007 were yet to be paid by December 31, 2007. There was no comparable expense in the year ended December 31, 2005.

Other Income, Net

For the years ended December 31,

(in thousands)

	2007			Change			2006			Change			2005
Interest income	$	610			(55	)%	$	1,370			(14	)%	$	1,593
Changes in fair value of warrant obligation		1,882			N/M	*		—			N/M	*		—
Impairment of investments		(1,036	)		N/M	*		—			N/M	*		—
Interest expense		(17	)		(13	)%		(15	)		N/M	*		—
Other income (expense)		18			(42	)%		31			154	%		(57	)
Minority interest		2,183			1,282	%		158			N/M	*		—
	$	3,640			136	%	$	1,544			1	%	$	1,536
* N/M – Not meaningful

Interest Income

Interest income consists of interest income earned in the current period and the corresponding prior periods as a result of the Company’s cash and short-term investment position following the raising of capital in the Company’s initial public offering in December 2004 and in the private placement of the Shares and Warrants in February 2007.

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The continued decrease in interest income during years ended December 31, 2007 and 2006, when compared to the corresponding period in fiscal 2005, is due to the utilization of the funds raised in order to finance infrastructure costs, to accumulate inventory and to fund costs of the MIRA-1 and RHEO-AMD trials and other clinical trials and, more recently, to acquire SOLX and OcuSense in line with our diversification strategy.

Changes in Fair Value of Warrant Obligation

On February 6, 2007, pursuant to the Securities Purchase Agreement between the Company and certain institutional investors, the Company issued the Warrants to these investors. The Warrants are five-year warrants exercisable into an aggregate of 2,670,933 shares of the Company’s common stock. On February 6, 2007, the Company also issued the Cowen Warrant to Cowen and Company, LLC in part payment of the placement fee payable to Cowen and Company, LLC for the services it had rendered as the placement agent in connection with the private placement of the Shares and the Warrants. The Cowen Warrant is a five-year warrant exercisable into an aggregate of 93,483 shares of the Company’s common stock. The per share exercise price of the Warrants is $2.20, subject to adjustment, and the Warrants became exercisable on August 6, 2007. All of the terms and conditions of the Cowen Warrant (other than the number of shares of the Company's common stock into which it is exercisable) are identical to those of the Warrants. The Company accounts for the Warrants and the Cowen Warrant in accordance with the provisions of SFAS No. 133 along with related interpretation EITF 00-19. Based on the provisions of EITF 00-19, the Company determined that the Warrants and the Cowen Warrant do not meet the criteria for classification as equity. Accordingly, the Company has classified the Warrants and the Cowen Warrant as a current liability as at December 31, 2007. The estimated fair value was determined using the Black-Scholes option-pricing model. In addition, SFAS No. 133 requires the Company to record the outstanding derivatives at fair value at the end of each reporting period resulting in an adjustment to the recorded liability of the derivative, with any gain or loss recorded in earnings of the applicable reporting period. The Company therefore estimated the fair value of the Warrants and the Cowen Warrant as at December 31, 2007 and determined the aggregate fair value to be a nominal amount, a decrease of approximately $2,052,578 over the initial measurement of the aggregate fair value of the Warrants and the Cowen Warrant on the date of issuance.

Changes in fair value of warrant obligation for the year ended December 31, 2007 includes a gain of $2,052,578 which reflect the decrease in the fair value of the Warrants and the Cowen Warrant at December 31, 2007 over their fair value on the date of issuance. Transaction costs associated with the issuance of the Warrants of $170,081 have also been recorded as a warrant expense in the Company’s consolidated statement of operations for the year ended December 31, 2007. There was no comparable net gain recorded in the years ended December 31, 2006 and 2005.

Impairment of  investments

As at December 31, 2007, we had investments in the aggregate principal amount of $1,900,000 which consist of investments in four separate asset-backed auction rate securities yielding an average return of 5.865% per annum.  However, as a result of market conditions, all of these investments have recently failed to settle on their respective settlement dates and have been reset to be settled at a future date with an average maturity of 46 days.  Based on discussions with the Company’s advisors and the current lack of liquidity for asset-backed securities of this type, we concluded that the carrying value of these investments was higher than its fair value as of December 31, 2007. Accordingly, these auction rate securities have been recorded at their estimated fair value of $863,750. We consider this to be an other-than-temporary reduction in the value of these auction rate securities. Accordingly, the impairment associated with these auction rate securities of $1,036,250 has been included as an impairment of investments in our consolidated statement of operations for the year ended December 31, 2007.

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Impairment of investments for the year ended December 31, 2007 reflect the decrease in the fair value of the Company’s investments in asset-backed auction rate securities as at December 31, 2007. There was no comparable expense recorded in the years ended December 31, 2006 and 2005.

Interest Expense

On November 30, 2006, we announced that Elias Vamvakas, our Chairman and Chief Executive Officer, had agreed to provide us with a standby commitment to purchase Convertible Debentures of the Company for a Total Commitment Amount of $8,000,000.  Pursuant to the Summary of Terms and Conditions, during the 12-month commitment term commencing on November 30, 2006, upon no less than 45 days’ written notice by the Company to Mr. Vamvakas, Mr. Vamvakas was obligated to purchase Convertible Debentures in the aggregate principal amount specified in such written notice. A commitment fee of 200 basis points was payable by the Company on the undrawn portion of the total $8,000,000 commitment amount. Any Convertible Debentures purchased by Mr. Vamvakas would have carried an interest rate of 10% per annum and would have been convertible, at Mr. Vamvakas’ option, into shares of the Company’s common stock at a conversion price of $2.70 per share. The Summary of Terms and Conditions of the standby commitment further provided that if the Company closed a financing with a third party, whether by way of debt, equity or otherwise and there are no Convertible Debentures outstanding, then, the Total Commitment Amount was to be reduced automatically upon the closing of the financing by the lesser of: (i) the Total Commitment Amount; and (ii) the net proceeds of the financing. On February 6, 2007, the Company raised gross proceeds in the amount of $10,016,000 in a private placement of shares of its common stock and warrants. The Total Commitment Amount was therefore reduced to zero, thus effectively terminating Mr. Vamvakas’ standby commitment. No portion of the standby commitment was ever drawn down by the Company, and the Company paid Mr. Vamvakas a total of $29,808 in commitment fees in February 2007.

Interest expense for the years ended December 31, 2007 and 2006 consists primarily of the commitment fee due to Mr. Vamvakas on the undrawn portion of the Total Commitment Amount during the periods. There was no comparable expense during the year ended December 31, 2005.

Other Income (Expense)

Other income for the years ended December 31, 2007 and 2006 consists primarily of foreign exchange gain of $22,889 and $37,229, respectively, due to exchange rate fluctuations on the Company’s foreign currency transactions. This gain was offset by miscellaneous tax expense of $4,879 and $6,120 during the years ended December 31, 2007 and 2006, respectively. Other expense was $57,025 for the year ended December 31, 2005 and consists of a provision for subscription receivable of $34,927 and miscellaneous tax expense of $23,021.

Minority Interest

Minority interest is from our acquisition of 50.1% of the capital stock of OcuSense, on a fully diluted basis, on November 30, 2006. The results of OcuSense’s operations have been included in our consolidated financial statements since that date. Income from minority interest of $2,182,843 and $157,624 for the years ended December 31, 2007 and 2006, respectively, relate to the loss reported by OcuSense in which the Company has a shared interest with minority partners.

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Recovery of Income Taxes

For the years ended December 31,

(in thousands)

		2007	Change			2006	Change			2005
Recovery of income taxes	$	5,655	96	%	$	2,888	349	%	$	643

Recovery of Income Taxes

Recovery of income taxes increased by $2,766,378 during the year ended December 31, 2007, as compared with the prior period in 2006. The increase is due to the elimination of the deferred tax liability of $7,995,790 associated with the Company’s distribution intangible which was fully impaired as at December 31, 2007. In addition, we recorded a deferred tax recovery in the amount of $2,244,990 associated with the recognition of the deferred tax asset from the availability of net operating losses in the United States of OcuSense during the 2007 fiscal year which may be utilized to reduce taxes in future years. These increases in recovery of income taxes were offset in part by a valuation allowance increase of $4,809,456 associated with the Company’s Retina division. A deferred tax asset was recognized in prior years as the asset was believed to be more likely than not to be realized based on existing taxable temporary differences.

Recovery of income taxes increased by $2,245,961 during the year ended December 31, 2006, as compared with the prior period in 2005 due primarily to the recognition of deferred tax asset from the availability of fiscal 2006 net operating losses in the United States which may be utilized to reduce taxes in future years. There was no comparable benefit recorded during the year ended December 31, 2005.

To date, the Company has recognized income tax benefits in the aggregate amount of $2.3 million associated with the recognition of the deferred tax asset from the availability of net operating losses in the United States which may be utilized to reduce taxes in future years. The benefits associated with the balance of the net operating losses are subject to a full valuation allowance since it is not more likely than not that these losses can be utilized in future years.

Recovery of income taxes for the years ended December 31, 2007 and 2006 also includes the amortization of the deferred tax liability of $223,544 and $15,684, respectively, which was recorded based on the difference between the fair value of intangible asset acquired upon the acquisition of OcuSense on November 30, 2006 and its tax bases. The increase in the amount recorded during the year ended December 31, 2007 as compared with the corresponding period in fiscal 2006 is due to the additional deferred tax liability recorded by the Company upon the payment of $2,000,000 to OcuSense in June 2007 upon the attainment by OcuSense of one of the two pre-determined milestones. In addition, the acquisition of 50.1% of the capital stock of OcuSense, on a fully diluted basis, was completed by the Company on November 30, 2006. Therefore, recovery of income taxes for the year ended December 31, 2006 only included one month’s amortization of the deferred tax liability recorded upon the acquisition of OcuSense, The deferred tax liability totaling $2,547,499 is being amortized over an average period of 10 years, the estimated useful life of the intangible asset. There was no comparable income tax benefit recorded during the year ended December 31, 2005.

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Discontinued Operations

On December 19, 2007, the Company sold to Solx Acquisition, and Solx Acquisition purchased from the Company, all of the issued and outstanding shares of the capital stock of SOLX, which had been the glaucoma subsidiary of the Company prior to the completion of this transaction. The consideration for the purchase and sale of all of the issued and outstanding shares of the capital stock of SOLX consisted of:  (i) on the closing date of the sale, the assumption by Solx Acquisition of all of the liabilities of the Company related to SOLX’s business, incurred on or after December 1, 2007, and the Company’s obligation to make a $5,000,000 payment to the former stockholders of SOLX due on September 1, 2008 in satisfaction of the outstanding balance of the purchase price of SOLX; (ii) on or prior to February 15, 2008, the payment by Solx Acquisition of all of the expenses that the Company had paid to the closing date, as they related to SOLX’s business during the period commencing on December 1, 2007; (iii) during the period commencing on the closing date and ending on the date on which SOLX achieves a positive cash flow, the payment by Solx Acquisition of a royalty equal to 3% of the worldwide net sales of the SOLX 790 Laser and the SOLX Gold Shunt, including next-generation or future models or versions of these products; and (iv) following the date on which SOLX achieves a positive cash flow, the payment by Solx Acquisition of a royalty equal to 5% of the worldwide net sales of these products. In order to secure the obligation of Solx Acquisition to make these royalty payments, SOLX granted to the Company a subordinated security interest in certain of its intellectual property. No value was assigned to the royalty payments as the determination of worldwide net sales of SOLX’s products is subject to significant uncertainty.

The Company’s results of operations related to discontinued operations for the years ended December 31, 2007 and 2006 are as follows:

	December 31,
		2007 $		2006 $
Revenue		244,150		31,625
Cost of goods sold
Cost of goods sold		119,147		11,053
Royalty costs		26,277		8,332
Total cost of goods sold		145,424		19,385
Gross profit		98,726		12,240
Operating expenses
General and administrative		3,630,943		1,378,536
Clinical and regulatory		2,828,686		754,624
Sales and marketing		818,301		330,210
Impairment of goodwill		14,446,977		—
Impairment of intangible assets		22,286,383		—
		44,011,290		2,463,370
		(43,912,564	)	(2,451,130	)
Other income (expenses)
Interest income		486		—
Accretion expense		(857,400	)	(273,192	)
Other		(9,302	)	(67	)
		(866,216	)	(273,259	)
Loss from discontinued operations before income taxes		(44,778,780	)	(2,724,389	)
Recovery of income taxes		9,349,882		1,182,005
Loss from discontinued operations		(35,428,898	)	(1,542,384	)

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Revenues, Cost of Goods Sold and Gross Margin of Discontinued Operations

For the years ended December 31,

(in thousands)

	2007			Change			2006
Revenue	$	244			663	%	$	32
Cost of goods sold
Cost of goods sold	$	119			982	%	$	11
Royalty costs		26			225	%		8
Total cost of sales	$	145			663	%	$	19
Gross margin		99			662	%		13
Percentage of revenue		41	%		—			41	%

Revenues

Revenue consists of revenue generated from the sale of components of the SOLX Glaucoma System.

The Company completed the acquisition of SOLX on September 1, 2006. On December 20, 2007, we announced the sale of SOLX to Solx Acquisition. The results of SOLX’s operations have therefore been included in our consolidated financial statements from September 1, 2006 to December 19, 2007, the closing date of the sale of SOLX.

Revenue therefore includes the sale of SOLX Gold Shunts from September 1, 2006 to December 19, 2007. There was no comparative revenue during the year ended December 31, 2005.

Cost of Sales

Cost of sales includes costs of goods sold and royalty costs. Our cost of goods sold consists primarily of costs for the manufacture of the SOLX Glaucoma System, including the costs we incur for the purchase of component parts from our suppliers, applicable freight and shipping costs, fees related to warehousing, logistics inventory management and recurring regulatory costs associated with conducting business and ISO certification.

Cost of sales includes the cost of the components of the SOLX Glaucoma System sold during the years ended December 31, 2007 and 2006.

Gross Margin

Gross margin on the sale of SOLX Gold Shunts was 41% during each of the years ended December 31, 2007 and 2006.

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Operating Expenses of Discontinued Operations

For the years ended December 31,

(in thousands)

	2007		Change			2006
General and administrative	$	3,631		163	%	$	1,378
Clinical and regulatory		2,829		275	%		755
Sales and marketing		818		148	%		330
Impairment of goodwill		14,447		N/M	*		—
Impairment of intangible assets		22,286		N/M	*		—
Total operating expenses	$	44,011		1,687	%	$	2,463
*N/M – Not meaningful

General and Administrative Expenses

General and administrative expenses increased by $2,252,407 during the year ended December 31, 2007, as compared with the corresponding period of fiscal 2006, due to an increase of $1,738,334 in the amortization of the intangible assets acquired during fiscal 2006 upon the acquisition of SOLX on September 1, 2006. SOLX employee and related travel costs and administrative expenses also increased by $311,886 and $183,575, respectively, during the year ended December 31, 2007 as compared with the corresponding period in fiscal 2006. We acquired SOLX on September 1, 2006. Therefore, general and administrative expenses for the year ended December 31, 2006 include SOLX’s cost for four months to December 2006.

Clinical and Regulatory Expenses

SOLX’s clinical and regulatory expenses increased by $2,074,062 during the year ended December 31, 2007 as compared with the comparative period in 2006. We acquired SOLX on September 1, 2006. Therefore, clinical and regulatory expenses for the year ended December 31, 2006 include SOLX’s cost for the four months ended December 31 2006.

Sales and Marketing Expenses

Sales and marketing expenses increased by $488,091 due to the increase in SOLX’s sales and marketing expenses of $315,581 and increased employee and related travel costs and administrative expenses of $107,935 and $28,686, respectively.

Impairment of Goodwill

On September 1, 2006, the Company acquired SOLX by way of a merger for a total purchase price of $29,068,443. Of this amount, $14,446,977 was allocated to goodwill. On December 19, 2007, the Company sold all of the issued and outstanding shares of the capital stock of SOLX to Solx Acquisition. The sale transaction established fair values for the Company’s recorded goodwill and certain of the Company’s intangible assets. Accordingly, the Company performed an impairment test of its recorded goodwill to re-assess whether its recorded goodwill was impaired as at December 1, 2007. Based on the goodwill impairment analysis performed, the Company concluded that a goodwill impairment charge of $14,446,977 should be recorded during the year ended December 31, 2007 to write down the value of its recorded goodwill to its fair value of nil as at December 31, 2007.

Impairment of Intangible Assets

The SOLX sale transaction established fair values for the Company’s recorded goodwill and the Company’s shunt and laser technology and regulatory and other intangible assets acquired upon the acquisition of SOLX on September 1, 2006. Accordingly, management was required to re-assess whether the carrying value of the Company’s shunt and laser technology and regulatory and other intangible assets was recoverable as of December 1, 2007. Based on management’s estimates of undiscounted cash flows associated with these intangible assets, the Company concluded that the carrying value of these intangible assets was not recoverable as of December 1, 2007. Accordingly, the Company recorded an impairment charge of $22,286,383 during the year ended December 31, 2007 to record the shunt and laser technology and regulatory and other intangible assets at their fair value as of December 31, 2007.

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Other Expense of Discontinued Operations

For the years ended December 31,

(in thousands)

	2007			Change			2006
Accretion expense	$	(857	)		(214	)%	$	(273	)
Other expense		(9	)		N/M	*		—
	$	(866	)		(217	)%	$	(273	)
* N/M – Not meaningful

Accretion Expense

In connection with the acquisition of SOLX on September 1, 2006, we remained indebted to the former stockholders of SOLX in an aggregate amount of up to $13,000,000 for the outstanding portion of the purchase price of SOLX. $5,000,000 of this amount was payable in cash on the second anniversary of the September 1, 2006 closing.  The $5,000,000 was recorded as a long-term liability at its present value, discounted at the incremental borrowing rate of the Company as at August 1, 2006. The difference between the discounted value and the $5,000,000 payable was being amortized using the effective yield method over the two-year period with the monthly expense being charged as an interest expense in the Company’s consolidated statement of operations. Accretion expense for the year ended December 31, 2007 and 2006 consists primarily of the accretion expense for the years ended December 2007 and 2006.

Recovery of Income Taxes of Discontinued Operations

For the years ended December 31,

(in thousands)

	2007		Change			2006
Recovery of income taxes	$	9,350		691	%	$	1,182

Recovery of Income Taxes

Recovery of income taxes increased by $8,167,877 during the year ended December 31, 2007, as compared with the prior period in 2006. The increase is primarily due to the elimination of the deferred tax liability of $11,861,145 associated with the intangible assets acquired upon the acquisition of SOLX on September 1, 2006 as these intangible assets were impaired as at December 31, 2007. This increase in recovery of income taxes were offset in part by a valuation allowance increase of $2,511,263 associated with the Company’s Glaucoma division. A deferred tax asset was recognized in prior years as the asset was believed to be more likely than not to be realized based on existing taxable temporary differences.

The recovery of income taxes was $1,182,450 during the year ended December 31, 2006 primarily due to the recognition of the deferred tax asset of $773,395 from the availability of fiscal 2006 net operating losses in the United States which may be utilized to reduce taxes in future years. Also impacting the recovery of income taxes was the amortization of the deferred tax liability of $409,055 which was recorded based on the difference between the fair value of intangible assets acquired and its tax bases.

49

LIQUIDITY AND CAPITAL RESOURCES

As at December 31,

(in thousands)

	2007			2006			Change
Cash and cash equivalents	$	2,236		$	5,741		$	(3,505	)
Short-term investments		—			9,785			(9,785	)
Total cash and cash equivalents and short-term investments	$	2,236		$	15,526		$	(13,290	)
Percentage of total assets		23	%		17	%	6 pts
Working capital (deficiency)	$	(997	)	$	13,539		$	(30,876	)

In December 2004, the Company raised $67,200,000 of gross cash proceeds (less issuance costs of $7,858,789) in an initial public offering of shares of its common stock. Immediately prior to the offering, the primary source of the Company’s liquidity was cash raised through the issuance of debentures.

On February 6, 2007, the Company raised gross proceeds in the amount of $10,016,000 (less issuance costs of approximately $750,000) in a private placement of shares of its common stock and warrants.

On February 19, 2008, we announced that the Company secured a bridge loan in an aggregate principal amount of $3,000,000 (less transaction costs of approximately $200,000) from a number of private parties. The loan bears interest at a rate of 12% per annum and has a 180-day term, which may be extended to 270 days under certain circumstances. The repayment of the loan is secured by a pledge by the Company of its shares of the capital stock of OcuSense.

To date, cash has been primarily utilized to finance increased infrastructure costs, to accumulate inventory and to fund costs of the MIRA-1, LEARN and RHEO-AMD trials and other clinical trials and to acquire SOLX and OcuSense in line with our diversification strategy. With the suspension of the Company’s RHEO™ System clinical trial development program, and the consequent winding-down of the RHEO-AMD study, and the Company’s disposition of SOLX, we expect that, in the future, we will use our cash resources to complete the product development of OcuSense’s TearLab™ test for DED and conduct the clinical trials that will be required for the TearLab™ test for DED. In addition, we remain indebted to OcuSense in an aggregate amount of up to $2,000,000 for the outstanding portion of the purchase price of the capital stock of OcuSense that we acquired on November 30, 2006. We currently expect this amount to become due and payable during the first half of 2008. Furthermore, we are legally committed to make an additional equity investment of $3,000,000 upon receipt, if any, from the FDA of a 510(k) clearance for the TearLab™ test for DED and another additional equity investment of $3,000,000 upon receipt, if any, from the FDA of a CLIA waiver for the TearLab™ test for DED.

Currently, we anticipate that the net proceeds of the loan, together with the Company’s other cash and cash-equivalents, will be sufficient to sustain the Company’s operations only until approximately the end of April 2008 (assuming that the outstanding obligation of OccuLogix to pay $2,000,000 to OcuSense becomes due and payable prior to the end of April 2008).

As at December 31, 2007, we had investments in the aggregate principal amount of $1,900,000 which consist of investments in four separate asset-backed auction rate securities yielding an average return of 5.865% per annum.  Contractual maturities for these auction rate securities range from 33 to 39 years, with an average interest reset date of approximately 46 days. Historically, the carrying value of auction rate securities approximated their fair value due to the frequent resetting of interest rates. However, as a result of market conditions associated with the liquidity issues experienced in the global credit and capital markets, all of these investments have recently failed to settle on their respective settlement dates and have been reset to be settled at a future date with an average maturity of 46 days.

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Due to the current lack of liquidity for asset-backed securities of this type, we concluded that the carrying value of these investments was higher than its fair value as of December 31, 2007. Accordingly, these auction rate securities have been recorded at their estimated fair value of $863,750, which represents a decline of $1,036,250 in the carrying value of these auction rate securities. We estimated the fair value of these auction rate securities based on the following: (i) the underlying structure of each security; (ii) the present value of future principal and interest payments discounted at rates considered to reflect current market conditions; (iii) consideration of the probabilities of default, auction failure, or repurchase at par for each period; and (iv) estimates of the recovery rates in the event of default for each security.  This estimated fair value could change significantly based on future market conditions.

We determined the reduction in the value of these auction rate securities to be an other-than-temporary reduction in value. Accordingly, the impairment associated with these auction rate securities of $1,036,250 has been included as an impairment of investments in our consolidated statement of operations for the year ended December 31, 2007. Our conclusion for the other-than-temporary impairment is based on the Company’s current liquidity position. Although we continue to receive payment of interest earned on these securities, we do not know at the present time when we will be able to convert these investments into cash.  Accordingly, management has classified these investments as a non-current asset on its consolidated balance sheet as of December 31, 2007. Management will continue to closely monitor these investments for future indications of further impairment. If the current market conditions deteriorate further, or the anticipated recovery in market values does not occur, we may be required to record additional impairment charges in fiscal 2008.

The illiquidity of these investments may have an adverse impact on the length of time during which we currently expect to be able to sustain our operations in the absence of an additional capital raise by the Company as we do not have the ability to hold these auction rate securities until the market recovers nor can we hold these securities until their contractual maturity dates.

Changes in Cash Flows

Years ended December 31,

(in thousands)

	2007			Change			2006			Change			2005
Cash used in operating activities	$	(17,217	)	$	(2,669	)	$	(14,548	)	$	4,162		$	(18,710	)
Cash provided by investing activities		4,510			(5,908	)		10,418			(33	)		10,451
Cash provided by financing activities		9,202			8,931			271			(57	)		328
Net (decrease) increase in cash and cash equivalents during the year	$	(3,505	)	$	354		$	(3,859	)	$	4,072		$	(7,931	)

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Cash Used in Operating Activities

Net cash used to fund our operating activities during the year ended December 31, 2007 was $17,217,438.  Net loss during the year was $68,139,314. The non-cash charges which comprise a portion of the net loss during that period consisted primarily of the intangible assets and goodwill impairment of $57,656,388 and the amortization of intangible assets, fixed assets, patents and trademarks and accretion expense of $6,475,869 netted by applicable deferred income taxes of $15,004,750 and minority interest of $2,182,843. Additional non-cash charges consist of $480,971 in stock-based compensation charges and impairment of investments of $1,036,250 netted by the change in the fair value of warrant obligation of $1,882,497.

The net change in non-cash working capital balances related to operations for the years ended December 31, 2007, 2006 and 2005 consists of the following:

	Years ended December 31,
		2007 $		2006 $		2005 $
Due to related party		—		(5,065	)	13,291
Amounts receivable		(58,782	)	390,634		(82,810	)
Inventory		2,756,759		2,250,554		(3,431,743	)
Prepaid expenses		37,951		247,361		(322,455	)
Accounts payable		797,415		(1,225,575	)	301,457
Accrued liabilities		911,987		(1,155,335	)	(563,925	)
Deferred revenue and rent inducement		—		—		(485,047	)
Due to stockholders		(109,842	)	(5,827	)	(358,523	)
Other current assets		7,000		12,781		4,105
		4,342,488		509,528		(4,925,650	)

· Amounts receivable increased due primarily to the expected repayment by Solx Acquisition, on or prior to February 15, 2008, in accordance with the stock purchase agreement between the Company and Solx Acquisition, of all the expenses relating to the SOLX business that the Company had paid.

· Decrease in inventory balance reflects the write-down of inventory and the provision for obsolescence for inventory the Company is not expected to be able to sell prior to their expiration dates.

· Decrease in prepaid expenses is primarily due to the expensing of advance payments made to various organizations involved in the RHEO-AMD trial due to our suspension of the trial, offset in part by prepaid insurance premiums.

· Accounts payable and accrued liabilities increased and reflect amounts owed for costs associated with the Company’s activities.

· The decrease in amounts due to stockholders is due to payments made to TLC Vision during the year ended December 31, 2007 for its payment of benefits of certain employees of the Company and for computer and administrative support.

Cash Provided by Investing Activities

Net cash provided by investing activities for the year ended December 31, 2007 is $4,510,838 and consists of the net sale of short-term investments of $7,885,000 offset in part by the payment of $3,000,000 to the former stockholders of SOLX in connection with the payment of the purchase price, cash in the amount of $267,934 used to acquire fixed assets and cash in the amount of $106,228 used to protect and maintain patents and trademarks.

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Net cash provided by investing activities for the year ended December 31, 2006 was $10,418,156 and resulted from cash generated from the sale of short-term investments of $21,841,860. Cash used in investing activities during the period consists of $255,886 used to acquire fixed assets and $105,217 used to protect and maintain patents and trademarks. Additional cash used in investing activities includes cash of $7,906,968 paid by the Company, including costs of acquisition, to acquire SOLX net of cash acquired from SOLX of $34,719. In addition, the Company advanced a total of $2,434,537 to SOLX to support its operations prior to the acquisition. The Company also invested $2,076,312 to acquire 50.1% of the capital stock of OcuSense, on a fully diluted basis, including acquisition costs of $76,312. Cash acquired upon the acquisition of OcuSense was $1,320,497. The $2,076,312 invested by the Company in OcuSense has been utilized to fund the operations of OcuSense.

Cash Provided by Financing Activities

Net cash provided by financing activities for the year ended December 31, 2007 was $9,201,735 and is made up of gross proceeds in the amount of $10,016,000 raised in the February 2007 private placement of the Shares and the Warrants, less issuance costs of $871,215 which includes the fair value of the Cowen Warrant of $97,222 issued in part payment of the placement fee owed to Cowen and Company, LLC. Cash provided by financing activities also includes cash received in the amount of $2,228 from the exercise of options to purchase shares of common stock of the Company, offset by additional share issuance costs of $42,500 in respect of the shares issued to the former stockholders of SOLX in part payment of the purchase price of SOLX.

Net cash provided by financing activities for the year ended December 31, 2006 was $270,935 and reflects cash received from the exercise of options to purchase shares of common stock of the Company.

Borrowings

On November 30, 2006, we announced that Elias Vamvakas, our Chairman and Chief Executive Officer, had agreed to provide us with a standby commitment to purchase Convertible Debentures of the Company for a Total Commitment Amount of $8,000,000.  Pursuant to the Summary of Terms and Conditions, during the 12-month commitment term commencing on November 30, 2006, upon no less than 45 days’ written notice by the Company to Mr. Vamvakas, Mr. Vamvakas was obligated to purchase Convertible Debentures in the aggregate principal amount specified in such written notice. A commitment fee of 200 basis points was payable by the Company on the undrawn portion of the total $8,000,000 commitment amount. Any Convertible Debentures purchased by Mr. Vamvakas would have carried an interest rate of 10% per annum and would have been convertible, at Mr. Vamvakas’ option, into shares of the Company’s common stock at a conversion price of $2.70 per share. The Summary of Terms and Conditions of the standby commitment further provided that if the Company closed a financing with a third party, whether by way of debt, equity or otherwise and there are no Convertible Debentures outstanding, then, the Total Commitment Amount was to be reduced automatically upon the closing of the financing by the lesser of: (i) the Total Commitment Amount; and (ii) the net proceeds of the financing. On February 6, 2007, the Company raised gross proceeds in the amount of $10,016,000 in a private placement of shares of its common stock and warrants. The Total Commitment Amount was therefore reduced to zero, thus effectively terminating Mr. Vamvakas’ standby commitment. No portion of the standby commitment was ever drawn down by the Company, and the Company paid Mr. Vamvakas a total of $29,808 in commitment fees in February 2007.

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Contractual Obligations and Contingencies

The following table summarizes our contractual commitments as of December 31, 2007 and the effect those commitments are expected to have on liquidity and cash flow in future periods.

	Payments Due by Period
Contractual Commitments	Total		Less than 1 year		1 to 3 years		More than 3 years
	$		$		$		$
Operating leases		445,202		197,374		247,828		—
Royalty payments		1,517,000		135,000		405,000		977,000
Consulting and non-competition agreements		206,286		153,286		56,000

On November 30, 2006, pursuant to the Series A Preferred Stock Purchase Agreement between us and OcuSense, we purchased 1,744,223 shares of OcuSense’s Series A Preferred Stock representing 50.1% of OcuSense’s capital stock on a fully diluted basis for an aggregate purchase price of up to $8,000,000. On the closing of the purchase which took place on November 30, 2006, we paid $2,000,000 of the purchase price. We paid another $2,000,000 installment of the purchase price on January 3, 2007. The Company agreed to make additional payments totaling $4,000,000 upon the attainment of two pre-defined milestones by OcuSense prior to May 1, 2009. In June 2007, we paid OcuSense a total of $2,000,000 upon the attainment of the first of the two pre-defined milestones. We will pay the last $2,000,000 installment of the purchase price upon the attainment by OcuSense of the second of such milestones, provided that the milestone is achieved prior to May 1, 2009. The Series A Preferred Stock Purchase Agreement also makes provision for an ability on our part to increase our ownership interest in OcuSense for nominal consideration if OcuSense fails to meet certain milestones by specified dates. In addition, pursuant to the Series A Preferred Stock Purchase Agreement, we have agreed to purchase $3,000,000 of shares of OcuSense’s Series B Preferred Stock, which shall constitute 10% of OcuSense’s capital stock on a fully diluted basis at the time of purchase, upon OcuSense’s receipt from the FDA of 510(k) clearance for the DED Test and to purchase another $3,000,000 of shares of OcuSense’s Series B Preferred Stock, which shall constitute an additional 10% of OcuSense’s capital stock on a fully diluted basis at the time of purchase, upon OcuSense’s receipt from the FDA of CLIA waiver for the DED Test.

Pursuant to the terms of our distribution agreement with MeSys GmbH, or MeSys, dated January 1, 2002, we undertook a minimum purchase commitment of 25 OctoNova pumps per year beginning after FDA approval of the RHEO™ System, representing an annual commitment after FDA approval of €405,000, or approximately $534,900. The marketing and distributorship agreement with Diamed provides for a minimum purchase of 1,000 OctoNova pumps during the period from the date of the agreement until the end of the five-year period following receipt of FDA approval, representing an aggregate commitment of €16,219,000, or approximately $23,871,935, based on exchange rates as of December 31, 2007.

Off-Balance-Sheet Arrangements

As of December 31, 2007, we did not have any significant off-balance-sheet arrangements as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

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Financial Condition

Management believes that the existing cash and cash equivalents and short-term investments, together with the net proceeds of the bridge loan, will be sufficient to fund the Company’s anticipated level of operations and other demands and commitments until approximately the end of April 2008 (assuming that the outstanding obligation of OccuLogix to pay $2,000,000 to OcuSense becomes due and payable prior to the end of April 2008).

As at December 31, 2007, we had investments in the aggregate principal amount of $1,900,000 which consist of investments in four separate asset-backed auction rate securities yielding an average return of 5.865% per annum.  However, as a result of market conditions, all of these investments have recently failed to settle on their respective settlement dates and have been reset to be settled at a future date with an average maturity of 46 days.  Based on discussions with the Company’s advisors and the current lack of liquidity for asset-backed securities of this type, we concluded that the carrying value of these investments was higher than its fair value as of December 31, 2007. Accordingly, these auction rate securities have been recorded at their estimated fair value of $863,750. We consider this to be an other-than-temporary reduction in the value, accordingly, the impairment associated with these auction rate securities of $1,036,250 has been included as an impairment of investments in our consolidated statement of operations for the year ended December 31, 2007. Although we continue to receive payment of interest earned on these securities, we do not know at the present time when it will be able to convert these investments into cash.  Accordingly, management has classified these investments as a non-current asset on its consolidated balance sheet as of December 31, 2007. Management will continue to closely monitor these investments for future indications of further impairment. The illiquidity of these investments may have an adverse impact on the length of time during which we currently expect to be able to sustain its operations in the absence of an additional capital raise by the Company.

Our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement and involves risks and uncertainties. Actual results could vary as a result of a number of factors. We have based this estimate on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Our future funding requirements will depend on many factors, including but not limited to:

· the cost and results of development of OcuSense’s TearLab™ test for DED;

· the cost and results, and the rate of progress, of the clinical trials of the TearLab™ test for DED that will be required to support OcuSense’s application to obtain 510(k) clearance and a CLIA waiver from the FDA to market and sell the TearLab™ test for DED in the United States;

· OcuSense’s ability to obtain 510(k) approval and a CLIA waiver from the FDA for the TearLab™ test for DED and the timing of such approval, if any;

· whether government and third-party payors agree to reimburse treatments using the TearLab™ test for DED;

· the costs and timing of building the infrastructure to market and sell the TearLab™ test for DED;

· the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; and

· the effect of competing technological and market developments.

With the suspension of the Company’s RHEO™ System clinical development program, and the consequent winding-down of the RHEO-AMD study, and the Company’s disposition of SOLX, the Company no longer has any operating business. Its major asset is its 50.1% ownership stake, on a fully diluted basis, in OcuSense. Accordingly, unless we acquire other businesses (which, in light of the Company’s financial condition, is unlikely to occur), our ability to generate any revenues will be dependent almost entirely upon the success of OcuSense.

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We cannot begin commercialization of the TearLab™ test for DED in the United States until we receive FDA approval. At this time, we do not know when we can expect to begin to generate revenues from the TearLab™ test for DED in the United States.

We will need additional capital in the future, and our prospects for obtaining it are uncertain. On October 9, 2007, we announced that the Board had authorized management and the Company’s advisors to explore the full range of strategic alternatives available to enhance shareholder value, including, but not limited to, the raising of capital through the sale of securities, one or more strategic alliances and the combination, sale or merger of all or part of the Company. For some time prior to the October 9, 2007 announcement, the Company had been seeking to raise additional capital, with the objective of securing funding sufficient to sustain its operations as it had been clear that, unless we were able to raise additional capital, the Company would not have had sufficient cash to support its operations beyond early 2008. Although the Company secured a bridge loan in an aggregate principal amount of $3,000,000 from a number of private parties on February 19, 2008, management believes that these net proceeds, together with the Company’s existing cash and cash-equivalents, will be sufficient to cover its operating activities and other demands only until approximately the end of April 2008 (assuming that the outstanding obligation of OccuLogix to pay $2,000,000 to OcuSense becomes due and payable prior to the end of April 2008). Additional capital may not be available on terms favorable to us, or at all. In addition, future financings could result in significant dilution of existing stockholders. However, unless we succeed in raising additional capital, we will be unable to continue our operations. See “Risk Factors—Risks Relating to Our Business—Our financial condition and history of losses have caused our auditors to express doubt as to whether we will be able to continue as a going concern.”

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations is based upon our audited consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amount of assets, liabilities, sales and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to our intangible assets, uncollectible receivables, inventories, goodwill and stock-based compensation. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Because this can vary in each situation, actual results may differ from these estimates under different assumptions or conditions.

We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our audited consolidated financial statements.

Revenue Recognition

The Company recognized revenue from the sale of the RHEO™ System, prior to the Company’s announcement of the indefinite suspension of its RHEO™ System clinical development program, which is comprised of OctoNova pumps and the related disposable treatment sets and, prior to the Company’s disposition of SOLX on December 19, 2007, from the sale of the components of the SOLX Glaucoma System which includes the SOLX 790 Titanium Sapphire Laser (“SOLX 790 Laser”) and the SOLX Gold Shunt. The Company received a signed binding purchase order from its customers. The pricing was a negotiated amount between the Company and its customers. The Company sold the components of the SOLX Glaucoma System directly to physicians and also through distributors. Revenue has been reported net of distributors’ commissions.

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The Company had the obligation to train its customers and to calibrate the OctoNova pumps delivered to them. Only upon the completion of these services did the Company recognize revenue for the pumps. The Company was also responsible for providing a one-year warranty on the OctoNova pumps, and the estimated cost of providing this service was accrued at the time revenue is recognized. The treatment sets and the components of the SOLX Glaucoma System did not require any additional servicing and revenue was recognized upon passage of title. However, the Company’s revenue recognition policy requires an assessment as to whether collectibility is reasonably assured, which requires the Company to evaluate the creditworthiness of its customers. The result of the assessment could materially impact the timing of revenue recognition.

Bad Debt Reserves

The Company evaluates the collectibility of its accounts receivable based on a combination of factors. In cases where management is aware of circumstances that may impair a specific customer’s ability to meet its financial obligations to the Company, a specific allowance against amounts due to the Company is recorded, which reduces the net recognized receivable to the amount management reasonably believes will be collected. For all other customers, the Company recognizes allowances for doubtful accounts based on the length of time the receivables are past due, the current business environment and historical experience. As at December 31, 2007 and 2006, the Company had bad debt reserves of $172,992 and nil, respectively. The Company expensed amounts related to bad debt reserves of nil, nil and $518,852 during the years ended December 31, 2007, 2006 and 2005, respectively, and set up a provision for $172,992, nil and $530,445 representing invoices for products shipped, plus related taxes, to a customer during the years ended December 31, 2007, 2006 and 2005, respectively, for which revenue was not recognized due to the likelihood that the customer would not be able to pay for the amounts invoiced.

Inventory Valuation

Inventory is recorded at the lower of cost and net realizable value and consists of finished goods. Cost is accounted for on a first-in, first-out basis. Deferred cost of sales (included in finished goods) consists of products shipped but not recognized as revenue because they did not meet the revenue recognition criteria.

The Company evaluates its ending inventory for estimated excess quantities and obsolescence, based on expected future sales levels and projections of future demand, with the excess inventory provided for. In addition, the Company assesses the impact of changing technology and market conditions.  In addition, the Company assesses whether recent transactions provide indicators as to whether the net realizable value of its inventory is below its recorded cost. In April 2006, the Company sold a number of treatment sets to Veris Health Sciences Inc. (“Veris”) at a price lower than the Company’s cost.  Accordingly, the Company wrote down the value of its treatment sets to reflect this current net realizable value during the year ended December 31, 2006. In light of the Company’s current financial position, on November 1, 2007, the Company announced an indefinite suspension of the RHEO™ System clinical development program for Dry AMD.  That decision was made following a comprehensive review of the respective costs and development timelines associated with the products in the Company’s portfolio and, in particular, the fact that, if the Company is unable to raise additional capital, it will not have sufficient cash to support its operations beyond early 2008. Accordingly, the Company has written down the value of its treatment sets and OctoNova pumps, the components of the RHEO™ System, to nil as of December 31, 2007 since the Company is not expected to be able to sell or utilize these treatment sets and OctoNova pumps prior to their expiration dates, in the case of the treatment sets, or before the technologies become outdated.

57

As at December 31, 2007 and 2006, the Company had inventory reserves of $7,295,545 and $5,101,394, respectively. During the years ended December 31, 2007, 2006 and 2005, the Company recognized a provision related to inventory of $2,790,209, $3,304,124 and $1,990,830, respectively, based on the above analysis.

Impairment of long-lived assets

We review our fixed assets and intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. When such an event occurs, management estimates the future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. In the event the undiscounted cash flows are less than the carrying amount of the asset, a further analysis is required to estimate the fair value of the asset using the discounted cash flow method and then an impairment loss equal to the excess of the carrying amount over the fair value is charged to operations.

Our intangible assets consist of the value of the exclusive distribution agreements we have with Asahi Medical and MeSys and other acquisition-related intangibles arising from our acquisition of SOLX and OcuSense during fiscal 2006 prior to the sale of SOLX on December 19, 2007. The distribution agreements and other acquisition-related intangible assets are amortized using the straight-line method over an estimated useful life of 15 and 10 years, respectively.

On November 1, 2007, we announced an indefinite suspension of the RHEO™ System clinical development program for Dry AMD and are in the process of winding down the RHEO-AMD study as there is no reasonable prospect that the RHEO™ System clinical development program will be relaunched in the foreseeable future.  In accordance with SFAS No. 144, we concluded that its indefinite suspension of the RHEO™ System clinical development program for Dry AMD was a significant event which may affect the carrying value of our distribution agreements. Accordingly, management was required to re-assess whether the carrying value of the Company’s distribution agreements was recoverable as of December 31, 2007. Based on management’s estimates of undiscounted cash flows associated with the distribution agreements, we concluded that the carrying value of the distribution agreements was not recoverable as of December 31, 2007. Accordingly, we recorded an impairment charge of $20,923,028 during the year ended December 31, 2007 to record the distribution agreements at their fair value as of December 31, 2007.

On December 19, 2007, we sold to Solx Acquisition, all of the issued and outstanding shares of the capital stock of SOLX. The sale transaction established fair values for the Company’s recorded goodwill and the Company’s shunt and laser technology and regulatory and other intangible assets acquired upon the acquisition of SOLX on September 1, 2006. Accordingly, management was required to re-assess whether the carrying value of the Company’s shunt and laser technology and regulatory and other intangible assets was recoverable as of December 1, 2007. Based on management’s estimates of undiscounted cash flows associated with these intangible assets, we concluded that the carrying value of these intangible assets was not recoverable as of December 1, 2007. Accordingly, we recorded an impairment charge of $22,286,383 during the year ended December 31, 2007 to record the shunt and laser technology and regulatory and other intangible assets at their fair value as of December 31, 2007.

The Company determined that, as at December 31, 2007, there have been no significant events which may affect the carrying value of its TearLab™ technology. However, the Company’s prior history of losses and losses incurred during the current fiscal year reflects a potential indication of impairment, thus requiring management to assess whether the OcuSense’s TearLab™ technology was impaired as of December 31, 2007. Based on management’s estimates of forecasted undiscounted cash flows as of December 31, 2007, the Company concluded that there is no indication of an impairment of the OcuSense’s TearLab™ technology. Therefore, no impairment charge was recorded during the year ended December 31, 2007.

58

Impairment of Goodwill

Effective January 1, 2002, goodwill is no longer amortized and is subject to an annual impairment test. Goodwill impairment is evaluated between annual tests upon the occurrence of certain events or circumstances. Goodwill impairment is assessed based on a comparison of the fair value of the reporting unit to the underlying carrying value of the reporting unit’s net assets, including goodwill. When the carrying amount of the reporting unit exceeds its fair value, the fair value of the reporting unit’s goodwill is compared with its carrying amount to measure the amount of impairment loss, if any.

Prior to the acquisition of SOLX and OcuSense during the second half of fiscal 2006, the Company was a single reporting unit. Therefore, management determined the fair value of the Company’s goodwill using the Company’s market capitalization as opposed to the fair value of its assets and liabilities. As a result of the announcement on February 3, 2006, the per share price of our common stock as traded on NASDAQ decreased from $12.75 on February 2, 2006 to close at $4.10 on February 3, 2006. The 10-day average price of the stock immediately following the announcement was $3.65 and reflected a decrease in our market capitalization from $536.6 million on February 2, 2006 to $153.6 million based on the 10-day average share price subsequent to the announcement. On June 12, 2006, we announced that the FDA will require us to perform an additional study of the RHEO™ System. In addition, on June 30, 2006, we announced that we had terminated negotiations with Sowood in connection with a proposed private purchase of approximately $30,000,000 of zero-coupon convertible notes of the Company. The per share price of our common stock decreased subsequent to the June 12, 2006 announcement and again after the June 30, 2006 announcement. Based on the result of the preliminary analysis of the data from MIRA-1 and the events that occurred during the second quarter of fiscal 2006, we concluded that there were sufficient indicators of impairment leading to an analysis of our intangible assets and goodwill and resulting in our reporting an impairment charge to goodwill of $65,945,686 and $147,451,758 during the years ended December 31, 2006 and 2005, respectively.

Subsequent to the acquisition of SOLX and OcuSense, the Company determined the fair value of its acquired goodwill based on a comparison of the fair value of the reporting unit to the underlying carrying value of the reporting unit’s net assets, including goodwill.

On December 19, 2007, the Company sold to Solx Acquisition, all of the issued and outstanding shares of the capital stock of SOLX, which had been the glaucoma subsidiary of the Company prior to the completion of this sale. The sale transaction established fair values for the Company’s recorded goodwill and certain of the Company’s intangible assets. Accordingly, the Company performed an impairment test of its recorded goodwill to re-assess whether its recorded goodwill was impaired as at December 1, 2007. Based on the goodwill impairment analysis performed, the Company concluded that a goodwill impairment charge of $14,446,977 should be recorded during the year ended December 31, 2007 to write down the value of its recorded goodwill to its fair value of nil as at December 31, 2007.

Stock-based Compensation

We account for stock-based compensation in accordance with the provisions of SFAS 123R. Under the fair value recognition provision of SFAS 123R, stock-based compensation cost is estimated at the grant date based on the fair value of the award and is recognized as an expense ratably over the requisite service period of the award. We have selected the Black-Scholes option-pricing model as our method of determining the fair value for all our awards and will recognize compensation cost on a straight-line basis over the awards’ vesting periods.

Impairment of Investments

As at December 31, 2007, we had investments in the aggregate principal amount of $1,900,000 which consist of investments in four separate asset-backed auction rate securities yielding an average return of 5.865% per annum.  However, as a result of market conditions, all of these investments have recently failed to settle on their respective settlement dates and have been reset to be settled at a future date with an average maturity of 46 days.  Due to the current lack of liquidity for asset-backed securities of this type, the Company has concluded that the carrying value of these investments was higher than its fair value as of December 31, 2007. Accordingly, these auction rate securities have been recorded at their estimated fair value of $863,750. We consider this to be an other-than-temporary reduction in the value. Accordingly, the loss associated with these auction rate securities of $1,036,250 has been included as an impairment of investments in the Company’s consolidated statement of operations for the year ended December 31, 2007. Although we continue to receive payment of interest earned on these securities, we do not know at the present time when we will be able to convert these investments into cash.  Accordingly, management has classified these investments as a non-current asset on its consolidated balance sheet as of December 31, 2007. We will continue to closely monitor these investments for future indications of further impairment. The illiquidity of these investments may have an adverse impact on the length of time during which we currently expect to be able to sustain our operations in the absence of an additional capital raise by the Company.

59

Fair Value of Warrants

On February 6, 2007, pursuant to the Securities Purchase Agreement between the Company and certain institutional investors, the Company issued the Warrants to these investors. The Warrants are five-year warrants exercisable into an aggregate of 2,670,933 shares of the Company’s common stock. On February 6, 2007, the Company also issued the Cowen Warrant to Cowen and Company, LLC in part payment of the placement fee payable to Cowen and Company, LLC for the services it had rendered as the placement agent in connection with the private placement of the Shares and the Warrants. The Cowen Warrant is a five-year warrant exercisable into an aggregate of 93,483 shares of the Company’s common stock. The per share exercise price of the Warrants is $2.20, subject to adjustment, and the Warrants became exercisable on August 6, 2007. All of the terms and conditions of the Cowen Warrant (other than the number of shares of the Company's common stock into which it is exercisable) are identical to those of the Warrants. The Company accounts for the Warrants and the Cowen Warrant in accordance with the provisions of SFAS No. 133 along with related interpretation EITF 00-19. Based on the provisions of EITF 00-19, the Company determined that the Warrants and the Cowen Warrant do not meet the criteria for classification as equity. Accordingly, the Company has classified the Warrants and the Cowen Warrant as a current liability as at December 31, 2007. The estimated fair value was determined using the Black-Scholes option-pricing model. In addition, SFAS No. 133 requires the Company to record the outstanding derivatives at fair value at the end of each reporting period resulting in an adjustment to the recorded liability of the derivative, with any gain or loss recorded in earnings of the applicable reporting period. The Company therefore estimated the fair value of the Warrants and the Cowen Warrant as at December 31, 2007 and determined the aggregate fair value to be a nominal amount, a decrease of approximately $2,052,578 over the initial measurement of the aggregate fair value of the Warrants and the Cowen Warrant on the date of issuance.

Effective Corporate Tax Rate

Income Taxes

As of December 31, 2007, we had net operating loss carry forwards for federal income taxes of $75 million. Our utilization of the net operating loss and tax credit carry forwards may be subject to annual limitations pursuant to Section 382 of the Internal Revenue Code, and similar state provisions, as a result of changes in our ownership structure. The annual limitations may result in the expiration of net operating losses and credits prior to utilization.

At December 31, 2007, we had recorded a deferred tax liability due to the difference between the fair value of our intangible assets and their tax bases. We also recorded a deferred tax asset, netted off against the deferred tax liability, from the availability of 2007 net operating losses in the United States which may be utilized to reduce taxes in future years. In addition, we also had additional deferred tax asset representing the benefit of net operating loss carry forwards and certain stock issuance costs capitalized for tax purposes. We did not record a benefit for this deferred tax asset because realization of the benefit was uncertain, and, accordingly, a valuation allowance is provided to offset the deferred tax asset.

60

The Company and its subsidiaries have current and prior year losses available to reduce taxable income and taxes payable in future years which, if not utilized, will expire as follows:

	$
2012	3,455,029
2018	4,500,401
2019	1,893,700
2020	4,488,361
2021	3,356,992
2022	2,497,602
2023	1,901,399
2024	6,494,479
2025	12,985,677
2026	12,339,131
2027	21,451,150

Recent Accounting Pronouncements

The adoption of Staff Accounting Bulletin No. 110, “Share-based payments”during fiscal 2007 did not have a material impact on our results of operations and financial position.

In September 2006, FASB issued Statement No. 157, “Fair Value Measurements” (“SFAS No. 157”). SFAS No. 157 defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning on or after November 15, 2007 and for interim periods within those fiscal years.

On February 12, 2008, FASB issued FASB Staff Position No. 157-2, “Effective Date of FASB Statement No 157” (FSP No. 157”). FSP No. 157-2 amends SFAS No. 157 to delay the effective date of SFAS No. 157 for non-financial  assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually) for fiscal years beginning after November 15, 2008.

On February 14, 2008, FASB issued FSP No. 157-1, “Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements that Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13” (“FSP No. 157-1”).  FSP No. 157-1 amends SFAS No. 157 to exclude SFAS No. 13, “Accounting for Leases” (“SFAS No. 13”), and other accounting pronouncements that address fair value measurements for purposes of lease classification or measurement under SFAS No. 13.

We are currently evaluating the impact that the adoption of SFAS No. 157, FSP No. 157-2 and FSP No. 157-1 will have on our results of operations and financial position.

In February 2007, FASB issued Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115” (“SFAS No. 159”). SFAS No. 159 expands the use of fair value accounting but does not affect existing standards which require assets or liabilities to be carried at fair value. Under SFAS No. 159, a company may elect to use fair value to measure accounts and loans receivable, available-for-sale and held-to-maturity securities, equity method investments, accounts payable, guarantees and issued debt. Other eligible items include firm commitments for financial instruments that otherwise would not be recognized at inception and non-cash warranty obligations where a warrantor is permitted to pay a third party to provide the warranty goods or services. If the use of fair value is elected, any upfront costs and fees related to the item must be recognized in earnings and cannot be deferred (e.g., debt issue costs). The fair value election is irrevocable and generally made on an instrument-by-instrument basis, even if a company has similar instruments that it elects not to measure based on fair value. At the adoption date, unrealized gains and losses on existing items for which fair value has been elected are reported as a cumulative adjustment to beginning retained earnings. Subsequent to the adoption of SFAS No. 159, changes in fair value are recognized in earnings. SFAS No. 159 is effective for fiscal years beginning on or after November 15, 2007 and is required to be adopted by the Company in the first quarter of fiscal 2008. The adoption of SFAS No. 159 will not have a material impact on our results of operations and financial position.

61

In June 2007, FASB’s Emerging Issues Task Force (“EITF”) issued EITF Issue No. 06-11, “Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards” (“EITF No. 06-11”). EITF No. 06-11 requires that the tax benefits related to dividend equivalents paid on restricted stock units, which are expected to vest, be recorded as an increase to additional paid-in capital. EITF No. 06-11 is effective prospectively to the income tax benefits on dividends declared in fiscal years beginning on or after December 15, 2007. We are currently evaluating the impact the adoption of EITF No. 06-11 will have on our results of operations and financial position.

In December 2007, FASB issued Statement No. 141R (revised 2007), “Business Combinations (a revision of Statement No. 141)” (“SFAS No. 141R”). SFAS No. 141R applies to all transactions or other events in which an entity obtains control of one or more businesses, including those business combinations achieved without the transfer of consideration. SFAS No. 141R retains the fundamental requirements in Statement No. 141 that the acquisition method of accounting be used for all business combinations. SFAS No. 141R expands the scope to include all business combinations and requires an acquirer to recognize the assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at their fair values as of the acquisition date. In addition, SFAS No. 141R changes the way entities account for business combinations achieved in stages by requiring the identifiable assets and liabilities to be measured at their full fair values. Also, contractual contingencies and contingent consideration shall be measured at fair value at the acquisition date. SFAS No. 141R is effective on a prospective basis to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. We are currently evaluating the impact, if any, that the adoption of SFAS No. 141R will have on our results of operations and financial position.

In December 2007, FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51” (“SFAS No. 160”). SFAS No. 160 amends ARB No. 51 to establish accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Additionally, SFAS No. 160 requires that consolidated net income include the amounts attributable to both the parent and the non-controlling interest. SFAS No. 160 is effective for interim periods beginning on or after December 15, 2008. We are currently evaluating the impact, if any, that the adoption of SFAS No. 160 will have on our results of operations and financial position.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Quantitative and Qualitative Disclosure of Market Risk

Currency Fluctuations and Exchange Risk

All of our sales are in U.S. dollars or are linked to the U.S. dollar, while a portion of our expenses are in Canadian dollars and Euros. We cannot predict any future trends in the exchange rate of the Canadian dollar or Euro against the U.S. dollar. Any strengthening of the Canadian dollar or Euro in relation to the U.S. dollar would increase the U.S. dollar cost of our operations, and affect our U.S. dollar measured results of operations. We do not engage in any hedging or other transactions intended to manage these risks. In the future, we may undertake hedging or other similar transactions or invest in market risk sensitive instruments if we determine that is advisable to offset these risks.

Interest Rate Risk

The primary objective of our investment activity is to preserve principal while maximizing interest income we receive from our investments, without increasing risk. We believe this will minimize our market risk.

As at December 31, 2007, we had investments in the aggregate principal amount of $1,900,000 which consist of investments in four separate asset-backed auction rate securities yielding an average return of 5.865% per annum.  However, as a result of market conditions, all of these investments have recently failed to settle on their respective settlement dates and have been reset to be settled at a future date with an average maturity of 46 days.  Due to the current lack of liquidity for asset-backed securities of this type, the Company has concluded that the carrying value of these investments was higher than its fair value as of December 31, 2007. Accordingly, these auction rate securities have been recorded at their estimated fair value of $863,750. We consider this to be an other-than-temporary reduction in the value. Accordingly, the loss associated with these auction rate securities of $1,036,250 has been included as an impairment of investments in the Company’s consolidated statement of operations for the year ended December 31, 2007. Although we continue to receive payment of interest earned on these securities, we do not know at the present time when we will be able to convert these investments into cash.  Accordingly, management has classified these investments as a non-current asset on its consolidated balance sheet as of December 31, 2007. We will continue to closely monitor these investments for future indications of further impairment. The illiquidity of these investments may have an adverse impact on the length of time during which we currently expect to be able to sustain our operations in the absence of an additional capital raise by the Company.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Consolidated Financial Statements

OccuLogix, Inc.

December 31, 2007 and 2006

64

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of OccuLogix, Inc.

We have audited the accompanying consolidated balance sheets of OccuLogix, Inc. (the “Company”) as of December 31, 2007 and 2006 and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2007.  Our audits also included the financial statement schedule listed in the index at Item 15(a). These financial statements and schedule are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2007 and 2006 and the consolidated result of its operations and its cash flows for each of the three years in the period ended December 31, 2007 in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

The accompanying consolidated financial statements have been prepared assuming that OccuLogix, Inc. will continue as a going concern.  As more fully described in Note 1, the Company has incurred recurring operating losses and has a working capital deficiency.  These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters also are described in Note 1.  The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

As discussed in Note 3 to these consolidated financial statements, the Company changed its accounting policy in regards to the accounting for income taxes for the year ended December 31, 2007. Additionally, as discussed in Note 16(e), the Company changed its accounting policy in regards to the accounting for stock-based compensation during the year ended December 31, 2006.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of OccuLogix, Inc.’s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 14, 2008 expressed an unqualified opinion thereon.

Toronto, Canada,	Chartered Accountants
March 14, 2008.	Licensed Public Accountants

65

OccuLogix, Inc.

CONSOLIDATED BALANCE SHEETS

(expressed in U.S. dollars)

(Going Concern Uncertainty – See Note 1)

	As of December 31,
		2007 $		2006 (restated – note 10) $
ASSETS
Current
Cash and cash equivalents		2,235,832			5,705,235
Short-term investments		—			9,785,000
Amounts receivable, net of bad debt reserves of $172,992 in 2007 and nil in 2006 (note 12(e))		374,815			165,409
Inventory, net of provision for inventory obsolescence of  $7,295,545 in 2007 and $5,101,394 in 2006		—			2,344,638
Prepaid expenses		481,121			548,883
Other current assets		10,442			10,442
Current assets relating to discontinued operations (note 10)		—			618,154
Total current assets		3,102,210			19,177,761
Fixed assets, net (note 6)		122,286			574,310
Patents and trademarks, net (note 7)		139,437			234,841
Investments (note 1)		863,750			—
Intangible assets, net (note 8)		5,770,677			26,876,732
Goodwill (note 5)		—			—
Other assets relating to discontinued operations (note 10)		—			43,540,051
		9,998,360			90,403,695
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current
Accounts payable (note 12)		1,192,807			162,705
Accrued liabilities (notes 12 and 14)		2,873,451			1,837,158
Due to stockholders (note 11)		32,814			152,406
Current portion of other long-term liability (note 4)		—			3,000,000
Current liabilities relating to discontinued operations (note 10)		—			486,466
Total current liabilities		4,099,072			5,638,735
Deferred tax liability, net (note 13)		—			7,851,667
Other long-term liability (note 4)		—			3,420,609
Other liabilities relating to discontinued operations (note 10)		—			11,087,750
Total liabilities		4,099,072			27,998,761
Commitments and contingencies (note 15)
Minority interest		—			1,184,844
Stockholders’ equity
Capital stock  (note 16)
Common stock		57,306			50,627
Par value of $0.001 per share;
Authorized: 75,000,000; Issued and outstanding:
December 31, 2007 – 57,306,145; December 31, 2006 – 50,626,562
Additional paid-in capital		362,402,899			354,191,066
Accumulated deficit		(356,560,917	)		(293,021,603	)
Total stockholders’ equity		5,899,288			61,220,090
		9,998,360			90,403,695

See accompanying notes

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OccuLogix, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(expressed in U.S. dollars except number of shares)

	Years ended December 31,
	2007			2006			2005
				(restated – note 10)
	$			$			$
Revenue
Sales to related parties (note 12)		—			—			81,593
Sales to unrelated parties		91,500			174,259			1,758,696
Total revenue		91,500			174,259			1,840,289
Cost of goods sold
Cost of goods sold to related parties (note 12)		—			—			43,236
Cost of goods sold to unrelated parties		2,298,103			3,428,951			3,250,866
Royalty costs		100,000			100,000			100,000
Total cost of goods sold		2,398,103			3,528,951			3,394,102
		(2,306,603	)		(3,354,692	)		(1,553,813	)
Operating expenses
General and administrative (notes 11, 12 and 16)		7,373,726			8,407,501			8,670,394
Clinical and regulatory (notes 12 and 16)		8,675,552			4,921,771			5,167,549
Sales and marketing (notes 12 and 16)		1,413,459			1,625,188			2,165,337
Impairment of goodwill (note 5)		—			65,945,686			147,451,758
Impairment of intangible asset (note 8)		20,923,028			—			—
Restructuring charges (note 9)		1,312,721			819,642			—
		39,698,486			81,719,788			163,455,038
Loss from continuing operations		42,005,089			(85,074,480	)		(165,008,851	)
Other income (expenses)
Interest income		609,933			1,370,208			1,593,366
Changes in fair value of warrant obligation		1,882,497			—			—
Impairment of investments (note 1)		(1,036,250	)		—			—
Interest expense		(17,228	)		(14,896	)		—
Other		18,010			30,935			(57,025	)
Minority interest		2,182,843			157,624			—
		3,639,805			1,543,871			1,536,341
Loss from continuing operations before income taxes		(38,365,284	)		(83,530,609	)		(163,472,510	)
Recovery of income taxes (note 13)		5,654,868			2,888,490			642,529
Loss from continuing operations		(32,710,416	)		(80,642,119	)		(162,829,981	)
Loss from discontinued operations (note 10)		(35,428,898	)		(1,542,384	)		—
Net loss for the year		(68,139,314	)		(82,184,503	)		(162,829,981	)
Weighted average number of shares outstanding – basic and diluted		56,628,186			44,979,692			41,931,240
Loss from continuing operations per share – basic and diluted	$	(0.58	)	$	(1.79	)	$	(3.88	)
Loss from discontinued operations per share – basic and diluted		(0.62	)		(0.04	)		—
Net loss per share – basic and diluted	$	(1.20	)	$	(1.83	)	$	(3.88	)

See accompanying notes

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OccuLogix, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(expressed in U.S. dollars)

	Voting common stock at par value				Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive loss		Stockholders’ equity
	shares issued
	#		$		$			$			$		$
Balance, December 31, 2004		41,806,768		41,807		336,063,557			(48,007,119	)		—		288,098,245
Stock-based compensation (note 16(e))		—		—		224,776			—			—		224,776
Stock issued on exercise of options (note 16(e))		279,085		279		230,956			—			—		231,235
Subscription receivable		—		—		221,661			—			—		221,661
Contribution of inventory from related party (note 12)		—		—		167,730			—			—		167,730
Contribution of inventory from unrelated party		—		—		15,652			—			—		15,652
Fractional payout of converted shares due to preferred stockholders		—		—		(45	)		—			—		(45	)
Additional share issue costs related to initial public offering (note 16(d))		—		—		(88,714	)		—			—		(88,714	)
Net loss for the year		—		—		—			(162,829,981	)		—		(162,829,981	)
Balance, December 31, 2005		42,085,853		42,086		336,835,573			(210,837,100	)		—		126,040,559
Stock-based compensation (note 16(e))		—		—		2,111,481			—			—		2,111,481
Stock issued on exercise of options (note 16(e))		140,726		141		270,794			—			—		270,935
Free inventory returned to related party (note 12)		—		—		(60,000	)		—			—		(60,000	)
Contribution of inventory from unrelated party		—		—		11,994			—			—		11,994
Shares issued on acquisition of Solx, Inc. (notes 4 and 16(d))		8,399,983		8,400		15,027,570			—			—		15,035,970
Shares issue costs		—		—		(21,908	)		—			—		(21,908	)
Change in OcuSense, Inc.’s stockholders’ equity, stock-based compensation		—		—		15,562			—			—		15,562
Net loss for the year		—		—		—			(82,184,503	)		—		(82,184,503	)
Balance, December 31, 2006		50,626,562		50,627		354,191,066			(293,021,603	)		—		61,220,090

68

OccuLogix, Inc.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY continued

(expressed in U.S. dollars)

	Voting common stock at par value				Additional paid-in capital			Accumulated deficit			Accumulated other comprehensive loss			Stockholders’ equity
	shares issued
	#		$		$			$			$			$
Balance, December 31, 2006  (balance forward)		50,626,562		50,627		354,191,066			(293,021,603	)		—			61,220,090
Net loss for the year		—		—		—			(68,139,314	)		—			(68,139,314	)
Unrealized loss on investments		—		—		—			—			(1,036,250	)		(1,036,250	)
Impairment of investments		—		—		—			—			1,036,250			1,036,250
Comprehensive loss															(68,139,314	)
Cumulative effect of adoption of FIN 48		—		—		—			4,600,000			—			4,600,000
Stock-based compensation (note 16(e))		—		—		325,666			—			—			325,666
Stock issued on exercise of options (note 16(e))		2,250		2		2,226			—			—			2,228
Contribution of inventory from related party (note 12)		—		—		384,660			—			—			384,660
Contribution of inventory from unrelated party		—		—		33,643			—			—			33,643
Shares issued on private placement of common stock (note 16(d))		6,677,333		6,677		8,053,967			—			—			8,060,644
Shares issue costs		—		—		(743,634	)		—			—			(743,634	)
Change in OcuSense, Inc.’s stockholders’ equity, stock-based compensation		—		—		155,305			—			—			155,305
Balance, December 31, 2007		57,306,145		57,306		362,402,899			(356,560,917	)		—			5,899,288

See accompanying notes

69

OccuLogix, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(expressed in U.S. dollars)

	Years ended December 31,
	2007			2006			2005
		$			$			$
OPERATING ACTIVITIES
Net loss for the year		(68,139,314	)		(82,184,503	)		(162,829,981	)
Adjustments to reconcile net loss to cash used in operating activities:
Stock-based compensation (note 16(e))		480,971			2,127,043			224,776
Amortization of fixed assets		844,948			213,488			99,301
Amortization of patents and trademarks		195,494			5,608			5,712
Amortization of intangible assets		4,578,027			2,749,212			1,716,667
Impairment of goodwill (note 5)		14,446,977			65,945,686			147,451,758
Impairment of intangible assets (note 8)		43,209,411			—			—
Accretion expense (note 4)		857,400			273,195			—
Amortization of premiums/discounts on short-term investments		—			35,985			147,337
Subscription receivable – provision for doubtful amount		—			—			34,927
Change in fair value of warrant obligation (note 16(f))		(1,882,497	)		—			—
Impairment of investments		1,036,250			—			—
Deferred income taxes (note 13)		(15,004,750	)		(4,065,962	)		(635,167	)
Minority interest		(2,182,843	)		(157,624	)		—
Net change in non-cash working capital balances related to operations (note 17)		4,342,488			509,528			(4,925,650	)
Cash used in operating activities		(17,217,438	)		(14,548,344	)		(18,710,320	)
INVESTING ACTIVITIES
Sale of short-term investments		7,885,000			21,841,860			10,689,818
Additions to fixed assets		(267,934	)		(255,886	)		(202,273	)
Additions to patents and trademarks		(106,228	)		(105,217	)		(36,290	)
Acquisition costs (note 4)		—			(949,499	)		—
Advance to Solx, Inc., pre-acquisition		—			(2,434,537	)		—
Payments for acquisitions, net of cash acquired (note 4)		(3,000,000	)		(7,678,565	)		—
Cash provided by investing activities		4,510,838			10,418,156			10,451,255
FINANCING ACTIVITIES
Proceeds from exercise of common stock options (note 16(e))		2,228			270,935			231,235
Proceeds from exercise of Series A convertible preferred stock warrants (note 16(f))		—			—			186,734
Fractional payout of converted shares due to preferred stockholders		—			—			(792	)
Share issuance costs		(816,493	)		—			(88,714	)
Proceeds from issuance of common stock (note 16(d))		10,016,000			—			—
Cash provided by financing activities		9,201,735			270,935			328,463
Net decrease in cash and cash equivalents during the year		(3,504,865	)		(3,859,253	)		(7,930,602	)
Cash and cash equivalents, beginning of year		5,740,697			9,599,950			17,530,552
Cash and cash equivalents, end of year		2,235,832			5,740,697	(i)		9,599,950

See accompanying notes

(i) As at December 31, 2006, cash and cash equivalents of $5,740,697 include cash and cash equivalents of discontinued operations of $35,462.

70

OCCULOGIX, INC.

Notes to Consolidated Financial Statements

(expressed in U.S. dollars except as otherwise noted)

1. NATURE OF OPERATIONS AND GOING CONCERN UNCERTAINTY

Nature of Operations

OccuLogix, Inc. (the “Company”) is an ophthalmic therapeutic company founded to commercialize innovative treatments for age-related eye diseases. Until recently, the Company operated two business divisions, being Retina and Glaucoma. Until recently, the Company’s Retina division was in the business of developing and commercializing a treatment for dry age-related macular degeneration, or Dry AMD. The Company’s product for Dry AMD, the RHEO™ System, contains a pump that circulates blood through two filters and is used to perform the Rheopheresis™ procedure, which is referred to under the Company’s trade name RHEO™ Therapy. The Rheopheresis™ procedure is a blood filtration procedure that selectively removes molecules from plasma, which is designed to treat Dry AMD, the most common form of the disease.

The Company conducted a clinical trial, called MIRA-1, or Multicenter Investigation of Rheopheresis for AMD, which, if successful, was expected to support its application with the U.S. Food and Drug Administration (the “FDA”) to obtain approval to market the RHEO™ System in the United States. On February 3, 2006, the Company announced that, based on a preliminary analysis of the data from MIRA-1, MIRA-1 did not meet its primary efficacy endpoint as it did not demonstrate a statistically significant difference in the mean change of Best Spectacle-Corrected Visual Acuity applying the Early Treatment Diabetic Retinopathy Scale, or ETDRS BCVA, between the treated and placebo groups in MIRA-1 at 12 months post-baseline. As expected, the treated group demonstrated a positive result. An anomalous response of the control group is the principal reason why the primary efficacy endpoint was not met.

On June 8, 2006, the Company met with the FDA to discuss the results of MIRA-1 and the impact the results will have on its application to market the RHEO™ System in the United States.  In light of MIRA-1’s failure to meet its primary efficacy endpoint, the FDA advised that it will require an additional study of the RHEO™ System to be performed. On January 29, 2007, the Company announced that it had obtained Investigational Device Exemption clearance from the FDA to commence the new pivotal clinical trial of the RHEO™ System called RHEO-AMD, or Safety and Effectiveness in a Multi-Center, Randomized, Sham-Controlled Investigation for Dry Non-exudative Age-Related Macular Degeneration (AMD) using Rheopheresis.

However, on November 1, 2007, the Company announced the indefinite suspension of its RHEO™ System clinical development program. This decision was made following a comprehensive review of the respective costs and development timelines associated with the products in the Company’s portfolio and in light of the Company’s financial position. The Company is in the process of winding down the RHEO-AMD study as there is no reasonable prospect that the RHEO™ System clinical development program will be relaunched in the foreseeable future. Subsequent to the Company’s fiscal 2007 year-end, as of February 25, 2008, the Company has terminated its relationship with Asahi Kasei Kuraray Medical Co., Ltd. (formerly Asahi Kasei Medical Co., Ltd.), or Asahi Medical. Asahi Medical manufactures, and supplied the Company with the Rheofilter filter and the Plasmaflo filter, both of which are key components of the RHEO™ System. The Company is also engaged in discussions with Diamed Medizintechnik GmbH, or Diamed, and MeSys GmbH, or MeSys, regarding the termination of its relationship with each of them.  Diamed is the designer, and MeSys is the manufacturer, of the OctoNova pump, another key component of the RHEO™ System.

In anticipation of the delay in the commercialization of the RHEO™ System in the United States as a result of the MIRA-1 study’s failure to meet its primary efficacy endpoint and the FDA’s requirement of the Company to conduct an additional study of the RHEO™ System, the Company accelerated its diversification plans and, on September 1, 2006, acquired Solx, Inc., or SOLX, a Boston University Photonics Center-incubated company that has developed a system for the treatment of glaucoma, called the SOLX Glaucoma System. The SOLX Glaucoma System developed by SOLX includes the SOLX 790 Laser and the SOLX Gold Shunt which can be used separately or together to provide physicians with multiple options to manage intraocular pressure or IOP (note 4). Upon the acquisition of SOLX, SOLX became the Glaucoma division of the Company.

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On December 20, 2007, the Company announced the sale of all of the issued and outstanding capital stock of SOLX to Solx Acquisition, Inc., or Solx Acquisition, a company wholly owned by Doug P. Adams, the founder of SOLX and who, until the closing of the sale, had been serving as an executive officer of the Company in the capacity of President & Founder, Glaucoma Division. The consideration for the purchase and sale of all of the issued and outstanding shares of the capital stock of SOLX consisted of:  (i) on December 19, 2007, the closing date of the sale, the assumption by Solx Acquisition of all of the liabilities of the Company, as they related to SOLX’s business, incurred on or after December 1, 2007, and the Company’s obligation to make a $5,000,000 payment to the former stockholders of SOLX due on September 1, 2008 in satisfaction of the outstanding balance of the purchase price of SOLX; (ii) on or prior to February 15, 2008, the payment by Solx Acquisition of all of the expenses that the Company had paid to the closing date, as they related to SOLX’s business during the period commencing on December 1, 2007; (iii) during the period commencing on the closing date and ending on the date on which SOLX achieves a positive cash flow, the payment by Solx Acquisition of a royalty equal to 3% of the worldwide net sales of the SOLX 790 Laser and the SOLX Gold Shunt, including next-generation or future models or versions of these products; and (iv) following the date on which SOLX achieves a positive cash flow, the payment by Solx Acquisition of a royalty equal to 5% of the worldwide net sales of these products. In order to secure the obligation of Solx Acquisition to make these royalty payments, SOLX granted to the Company a subordinated security interest in certain of its intellectual property. In connection with the sale of SOLX, those employees of the Company, whose roles and responsibilities related mainly to SOLX’s business, ceased to be employees of the Company and became employees of Solx Acquisition or SOLX.

As part of its accelerated diversification plans, on November 30, 2006, the Company acquired 50.1% of the capital stock, on a fully diluted basis, of OcuSense, Inc., or OcuSense, a San Diego-based company that is in the process of developing technologies that will enable eye care practitioners to test, at the point-of-care, for highly sensitive and specific biomarkers using nanoliters of tear film (note 4).

With the suspension of the Company’s RHEO™ System clinical development program, and the consequent winding-down of the RHEO-AMD study, and the Company’s disposition of SOLX, the Company no longer has any operating business. Its major asset is its 50.1% ownership stake, on a fully diluted basis, in OcuSense.

Going concern uncertainty

The consolidated financial statements have been prepared on the basis that the Company will continue as a going concern. However, the Company has sustained substantial losses of $68,139,314, $82,184,503 and $162,829,981 for the years ended December 31, 2007, 2006 and 2005, respectively. The Company’s working capital deficiency at December 31, 2007 is $996,862, which represents a $14,535,888 reduction of its working capital of $13,539,026 at December 31, 2006. As a result of the Company’s history of losses and financial condition, there is substantial doubt about the ability of the Company to continue as a going concern.

On February 19, 2008, the Company announced that it has secured a bridge loan in an aggregate principal amount of $3,000,000 (less transaction costs of approximately $200,000) from a number of private parties. The loan bears interest at a rate of 12% per annum and has a 180-day term, which may be extended to 270 days under certain circumstances. The Company has pledged its shares of the capital stock of OcuSense as collateral for the loan.

Management believes that these proceeds, together with the Company’s existing cash, will be sufficient to cover its operating activities and other demands only until approximately the end of April 2008 (assuming that the outstanding obligation of OccuLogix to pay $2,000,000 to OcuSense becomes due and payable prior to the end of April 2008) (note 4).  The Company currently is not generating cash from operations, and most of its cash has been, and is being, utilized to fund its operations and to fund deferred acquisition payments. The Company’s operating expenses have consisted mostly of expenses relating to the furtherance of its clinical trial activities, the commercialization of the SOLX Glaucoma System in Europe and the completion of the product development of the TearLab™ test for dry eye disease, or DED.  Unless the Company raises additional capital, it will not have sufficient cash to support its operations beyond approximately the end of April 2008.

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On October 9, 2007, the Company announced that its Board of Directors, or the Board, had authorized management and the Company’s advisors to explore the full range of strategic alternatives available to enhance shareholder value. These alternatives may include, but are not limited to, the raising of capital through the sale of securities, one or more strategic alliances and the combination, sale or merger of all or part of OccuLogix. In making the announcement, the Company stated that there can be no assurance that the exploration of strategic alternatives will result in a transaction. To date, the Company has not disclosed, nor does it intend to disclose, developments with respect to its exploration of strategic alternatives unless and until the Board, has approved a specific transaction.

For some time prior to the October 9, 2007 announcement, the Company had been seeking to raise additional capital, with the objective of securing funding sufficient to sustain its operations as it had been clear that, unless the Company was able to raise additional capital, the Company would not have had sufficient cash to support its operations beyond early 2008. The Board’s decisions to suspend the Company’s RHEO™ System clinical development program and to dispose of SOLX were made and implemented in order to conserve as much cash as possible while the Company continued its capital-raising efforts.

On January 9, 2008, the Company announced the departure, or pending departure, of seven members of its executive team and, commencing on February 1, 2008, a 50% reduction in the salary of each of Elias Vamvakas, its Chairman and Chief Executive Officer, and Tom Reeves, its President and Chief Operating Officer. By January 31, 2008, a total of 12 non-executive employees of the Company left the Company’s employment.

As at December 31, 2007, the Company had investments in the aggregate principal amount of $1,900,000 which consist of investments in four separate asset-backed auction rate securities yielding an average return of 5.865% per annum.  However, as a result of market conditions, all of these investments have recently failed to settle on their respective settlement dates and have been reset to be settled at a future date with an average maturity of 46 days.  Due to the current lack of liquidity for asset-backed securities of this type, the Company has concluded that the carrying value of these investments was higher than its fair value as of December 31, 2007. Accordingly, these auction rate securities have been recorded at their estimated fair value of $863,750. The Company considers this to be an other-than-temporary reduction in the value. Accordingly, the loss associated with these auction rate securities of $1,036,250 has been included as an impairment of investments in the Company’s consolidated statement of operations for the year ended December 31, 2007. Although the Company continues to receive payment of interest earned on these securities, the Company does not know at the present time when it will be able to convert these investments into cash.  Accordingly, management has classified these investments as a non-current asset on its consolidated balance sheet as of December 31, 2007. Management will continue to closely monitor these investments for future indications of further impairment. The illiquidity of these investments may have an adverse impact on the length of time during which the Company currently expects to be able to sustain its operations in the absence of an additional capital raise by the Company.

The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary if the Company were not able to continue in existence as a going concern.

2. CORRECTION OF PRIOR YEARS’ COMPARATIVE FINANICAL STATEMENTS

In accordance with the U.S. Securities and Exchange Commission (the “SEC”) Staff Accounting Bulletin (“SAB”) No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements”, the Company’s comparative consolidated financial statements have been corrected to reflect the Company’s accounting for stock options granted during fiscal 2005 to certain consultants that were subject to performance conditions.  The vesting of these options was contingent upon the attainment of FDA approval of the RHEO™ System.  These stock options were accounted for in accordance with Statement of Financial Accounting Standard (“SFAS”) No. 123 “Accounting for Stock-Based Compensation” (“SFAS No. 123”) and subsequently in accordance with SFAS No. 123(R) (revised 2004), “Stock-Based Compensation” (“SFAS No. 123R”) upon the Company’s adoption of SFAS No. 123(R) on January 1, 2006. The total fair value of these options was estimated at the date of grant and was being amortized, over the Company’s estimate of the expected vesting period, as stock-based compensation expense in the Company’s consolidated statements of operations.  In preparing the consolidated financial statements for the year ended December 31, 2007, the Company noted that these options should have been accounted for in accordance with Emerging Issues Task Force (“EITF”) 96-18, Accounting for Equity Instruments That Are Issued to Other Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services, (“EITF 96-18”) which requires that if, on the measurement date of the award, the quantity or any of the terms of the equity instruments are dependent on the achievement of performance conditions which result in a range of fair values, the lowest aggregate amount should be used.

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Based on the provisions of EITF 96-18, the Company concluded that no stock-based compensation expense should have been recorded for these options. Since the effect of the error on the individual prior periods’ consolidated financial statements was immaterial, the Company has adjusted the comparative consolidated financial statements of prior years to reflect the correction of this error without undertaking a restatement of the prior periods’ consolidated financial statements. The following financial statement line items for fiscal 2006 and 2005 were affected by the correction of the error.

	Previously reported			Corrected amount			Effect of error
		$			$			$
Balance Sheets
As of December 31, 2006
Additional paid-in capital		354,320,116			354,191,066			(129,050	)
Accumulated deficit		(293,150,653	)		(293,021,603	)		129,050
As of December 31, 2005
Additional paid-in capital		336,977,578			336,835,573			(142,005	)
Accumulated deficit		(210,979,105	)		(210,837,100	)		142,005
Statements of Operations
Year ended December 31, 2006
General and administrative(i)		8,452,915			8,407,501			45,414
Clinical and regulatory(i)		4,956,207			4,921,771			34,436
Sales and marketing(i)		1,639,428			1,625,188			14,240
Loss from continuing operations		(80,736,209	)		(80,642,119	)		94,090
Cumulative effect of a change in accounting principle		107,045			—			(107,045	)
Net loss for the year		(82,171,548	)		(82,184,503	)		(12,955	)
Year ended December 31, 2005
General and administrative expenses		8,729,456			8,670,394			59,062
Clinical and regulatory expenses		5,250,492			5,167,549			82,943
Loss from continuing operations		(162,971,986	)		(162,829,981	)
Net loss for the year		(162,971,986	)		(162,829,981	)		142,005

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	Previously reported			Corrected amount		Effect of error
		$			$		$
Statements of Cash Flows
Year ended December 31, 2006
Operating Activities
Adjustments to reconcile net loss to cash used in operations
Stock-based compensation(i)		2,221,133			2,127,043		94,090
Cumulative effect of a change in accounting principle		(107,045	)		—		(107,045	)
Year ended December 31, 2005
Operating Activities
Adjustments to reconcile net loss to cash used in operations
Stock-based compensation		366,781			224,776		142,005

(i) The comparative figures for the year ended December 31, 2006 have been reclassified to reflect the effect of discontinued operations.

The cumulative effect of the correction for the years ended December 31, 2006 and 2005 on basic and diluted net loss per share was nil.

3. SIGNIFICANT ACCOUNTING POLICIES

The consolidated financial statements have been prepared by management in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”).

Basis of consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant intercompany transactions and balances have been eliminated on consolidation.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Some of the Company’s more significant estimates include those related to uncollectible receivables, stock-based compensation, investments and its intangible assets. Actual results could differ from those estimates.

75

Revenue recognition

Prior to the Company’s announcement of the indefinite suspension of its RHEO™ System clinical development program, the Company recognized revenue from the sale of the RHEO™ System, which is comprised of OctoNova pumps and the related disposable treatment sets, and, prior to the Company’s disposition of SOLX on December 19, 2007, the Company recognized revenue from the sale of the components of the SOLX Glaucoma System which includes the SOLX 790 Titanium Sapphire Laser (“SOLX 790 Laser”) and the SOLX Gold Shunt. The Company received a signed binding purchase order from its customers. The pricing was a negotiated amount between the Company and its customers. The Company sold the components of the SOLX Glaucoma System directly to physicians and also through distributors. Revenue has been reported net of distributors’ commissions.

The Company had the obligation to train its customers and to calibrate the OctoNova pumps delivered to them. Only upon the completion of these services did the Company recognize revenue for the pumps. The Company was also responsible for providing a one-year warranty on the OctoNova pumps, and the estimated cost of providing this service was accrued at the time revenue was recognized. The treatment sets and the components of the SOLX Glaucoma System did not require any additional servicing and revenue was recognized upon passage of title. However, the Company’s revenue recognition policy requires an assessment as to whether collectibility is reasonably assured, which requires the Company to evaluate the creditworthiness of its customers. The result of the assessment could materially impact the timing of revenue recognition.

Cost of goods sold

Cost of sales includes costs of goods sold and royalty costs. The Company’s cost of goods sold consists primarily of costs for the manufacture of the RHEO™ System, prior to the Company’s announcement of the indefinite suspension of its RHEO™ System clinical development program,and, the SOLX Glaucoma System, prior to the Company’s disposition of SOLX on December 19, 2007. Cost of sales also includes the costs the Company incurs for the purchase of component parts from its suppliers, applicable freight and shipping costs, fees related to warehousing, logistics inventory management and recurring regulatory costs associated with conducting business and ISO certification. In addition to these direct costs, included in the cost of goods sold are licensing costs associated with distributing the RHEO™ System in Canada and minimum royalty payments due to Mr. Hans Stock and Dr. Richard Brunner that are only recoverable based on sufficient volume (notes 11 and 12).

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and highly liquid short-term investments with original maturities of 90 days or less at the date of purchase.

Investments

Investments consist of investments in auction rate securities. These investments are classified as available-for-sale securities and are recorded at fair value with unrealized gains or losses reported in accumulated other comprehensive income unless the fair value is determined to be less than the carrying value and that this reduction in value is other than temporary.  In such circumstances, the reduction in the carrying value is included in the determination of net loss. All of the auction rate securities have contractual maturities of more than three years.

Bad debt reserves

The Company evaluates the collectibility of its accounts receivable based on a combination of factors. In cases where management is aware of circumstances that may impair a specific customer’s ability to meet its financial obligations to the Company, a specific allowance against amounts due to the Company is recorded, which reduces the net recognized receivable to the amount management reasonably believes will be collected. For all other customers, the Company recognizes allowances for doubtful accounts based on the length of time the receivables are past due, the current business environment and historical experience. As at December 31, 2007 and 2006, the Company had bad debt reserves of $172,992 and nil, respectively. The Company expensed amounts related to bad debt reserves of nil, nil and $518,852 during the years ended December 31, 2007, 2006 and 2005, respectively, and set up a provision for $172,992, nil and $530,445 representing invoices for products shipped, plus related taxes, to a customer during the years ended December 31, 2007, 2006 and 2005, respectively, for which revenue was not recognized due to the likelihood that the customer would not be able to pay for the amounts invoiced.

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Inventory

Inventory is recorded at the lower of cost and net realizable value and consists of finished goods. Cost is accounted for on a first-in, first-out basis. Deferred cost of sales (included in finished goods) consists of products shipped but not recognized as revenue because they did not meet the revenue recognition criteria.

The Company evaluates its ending inventory for estimated excess quantities and obsolescence, based on expected future sales levels and projections of future demand, with the excess inventory provided for. In addition, the Company assesses the impact of changing technology and market conditions.  In addition, the Company assesses whether recent transactions provide indicators as to whether the net realizable value of its inventory is below its recorded cost.In April 2006, the Company sold a number of treatment sets to Veris Health Sciences Inc. (“Veris”) at a price lower than the Company’s cost.  Accordingly, the Company wrote down the value of its treatment sets to reflect this current net realizable value during the year ended December 31, 2006. In light of the Company’s current financial position, on November 1, 2007, the Company announced an indefinite suspension of the RHEO™ System clinical development program for Dry AMD.  That decision was made following a comprehensive review of the respective costs and development timelines associated with the products in the Company’s portfolio and, in particular, the fact that, if the Company had been unable to raise additional capital, it would not have had sufficient cash to support its operations beyond early 2008. Accordingly, the Company has written down the value of its treatment sets and OctoNova pumps, the components of the RHEO™ System, to nil as of December 31, 2007 since the Company is not expected to be able to sell or utilize these treatment sets and OctoNova pumps prior to their expiration dates, in the case of the treatment sets, or before the technologies become outdated.

As at December 31, 2007 and 2006, the Company had inventory reserves of $7,295,545 and $5,101,394, respectively. During the years ended December 31, 2007, 2006 and 2005, the Company recognized a provision related to inventory of $2,790,209, $3,304,124 and $1,990,830, respectively, based on the above analysis.

Fair value of financial instruments

Fair value of a financial instrument is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties. The estimated fair values of cash and cash equivalents, amounts receivable, accounts payable, accrued liabilities and amounts due from and to stockholders approximate their carrying values due to the short-term maturities of these instruments.

Fixed assets

Fixed assets are recorded at cost less accumulated amortization. Amortization is calculated using the straight-line method, commencing when the assets become available for productive use, based on the following estimated useful lives:

Furniture and office equipment	2 – 7 years
Computer equipment and software	3 years
Leasehold improvements	Shorter of useful life or initial term of the lease
Medical equipment	1 – 5 years

Impairment of long-lived assets

The Company reviews its fixed assets and intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. When such an event occurs, management estimates the future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. In the event the undiscounted cash flows are less than the carrying amount of the asset, an impairment loss equal to the excess of the carrying amount over the fair value is charged to operations.

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The Company’s intangible assets as at December 31, 2007 are comprised of the value of the exclusive distribution agreements the Company had with Asahi Medical, Diamed and MeSys and the value of the TearLab™ technology acquired upon the acquisition of 50.1% of the capital stock of OcuSense on a fully diluted basis. The Company’s intangible assets are being amortized using the straight-line method over an estimated useful life of 10 years.

Patents and trademarks

Patents and trademarks are recorded at historical cost and are amortized using the straight-line method over their estimated useful lives, not to exceed 15 years.

Goodwill

Goodwill is not amortized and instead is subject to an annual impairment test. The Company’s annual impairment test is conducted effective October 1 and is evaluated between annual tests upon the occurrence of certain events or circumstances. Goodwill impairment is assessed based on a comparison of the fair value of the reporting unit to the underlying carrying value of the reporting unit’s net assets, including goodwill. When the carrying amount of the reporting unit exceeds its fair value, the fair value of the reporting unit’s goodwill is compared with its carrying amount to measure the amount of impairment loss, if any.

Foreign currency translation

The Company’s functional and reporting currency is the U.S. dollar. The assets and liabilities of the Company’s Canadian operations are maintained in U.S. dollars. Monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars at exchange rates in effect at the consolidated balance sheet dates, and non-monetary assets and liabilities are translated at exchange rates in effect on the date of the transaction. Revenue and expenses are translated into U.S. dollars at average exchange rates prevailing during the year. Resulting exchange gains and losses are included in net loss for the year and are not material in any of the years presented.

Clinical and regulatory costs

Clinical and regulatory costs attributable to the performance of contract services are recognized as the services are performed. Non-refundable, up-front fees paid in connection with these contracted services are deferred and recognized as an expense on a straight-line basis over the estimated term of the related contract.

Income taxes

On January 1, 2007, the Company adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – An Interpretation of FASB Statement No. 109” (“FIN No. 48”). FIN No. 48 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements.  Under FIN No. 48, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position.  The tax benefits recognized in the consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. FIN No. 48 also provides guidance on derecognition, classification, interest and penalties on income taxes and accounting in interim periods and requires increased disclosure.

As a result of the implementation of the provisions of FIN No. 48, the Company recognized a reduction to the January 1, 2007 deferred tax liability balance in the amount of $4.6 million with a corresponding reduction to accumulated deficit.

As of January 1, 2007, the Company had unrecognized tax benefits of $24.8 million which, if recognized, would favorably affect the Company’s effective tax rate.

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When applicable, the Company recognizes accrued interest and penalties related to unrecognized tax benefits as other expense in its consolidated statements of operations, which is consistent with the recognition of these items in prior reporting periods. As of January 1, 2007, the Company did not have any liability for the payment of interest and penalties.

The Company does not expect a significant change in the amount of its unrecognized tax benefits within the next 12 months. Therefore, it is not expected that the change in the Company’s unrecognized tax benefits will have a significant impact on the results of operations or financial position of the Company.

However, a portion of the Company’s net operating losses may be subject to annual limitations as a result of the Company’s initial public offering and prior changes of control. Accordingly, until a formal analysis of the effect of the changes of control is performed, a portion of the income tax benefits recognized to date may be affected.

All federal income tax returns for the Company and its subsidiaries remain open since their respective dates of incorporation due to the existence of net operating losses.  The Company and its subsidiaries have not been, nor are they currently, under examination by the Internal Revenue Service or the Canada Revenue Agency.

State and provincial income tax returns are generally subject to examination for a period of between three and five years after their filing.  However, due to the existence of net operating losses, all state income tax returns of the Company and its subsidiaries since their respective dates of incorporation are subject to re-assessment.  The state impact of any federal changes remains subject to examination by various states for a period of up to one year after formal notification to the states.  The Company and its subsidiaries have not been, nor are they currently, under examination by any state tax authority.

Stock-based compensation

The Company accounts for stock-based compensation expense for its employees in accordance with the provisions of SFAS No. 123R. Under the fair value recognition provision of SFAS No. 123R, stock-based compensation cost is estimated at the grant date based on the fair value of the award and is recognized as an expense ratably over the requisite service period of the award. The Company has selected the Black-Scholes option-pricing model as its method of determining the fair value for all its awards and will recognize compensation cost on a straight-line basis over the awards’ vesting periods (note 16(e)).

Net loss per share

The Company follows SFAS No. 128, “Earnings Per Share” (“SFAS No. 128”). In accordance with SFAS No. 128, companies that are publicly held or have complex capital structures are required to present basic and diluted earnings per share (“EPS”) on the face of the statement of income. Basic EPS excludes dilution and is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding for the year. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted and the resulting additional shares are dilutive because their inclusion decreases the amount of EPS.

The following are potentially dilutive securities which have not been used in the calculation of diluted loss per share as they are anti-dilutive:

	Years ended December 31,
		2007 #	2006 #	2005 #
Stock options		4,787,387	4,237,221	4,107,614
Warrants		2,764,416	—	—

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Comprehensive income

The Company follows SFAS No. 130, “Reporting Comprehensive Income” (“SFAS No. 130”). SFAS No. 130 establishes standards for reporting and the presentation of comprehensive income and its components in a full set of financial statements. SFAS No. 130 requires only additional disclosures in the financial statements and does not affect the Company’s financial position or results of operations.

Comparative figures

Certain of the comparative figures have been reclassified to conform to the current year’s method of presentation and to reflect the effect of discontinued operations.

Recent accounting pronouncements

The adoption of SABNo. 110, “Share-based payments”, during fiscal 2007 did not have a material impact on the Company’s results of operations and financial position:

In September 2006, FASB issued Statement No. 157, “Fair Value Measurements” (“SFAS No. 157”). SFAS No. 157 defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. SFAS No. 157 is effective for financial statements issued for fiscal years beginning on or after November 15, 2007 and for interim periods within those fiscal years.

On February 12, 2008, FASB issued FASB Staff Position No. 157-2, “Effective Date of FASB Statement No 157” (FSP No. 157”). FSP No. 157-2 amends SFAS No. 157 to delay the effective date of SFAS No. 157 for non-financial  assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually) for fiscal years beginning after November 15, 2008.

On February 14, 2008, FASB issued FSP No. 157-1, “Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements that Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13” (“FSP No. 157-1”).  FSP No. 157-1 amends SFAS No. 157 to exclude SFAS No. 13, “Accounting for Leases” (“SFAS No. 13”), and other accounting pronouncements that address fair value measurements for purposes of lease classification or measurement under SFAS No. 13.

The Company is currently evaluating the impact that the adoption of SFAS No. 157, FSP No. 157-2 and FSP No. 157-1 will have on its results of operations and financial position.

In February 2007, FASB issued Statement No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115” (“SFAS No. 159”). SFAS No. 159 expands the use of fair value accounting but does not affect existing standards which require assets or liabilities to be carried at fair value. Under SFAS No. 159, a company may elect to use fair value to measure accounts and loans receivable, available-for-sale and held-to-maturity securities, equity method investments, accounts payable, guarantees and issued debt. Other eligible items include firm commitments for financial instruments that otherwise would not be recognized at inception and non-cash warranty obligations where a warrantor is permitted to pay a third party to provide the warranty goods or services. If the use of fair value is elected, any upfront costs and fees related to the item must be recognized in earnings and cannot be deferred (e.g., debt issue costs). The fair value election is irrevocable and generally made on an instrument-by-instrument basis, even if a company has similar instruments that it elects not to measure based on fair value. At the adoption date, unrealized gains and losses on existing items for which fair value has been elected are reported as a cumulative adjustment to beginning retained earnings. Subsequent to the adoption of SFAS No. 159, changes in fair value are recognized in earnings. SFAS No. 159 is effective for fiscal years beginning on or after November 15, 2007 and is required to be adopted by the Company in the first quarter of fiscal 2008. The adoption of SFAS No. 159 will not have a material impact on the Company’s results of operations and financial position.

In June 2007, FASB’s EITF issued EITF Issue No. 06-11, “Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards” (“EITF No. 06-11”). EITF No. 06-11 requires that the tax benefits related to dividend equivalents paid on restricted stock units, which are expected to vest, be recorded as an increase to additional paid-in capital. EITF No. 06-11 is effective prospectively to the income tax benefits on dividends declared in fiscal years beginning on or after December 15, 2007. The Company is currently evaluating the impact the adoption of EITF No. 06-11 will have on its results of operations and financial position.

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In December 2007, FASB issued Statement No. 141R (revised 2007), “Business Combinations (a revision of Statement No. 141)” (“SFAS No. 141R”). SFAS No. 141R applies to all transactions or other events in which an entity obtains control of one or more businesses, including those business combinations achieved without the transfer of consideration. SFAS No. 141R retains the fundamental requirements in Statement No. 141 that the acquisition method of accounting be used for all business combinations. SFAS No. 141R expands the scope to include all business combinations and requires an acquirer to recognize the assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at their fair values as of the acquisition date. In addition, SFAS No. 141R changes the way entities account for business combinations achieved in stages by requiring the identifiable assets and liabilities to be measured at their full fair values. Also, contractual contingencies and contingent consideration shall be measured at fair value at the acquisition date. SFAS No. 141R is effective on a prospective basis to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company is currently evaluating the impact, if any, that the adoption of SFAS No. 141R will have on its results of operations and financial position.

In December 2007, FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements - an amendment of ARB No. 51” (“SFAS No. 160”). SFAS No. 160 amends ARB No. 51 to establish accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS No. 160 clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Additionally, SFAS No. 160 requires that consolidated net income include the amounts attributable to both the parent and the non-controlling interest. SFAS No. 160 is effective for interim periods beginning on or after December 15, 2008. The Company is currently evaluating the impact, if any, that the adoption of SFAS No. 160 will have on its results of operations and financial position.

4. ACQUISITIONS

During the fiscal year ended December 31, 2006, the Company completed two acquisitions. The results of each purchase acquisition are included in the Company’s consolidated statements of operations from the date of each acquisition. There were no acquisitions made during fiscal 2007.

The Company’s acquisitions during fiscal 2006 are described below.

Solx, Inc.

On September 1, 2006, the Company acquired SOLX, a privately held company that has developed a system for the treatment of glaucoma.  The SOLX Glaucoma System developed by SOLX includes the SOLX 790 Laser and the SOLX Gold Shunt which can be used separately or together to provide physicians with multiple options to manage intraocular pressure. The acquisition of SOLX represented an expansion of the Company’s ophthalmic product portfolio beyond the RHEO™ procedure for Dry AMD. The results of SOLX’s operations have been included in the Company’s consolidated financial statements since September 1, 2006.

The Company acquired SOLX by way of a merger, in connection with which the Company issued an aggregate of 8,399,983 shares of its common stock and paid $7,000,000 in cash to the stockholders of SOLX. The Company made an additional payment of $3,000,000 in cash on the first anniversary of the September 1, 2006 closing and was expected to make an additional payment of $5,000,000 in cash to the former stockholders of SOLX on the second anniversary of the September 1, 2006 closing.  In addition, if SOLX received final FDA approval for the marketing and sale of the SOLX Gold Shunt on or prior to December 31, 2007, the Company was expected to make an additional $5,000,000 in cash to the former stockholders of SOLX. The stock consideration was valued based on a per share price of $1.79, being the weighted-average closing sale price of the Company’s common stock as traded on the NASDAQ Global Market (“NASDAQ”) over the two-day trading period before and after August 1, 2006, being the date the terms of the acquisition of SOLX were agreed to and announced.  The Company recorded the cash payment paid on the first anniversary of the closing date as a current liability as of December 31, 2006. The $5,000,000 due on the second anniversary of the closing date was recorded as a long-term liability at its present value, discounted at the incremental borrowing rate of the Company as at August 1, 2006. The difference between the discounted value and the $5,000,000 payable was being amortized using the effective yield method over the two-year period with the monthly expense being charged as an interest expense in the Company’s consolidated statements of operations. In accordance with SFAS No. 141, “Business Combinations”, the contingent payment of $5,000,000 was not included in the determination of the purchase price or recorded as a liability as the receipt of FDA approval for the marketing and sale of the SOLX Gold Shunt on or prior to December 31, 2007 was subject to many variables, the outcome of which was not determinable beyond reasonable doubt.

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The total purchase price of $29,068,443, which included acquisition-related transaction costs of $851,279, was allocated as follows:

	$
Net tangible assets		(2,908,384	)
Deferred tax liability		(12,270,150	)
Intangible assets:
Shunt and laser technology		27,000,000
Regulatory and other		2,800,000
		14,621,466
Goodwill		14,446,977
		29,068,443

Acquisition-related transaction costs included investment banking, legal and accounting fees and other third-party costs directly related to the acquisition.

In estimating the fair value of the intangible assets acquired, the Company considered a number of factors, including the valuation performed by an independent third-party valuator that used the income approach to value SOLX’s shunt and laser technology (consisting of the SOLX Gold Shunt and the SOLX 790 Laser) and the cost approach to value the regulatory and other intangible assets acquired (note 8).

On December 19, 2007, the Company sold all of the issued and outstanding capital stock of SOLX to Solx Acquisition. The consideration for the purchase and sale of all of the issued and outstanding shares of the capital stock of SOLX consisted of:  (i) on the closing date of the sale, the assumption by Solx Acquisition of all of the liabilities of the Company related to SOLX’s business, incurred on or after December 1, 2007, and the Company’s obligation to make a $5,000,000 payment to the former stockholders of SOLX due on September 1, 2008 in satisfaction of the outstanding balance of the purchase price of SOLX; (ii) on or prior to February 15, 2008, the payment by Solx Acquisition of all of the expenses that the Company had paid to the closing date, as they related to SOLX’s business during the period commencing on December 1, 2007; (iii) during the period commencing on the closing date and ending on the date on which SOLX achieves a positive cash flow, the payment by Solx Acquisition of a royalty equal to 3% of the worldwide net sales of the SOLX 790 Laser and the SOLX Gold Shunt, including next-generation or future models or versions of these products; and (iv) following the date on which SOLX achieves a positive cash flow, the payment by Solx Acquisition of a royalty equal to 5% of the worldwide net sales of these products. In order to secure the obligation of Solx Acquisition to make these royalty payments, SOLX granted to the Company a subordinated security interest in certain of its intellectual property. The results of operations of SOLX from September 1, 2006, the date the Company acquired SOLX, to December 19, 2007, the closing date of the sale, have been included in discontinued operations in the Company’s consolidated statements of operations (note 10).

OcuSense, Inc.

On November 30, 2006, the Company acquired 50.1% of the capital stock of OcuSense, measured on a fully diluted basis. OcuSense’s first product, which is currently under development, is a hand-held tear film test for the measurement of osmolarity, a quantitative and highly specific biomarker that has shown to correlate with dry eye disease, or DED. The test is known as the TearLab™ test for DED. The results of OcuSense’s operations have been included in the Company’s consolidated financial statements since November 30, 2006.

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Pursuant to the terms of the Series A Preferred Stock Purchase Agreement (the “Series A Preferred Stock Purchase Agreement”), dated as of November 30, 2006, between OcuSense and the Company, the Company purchased 1,754,589 shares of OcuSense’s Series A Preferred Stock, par value of $0.001 per share, representing 50.1% of OcuSense’s capital stock on a fully diluted basis for an aggregate purchase price of up to $8,000,000 (the “Purchase Price”). On the closing of the purchase which took place on November 30, 2006, the Company paid $2,000,000 of the Purchase Price. The Company paid another $2,000,000 installment of the Purchase Price on January 3, 2007. In June 2007, the Company paid the third $2,000,000 installment of the Purchase Price upon the attainment by OcuSense of the first of two pre-defined milestones. The Company is expected to pay the last $2,000,000 installment of the Purchase Price upon the attainment by OcuSense of the second of such milestones, provided that the milestone is achieved prior to May 1, 2009. The contingent payments totaling $4,000,000, $2,000,000 of which has been paid during fiscal 2007, were not included in the determination of the Purchase Price or recorded as a liability as at December 31, 2006 as the attainment by OcuSense of the two pre-determined milestones prior to May 1, 2009 was subject to many variables, the outcome of which is not determinable beyond reasonable doubt. Upon the payment of the first contingent amount in June 2007, the carrying value of the TearLab™ technology acquired upon the acquisition of OcuSense was increased by $1,663,333, which reflects the minority interest portion of the $2,000,000 paid to OcuSense in the amount of $998,000 and the additional deferred tax liability of $665,333 recorded based on the difference between the increase in the carrying value of the TearLab™ technology and its tax basis (note 8).

The Series A Preferred Stock Purchase Agreement also makes provision for an ability on the part of the Company to increase its ownership interest in OcuSense for nominal consideration if OcuSense fails to meet certain other milestones by specified dates. In addition, pursuant to the Series A Preferred Stock Purchase Agreement, the Company has agreed to purchase $3,000,000 of shares of OcuSense’s Series B Preferred Stock, which shall constitute 10% of OcuSense’s capital stock on a fully diluted basis at the time of purchase, upon OcuSense’s receipt from the FDA of 510(k) clearance for the TearLab™ test for DED and to purchase another $3,000,000 of shares of OcuSense’s Series B Preferred Stock, which shall constitute an additional 10% of OcuSense’s capital stock on a fully diluted basis at the time of purchase, upon OcuSense’s receipt from the FDA of Clinical Laboratory Improvement Amendments, or CLIA, waiver for the TearLab™ test for DED.

The adjusted purchase price of $5,169,098 includes acquisition-related transaction costs of $171,098. Acquisition-related transaction costs include legal fees and other third-party costs directly related to the acquisition.

The adjusted purchase price of $5,169,098 (2006 - $4,171,098) has been allocated as follows:

	December 31,
	2007			2006
	$			$
Net tangible assets		1,347,848			1,347,848
Deferred tax liability		(2,547,499	)		(1,882,166	)
Intangible asset		6,368,749			4,705,416
		5,169,098			4,171,098

In estimating the fair value of the intangible assets acquired, the Company considered a number of factors, including the valuation performed by an independent third-party valuator that used the income approach to value OcuSense’s TearLab™ technology (note 8).

If the Company’s acquisition of 50.1% of the capital stock of OcuSense, measured on a fully diluted basis, had been completed on January 1, 2005, the effect on the pro forma statements of operations would have been to increase net loss by $1,320,036 and $378,224 for the years ended December 31, 2006 and 2005, respectively. Net loss per share would have increased by $0.03 and $0.01 for the years ended December 31, 2006 and 2005, respectively. There is no pro forma effect on the Company’s revenue for each of the years ended December 31, 2006 and 2005.

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The unaudited pro forma information is presented for information purposes only and may not be indicative of the results of operations if the acquisition had occurred on January 1, 2005, nor is it necessarily indicative of future results of operations.

5. GOODWILL

The Company follows the provisions of SFAS No. 142, “Goodwill and Other Intangible Assets” (“SFAS No. 142”), which requires that goodwill not be amortized but instead be tested for impairment at least annually and more frequently if circumstances indicate possible impairment.

The Company’s goodwill amount by reporting unit is as follows:

	Retina			Glaucoma			Total
	$			$			$
Balance, December 31, 2005		65,945,686			—			65,945,686
Acquired during the period		—			14,446,977			14,446,977
Impairment loss recognized		(65,945,686	)		—			(65,945,686	)
Balance, December 31, 2006		—			14,446,977			14,446,977
Impairment loss recognized		—			(14,446,977	)		(14,446,977	)
Balance, December 31, 2007		—			—			—

The Company performs its annual goodwill impairment analysis on its acquired goodwill on October 1 of each year and evaluates the carrying value of its goodwill between annual tests upon the occurrence of certain events and circumstances.

Retina

The Company conducted a pivotal clinical trial, called MIRA-1, which, if successful, was expected to support its application to the FDA to obtain approval to market the RHEO™ System in the United States. On February 3, 2006, the Company announced that, based on a preliminary analysis of the data from MIRA-1, MIRA-1 did not meet its primary efficacy endpoint as it did not demonstrate a statistically significant difference in the mean change of ETDRS BCVA between the treated and placebo groups in MIRA-1 at 12 months post-baseline. As a result of the announcement on February 3, 2006, the per share price of the Company’s common stock as traded on NASDAQ decreased from $12.75 on February 2, 2006 to close at $4.10 on February 3, 2006. The 10-day average price of the stock immediately following the announcement was $3.65 and reflected a decrease in the Company’s market capitalization from $536.6 million on February 2, 2006 to $153.6 million based on the 10-day average share price subsequent to the announcement. Based on this, the Company concluded that there were sufficient indicators to require management to re-assess whether the Company’s recorded goodwill was impaired as of December 31, 2005. Prior to the acquisition of SOLX and OcuSense during the second half of fiscal 2006, the Company was a single reporting unit. Therefore, management determined the fair value of the Company's goodwill using the Company’s market capitalization as opposed to the fair value of its assets and liabilities. The Company recorded a goodwill impairment charge of $147,451,758 during the year ended December 31, 2005 as a result of a goodwill impairment re-assessment performed subsequent to the February 3, 2006 announcement.

On June 12, 2006, the Company announced that it met with the FDA to discuss the results of MIRA-1 and confirmed that the FDA will require the Company to perform an additional study of the RHEO™ System to obtain approval to market the RHEO™ System in the United States.  In addition, on June 30, 2006, the Company announced that it had terminated negotiations with Sowood Capital Management LP in connection with a proposed private purchase of approximately $30,000,000 of zero-coupon convertible notes of the Company. In accordance with SFAS No. 142, the Company concluded that, based on the price of the Company’s common stock subsequent to the June 12, 2006 announcement and again after the June 30, 2006 announcement, there were sufficient indicators to require management to re-assess whether the Company’s recorded goodwill was impaired as at June 30, 2006. Based on the goodwill impairment analysis performed, the Company concluded that a further goodwill impairment charge of $65,945,686 should be recorded during the second quarter of 2006.

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Glaucoma

On September 1, 2006, the Company acquired SOLX by way of a merger for a total purchase price of $29,068,443. Of this amount, $14,446,977 has been allocated to goodwill. On December 19, 2007, the Company sold to Solx Acquisition, and Solx Acquisition purchased from the Company, all of the issued and outstanding shares of the capital stock of SOLX, which had been the Glaucoma division of the Company prior to the completion of the transactions provided for in the stock purchase agreement. The sale transaction established fair values for the Company’s recorded goodwill and certain of the Company’s intangible assets. Accordingly, the Company performed an impairment test of its recorded goodwill to re-assess whether its recorded goodwill was impaired as at December 1, 2007. Based on the goodwill impairment analysis performed, the Company concluded that a goodwill impairment charge of $14,446,977 should be recorded during the year ended December 31, 2007 to write down the value of its recorded goodwill to its fair value of nil (note 10).

6. FIXED ASSETS

	2007				2006
	Cost		Accumulated Amortization		Cost		Accumulated Amortization
	$		$		$		$
Furniture and office equipment		101,903		50,854		119,776		49,566
Computer equipment and software		197,317		155,928		268,955		145,001
Leasehold improvements		6,335		704		—		—
Medical equipment		1,163,135		1,138,918		1,805,228		1,138,675
		1,468,690		1,346,404		2,193,959		1,333,242
Less accumulated amortization		1,346,404				1,333,242
		122,286				860,717

Amortization expense was $844,948, $213,488 and $99,301 during the years ended December 31, 2007, 2006 and 2005, respectively, of which $231,542, $74,610 and nil is included as amortization expense of discontinued operations for the years ended December 31, 2007, 2006 and 2005, respectively (note 10).

On November 1, 2007, the Company announced an indefinite suspension of the RHEO™ System clinical development program for Dry AMD and is in the process of winding down the RHEO-AMD study as there is no reasonable prospect that the RHEO™ System clinical development program will be relaunched in the foreseeable future. In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”), the Company determined that the carrying value of certain of the Company’s medical equipment was not recoverable as of December 31, 2007. Accordingly, during the year ended December 31, 2007, the Company recorded a reduction to the carrying value of certain of its medical equipment of $431,683 which reflects a write-down of the value of this medical equipment to nil as of December 31, 2007. The assets written down were being used in the clinical trials of the RHEO™ System. The Company did not write down the carrying value of any of its fixed assets during the years ended December 31, 2006 and 2005.

7. PATENTS AND TRADEMARKS

	2007				2006
	Cost		Accumulated Amortization		Cost		Accumulated Amortization
	$		$		$		$
Patents		236,854		113,013		139,461		14,909
Trademarks		120,211		104,615		117,513		7,224
		357,065		217,628		256,974		22,133
Less accumulated amortization		217,628				22,133
		139,437				234,841

85

Amortization expense was $195,494, $5,608 and $5,712 during the years ended December 31, 2007, 2006 and 2005, respectively.

Based on the November 1, 2007 announcement and in accordance with SFAS No. 144, the Company determined that the carrying value of certain of the Company’s patents and trademarks was not recoverable as of December 31, 2007. Accordingly, during the year ended December 31, 2007, the Company recorded a $190,873 reduction to the carrying value of its patents and trademarks related to the RHEO™ System which reflects a write-down of these patents and trademarks to a value of nil as of December 31, 2007. The Company did not write down the carrying value of any of its patents and trademarks during the years ended December 31, 2006 and 2005.

The Company’s recorded patents and trademarks as of December 31, 2007 relate to the cost of pending applications for patents and trademarks for the TearLab™ technology. These patents and trademarks will be amortized, using the straight-line method, over an estimated useful life of 10 years from the date of approval of the patents and trademarks.

Estimated amortization expense for patents and trademarks for each of the next five years is as follows:

	Patents $		Trademarks $		Total $
2008		12,384		1,560		13,944
2009		12,384		1,560		13,944
2010		12,384		1,560		13,944
2011		12,384		1,560		13,944
2012		12,384		1,560		13,944
		61,920		7,800		69,720

8. INTANGIBLE ASSETS

The Company’s intangible assets consist of the value of the exclusive distribution agreements that the Company has with its major suppliers and other acquisition-related intangibles. The Company has no indefinite-lived intangible assets. The distribution agreements were being amortized using the straight-line method over an estimated useful life of 15 years while the other acquisition-related intangible assets are amortized using the straight-line method over an estimated useful life of 10 years, respectively. Amortization expense for the years ended December 31, 2007, 2006 and 2005 was $4,578,027, $2,749,212 and $1,716,667, respectively, of which $2,731,667, $993,333 and nil is included as amortization expense of discontinued operations for the years ended December 31, 2007, 2006 and 2005, respectively (note 10).

Intangible assets subject to amortization consist of the following:

	2007				2006
	Cost		Accumulated Amortization		Cost		Accumulated Amortization
	$		$		$		$
Distribution agreements		—		—		25,750,000		3,539,472
Shunt and laser technology		—		—		27,000,000		900,000
Regulatory and other		—		—		2,800,000		93,333
TearLab™ technology		6,368,749		598,072		4,705,416		39,212
		6,368,749		598,072		60,255,416		4,572,017

86

Estimated amortization expense for the intangible assets for each of the fiscal years ending December 31 is as follows:

	$
2008		647,179
2009		647,179
2010		647,179
2011		647,179
2012 and thereafter		3,181,961
		5,770,677

The Company’s intangible assets consist of the value of the exclusive distribution agreements the Company has with Asahi Medical, the manufacturer of the Rheofilter filters and the Plasmaflo filters, and Diamed and MeSys, the designer and the manufacturer, respectively, of the OctoNova pumps. The Rheofilter filter, the Plasmaflo filter and the OctoNova pump are components of the RHEO™ System, the Company’s product for the treatment of Dry AMD. On November 1, 2007, the Company announced an indefinite suspension of the RHEO™ System clinical development program for Dry AMD and is in the process of winding down the RHEO-AMD study as there is no reasonable prospect that the RHEO™ System clinical development program will be relaunched in the foreseeable future.  In accordance with SFAS No. 144, the Company concluded that its indefinite suspension of the RHEO™ System clinical development program for Dry AMD was a significant event which may affect the carrying value of its distribution agreements. Accordingly, management was required to re-assess whether the carrying value of the Company’s distribution agreements was recoverable as of December 31, 2007. Based on management’s estimates of undiscounted cash flows associated with the distribution agreements, the Company concluded that the carrying value of the distribution agreements was not recoverable as of December 31, 2007. Accordingly, the Company recorded an impairment charge of $20,923,028 during the year ended December 31, 2007 to record the distribution agreements at their fair value as of December 31, 2007.

On December 19, 2007, the Company sold to Solx Acquisition all of the issued and outstanding shares of the capital stock of SOLX, which had been the Glaucoma division of the Company prior to the completion of the transactions provided for in the stock purchase agreement. The sale transaction established fair values for the Company’s recorded goodwill and the Company’s shunt and laser technology and regulatory and other intangible assets acquired upon the acquisition of SOLX on September 1, 2006. Accordingly, management was required to re-assess whether the carrying value of the Company’s shunt and laser technology and regulatory and other intangible assets was recoverable as of December 1, 2007. Based on management’s estimates of undiscounted cash flows associated with these intangible assets, the Company concluded that the carrying value of these intangible assets was not recoverable as of December 1, 2007. Accordingly, the Company recorded an impairment charge of $22,286,383 during the year ended December 31, 2007 to record the shunt and laser technology and regulatory and other intangible assets at their fair value as of December 31, 2007 (note 10).

The Company determined that, as of December 31, 2007, there have been no significant events which may affect the carrying value of its TearLab™ technology. However, the Company’s prior history of losses and losses incurred during the current fiscal year reflects a potential indication of impairment, thus requiring management to assess whether the Company’s TearLab™ technology was impaired as of December 31, 2007. Based on management’s estimates of forecasted undiscounted cash flows as of December 31, 2007, the Company concluded that there is no indication of an impairment of the Company’s TearLab™ technology. Therefore, no impairment charge was recorded during the year ended December 31, 2007.

9. RESTRUCTURING CHARGES

In March 2006, the Company implemented a number of structural and management changes designed to then support both the continued development of its RHEO™ System and to execute its accelerated diversification strategy within ophthalmology. In accordance with SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities” (“SFAS No. 146”), the Company recognized a total of $819,642 in restructuring charges during the year ended December 31, 2006.The restructuring charges of $819,642 recorded during the year ended December 31, 2006 consist solely of severance and benefit costs related to the termination of a total of 12 employees at both the Company’s Mississauga, Ontario and Palm Harbor, Florida offices. All severance and benefit costs were fully paid as at December 31, 2006.

87

On January 9, 2008, the Company announced the termination of employment of certain members of its executive team in light of the Company's current financial situation and in connection with the indefinite suspension of its RHEO™ System clinical development program and the sale of SOLX. In accordance with SFAS No. 146, the Company recognized a total of $1,312,721 in restructuring charges during the year ended December 31, 2007. The total restructuring charges of $1,312,721 recorded in the year ended December 31, 2007 consist solely of severance and benefit costs related to the termination of a total of eight employees at both the Company’s Mississauga, Ontario and Palm Harbor, Florida offices. All severance and benefit costs are yet to be paid as at December 31, 2007.

10. DISCONTINUED OPERATIONS

On December 19, 2007, the Company sold to Solx Acquisition, and Solx Acquisition purchased from the Company, all of the issued and outstanding shares of the capital stock of SOLX, which had been the Glaucoma division of the Company prior to the completion of this transaction. The consideration for the purchase and sale of all of the issued and outstanding shares of the capital stock of SOLX consisted of:  (i) on the closing date of the sale, the assumption by Solx Acquisition of all of the liabilities of the Company related to SOLX’s business, incurred on or after December 1, 2007, and the Company’s obligation to make a $5,000,000 payment to the former stockholders of SOLX due on September 1, 2008 in satisfaction of the outstanding balance of the purchase price of SOLX; (ii) on or prior to February 15, 2008, the payment by Solx Acquisition of all of the expenses that the Company had paid to the closing date, as they related to SOLX’s business during the period commencing on December 1, 2007; (iii) during the period commencing on the closing date and ending on the date on which SOLX achieves a positive cash flow, the payment by Solx Acquisition of a royalty equal to 3% of the worldwide net sales of the SOLX 790 Laser and the SOLX Gold Shunt, including next-generation or future models or versions of these products; and (iv) following the date on which SOLX achieves a positive cash flow, the payment by Solx Acquisition of a royalty equal to 5% of the worldwide net sales of these products. In order to secure the obligation of Solx Acquisition to make these royalty payments, SOLX granted to the Company a subordinated security interest in certain of its intellectual property. No value was assigned to the royalty payments as the determination of worldwide net sales of SOLX’s products is subject to significant uncertainty.

The sale transaction described above established fair values for certain of the Company’s acquisition-related intangible assets and goodwill. Accordingly, the Company performed an impairment test of these assets at December 1, 2007. Based on this analysis, during the year ended December 31, 2007, the Company recognized a non-cash goodwill impairment charge of $14,446,977 and an impairment charge of $22,286,383 to record its acquisition-related intangible assets at their fair value as of December 31, 2007 (notes 5 and 8).

88

The Company’s results of operations related to discontinued operations for the years ended December 31, 2007 and 2006 are as follows:

	December 31,
	2007 $			2006 $
Revenue		244,150			31,625
Cost of goods sold
Cost of goods sold		119,147			11,053
Royalty costs		26,277			8,332
Total cost of goods sold		145,424			19,385
		98,726			12,240
Operating expenses
General and administrative (notes 11, 12 and 16)		3,630,943			1,378,536
Clinical and regulatory (notes 12 and 16)		2,828,686			754,624
Sales and marketing (notes 12 and 16)		818,301			330,210
Impairment of goodwill (note 5)		14,446,977			—
Impairment of intangible assets (note 8)		22,286,383			—
		44,011,290			2,463,370
		(43,912,564	)		(2,451,130	)
Other income (expenses)
Interest income		486			—
Interest and accretion expense		(857,400	)		(273,192	)
Other		(9,302	)		(67	)
		(866,216	)		(273,259	)
Loss from discontinued operations before income taxes		(44,778,780	)		(2,724,389	)
Recovery of income taxes (note 13)		9,349,882			1,182,005
Loss from discontinued operations		(35,428,898	)		(1,542,384	)

89

The Company’s assets and liabilities related to discontinued operations at December 31, 2006 are shown below. The Company did not have any assets and liabilities related to discontinued operations at December 31, 2007.

	December 31, 2006 $
ASSETS
Current
Cash and cash equivalents		35,462
Amounts receivable		800
Inventory		371,099
Prepaid expenses		131,593
Other current assets		79,200
Total current assets		618,154
Fixed assets, net (note 6)		286,407
Intangible assets, net (note 8)		28,806,667
Goodwill (note 5)		14,446,977
		44,158,205
LIABILITES
Current
Accounts payable		232,687
Accrued liabilities (notes 12 and 14)		253,779
Total current liabilities		486,466
Deferred tax liability (note 13)		11,087,750
		11,574,216

11. DUE TO STOCKHOLDERS

	December 31,
		2007 $		2006 $
Due (from)/to
TLC Vision Corporation (note 12)		(2,708	)	91,884
Other stockholders (note 12)		35,522		60,522
		32,814		152,406

The balance due from and owing to TLC Vision Corporation (“TLC Vision”) is related to computer and administrative support provided by TLC Vision, net of payments made by the Company to TLC Vision. All amounts have been expensed during the years ended December 31, 2007 and 2006, respectively, and included in general and administrative expenses. The balance due to other stockholders includes outstanding royalty fees payable to Mr. Hans Stock.

12. RELATED PARTY TRANSACTIONS

The following are the Company’s related party transactions in addition to those disclosed in notes 10, 11 and 15.

 (a) RHEO Clinic Inc.

One of the Company’s primary customers had been RHEO Clinic Inc., a subsidiary of TLC Vision. RHEO Clinic Inc. used the RHEO™ System to treat patients for which it charged its customers (the patients) a per-treatment fee. During the third quarter of 2005, RHEO Clinic Inc. determined that it would no longer treat patients and subsequently sold certain of its assets to the Company at a purchase price of C$61,812, including all applicable taxes. In connection with that sale, the Company agreed to share equally in losses incurred by RHEO Clinic Inc., to a maximum of C$28,952, for assets that RHEO Clinic Inc. was not able to dispose of as of the agreed date, being December 31, 2005. On May 1, 2006, the Company paid RHEO Clinic Inc. C$31,859 which included the amount owing for losses incurred for the assets that RHEO Clinic Inc. was not able to dispose of as of the agreed date.

90

 (b) TLC Vision and Diamed

On June 25, 2003, the Company entered into agreements with TLC Vision and Diamed to issue grid debentures in the maximum aggregate principal amount of $12,000,000 in connection with the funding of the Company’s MIRA-1 and related clinical trials. $7,000,000 of the aggregate principal amount was convertible into shares of the Company’s common stock at a price of $0.98502 per share, and $5,000,000 of the aggregate principal amount was non-convertible.

The $5,000,000 portion of the $12,000,000 commitment which was not convertible into the Company’s common stock was not advanced and the commitment was terminated prior to the completion of the Company’s initial public offering of shares of its common stock. During the years ended December 31, 2004 and 2003, the Company issued grid debentures in an aggregate principal amount of $4,350,000 and $2,650,000 to TLC Vision and Diamed, respectively, under the convertible portion of the grid debentures. On December 8, 2004, as part of the corporate reorganization relating to the Company’s initial public offering, the Company issued 7,106,454 shares of its common stock to TLC Vision and Diamed, upon conversion of $7,000,000 of aggregate principal amount of convertible debentures at a conversion price of $0.98502 per share. Collectively, at December 31, 2007, the two companies have a combined 35.6% equity interest in the Company on a fully diluted basis.

 (c) Asahi Medical

The Company entered into a distributorship agreement (the “Distribution Agreement”), effective October 20, 2006, with Asahi Medical. The Distribution Agreement replaced the 2001 distributorship agreement between Asahi Medical and the Company, as supplemented and amended by the 2003, 2004 and 2005 Memoranda. Pursuant to the Distribution Agreement, the Company had distributorship rights to Asahi Medical's Plasmaflo filter and Asahi Medical's second generation polysulfone Rheofilter filter on an exclusive basis in the United States, Mexico and certain Caribbean countries (collectively, “Territory 1-a”), on an exclusive basis in Canada, on an exclusive basis in Colombia, Venezuela, New Zealand, Australia (collectively, “Territory 2”) and on a non-exclusive basis in Italy.

On January 28, 2008, the Company disclosed that it was engaged in discussions with Asahi Medical to terminate the Distribution Agreement. The Company and Asahi Medical have entered into a termination agreement to terminate substantially all of their obligations under the Distribution Agreement on and as of February 25, 2008 (the “Termination Agreement”).  Pursuant to the Termination Agreement, the Company and Asahi Medical have agreed to a mutual release of claims relating to the Distribution Agreement, other than any claims relating to certain provisions of the Distribution Agreement which survived its termination.

The Company received free inventory from Asahi Medical for purposes of the RHEO-AMD trial, the LEARN, or Long-term Efficacy in AMD from Rheopheresis in North America, trials and related clinical studies. The Company has accounted for this inventory at a value equivalent to the cost the Company has paid for the same filters purchased from Asahi Medical for purposes of commercial sales to the Company’s customers. The value of the free inventory received from Asahi Medical was $384,660 and nil for the years ended December 31, 2007 and 2006, respectively.

 (d) Mr. Hans Stock (note 11)

On February 21, 2002, the Company entered into an agreement with Mr. Stock as a result of his assistance in procuring a distributorship agreement for the filter products used in the RHEO™ System from Asahi Medical. Mr. Stock agreed to further assist the Company in procuring new product lines from Asahi Medical for marketing and distribution by the Company. The agreement will remain effective for a term consistent with the term of the distributorship agreement with Asahi Medical, and Mr. Stock will receive a 5% royalty payment on the purchase of the filters from Asahi Medical. During each of the years ended December 31, 2007 and 2006, the Company did not pay any amount to Mr. Stock as royalty fees. Included in due to stockholders at December 31, 2007 and 2006 is $48,022 and $48,022, respectively, due to Mr. Stock.

91

On June 25, 2002, the Company entered into a consulting agreement with Mr. Stock for the purpose of procuring a patent license for the extracorporeal applications in ophthalmic diseases for that period of time in which the patent was effective. Mr. Stock was entitled to 1.0% of total net revenue from the Company’s commercial sales of products sold in reliance and dependence upon the validity of the patent’s claims and rights in the United States. The Company agreed to make advance consulting payments to Mr. Stock of $50,000 annually, payable on a quarterly basis, to be credited against any and all future consulting payments payable in accordance with this agreement. Due to the uncertainty of future royalty payment requirements, all required payments to date have been expensed.

On August 6, 2004, the Company entered into a patent license and royalty agreement with Mr. Stock to obtain an exclusive license to U.S. Patent No. 6,245,038. The Company is required to make royalty payments totaling 1.5% of product sales to Mr. Stock, subject to minimum advance royalty payments of $12,500 per quarter. The advance payments are credited against future royalty payments to be made in accordance with the agreement. This agreement replaces the June 25, 2002 consulting agreement with Mr. Stock which provided for a royalty payment of 1% of product sales. During each of the years ended December 31, 2007 and 2006, the Company paid $50,000 to Mr. Stock as royalty fees. Included in due to stockholders at December 31, 2007 and 2006 is $12,500 and $12,500, respectively, due to Mr. Stock.

 (e) Other

On June 25, 2003, the Company entered into a reimbursement agreement with Apheresis Technologies, Inc. (“ATI”) pursuant to which employees of ATI, including Mr. John Cornish, one of the Company’s stockholders and its former Vice President, Operations, provided services to the Company and ATI is reimbursed for the applicable percentage of time the employees spend working for the Company. Effective April 1, 2005, the Company terminated its reimbursement agreement with ATI, as a result of which termination the Company no longer compensated ATI in respect of any salary paid to, or benefits provided to, Mr. Cornish by ATI. Until April 1, 2005, Mr. Cornish did not have an employment contract with the Company and received no direct compensation from the Company. On April 1, 2005, Mr. Cornish entered into an employment agreement with the Company under which he received an annual base salary of $106,450, representing compensation to him for devoting 80% of his time to the business and affairs of the Company. Effective June 1, 2005, the Company amended its employment agreement with Mr. Cornish such that he began to receive an annual base salary of $116,723, representing compensation to him for devoting 85% of his time to the business and affairs of the Company. Effective April 13, 2006, the Company further amended its employment agreement with Mr. Cornish such that his annual base salary was decreased to $68,660 in consideration of his devoting 50% of his time to the business and affairs of the Company. In light of the Company's current financial situation, and in connection with the indefinite suspension of its RHEO™ System clinical development program and the sale of SOLX, the Company terminated the employment of Mr. Cornish effective January 4, 2008.

During the year ended December 31, 2007, ATI made available to the Company, upon request, the services of certain of ATI’s employees and consultants on a per diem basis.  During the year ended December 31, 2007, the Company paid ATI $98,769 under this arrangement (2006 – nil). Included in accounts payable and accrued liabilities at December 31, 2007 and 2006 is $20,004 and $9,629, respectively, due to ATI.

Effective January 1, 2004, the Company entered into a rental agreement with Cornish Properties Corporation, a company owned and managed by Mr. Cornish, pursuant to which the Company leases space from Cornish Properties Corporation at $2,745 per month. The original term of the lease extended to December 31, 2005. On November 8, 2005, as provided for in the rental agreement, the Company extended the term of the rental agreement with Cornish Properties Corporation for another year, ending December 31, 2006. On December 19, 2006, the Company extended the term of the rental agreement with Cornish Properties Corporation for another year, ending December 31, 2007, at a lease payment of $2,168 per month. During the years ended December 31, 2007 and 2006, the Company paid Cornish Properties Corporation an amount of $26,016 and $32,940, respectively, as rent.

On November 30, 2006, the Company announced that Mr. Elias Vamvakas, the Chairman, Chief Executive Officer and Secretary of the Company, had agreed to provide the Company with a standby commitment to purchase convertible debentures of the Company (“Convertible Debentures”) in an aggregate maximum amount of $8,000,000 (the “Total Commitment Amount”).  Pursuant to the Summary of Terms and Conditions, executed and delivered as of November 30, 2006 by the Company and Mr. Vamvakas, during the 12-month commitment term commencing on November 30, 2006, upon no less than 45 days’ written notice by the Company to Mr. Vamvakas, Mr. Vamvakas was obligated to purchase Convertible Debentures in the aggregate principal amount specified in such written notice. A commitment fee of 200 basis points was payable by the Company on the undrawn portion of the Total Commitment Amount. Any Convertible Debentures purchased by Mr. Vamvakas would have carried an interest rate of 10% per annum and would have been convertible, at Mr. Vamvakas’ option, into shares of the Company’s common stock at a conversion price of $2.70 per share. The Summary of Terms and Conditions further provided that if the Company closes a financing with a third party, whether by way of debt, equity or otherwise and there are no Convertible Debentures outstanding, then the Total Commitment Amount was to be reduced automatically upon the closing of the financing by the lesser of: (i) the Total Commitment Amount; and (ii) the net proceeds of the financing. On February 6, 2007, the Company raised gross proceeds in the amount of $10,016,000 in a private placement of shares of its common stock and warrants. The Total Commitment Amount was therefore reduced to zero, thus effectively terminating Mr. Vamvakas’ standby commitment. No portion of the standby commitment was ever drawn down by the Company, and the Company paid Mr. Vamvakas a total of $29,808 in commitment fees in February 2007.

92

The Company entered into a consultancy and non-competition agreement on July 1, 2003 with the Center for Clinical Research (“CCR”), then a significant shareholder of the Company, which requires the Company to pay a fee of $5,000 per month. For the year ended December 31, 2003, CCR agreed to forego the payment of $75,250 due to it in exchange for options to purchase 20,926 shares of the Company’s common stock at an exercise price of $0.13 per share. In addition, CCR agreed to the repayment of the balance of $150,500 due to it at a rate of $7,500 per month beginning in July 2003. On August 22, 2005, the Company amended the consultancy and non-competition agreement with CCR such that the fee payable to it was increased from $5,000 to $15,000 per month effective January 1, 2005. The monthly fee is fixed regardless of actual time incurred by CCR in performance of the services rendered to the Company. The agreement allows either party to convert the payment arrangement to a fee of $2,500 daily. In the event of such conversion, CCR shall provide services on a daily basis as required by the Company and will invoice the Company for the total number of days that services were provided in that month. The amended consultancy and non-competition agreement provides for the payment of a one-time bonus of $200,000 upon receipt by the Company of FDA approval of the RHEO™ System and the grant of 60,000 options to CCR at an exercise price of $7.15 per share. The stockholders of the Company approved the adjustment of the exercise price of these options to $2.05 per share on June 23, 2006. These options were scheduled to vest as to 100% when and if the Company receives FDA approval of the RHEO™ System on or before November 30, 2006, as to 80% when and if the Company receives FDA approval after November 30, 2006 but on or before January 31, 2007 and as to 60% when and if the Company receives FDA approval after January 31, 2007. In August 2006, by letter agreement between the Company and CCR, it was agreed that the monthly fee of $15,000 would be suspended at the end of August 2006 until CCR’s services are required by the Company in the future. This resulted in a consulting expense, included within clinical and regulatory expense for the years ended December 31, 2007 and 2006, of $10,000 and $125,000, respectively.

On September 29, 2004, the Company signed a product purchase agreement with Veris for its purchase from the Company of 8,004 treatment sets over the period from October 2004 to December 2005, a transaction valued at $6,003,000, after introductory rebates. However, due to delays in opening its planned number of clinics throughout Canada, Veris no longer required the contracted-for number of treatment sets in the period. The Company agreed to the original pricing for the reduced number of treatment sets required in the period. Dr. Jeffrey Machat, who is an investor in, and one of the directors of, Veris, was a co-founder and former director of TLC Vision. In December 2005, by letter agreement, the Company agreed to the volume and other terms for the purchase and sale of treatment sets and pumps for the period ending February 28, 2006. As of December 31, 2005, the Company had received a total of $1,779,566 from Veris. Included in amounts receivable, net at December 31, 2005, was $1,049,297 due from Veris for the purchase of additional pumps and treatment sets. Veris agreed to the payment of interest at the rate of 8% per annum on all amounts outstanding for more than 45 days up to March 31, 2006, the expected date of final payment. In January 2006, the Company received from Veris an interest payment of $4,495 on amounts outstanding for more than 45 days to December 31, 2005. On February 3, 2006, the Company announced that the MIRA-1 clinical trial had not met its primary efficacy endpoint and that it would be more likely than not that the Company will be required to conduct a follow-up clinical trial of the RHEO™ System in order to support its Pre-Market Approval application to the FDA. Because of this delay in being able to pursue commercialization of the RHEO™ System in the United States and the resulting market reaction to this news and based on discussions with Veris, the Company believed that Veris would not be able to meet its financial obligations to the Company. Therefore, during the year ended December 31, 2005, the Company recorded an allowance for doubtful accounts of $1,049,297 against the amount due from Veris and did not accrue additional interest on the amount outstanding during the year ended December 31, 2006.

93

In April 2006, the Company agreed to sell a total of 1,000 treatment sets, with a negotiated discount, to Veris at a price of $200 per treatment set, which is lower than the Company’s cost. It was also agreed that payment for the treatment sets must be received by the Company in advance of shipment.  In July 2006, Veris negotiated new payment terms with the Company, and it was agreed that payment for treatment sets shipped subsequent to June 2006 must be received within 60 days of shipment. The Company also agreed that all sales of treatment sets made to Veris to the end of 2006 will remain at the discounted price of $200 per treatment set. During the year ended December 31, 2006, the Company received a total of $171,800 from Veris for the purchase of 1,207 treatment sets. The sale of the treatment sets was included in revenue for the year ended December 31, 2006 as all the treatment sets had been delivered to Veris. In November 2006, the Company sold 348 treatment sets to Veris for $73,776, including applicable taxes, payment for which was not received by the Company within the agreed 60-day credit period. The sale of these treatment sets was not recognized as revenue during the year ended December 31, 2006 as the Company believed that Veris would not be able to meet its financial obligations to the Company. In January 2007, the Company met with the management of Veris and agreed to forgive the outstanding amount receivable of $73,776 for the purchase of 348 treatment sets delivered to Veris in November 2006. This amount was therefore not included in amounts receivable, net as of December 31, 2006. In addition, the Company recorded an inventory loss of $60,987 in the year ended December 31, 2006 for the sale of these 348 treatment sets since these treatment sets had been delivered to Veris already.

In June 2006, Veris returned four pumps which had been sold to it in December 2005. In fiscal 2005, the Company had recorded an inventory loss associated with all sales made to Veris in December 2005 and did not recognize revenue due to the Company’s anticipation that Veris may not return the products shipped to it and would not be able to pay for the amounts invoiced. Accordingly, during fiscal 2006, amounts receivable, net and the allowance for doubtful accounts recorded against the amount due from Veris have been reduced by the invoiced amount for the four pumps of $143,520. In addition, the cost of the four pumps returned by Veris, valued at $85,058, was used to reduce the cost of goods sold in the period.

On November 6, 2006, the Company amended its product purchase agreement with Veris and agreed to forgive the outstanding amount receivable of $904,101 from Veris which had been owing for the purchase of treatment sets and pumps and for related services delivered or provided to Veris during the period from September 14, 2005 to December 31, 2005. In consideration of the forgiveness of this debt, Veris agreed that the Company did not owe Veris any amounts whatsoever in connection with (i) the use by the Company of the leasehold premises located at 5280 Solar Drive in Mississauga, Ontario or (ii) legal fees and expenses incurred by Veris prior to February 14, 2006 with respect to certain of Veris’ trademarks that had been assigned to the Company, and licensed back to Veris, on February 14, 2006.

In March 2007, Veris negotiated new payment terms with the Company, and it was agreed that payment for treatment sets shipped subsequent to March 2007 must be received within 180 days of shipment. During the year ended December 31, 2007, the Company sold a total of 816 treatment sets to Veris, for a total amount of $172,992, plus applicable taxes. The sale of these treatment sets was not recognized as revenue during the year ended December 31, 2007 based on Veris’ payment history with the Company and the new 180-day payment terms agreed by Veris and the Company. In October 2007, the Company met with the management of Veris and, based on discussions with Veris, the Company believes that Veris will not be able to meet its financial obligations to the Company. Therefore, during the year ended December 31, 2007, the Company recorded an allowance for doubtful accounts of $172,992 against the total amount due from Veris for the purchase of these treatment sets.

The Company also entered into a clinical trial agreement on November 22, 2005 with Veris which required Veris to provide certain clinical trial services to the Company. The agreement provided for an advance payment of C$195,000 to Veris which represents 30% of the total value of the contract. The Company paid Veris C$195,000 on November 22, 2005 as provided for in the clinical trial agreement. This amount has been expensed during the year ended December 31, 2005 as the Company has suspended the clinical trial in question.

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During the fourth quarter of 2004, the Company began a business relationship with Innovasium Inc. Innovasium Inc. designed and built some of the Company’s websites and also created some of the sales and marketing materials to reflect the look of the Company’s websites. Daniel Hageman, who is the President and one of the owners of Innovasium Inc., is the spouse of a former officer of the Company. During the years ended December 31, 2007 and 2006, the Company paid Innovasium Inc. C$74,932 and C$44,219, respectively. Included in accounts payable and accrued liabilities at December 31, 2007 and 2006 is nil and nil, respectively, due to Innovasium Inc. These amounts are expensed in the period incurred and paid when due.

13. INCOME TAXES

Significant components of the Company’s deferred tax assets and liabilities are as follows:

	December 31,
		2007 $		2006 $
Deferred tax assets
Intangibles		144,644		1,547,214
Fixed assets		50,902		3,457
Stock options		4,998,697		4,845,559
Accruals and other		2,935,841		2,244,941
Research tax credit		12,801,402		215,719
Net operating loss carryforwards		27,292,240		23,355,282
		48,223,726		32,212,172
Valuation allowance		(45,915,455	)	(29,428,172	)
Deferred tax asset of continuing operations		2,308,271		2,010,605
Deferred tax asset of discontinued operations		—		773,395
		2,308,271		2,784,000
Deferred tax liability
Intangible assets (other than goodwill)		(2,308,271	)	(21,723,417	)
Deferred tax liability of continuing operations		(2,308,271	)	(9,862,272	)
Deferred tax liability of discontinued operations		—		(11,861,145	)
		(2,308,271	)	(21,723,417	)
Deferred tax liability of continuing operations, net		—		(7,851,667	)
Deferred tax liability of discontinued operations, net		—		(11,087,750	)

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The following is a reconciliation of the recovery of income taxes between those that are expected, based on substantively enacted tax rates and laws, to those currently reported:

	December 31,
	2007			2006			2005
				restated – notes 2 and 10
		$			$			$
Loss from continuing operations before income taxes		(38,365,284	)		(83,530,609	)		(163,472,510	)
Expected recovery of income taxes		(13,927,612	)		(30,255,276	)		(60,486,249	)
Non-controlling interest		(873,137	)		(63,050	)		—
Goodwill impairment		(14,165,305	)		23,740,447			54,557,150
Stock-based compensation		(677,699	)		55,117			38,628
Rate change		—			322,321			12,923
Tax free income		—			(864	)		(46,979	)
Return to provision		(35,270	)		(180,455	)		1,252,842
Non-deductible expenses		252,519			89,360			19,656
Change in valuation allowance		22,771,636			3,404,355			4,009,500
Recovery of income taxes from continued operations		(5,654,868	)		(2,888,490	)		(642,529	)
Recovery of income taxes from discontinued operations		(9,349,882	)		(1,182,005	)		—
Total recovery of income taxes		15,004,750			(4,070,495	)		(642,529	)

The Company and its subsidiaries have current and prior year losses available to reduce taxable income and taxes payable in future years, and, if these losses are not utilized, they will expire as follows:

	$
2012	3,455,029
2018	4,500,401
2019	1,893,700
2020	4,488,361
2021	3,356,992
2022	2,497,602
2023	1,901,399
2024	6,494,479
2025	12,985,677
2026	12,339,131
2027	21,451,150

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14. ACCRUED LIABILITIES

	December 31,
	2007 $		2006 $
Continuing operations
Due to professionals		475,044		688,619
Due to clinical trial sites		136,681		110,798
Due to clinical trial specialists		116,359		113,142
Product development costs		277,521		124,312
Due to employees and directors		66,804		418,682
Sales tax and capital tax payable		26,820		12,394
Corporate compliance		246,675		227,475
Interest payable		—		10,758
Severances		1,312,721		—
Miscellaneous		214,826		130,978
		2,873,451		1,837,158
Discontinued operations
Due to professionals		—		20,428
Due to clinical trial sites		—		84,276
Due to clinical trial specialists		—		93,500
Due to employees and directors		—		45,464
Miscellaneous		—		10,111
		—		253,779

15. COMMITMENTS AND CONTINGENCIES

Commitments

The Company has commitments relating to operating leases for rental of office space and equipment from unrelated parties. The total future minimum obligation under the various leases is $197,374 for 2008. Rent paid under these leases was $90,465, $80,329 and $60,207 for the years ended December 31, 2007, 2006 and 2005, respectively. All Canadian dollar amounts have been converted at the year-end exchange rate.

In May and June 2002, the Company entered into two separate agreements with Dr. Richard Brunner and Mr. Stock, respectively, to obtain the exclusive license to U.S. Patent No. 6,245,038. The Company is required to make royalty payments totaling 1.5% of product sales. The Company is required to make minimum advance quarterly royalty payments of $25,000 and amounts credited against future royalty payments to be made in accordance with the agreements. These agreements may be terminated by the Company upon the first to occur of:

(a) all patents of the patent rights expiring, which is June 2017;

(b) all patent claims of the patent rights being invalidated; or

(c) the introduction of a similar competing technology deployed in the United States which could not be deterred by enforcement of the patent.

On August 6, 2004, the Company entered into a patent license and royalty agreement with Mr. Stock to obtain an exclusive license to U.S. Patent No. 6,245,038. The Company is required to make royalty payments totaling 1.5% of product sales to Mr. Stock, subject to minimum advance royalty payments of $12,500 per quarter. The advance payments are credited against future royalty payments to be made in accordance with the agreement. This agreement replaces the June 2002 consulting agreement with Mr. Stock, which provided for a royalty payment of 1% of product sales. This agreement effectively increases the total royalty payments required to be made in respect of U.S. Patent No. 6,245,038 to 2% of product sales (note 12).

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Future minimum royalty payments under the agreements as at December 31, 2007 are approximately as follows:

	$
2008		100,000
2009		100,000
2010		100,000
2011		100,000
2012 and thereafter		550,000
		950,000

In addition, the Company entered into a consultancy and non-competition agreement on July 1, 2003 with CCR (note 12), which requires the Company to pay a fee of $5,000 per month. On August 22, 2005, the Company amended the consultancy and non-competition agreement with CCR such that the fee payable was increased from $5,000 to $15,000 per month effective January 1, 2005. The monthly fee is fixed regardless of actual time incurred by CCR in performance of the services rendered to the Company. The agreement allows either party to convert the payment arrangement to a fee of $2,500 daily. In the event of such conversion, CCR shall provide services on a daily basis as required by the Company and will invoice the Company for the total number of days that services were provided in that month. The amended consultancy and non-competition agreement provides for the payment of a one-time bonus of $200,000 upon receipt by the Company of FDA approval of the RHEO™ System and the grant of 60,000 options to CCR at an exercise price of $7.15 per share. The stockholders of the Company approved the adjustment of the exercise price of these options to $2.05 per share on June 23, 2006 (note 16(e)). These options were scheduled to vest as to 100% when and if the Company receives FDA approval of the RHEO™ System on or before November 30, 2006, as to 80% when and if the Company receives FDA approval after November 30, 2006 but on or before January 31, 2007 and as to 60% when and if the Company receives FDA approval after January 31, 2007. In August 2006, by letter agreement between the Company and CCR, it was agreed that the monthly fee of $15,000 would be suspended at the end of August 2006 until CCR’s services will be required by the Company in the future. The future minimum obligation under the consultancy and non-competition agreement for 2008 is therefore nil.

The Company entered into consulting agreements with individual members of its Scientific Advisory Board (“SAB”). The SAB was established in fiscal 2005 to advise the Company on its continuing research and development activities. In light of the Company’s financial position, on November 1, 2007, the Company announced an indefinite suspension of the RHEO™ System clinical development program for Dry AMD.  That decision was made following a comprehensive review of the respective costs and development timelines associated with the products in the Company’s portfolio and, in particular, the fact that, if the Company were unable to raise additional capital, it would not have had sufficient cash to support its operations beyond early 2008. Accordingly, the Company terminated its agreements with the individual members of the SAB effective November 1, 2007. The future minimum obligation under the various consulting agreements is therefore nil. Consulting fees paid amounted to $218,929, $244,165 and nil for the years ended December 31, 2007, 2006 and 2005.

On November 30, 2006, pursuant to the Series A Preferred Stock Purchase Agreement between the Company and OcuSense, the Company purchased 1,744,223 shares of OcuSense’s Series A Preferred Stock representing 50.1% of OcuSense’s capital stock on a fully diluted basis for an aggregate purchase price of up to $8,000,000 (the “Purchase Price”). On the closing of the purchase which took place on November 30, 2006, the Company paid $2,000,000 of the Purchase Price. The Company paid another $2,000,000 installment of the Purchase Price on January 3, 2007. In June 2007, the Company paid the third $2,000,000 installment of the Purchase Price upon the attainment by OcuSense of the first of two pre-defined milestones. The Company is expected to pay the last $2,000,000 installment of the Purchase Price upon the attainment by OcuSense of the second of such milestones, provided that the milestone is achieved prior to May 1, 2009. The Series A Preferred Stock Purchase Agreement also makes provision for an ability on the part of the Company to increase its ownership interest in OcuSense for nominal consideration if OcuSense fails to meet certain milestones by specified dates. In addition, pursuant to the Series A Preferred Stock Purchase Agreement, the Company has agreed to purchase $3,000,000 of shares of OcuSense’s Series B Preferred Stock, which shall constitute 10% of OcuSense’s capital stock on a fully diluted basis at the time of purchase, upon OcuSense’s receipt from the FDA of 510(k) clearance for the TearLab™ test for DED and to purchase another $3,000,000 of shares of OcuSense’s Series B Preferred Stock, which shall constitute an additional 10% of OcuSense’s capital stock on a fully diluted basis at the time of purchase, upon OcuSense’s receipt from the FDA of CLIA waiver for the TearLab™ test for DED (note 4).

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On April 4, 2007, the Company entered into an independent contractor services agreement with Carol Jones for the purpose of providing consulting services for the Company’s clinical trial activities. The agreement requires the Company to pay a minimum fee of $1,750 per month during the period from April 4, 2007 to April 4, 2008. Future minimim obligation under the independent contractor services agreement is $24,500 for 2008.

On January 25, 2007, OcuSense entered into a consulting agreement with Dr. Michael Lemp which requires the Company to pay a consulting fee of $8,333 per month. Future minimim obligation under the consulting agreement is $100,000 for 2008.

On February 1, 2007, OcuSense entered into a consulting agreement with Nancy Cahill which requires the Company to pay a consulting fee of $1,000 per month. Future minimim obligation under the consulting agreement is $12,000 for 2008.

On September 17, 2007, OcuSense signed a letter of agreement with KAM Communications for the purpose of providing marketing support for the future launch of the TearLab™ test for DED which requires the Company to pay a monthly fee of $2,398. Future minimum obligation under the agreement is $16,786 for 2008.

Contingencies

During the ordinary course of business activities, the Company may be contingently liable for litigation and a party to claims. Management believes that adequate provisions have been made in the accounts where required. Although it is not possible to estimate the extent of potential costs and losses, if any, management believes that the ultimate resolution of any such contingencies will not have a material adverse effect on the financial position and results of operations of the Company.

Pursuant to the terms of the distribution agreement with MeSys, dated January 1, 2002, the Company undertook a commitment to purchase a minimum of 25 OctoNova pumps yearly, beginning after receipt of FDA approval of the RHEO™ System, representing an annual commitment of approximately $534,900. The marketing and distributorship agreement with Diamed provides for a minimum purchase of 1,000 OctoNova pumps during the period from the date of the agreement until the end of the five-year period following receipt of FDA approval, representing an aggregate commitment of €16,219,000, or approximately $23,871,935, based on exchange rates as of December 31, 2007. The Company is currently engaged in discussions with Diamed and MeSys regarding the termination of its relationship with each of them.  Diamed is the designer, and MeSys is the manufacturer, of the OctoNova pump, one of the key components of the RHEO™ System.

16. CAPITAL STOCK

(a) Authorized share capital

The total number of authorized shares of common stock of the Company is 75,000,000. Each share of common stock has a par value of $0.001 per share. The total number of authorized shares of preferred stock of the Company is 10,000,000. Each share of preferred stock has a par value of $0.001 per share.

(b) Reorganizations

(i) On July 18, 2002, the Company’s former parent company, OccuLogix Corp. (“Old OccuLogix”), merged with the Company, which was then a wholly-owned subsidiary of Old OccuLogix, to form OccuLogix, Inc. Pursuant to the merger, the Company effected a one-for-four stock split of its common and convertible preferred stock pursuant to which each share of Old OccuLogix common stock outstanding immediately prior to the merger was converted into one-fourth of one fully paid and non-assessable share of the Company’s common stock. Each outstanding share of Old OccuLogix Series A preferred stock was converted into one-fourth of one fully paid and non-assessable share of the Company’s Series A convertible preferred stock.

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At the effective time of the merger, each outstanding warrant and option to purchase common stock of Old OccuLogix was assumed by the Company and converted into a warrant or option to purchase common stock of the Company, with appropriate adjustments to the exercise price and number of shares for which such warrants or options were exercisable.

(ii) On December 8, 2004, the Company consummated certain reorganization transactions, which are collectively referred to as the “Reorganization” and which consisted of the following:

· 4,622,605 shares of common stock issued upon the automatic conversion of all outstanding shares of Series A and Series B convertible preferred stock;

· 7,106,454 shares of common stock issued to TLC Vision and Diamed upon conversion of $7,000,000 aggregate principal amount of convertible grid debentures held by them, the conversion price was $0.98502 per share; and

· 19,070,234 shares of common stock issued to TLC Vision in connection with the purchase by the Company of TLC Vision’s 50% interest in OccuLogix L.P. (the “Partnership”), this amount included 1,281,858 shares of common stock which were issued upon the exchange of shares of OccuLogix ExchangeCo ULC, one of the Company’s Canadian subsidiaries, issued for tax purposes to TLC Vision in connection with the Company’s purchase of TLC Vision’s interest in the Partnership.

Following the Reorganization, the Partnership’s U.S. business was carried on, and will continue to be carried on, by OccuLogix LLC, a Delaware limited liability company that is the Company’s wholly-owned, indirect subsidiary. The Partnership carried on the Canadian business until December 31, 2005.

The Company had licensed to the Partnership all of the distribution and marketing rights for the RHEO™ System for ophthalmic indications to which it is entitled. Prior to the Reorganization, the Company’s only profit stream came from its share of the Partnership’s earnings. The Company’s acquisition of TLC Vision’s 50% ownership interest in the Partnership, achieved through the Reorganization, moved the earnings potential for sales of the RHEO™ System to the Company.

(iii) On December 31, 2005, the Partnership transferred all of its assets and liabilities, and assigned its right to develop and sell the RHEO™ System, to OccuLogix Canada Corp., a wholly-owned subsidiary of the Company. Following the transfer, the Partnership’s Canadian business will be carried on by OccuLogix Canada Corp. The Partnership and its general partner have subsequently been wound up.

(c) Convertible preferred stock

Convertible preferred stockholders were entitled to one vote per share, on an “as-converted to common stock” basis. Each share of Series A and Series B Convertible Preferred Stock was entitled to receive a non-cumulative dividend of $0.411216 and $0.34698, respectively, prior to the payment of any dividend on common stock. Each share of Series A and Series B Convertible Preferred Stock was entitled to a liquidation preference of $4.836 and $3.5183, respectively, plus any declared but unpaid dividend before any payment could be made to holders of common stock.

After giving effect to the anti-dilution adjustment resulting from the issuance of the June 25, 2003 related party secured grid debentures (note 12), each share of Series A and Series B Convertible Preferred Stock was convertible into 1.678323 and 1.643683 shares of common stock, respectively, at the option of the holder. Each share of Series A and Series B Convertible Preferred Stock would automatically convert into shares of common stock at the conversion rate previously described if the Company obtained a firm underwriting commitment for an initial public offering. The conversion rate would be adjusted for stock dividends, stock splits and other dilutive events. Shares of Series A and Series B Convertible Preferred Stock would automatically convert in the event of sale of all or substantially all of the assets or capital stock of the Company.

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(d) Common stock

In December 2004, 5,600,000 shares of common stock of the Company at $12.00 per share were issued in connection with the initial public offering for gross cash proceeds of $67,200,000 (less issuance costs of $7,858,789).

On September 1, 2006, the Company issued 8,399,983 shares of its common stock to the former stockholders of SOLX in connection with the acquisition of SOLX. The stock consideration was valued based on a per share price of $1.79, being the weighted-average closing sale price of the Company’s common stock as traded on NASDAQ over the two-day trading period before and after August 1, 2006, being the date the terms of the acquisition of SOLX were agreed to and announced (note 4).

On February 1, 2007, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with certain institutional investors, pursuant to which the Company agreed to issue to those investors an aggregate of 6,677,333 shares of the Company’s common stock (the “Shares”) and five-year warrants exercisable into an aggregate of 2,670,933 shares of the Company’s common stock (the “Warrants”).  The per share purchase price of the Shares was $1.50, and the per share exercise price of the Warrants is $2.20, subject to adjustment.  The Warrants became exercisable on August 6, 2007. Pursuant to the Securities Purchase Agreement, on February 6, 2007, the Company issued the Shares and the Warrants. The gross proceeds of the sale of the Shares and the Warrants totaled $10,016,000 (less transaction costs of $871,215). On February 6, 2007, the Company also issued to Cowen and Company, LLC a five-year warrant exercisable into an aggregate of 93,483 shares of the Company’s common stock (the “Cowen Warrant”) in part payment of the placement fee payable to Cowen and Company, LLC for the services it had rendered as the placement agent in connection with the sale of the Shares and the Warrants. All of the terms and conditions of the Cowen Warrant (other than the number of shares of the Company's common stock into which the Cowen Warrant is exercisable) are identical to those of the Warrants. The estimated grant date fair value of the Cowen Warrant of $97,222 is included in the transaction costs of $871,215 (note 16(f)).

101

As at December 31, 2007, the number of shares of common stock of the Company reserved for issuance upon the exercise of stock options is as follows:

Expiry date	Range of exercise prices $		#
2008		2.05	25,000
2009		2.00 – 2.05	167,625
2010		2.00 – 2.05	119,375
2012		0.80 – 2.00	96,090
2013		0.99 – 1.30	1,079,798
2014		2.05	675,000
2015		2.05	949,500
2016		1.77 – 2.14	728,749
2017		1.11 – 1.82	946,250
			4,787,387

(e) Stock Option Plan

The Company has a stock option plan, the 2002 Stock Option Plan (the “Stock Option Plan”), which was most recently amended in June 2007 in order to, among other things, increase the share reserve under the Stock Option Plan by 2,000,000. Under the Stock Option Plan, up to 6,456,000 options are available for grant to employees, directors and consultants. Options granted under the Stock Option Plan may be either incentive stock options or non-statutory stock options. Under the terms of the Stock Option Plan, the exercise price per share for an incentive stock option shall not be less than the fair market value of a share of stock on the effective date of grant and the exercise price per share for non-statutory stock options shall not be less than 85% of the fair market value of a share of stock on the date of grant. No option granted to a holder of more than 10% of the Company’s common stock shall have an exercise price per share less than 110% of the fair market value of a share of stock on the effective date of grant.

Options granted may be time-based or performance-based options.  The vesting of performance-based options is contingent upon meeting company-wide goals, including obtaining FDA approval of the RHEO™ System and the achievement of a minimum amount of sales over a specified period. Generally, options expire 10 years after the date of grant. No incentive stock options granted to a 10% owner optionee shall be exercisable after the expiration of five years after the effective date of grant of such option, no option granted to a prospective employee, prospective consultant or prospective director may become exercisable prior to the date on which such person commences service, and with the exception of an option granted to an officer, director or consultant, no option shall become exercisable at a rate less than 20% per annum over a period of five years from the effective date of grant of such option unless otherwise approved by the board of directors of the Company (the “Board of Directors”).

The Company has also issued options outside of the Stock Option Plan. These options were issued before the establishment of the Stock Option Plan, when the authorized limit of the Stock Option Plan was exceeded or as permitted under stock exchange rules when the Company was recruiting executives. In addition, options issued to companies for the purpose of settling amounts owing were issued outside of the Stock Option Plan, as the Stock Option Plan prohibited the granting of options to companies. The issuance of such options was approved by the Board of Directors and granted on terms and conditions similar to those options issued under the Stock Option Plan.

On January 1, 2006, the Company adopted the provisions of SFAS No. 123R, “Share-Based Payments”, requiring the recognition of expense related to the fair value of its stock-based compensation awards. The Company elected to use the modified prospective transition method as permitted by SFAS No. 123R and therefore has not restated its financial results for prior periods. Under this transition method, stock-based compensation expense for each of the years ended December 31, 2007 and 2006 includes compensation expense for all stock-based compensation awards granted prior to, but not yet vested as of January 1, 2006 based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123. Stock-based compensation expense for all stock-based compensation awards granted subsequent to January 1, 2006 was based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123R. The Company recognizes compensation expense for stock option awards on a straight-line basis over the requisite service period of the award.

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The following table sets forth the total stock-based compensation expense resulting from stock options included in the Company’s consolidated statements of operations:

	December 31,
	2007		2006 (i)		2005 (ii)
	$		$		$
General and administrative		65,660		1,396,609		170,576
Clinical and regulatory		216,246		203,131		53,700
Sales and marketing		199,065		527,303		500
Stock-based compensation expense before income taxes (iii)(iv)		480,971		2,127,043		224,776

(i) At the annual meeting of stockholders of the Company held on June 23, 2006, the stockholders of the Company approved the re-pricing of all then out-of-the-money stock options of the Company.  Consequently, the exercise price of all outstanding stock options of the Company that, on June 23, 2006, was greater than $2.05, being the weighted average trading price of the Company’s common stock on NASDAQ during the five-trading day period immediately preceding June 23, 2006, was adjusted downward to $2.05.  2,585,000 of the Company’s outstanding stock options with a weighted average exercise price of $8.42 were affected by the re-pricing. SFAS No. 123R requires the re-pricing of equity awards to be treated as a modification of the original award and provides that such a modification is an exchange of the original award for a new award.  SFAS No. 123R considers the modification to be the repurchase of the old award for a new award of equal or greater value, incurring additional compensation cost for any incremental value.  This incremental difference in value is measured as the excess, if any, of the fair value of the modified award determined in accordance with the provisions of SFAS No. 123R over the fair value of the original award immediately before its terms are modified, measured based on the share price and other pertinent factors at that date.  SFAS No. 123R provides that this incremental fair value, plus the remaining unrecognized compensation cost from the original measurement of the fair value of the old option, must be recognized over the remaining vesting period. Of the 2,585,000 options affected by the re-pricing, 1,401,073 were vested as at December 31, 2006.  Therefore, additional compensation cost of $423,338 for the 1,401,073 stock options that were vested has been recognized and is included in the stock-based compensation expense for the year ended December 31, 2006.

In accordance with SFAS No. 123R, the Company also recorded compensation expense of $3,363 in the year ended December 31, 2006 as the Board of Directors approved accelerating the vesting of 1,250 unvested stock options granted to a terminated employee on April 28, 2006.  SFAS No. 123R treats such a modification as a cancellation of the original unvested award and the grant of a new fully vested award as of that date.

(ii) Stock-based compensation expense for the year ended December 31, 2005 relates primarily to compensation expense associated with non-employee stock options. The fair value of these options was determined using the Black-Scholes option-pricing model and was recorded in the Company’s consolidated statements of operations in accordance with the provisions of SFAS No. 123.

On December 11, 2005, the Board of Directors approved accelerating the vesting of unvested stock options granted prior to December 31, 2004 to employees, officers and directors. As a result of the vesting acceleration, options to purchase 438,561 shares of the Company’s common stock became exercisable immediately, including 308,611 held by executive officers, 48,958 held by non-employee directors and 80,992 held by other employees. These accelerated stock options represent approximately 30% of the total employee stock options of the Company that would not have been vested as at December 31, 2005. The weighted average exercise price of the options that were accelerated was $11.78. The purpose of the acceleration was to enable the Company to avoid recognizing compensation expense associated with these options of $1,532,203 and $1,466,253 during the years ended December 31, 2006 and 2007, respectively, in its consolidated statements of operations as a result of the adoption of SFAS No. 123R on January 1, 2006. In accordance with APB No. 25, the Company recorded a compensation expense of $53,295 for the year ended December 31, 2005 as 9,033 of the total options, of which the vesting was accelerated, were “in-the-money” as at the date of the accelerated vesting. With respect to SFAS No. 123, the Company recognized, for purposes of pro forma disclosures, the incremental increase in fair value and the remaining balance of unrecognized compensation cost for the affected options at the time of acceleration.

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In accordance with APB No. 25, the Company also recorded a compensation expense of $4,431 for the year ended December 31, 2005 as certain performance-based options granted to an employee and two directors were “in-the-money” as at December 31, 2005.

(iii) The tax benefit associated with the Company’s stock-based compensation expense for the years ended December 31, 2007, 2006 and 2005 is $964,644, $781,527 and nil, respectively. This amount has not been recognized in the Company's consolidated financial statements for the years ended December 31, 2007 and 2006 as there is a low probability that the Company will realize this benefit.

(iv) Of the total stock-based compensation expense of $480,971, $2,127,043 and $224,776 included in the Company’s consolidated statements of operations for the years ended December 31, 2007, 2006 and 2005, respectively, $72,800, $36,287 and nil is included as stock-based compensation expense of discontinued operations for the years ended December 31, 2007, 2006 and 2005, respectively.

Net cash proceeds from the exercise of common stock options were $2,228, $270,935 and $231,235 for the years ended December 31, 2007, 2006 and 2005, respectively. No income tax benefit was realized from stock option exercises during the years ended December 31, 2007, 2006 and 2005. In accordance with SFAS No. 123R, the Company presents excess tax benefits from the exercise of stock options, if any, as financing cash flows rather than operating cash flows.

Prior to the adoption of SFAS No. 123R, the Company applied the provisions of SFAS No. 123, which allowed companies either to expense the estimated fair value of employee stock options or to follow the intrinsic value method as set forth in APB No. 25 but required companies to disclose the pro forma effects on net loss as if the fair value of the options had been expensed. The Company elected to apply APB No. 25 in accounting for employee stock options. Therefore, as required by SFAS No. 123, prior to the adoption of SFAS No. 123R, the Company provided pro forma net loss and pro forma net loss per share disclosures for stock-based awards as if the fair value of the options had been expensed.

The following table illustrates the pro forma net loss and net loss per share of common stock as if the fair value method had been applied to all awards during the year ended December 31, 2005:

	$
Net loss, as reported	(162,829,981	)
Adjustment for APB No. 25	57,726
Adjustment for SFAS No. 123	(6,664,395	)
Pro forma net loss	(169,436,650	)
Pro forma net loss per share - basic and diluted	(4.04	)

The weighted average fair value of stock options granted during the years ended December 31, 2007, 2006 and 2005 was $0.90, $1.77 and $3.54, respectively. The estimated fair value was determined using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	Years ended December 31,
	2007		2006		2005
Volatility		0.765		0.901		0.728
Expected life of options		5.85 years		5.56 years		2.33 years
Risk-free interest rate		4.87%		4.83%		3.87%
Dividend yield		0%		0%		0%

The Company’s computation of expected volatility for the years ended December 31, 2007, 2006 and 2005 is based on a comparable company’s historical stock prices as the Company did not have sufficient historical data. The Company’s computation of expected life has been estimated using the “short-cut approach” as provided in SAB No. 110 as options granted by the Company meet the criteria of “plain vanilla” options as defined in SAB No. 110. Under this approach, estimated life is calculated to be the mid-point between the vesting date and the end of the contractual period. The risk-free interest rate for an award is based on the U.S. Treasury yield curve with a term equal to the expected life of the award on the date of grant.

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A summary of the options issued during the year ended December 31, 2007 and the total number of options outstanding as of that date and changes since December 31, 2004 are set forth below:

	Number of Options Outstanding			Weighted Average Exercise Price $		Weighted Average Remaining Contractual Life (years)		Aggregate Intrinsic Value $
Outstanding, December 31, 2004		2,749,199			4.64		8.31		—
Granted		1,823,750			8.10
Exercised		(279,085	)		0.83
Forfeited		(186,250	)		9.99
Outstanding, December 31, 2005		4,107,614			1.75		8.20		—
Granted		890,000			1.99
Exercised		(140,726	)		1.93
Forfeited		(619,667	)		2.05
Outstanding, December 31, 2006 (i)		4,237,221			1.75		7.61		—
Granted		1,077,500			1.31
Exercised		(2,250	)		0.99
Forfeited		(525,084	)		1.83
Outstanding, December 31, 2007		4,787,387			1.64		7.41		—
Vested or expected to vest, December 31, 2007		3,203,728			1.61		6.48		—
Exercisable, December 31, 2007		3,006,637			1.61		6.32		—

(i) At the annual meeting of stockholders of the Company held on June 23, 2006, the stockholders of the Company approved the re-pricing of all then out-of-the-money stock options of the Company.  Consequently, the exercise price of all outstanding stock options of the Company that, on June 23, 2006, was greater than $2.05, being the weighted average trading price of the Company’s common stock on NASDAQ during the five-trading day period immediately preceding June 23, 2006, was adjusted downward to $2.05.

The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of fiscal 2007 of $0.08 and the exercise price, multiplied by the number of shares that would have been received by the option holders if the options had been exercised on December 31, 2007). This amount is nil for all the years presented as the exercise price of all options outstanding as at December 31, 2007, 2006, 2005 and 2004 is higher than $0.08, the Company’s closing stock price on the last trading day of fiscal 2007.

As at December 31, 2007, $3,870,931 of total unrecognized compensation cost related to stock options is expected to be recognized over a weighted-average period of 1.85 years.

 (f) Warrants

On February 6, 2007, pursuant to the Securities Purchase Agreement between the Company and certain institutional investors (note 16(d)), the Company issued the Warrants to these investors. The Warrants are five-year warrants exercisable into an aggregate of 2,670,933 shares of the Company’s common stock. On February 6, 2007, the Company also issued the Cowen Warrant to Cowen and Company, LLC in part payment of the placement fee payable to Cowen and Company, LLC for the services it had rendered as the placement agent in connection with the private placement of the Shares and the Warrants pursuant to the Securities Purchase Agreement. The Cowen Warrant is a five-year warrant exercisable into an aggregate of 93,483 shares of the Company’s common stock. The per share exercise price of the Warrants is $2.20, subject to adjustment, and the Warrants became exercisable on August 6, 2007. All of the terms and conditions of the Cowen Warrant (other than the number of shares of the Company's common stock into which it is exercisable) are identical to those of the Warrants.

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The Company accounts for the Warrants and the Cowen Warrant in accordance with the provisions of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS No. 133”), along with related interpretation EITF No. 00-19, “Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock” (“EITF No. 00-19”). SFAS No. 133 requires every derivative instrument within its scope (including certain derivative instruments embedded in other contracts) to be recorded on the balance sheet as either an asset or liability measured at its fair value, with changes in the derivative’s fair value recognized currently in earnings unless specific hedge accounting criteria are met. Based on the provisions of EITF No. 00-19, the Company determined that the Warrants and the Cowen Warrant do not meet the criteria for classification as equity. Accordingly, the Company has classified the Warrants and the Cowen Warrant as a current liability at December 31, 2007.

The estimated fair value of the Warrants and the Cowen Warrant was determined using the Black-Scholes option-pricing model with the following weighted-average assumptions:

Volatilit	79.8%
Expected life of Warrants	5 years
Risk-free interest rate	4.76%
Dividend yield	0%

The Company initially allocated the total proceeds received, pursuant to the Securities Purchase Agreement, to the Shares and the Warrants based on their relative fair values. This resulted in an allocation of $2,052,578 to obligation under warrants which includes the fair value of the Cowen Warrant of $97,222.

In addition, SFAS No. 133 requires the Company to record the outstanding derivatives at fair value at the end of each reporting period, resulting in an adjustment to the recorded liability of the derivative, with any gain or loss recorded in earnings of the applicable reporting period. The Company therefore estimated the fair value of the Warrants and the Cowen Warrant as at December 31, 2007 and determined the aggregate fair value to be a nominal amount, a decrease of approximately $2,052,578 over the initial measurement of the aggregate fair value of the Warrants and the Cowen Warrant on the date of issuance. Accordingly, the Company recognized a gain of $2,052,578 in its consolidated statement of operations for the year ended December 31, 2007 which reflects the decrease in the Company’s obligation to its warrant holders to its nominal amount at December 31, 2007.

Transaction costs associated with the issuance of the Warrants of $170,081 has been recorded as a warrant expense in the Company’s consolidated statement of operations for the year ended December 31, 2007.

A summary of the Warrants issued during the year ended December 31, 2007 and the total number of warrants outstanding as of that date are set forth below:

	Number of Warrants Outstanding #		Weighted Average Exercise Price $
Outstanding, December 31, 2006		—		—
Granted		2,764,416		2.20
Outstanding, December 31, 2007		2,764,416		2.20

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17. CONSOLIDATED STATEMENTS OF CASH FLOWS

The net change in non-cash working capital balances related to operations consists of the following:

	Years ended December 31,
	2007 $			2006 $			2005 $
Due to related party		—			(5,065	)		13,291
Amounts receivable		(58,782	)		390,634			(82,810	)
Inventory		2,756,759			2,250,554			(3,431,743	)
Prepaid expenses		37,951			247,361			(322,455	)
Accounts payable		797,415			(1,225,575	)		301,457
Accrued liabilities		911,987			(1,155,335	)		(563,925	)
Deferred revenue and rent inducement		—			—			(485,047	)
Due to stockholders		(109,842	)		(5,827	)		(358,523	)
Other current assets		7,000			12,781			4,105
		4,342,488			509,528			(4,925,650	)

The following table lists those items that have been excluded from the consolidated statements of cash flows as they relate to non-cash transactions and additional cash flow information:

	Years ended December 31,
	2007 $		2006 $			2005 $
Free inventory		418,303		(48,006	)		183,382
Warrant issued in part payment of placement fee		97,222		―			—
Common stock issued on acquisition		—		15,035,969			―
Additional cash flow information
Interest paid		11,180		―			—
Income taxes recovered (paid), net		—		4,533			(8,138	)

18. FINANCIAL INSTRUMENTS

Currency risk

The Company’s activities which result in exposure to fluctuations in foreign currency exchange rates consist of the purchase of equipment from suppliers billing in foreign currencies. The Company does not use derivative financial instruments to reduce its currency risk.

Credit risk

The Company’s financial instruments that are exposed to concentration of credit risk consist primarily of cash and cash equivalents and amounts receivable. The Company maintains its accounts for cash with large low credit risk financial institutions in the United States and Canada in order to reduce its exposure.

During fiscal 2007, the Company derived all of its revenue from the sale of the components of the RHEO™ System and the SOLX Glaucoma System prior to the sale of all of the issued and outstanding shares of SOLX on December 19, 2007. During the year ended December 31, 2007, the Company sold components of the RHEO™ System to one of its customers, Veris. As previously discussed in note 12, the Company fully provided for the balance due from Veris. Accordingly, no trade receivables due from Veris have been recognized as at December 31, 2007.

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Fair value of financial instruments

Fair value of a financial instrument is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties. The estimated fair values of cash and cash equivalents, amounts receivable, accounts payable, accrued liabilities and amounts due from and to stockholders approximate their carrying values due to the short-term maturities of these instruments.

As at December 31, 2007, the Company had investments in the aggregate principal amount of $1,900,000 which consist of investments in four separate asset-backed auction rate securities yielding an average return of 5.865% per annum.  However, as a result of market conditions, all of these investments have recently failed to settle on their respective settlement dates and have been reset to be settled at a future date with an average maturity of 46 days.  Due to the current lack of liquidity for asset-backed securities of this type, the Company has concluded that the carrying value of these investments was higher than its fair value as of December 31, 2007. Accordingly, these auction rate securities have been recorded at their estimated fair value of $863,750. The Company considers this to be an other-than-temporary reduction in the value. Accordingly, the loss associated with these auction rate securities of $1,036,250 has been included as an impairment of investments in the Company’s consolidated statement of operations for the year ended December 31, 2007. Although the Company continues to receive payment of interest earned on these securities, the Company does not know at the present time when it will be able to convert these investments into cash.  Accordingly, management has classified these investments as a non-current asset on its consolidated balance sheet as of December 31, 2007. Management will continue to closely monitor these investments for future indications of further impairment. The illiquidity of these investments may have an adverse impact on the length of time during which the Company currently expects to be able to sustain its operations in the absence of an additional capital raise by the Company.

19. SEGMENTED INFORMATION

As a result of the acquisition of SOLX and OcuSense during 2006 (note 4), the Company had three reportable segments: retina, glaucoma and point-of-care. The retina segment was in the business of commercializing the RHEO™ System which was used to perform the Rheopheresis™ procedure, a procedure that selectively removes molecules from plasma, which is designed to treat Dry AMD. The Company began limited commercialization of the RHEO™ System in Canada in 2003 and provided support to its sole customer in Canada, Veris, in its commercial activities in Canada. The Company obtained investigational device exemption clearance from the FDA to commence RHEO-AMD, its clinical study of the RHEO™ System. On November 1, 2007, the Company announced an indefinite suspension of the RHEO™ System clinical development program for Dry AMD.  That decision was made following a comprehensive review of the respective costs and development timelines associated with the products in the Company’s portfolio and, in particular, the fact that, if the Company is unable to raise additional capital, it will not have sufficient cash to support its operations beyond approximately the end of April 2008 (assuming that the outstanding obligation of OccuLogix to pay $2,000,000 to OcuSense becomes due and payable prior to the end of April 2008) (note 4).

The glaucoma segment of the Company was in the business of providing treatment for glaucoma with the use of the components of the SOLX Glaucoma System which are used to provide physicians with multiple options to manage intraocular pressure. The Company was seeking to obtain 510(k) approval to market the components of the SOLX Glaucoma System in the United States. The Company acquired the glaucoma segment in the acquisition of SOLX on September 1, 2006; therefore, no amounts are shown for the segment in periods prior to September 1, 2006. On December 19, 2007, the Company sold all of the issued and outstanding shares of the capital stock of SOLX, which had been the glaucoma segment of the Company prior to the completion of this sale. All revenue and expenses related to the Company’s glaucoma segment, prior to the December 19, 2007 closing date, has therefore been included in discontinued operations on its consolidated statements of operations for the years ended December 31, 2007 and 2006.

The point-of-care segment is made up of the TearLab™ business which is currently developing technologies that enable eye care practitioners to test, at the point-of-care, for highly sensitive and specific biomarkers in tears using nanoliters of tear film. The Company acquired the TearLab™ business in the acquisition of 50.1% of the capital stock of OcuSense, on a fully diluted basis, on November 30, 2006; therefore, no amounts are shown in periods prior to November 30, 2006. During the year ended December 31, 2006, the TearLab™ business did not meet the quantitative criteria to be disclosed separately as a reportable segment and was included as other.

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The accounting policies of the segments are the same as those described in significant accounting policies (note 3). Intersegment sales and transfers are minimal and are accounted for at current market prices, as if the sales or transfers were to third parties.

The Company’s reportable units are strategic business units that offer different products and services. They are managed separately, because each business unit requires different technology and marketing strategies. The Company’s business units are acquired or developed as a unit, and in the case of SOLX and OcuSense, their respective management was retained at the time of acquisition.

The Company’s business units are as follows:

	Retina			Glaucoma			Point-of-care			Total
	$			$			$			$
Year ended December 31, 2007
Revenue		91,500			—			—			91,500
Expenses:
Cost of goods sold		2,398,103			—			—			2,398,103
Operating		10,230,299			—			4,577,178			14,807,477
Depreciation and amortization		2,065,088			—			590,172			2,655,260
Impairment of intangible asset		20,923,028			—			—			20,923,028
Restructuring charges		1,312,721			—			—			1,312,721
Loss from continuing operations		(36,837,739	)		—			(5,167,350	)		(42,005,089	)
Interest income		551,948			—			57,985			609,933
Interest expense		(16,444	)		—			(784	)		(17,228	)
Changes in fair value of warrant obligation		1,882,497			—			—			1,882,497
Loss on short-term investment		(1,036,250	)		—			—			(1,036,250	)
Other income (expense), net		(6,547	)		—			24,557			18,010
Minority interest		—			—			2,182,843			2,182,843
Recovery of income taxes		3,186,334			—			2,468,534			5,654,868
Loss from continuing operations		(32,276,201	)		—			(434,215	)		(32,710,416	)
Loss from discontinued operations		—			(35,428,898	)		—			(35,428,898	)
Net loss		(32,276,201	)		(35,428,898	)		(434,215	)		(68,139,314	)
Total assets		3,672,542			—			6,325,818			9,998,360

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	Retina			Glaucoma			Point-of-care			Total
	$			$			$			$
Year ended December 31, 2006
Revenue		174,259			—			—			174,259
Expenses:
Cost of goods sold		3,528,951			—			—			3,528,951
Operating		12,741,701			—			312,394			13,054,095
Depreciation and amortization		1,860,849			—			39,516			1,900,365
Impairment of goodwill		65,945,686			—			—			65,945,686
Restructuring charges		819,642			—			—			819,642
Loss from continuing operations		(84,722,570	)		—			(351,910	)		(85,074,480	)
Interest income		1,370,208			—			—			1,370,208
Interest expense		(13,592	)					(1,304	)		(14,896	)
Other income (expense), net		31,108			—			(173	)		30,935
Minority interest		—						157,624			157,624
Recovery of income taxes		2,814,058			—			74,432			2,888,490
Loss from continuing operations		(80,520,788	)		—			(121,331	)		(80,642,119	)
Loss from discontinued operations		—			(1,542,384	)		—			(1,542,384	)
Net loss for the year		(80,520,788	)		(1,542,384	)		(121,331	)		(82,184,503	)
Total assets		38,762,773			44,158,205			7,482,717			90,403,695
Year ended December 31, 2005
Revenue		1,840,289			—			—			1,840,289
Expenses:
Cost of goods sold		3,394,102			—			—			3,394,102
Operating		14,181,600			—			—			14,181,600
Depreciation and amortization		1,821,680			—			—			1,821,680
Impairment of goodwill		147,451,758			—			—			147,451,758
Loss from continuing operations		(165,008,851	)		—			—			(165,008,851	)
Interest income		1,593,366			—			—			1,593,366
Other expense, net		(57,025	)		—			—			(57,025	)
Recovery of income taxes		642,529			—			—			642,529
Net loss for the year		(162,829,981	)								(162,829,981	)
Total assets		137,806,058			—			—			137,806,058

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The Company’s geographic segments are as follows:

	United States		Canada		Europe		Israel		Total
	$		$		$		$		$
Year ended December 31, 2007
Fixed assets and intangible assets		5,972,098		60,302		—		—		6,032,400
Year ended December 31, 2006
Fixed assets and intangible assets		70,932,850		186,987		63,484		42,613		71,225,934
Year ended December 31, 2005
Fixed assets and intangible assets		90,340,988		137,686		—		—		90,478,674

20. SUBSEQUENT EVENT

(i) On February 19, 2008, the Company announced that it had secured a bridge loan in an aggregate principal amount of $3,000,000 (less transaction costs of approximately $200,000) from a number of private parties. The loan bears interest at a rate of 12% per annum and has a 180-day term, which may be extended to 270 days under certain circumstances. The Company has pledged its shares of the capital stock of OcuSense as collateral for the loan.

Under the terms of the loan agreement, the Company has two pre-payment options available to it, should it decide to not wait until the maturity date to repay the loan. Under the first pre-payment option, the Company may repay the loan in full by paying the lenders, in cash, the amount of outstanding principal and accrued interest and issuing to the lenders five-year warrants in an aggregate amount equal to approximately 19.9% of the issued and outstanding shares of the Company’s common stock (but not to exceed 20% of the issued and outstanding shares of the Company’s common stock). The warrants would be exercisable into shares of the Company’s common stock at an exercise price of $0.10 per share and would not become exercisable until the 180th day following their issuance. Under the second pre-payment option, provided that the Company has closed a private placement of shares of its common stock for aggregate gross proceeds of at least $4,000,000, the Company may repay the loan in full by issuing to the lenders shares of its common stock, in an aggregate amount equal to the amount of outstanding principal and accrued interest, at a 15% discount to the price paid by the private placement investors. Any exercise by the Company of the second pre-payment option would be subject to stockholder and regulatory approval.

(ii) On September 18, 2007, OccuLogix received a letter from The Nasdaq Stock Market, or Nasdaq, indicating that, for the previous 30 consecutive business days, the bid price of the Company’s common stock closed below the minimum $1.00 per share requirement for continued inclusion under Marketplace Rule 4450(e)(5), or the Minimum Bid Price Rule. Therefore, in accordance with Marketplace Rule 4450(e)(2), the Company was provided 180 calendar days, or until March 17, 2008, to regain compliance. The Nasdaq letter stated that, if, at any time before March 17, 2008, the bid price of the Company’s common stock closes at $1.00 per share or more for a minimum of 10 consecutive business days, Nasdaq staff will provide written notification that it has achieved compliance with the Minimum Bid Price Rule. The Nasdaq letter also stated that, if the Company does not regain compliance with the Minimum Bid Price Rule by March 17, 2008, Nasdaq staff will provide written notification that the Company’s securities will be delisted, at which time the Company may appeal the Nasdaq staff’s determination to delist its securities to a Nasdaq Listing Qualifications Panel.

111

On February 1, 2008, the Company received a letter from The Nasdaq Stock Market, or Nasdaq, indicating that, for the previous 30 consecutive trading days, the Company’s common stock did not maintain a minimum market value of publicly held shares of $5,000,000 as required for continued inclusion by Marketplace Rule 4450(a)(2), or the MVPHS Rule. Therefore, in accordance with Marketplace Rule 4450(e)(1), the Company was provided 90 calendar days, or until May 1, 2008, to regain compliance. The Nasdaq letter stated that, if at any time before May 1, 2008, the minimum market value of publicly held shares of the Company’s common stock is $5,000,000 or greater for a minimum of 10 consecutive trading days, Nasdaq staff will provide written notification that the Company complies with the MVPHS Rule. The Nasdaq letter also stated that, if the Company does not regain compliance with the MVPHS Rule by May 1, 2008, Nasdaq staff will provide written notification that the Company’s securities will be delisted, at which time the Company may appeal the Nasdaq staff’s determination to delist its securities to a Nasdaq Listing Qualifications Panel.

The Company will not have become compliant with the Minimum Bid Price Rule by March 17, 2008. Although the Company intends to appeal any determination by Nasdaq staff to delist its common stock to a Nasdaq Listing Qualifications Panel, the Company may not be successful in its appeal, in which case its common stock may be transferred to The Nasdaq Capital Market or be delisted altogether. Should either occur, existing stockholders will suffer decreased liquidity.

These Nasdaq notices have no effect on the listing of the Company's common stock on the Toronto Stock Exchange.

21. QUARTERLY FINANCIAL DATA (UNAUDITED)

The following tables contain selected unaudited consolidated statement of operations data for each quarter of fiscal 2007 and 2006:

	Fiscal 2007 Quarter Ended
	March 31			June 30			September 30			December 31
	$			$			$			$
Revenue		90,000			—			—			1,500
Gross profit (loss)		57,900			(33,297	)		(2,287,411	)		(43,795	)
(Loss) from continuing operations		(3,169,254	)		(1,497,312	)		(18,577,182	)		(9,466,668	)
(Loss) from discontinued operations		(1,103,490	)		(1,081,559	)		(1,082,842	)		(32,161,007	)
Net (loss)		(4,272,744	)		(2,578,871	)		(19,660,024	)		(41,627,675	)
Weighted average number of shares outstanding – basic and diluted		54,558,769			57,304,020			57,306,145			57,306,145
Net (loss) from continuing operations per share – basic and diluted		(0.06	)		(0.03	)		(0.32	)		(0.17	)
Net (loss) from discontinued operations per share – basic and diluted		(0.02	)		(0.02	)		(0.02	)		(0.56	)
Net (loss) per share – basic and diluted		(0.08	)		(0.05	)		(0.34	)		(0.73	)

112

	Fiscal 2006 Quarter Ended
	March 31			June 30			September 30			December 31
	$			$			$			$
Revenue		—			82,715			53,144			38,400
Gross profit (loss)		(1,650,000	)		78,398			(52,214	)		(1,730,876	)
(Loss) from continuing operations		(5,806,868	)		(69,971,237	)		(3,033,234	)		(1,830,780	)
(Loss) from discontinued operations		—			—			(531,771	)		(1,010,613	)
Net (loss)		(5,806,868	)		(69,971,237	)		(3,565,005	)		(2,841,393	)
Weighted average number of shares outstanding – basic and diluted		42,166,561			42,186,579			44,911,018			50,622,496
Net (loss) from continuing operations per share – basic and diluted		(0.14	)		(1.66	)		(0.07	)		(0.04	)
Net (loss) from discontinued operations per share – basic and diluted		—			—			(0.01	)		(0.02	)
Net (loss) per share – basic and diluted		(0.14	)		(1.66	)		(0.08	)		(0.06	)

(i) Loss from continuing operations for the three months ended March 31, 2007 includes a charge for the change in the fair value of the Company’s obligation under warrants and warrant expense of $723,980.

(ii) Loss from continuing operations for the three months ended June 30, September 30 and December 31, 2007 includes income recognized from the change in the fair value of the Company’s obligation under warrants of $1,500,710, $856,969 and $248,797, respectively.

(iii) Loss from continuing operations for the three months ended December 31, 2007 includes a charge for the loss on short-term investments of $1,036,250.

(iv) Loss from continuing operations for the three months ended September 30, 2007, December 31, 2006 and March 31, 2006 includes the expense of amounts related to inventory reserves of $2,782,494, $1,679,124 and $1,625,000, respectively.

(v) Loss from continuing operations for the three months ended June 30, 2006 includes a goodwill impairment charge of $65,945,686.

(vi) Loss from discontinued operations for the three months ended December 31, 2007 includes a goodwill impairment charge of $14,446,977.

(vii) Loss from continuing operations for the three months ended September 30, 2007 includes the charge for the impairment of intangible assets of $20,923,028.

(viii) Loss from discontinued operations for the three months ended December 31, 2007 includes the charge for the impairment of intangible assets of $22,286,383.

(ix) Net loss per share – basic and diluted are computed independently for the quarters presented. Therefore, the sum of the quarterly per share information may not be equal to the annual per share information.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES.

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. The Company’s disclosure controls and procedures are designed to provide reasonable assurance of achieving their desired objectives, and the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective to provide that reasonable assurance.

As of the end of the period covered by the report, the Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act). Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) were effective to ensure that information required to be disclosed in the reports the Company files and submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

There have been no significant changes in the Company’s internal control over financial reporting that occurred during the year ended December 31, 2007, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of the Company is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable assurance to the Company’s management and Board of Directors regarding the preparation and fair presentation of published financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2007. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework. Based on our assessment, we believe that, as of December 31, 2007, the Company’s internal control over financial reporting is effective based on those criteria.

Management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2007, has been audited by Ernst & Young LLP, an independent registered public accounting firm who also audited the Company’s consolidated financial statements. Ernst & Young’s attestation report on management’s assessment of the Company’s internal control over financial reporting is included elsewhere herein.

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REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders of OccuLogix, Inc.

We have audited OccuLogix, Inc.’s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria).  OccuLogix, Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s annual report on internal control over financial reporting.  Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, OccuLogix, Inc. maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of OccuLogix, Inc. as of December 31, 2007 and 2006, and the related consolidated statements of operations, changes in stockholders’ equity and cash flows for each of the three years ended December 31, 2007 and our report dated 14, 2008 expressed an unqualified opinion thereon in the period.

Toronto, Canada,	Chartered Accountants
March 14, 2008.	Licensed Public Accountants

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ITEM 9B. OTHER INFORMATION.

None.

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PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information required with respect to directors is incorporated herein by reference to the information contained in the General Proxy Information for our 2008 Annual Meeting of Stockholders (the “Proxy Statement”). The information with respect to our audit committee financial expert is incorporated herein by reference to the information contained in the sections captioned “Appointment of Auditors” and “Audit Committee Report” of the Proxy Statement.

Information about our Code of Ethics appears under the heading “Code of Business Conduct and Ethics” in the Proxy Statement. That portion of the Proxy Statement is incorporated by reference into this report.

Information about compliance with Section 16(a) of the Exchange Act appears under the heading “Section 16(a) Beneficial Ownership Reporting Compliance” in the Proxy Statement. That portion of the Proxy Statement is incorporated by reference into this report.

ITEM 11. EXECUTIVE COMPENSATION.

Information about compensation of our named executive officers appears under the headings “Executive Officers” and “Information on Executive Compensation” in the Proxy Statement. Information about compensation of our directors appears under the heading “Compensation of Directors” in the Proxy Statement. These portions of the Proxy Statement are incorporated by reference into this report.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

Information about security ownership of certain beneficial owners and management and information regarding securities authorized for issuance under equity compensation plans appears under the headings “Information on Executive Compensation”, “Employee Benefit Plans” and “Principal Stockholders” in the Proxy Statement. These portions of the Proxy Statement are incorporated by reference to this report.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS.

Information about certain relationships and related transactions appears under the heading “Certain Relationships and Related Party Transactions” in the Proxy Statement. That portion of the Proxy Statement is incorporated by reference into this report.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Information about the principal accountant fees and services as well as related pre-approval policies and procedures appears under the headings “Appointment of Auditors” and “Audit Committee Report” in the Proxy Statement. These portions of the Proxy Statement are incorporated by reference into this report.

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PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a) The following documents are filed as part of the report:

(1) Financial Statements included in PART II of this report:

Included in PART II of this report:	Page
Report of Independent Auditors	65
Consolidated Balance Sheets as at December 31, 2007 and December 31, 2006	66
Consolidated Statements of Operations for the three years ended December 31, 2007	67
Consolidated Statements of Changes in Stockholders’ Equity for the three years ended December 31, 2007	68
Consolidated Statements of Cash Flows for the three years ended December 31, 2007	70
Notes to Consolidated Financial Statements	71

(2) Financial Statement Schedules:

Schedule II – Valuation and Qualifying Accounts and Reserves

Except as noted above, all financial statement schedules for which provisions have been made in the applicable accounting regulations of the Commission have been omitted because they are inapplicable, not required by the instructions or because the required information is either incorporated herein by reference or included in the financial statements or notes thereto included in this report.

(3) Exhibits:

The exhibits required to be filed as part of this Annual Report on Form 10-K are listed in the attached Index to Exhibits. Items 10.4, 10.5, 10.8 to 10.14 inclusive, 10.18, 10.24, 10.40, 10.44 to 10.49 inclusive and 10.52 to 10.57 inclusive in the attached Index to Exhibits are management contracts or compensatory plans or arrangements.

(b) Exhibits

The exhibits required to be filed as part of this Annual Report on Form 10-K are listed in the attached Index to Exhibits.

*               *               *

Copies of the exhibits filed with this Annual Report on Form 10-K or incorporated by reference herein do not accompany copies hereof for distribution to stockholders of the Registrant. The Registrant will furnish a copy of any of such exhibits to any stockholder requesting the same for a nominal charge to cover duplicating costs.

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POWER OF ATTORNEY

The registrant and each person whose signature appears below hereby appoint Elias Vamvakas and William G. Dumencu as attorney-in-fact with full power of substitution, severally, to execute in the name and on behalf of the registrant and each such person, individually and in each capacity stated below, one or more amendments to this Annual Report on Form 10-K, which amendments may make such changes in this Annual Report as the attorney-in-fact acting in the premises deems appropriate and to file any such amendments to this Annual Report on Form 10-K with the Securities and Exchange Commission.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Annual Report on Form 10-K to be signed on its behalf by the undersigned thereunto duly authorized.

Dated: March 17, 2008	OCCULOGIX, INC.
	By:	/s/ Elias Vamvakas
		Elias Vamvakas
		Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this Annual Report on Form 10-K has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

119

Dated:  March 17, 2008	By:	/s/ Elias Vamvakas
		Elias Vamvakas
		Chief Executive Officer and
		Chairman of Board of Directors
Dated: March 17, 2008	By:	/s/ William G. Dumencu
		William G. Dumencu
		Chief Financial Officer and Treasurer
Dated:  March 17, 2008	By:	/s/ Jay T. Holmes
		Jay T. Holmes
		Director
Dated: March 17, 2008	By:	/s/ Thomas N. Davidson
		Thomas N. Davidson
		Director
Dated:  March 17, 2008	By:	/s/ Richard L. Lindstrom
		Richard L. Lindstrom, M.D.
		Director
Dated:  March 17, 2008	By:	/s/ Georges Noël
		Georges Noël
		Director
Dated:  March 17, 2008	By:	/s/ Adrienne L. Graves
		Adrienne L. Graves
		Director
Dated:  March 17, 2008	By:	/s/ Gilbert S. Omenn
		Gilbert S. Omenn
		Director

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SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

	Balance at beginning of period		Charged to costs and expenses		Charged to other accounts		Deductions			Balance at end of period
	$		$		$		$			$
Fiscal 2005
Bad debt reserves		—		518,852		—		—			518,852
Inventory reserves		—		1,990,830		—		—			1,990,830
Fiscal 2006
Bad debt reserves		518,852		—		—		(518,852	) 1		—
Inventory reserves		1,990,830		3,304,124		—		(193,560	) 2		5,101,394
Fiscal 2007
Bad debt reserves		—		—		—		—			—
Inventory reserves		5,101,394		2,790,209		—		(596,058	) 2		7,295,545

1. During fiscal 2006, OccuLogix, Inc. (“the Company”) agreed to forgive the amount receivable from Veris Health Services Inc. (“Veris”) which had been owing for products and related services delivered or provided to Veris during the period from September 14, 2005 to December 31, 2005.

2. During fiscal 2007 and 2006, the Company utilized inventory that had previously been provided for.

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3. Index to Exhibits

2.1	Form of Plan of Reorganization (incorporated by reference to Exhibit 2.1 to the Registrant’s Registration Statement on Form S-1/A No. 4, filed with the Commission on December 6, 2004 (file no. 333-118024)).
3.1	Amended and Restated Certificate of Incorporation of the Registrant as currently in effect (incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement on Form S-1/A No. 3, filed with the Commission on November 16, 2004 (file no. 333-118024)).
3.2	Amended and Restated By-Laws of the Registrant as currently in effect (incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement on Form S-1/A No. 3, filed with the Commission on November 16, 2004 (file no. 333-118024)).
10.1	Amended and Restated Marketing and Distribution Agreement dated October 25, 2004 between Diamed Medizintechnik GmbH and the Registrant (incorporated by reference to Exhibit 10.6 to the Registrant’s Registration Statement on Form S-1/A No. 1, filed with the Commission on October 7, 2004 (file no. 333-118024)).
10.2	Amended and Restated Patent License and Royalty Agreement dated October 25, 2004 between the Registrant and Dr. Richard Brunner (incorporated by reference to Exhibit 10.8 to the Registrant’s Registration Statement on Form S-1/A No. 1, filed with the Commission on October 7, 2004 (file no. 333-118024)).
10.3	Amended and Restated Patent License and Royalty Agreement dated October 25, 2004 between the Registrant and Hans Stock (incorporated by reference to Exhibit 10.12 to the Registrant’s Registration Statement on Form S-1/A No. 1, filed with the Commission on October 7, 2004 (file no. 333-118024)).
10.4	Employment Agreement between the Registrant and Elias Vamvakas dated September 1, 2004 (incorporated by reference to Exhibit 10.13 to the Registrant’s Registration Statement on Form S-1/A No. 1, filed with the Commission on October 7, 2004 (file no. 333-118024)).
10.5	Employment Agreement between the Registrant and Thomas P. Reeves dated August 1, 2004 (incorporated by reference to Exhibit 10.14 to the Registrant’s Registration Statement on Form S-1/A No. 1, filed with the Commission on October 7, 2004 (file no. 333-118024)).
10.6	Rental Agreement between the Registrant and Cornish Properties Corporation dated January 1, 2004 (incorporated by reference to Exhibit 10.27 to the Registrant’s Registration Statement on Form S-1/A No. 4, filed with the Commission on December 6, 2004 (file no. 333-118024)).
10.7	Agreement between the Registrant and Rheogenx Biosciences Corporation dated March 28, 2005 (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on May 6, 2005 (file no. 000-51030)).
10.8	Amending Agreement between the Registrant and Thomas P. Reeves, dated as of July 1, 2005, amending the Employment Agreement between the Registrant and Thomas P. Reeves dated August 2004 (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on August 8, 2005 (file no. 000-51030)).
10.9	Option Agreement between Steve Parks and the Registrant dated as of October 4, 2005 (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on November 10, 2005 (file no. 000-51030)).
10.10	Release Agreement between John Caloz and the Registrant, dated as of April 13, 2006, terminating the Employment Agreement between the Registrant and John Caloz dated May 18, 2006 (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on May 10, 2006 (file no. 000-51030)).

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10.11	Release Agreement between Irving Siegel and the Registrant, dated as of April 13, 2006, terminating the Employment Agreement between the Registrant and Irving Siegel dated as of August 3, 2003, as amended by the Amending Agreement between the Registrant and Irving Siegel dated as of September 1, 2005 (incorporated by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on May 10, 2006 (file no. 000-51030)).
10.12	Termination Agreement among the Registrant, AMD Medical Services Inc., Irving Siegel, OccuLogix Canada Corp., Rheo Clinic Inc. and TLC Vision Corporation, dated as of April 13, 2006, terminating, among other things, the Consulting Agreement among the Registrant, AMD Medical Services Inc. and Irving Siegel dated September 1, 2005 (incorporated by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on May 10, 2006 (file no. 000-51030)).
10.13	Amending Agreement between the Registrant and Nozhat Choudry, dated as of April 1, 2006, amending the Employment Agreement between the Registrant and Nozhat Choudry dated as of February 10, 2006 (incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on May 10, 2006 (file no. 000-51030)).
10.14	Amending Agreement between the Registrant and John Cornish, dated as of April 13, 2006, amending the Employment Agreement between the Registrant and John Cornish dated as of April 1, 2005, as amended by the Amending Agreement between the Registrant and John Cornish dated as of June 1, 2005 (incorporated by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on May 10, 2006 (file no. 000-51030)).
10.15	Convertible Unsecured Promissory Note of Solx, Inc., dated April 1, 2006, in the principal amount of $2,000,000 (incorporated by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q/A, filed with the Commission on May 25, 2006 (file no. 000-51030)).
10.16	Agreement and Plan of Merger, dated as of August 1, 2006, by and among the Registrant, OccuLogix Mergeco, Inc., Solx, Inc. and Doug P. Adams, John Sullivan and Peter M. Adams, acting, in each case, in his capacity as a member of the Stockholder Representative Committee referred to therein (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on August 9, 2006 (file no. 000-51030)).
10.17	Convertible Unsecured Promissory Note of Solx, Inc., dated August 1, 2006, in the principal amount of $240,000 (incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on August 9, 2006 (file no. 000-51030)).
10.18	Employment Agreement between the Registrant and Doug P. Adams dated as of September 1, 2006 (incorporated by reference to Exhibit 10.41 to the Registrant’s Annual Report on Form 10-K/A, filed with the Commission on March 29, 2007 (file no. 000-51030)).
10.19	Registration Rights Agreement, dated as of September 1, 2006, among the Registrant, Doug P. Adams, John Sullivan and Peter M. Adams, acting, in each case, in his capacity as a member of the Stockholder Representative Committee referred to in the Agreement and Plan of Merger, dated as of August 1, 2006, by and among the Registrant, OccuLogix Mergeco, Inc., Solx, Inc. and Doug P. Adams, John Sullivan and Peter M. Adams, acting, in each case, in his capacity as a member of the Stockholder Representative Committee referred to therein (incorporated by reference to Exhibit 10.42 to the Registrant’s Annual Report on Form 10-K/A, filed with the Commission on March 29, 2007 (file no. 000-51030)).
10.20	2006 Distributorship Agreement between Asahi Kasei Medical Co., Ltd. and the Registrant dated October 20, 2006 (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on November 9, 2006 (file no. 000-51030)).

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10.21	Summary of Terms and Conditions between the Registrant and Elias Vamvakas dated November 30, 2006 (incorporated by reference to Exhibit 10.44 to the Registrant’s Annual Report on Form 10-K/A, filed with the Commission on March 29, 2007 (file no. 000-51030)).
10.22	Series A Stock Purchase Agreement by and among OcuSense, Inc. and the Registrant dated as of November 30, 2006 (incorporated by reference to Exhibit 10.45 to the Registrant’s Annual Report on Form 10-K/A, filed with the Commission on March 29, 2007 (file no. 000-51030)).  (Exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be provided to the Securities and Exchange Commission upon request.)
10.23	Securities Purchase Agreement, dated as of February 1, 2007, by and among the Registrant and the investors listed on the Schedule of Investors attached thereto as Exhibit A (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K, filed with the Commission on February 6, 2007 (file no. 000-51030)).
10.24	Employment Agreement between the Registrant and Suh Kim dated as of March 12, 2007 (incorporated by reference to Exhibit 10.47 to the Registrant’s Annual Report on Form 10-K/A, filed with the Commission on March 29, 2007 (file no. 000-51030)).
10.25	License Agreement between OcuSense, Inc. and The Regents of the University of California dated March 12, 2003 (incorporated by reference to Exhibit 10.48 to the Registrant’s Annual Report on Form 10-K/A, filed with the Commission on March 29, 2007 (file no. 000-51030)).  (Portions of this exhibit have been omitted pursuant to a request for confidential treatment.)
10.26	Amendment No. 1, dated June 9, 2003, to the License Agreement between OcuSense, Inc. and The Regents of the University of California dated March 12, 2003 (incorporated by reference to Exhibit 10.49 to the Registrant’s Annual Report on Form 10-K/A, filed with the Commission on March 29, 2007 (file no. 000-51030)).
10.27	Amendment No. 2, dated September 5, 2005, to the License Agreement between OcuSense, Inc. and The Regents of the University of California dated March 12, 2003 (incorporated by reference to Exhibit 10.50 to the Registrant’s Annual Report on Form 10-K/A, filed with the Commission on March 29, 2007 (file no. 000-51030)).  (Portions of this exhibit have been omitted pursuant to a request for confidential treatment.)
10.28	Amendment No. 3, dated July 7, 2006, to the License Agreement between OcuSense, Inc. and The Regents of the University of California dated March 12, 2003 (incorporated by reference to Exhibit 10.51 to the Registrant’s Annual Report on Form 10-K/A, filed with the Commission on March 29, 2007 (file no. 000-51030)).
10.29	Amendment No. 4, dated October 9, 2006, to the License Agreement between OcuSense, Inc. and The Regents of the University of California dated March 12, 2003 (incorporated by reference to Exhibit 10.52 to the Registrant’s Annual Report on Form 10-K/A, filed with the Commission on March 29, 2007 (file no. 000-51030)).
10.30	Terms of Business, dated February 5, 2007, between Invetech Pty Ltd and OcuSense, Inc.
10.31	Amendment No. 5, dated June 29, 2007, to the License Agreement between OcuSense, Inc. and The Regents of the University of California dated March 12, 2003. (Portions of this exhibit have been omitted pursuant to a request for confidential treatment.)
10.32	Lease, dated October 17, 2005, between Penyork Properties III Inc. and the Registrant.
10.33	Lease Amending Agreement, dated as of March 9, 2007, between the Registrant and 2600 Skymark Investments Inc., amending the Lease between Penyork Properties III Inc. and the Registrant dated October 17, 2005.

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10.34	2002 Stock Option Plan, as amended and restated on June 29, 2007.
10.35	Manufacturing and Development Agreement, dated October 25, 2007, between MiniFAB (Aust) Pty Ltd and OcuSense, Inc.  (Portions of this exhibit have been omitted pursuant to a request for confidential treatment.)
10.36	First Amendment to Series A Preferred Stock Purchase Agreement, dated October 29, 2007, between OcuSense, Inc. and the Registrant (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on November 9, 2007 (file no. 000-51030)).
10.37	Research Agreement, dated as of December 13, 2007, between * and OcuSense, Inc. (Portions of this exhibit have been omitted pursuant to a request for confidential treatment.)
10.38	Stock Purchase Agreement, dated as of December 19, 2007, between the Registrant and Solx Acquisition, Inc.  (Exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K and will be provided to the Commission upon request.)
10.39	Amending Agreement, dated as of December 19, 2007, by and among the Registrant, Solx, Inc. and Peter M. Adams, acting for and on behalf of the Stockholder Representative Committee, amending the Agreement and Plan of Merger, dated as of August 1, 2006, by and among the Registrant, OccuLogix Mergeco, Inc., Solx, Inc. and Doug P. Adams, John Sullivan and Peter M. Adams, acting in each case, in his capacity as a member of the Stockholder Representative Committee referred to therein.
10.40	Termination Agreement, dated as of December 19, 2007, between Doug P. Adams and the Registrant, terminating the Employment Agreement between the Registrant and Doug P. Adams dated as of September 1, 2006.
10.41	Limited Guaranty, dated as of December 19, 2007, by Doug P. Adams for the benefit of the Registrant.
10.42	Security Agreement, dated as of December 19, 2007, by Solx, Inc. in favor of the Registrant.
10.43	Letter Agreement, dated December 20, 2007, between the Registrant and Solx Acquisition, Inc.
10.44	Termination Agreement, dated as of January 4, 2008, between John Cornish and the Registrant, terminating the Employment Agreement between the Registrant and John Cornish dated as of April 1, 2005, as amended.
10.45	Termination Agreement, dated as of January 4, 2008, between Julie Fotheringham and the Registrant, terminating the Employment Agreement between the Registrant and Julie Fotheringham dated September 1, 2004.
10.46	Termination Agreement, dated as of January 4, 2008, between Stephen Parks and the Registrant, terminating the Employment Agreement between Stephen Parks and the Registrant dated as of October 4, 2005.
10.47	Termination Agreement, dated as of January 8, 2008, between David C. Eldridge and the Registrant, terminating the Employment Agreement between the Registrant and Dr. David Eldridge dated November 9, 2004.
10.48	Termination Agreement, dated as of January 31, 2008, between Nozhat Choudry and the Registrant, terminating the Employment Agreement between Nozhat Choudry and the Registrant, as amended.

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10.49	Termination Agreement, dated as of January 31, 2008, between Stephen Kilmer and the Registrant, terminating the Employment Agreement between the Registrant and Stephen Kilmer dated July 30, 2004.
10.50	Loan Agreement, dated as of February 19, 2008, by and among the Registrant, the Lenders named therein and Marchant Securities Inc.
10.51	Share Pledge Agreement, dated as of February 19, 2008, by the Registrant in favor of Marchant Securities Inc., as collateral agent.
10.52	Employment Agreement, dated as of February 25, 2008, between the Registrant and William G. Dumencu.
10.53	Termination Agreement, dated as of February 25, 2008, between Asahi Kasei Kuraray Medical Co., Ltd and the Registrant
10.54	Amending Agreement, dated as of March 3, 2008, between Nozhat Choudry and the Registrant, amending the Termination Agreement between Nozhat Choudry and the Registrant dated as of January 31, 2008.
10.55	Amending Agreement, dated as of March 3, 2008, between John Cornish and the Registrant, amending the Termination Agreement between John Cornish and the Registrant dated as of January 4, 2008.
10.56	Amending Agreement, dated as of March 3, 2008, between David C. Eldridge and the Registrant, amending the Termination Agreement between David C. Eldridge and the Registrant dated as of January 8, 2008.
10.57	Amending Agreement, dated as of March 3, 2008, between Julie Fotheringham and the Registrant, amending the Termination Agreement between Julie Fotheringham and the Registrant dated as of January 4, 2008.
10.58	Amending Agreement, dated as of March 3, 2008, between Stephen Parks and the Registrant, amending the Termination Agreement between Stephen Parks and the Registrant dated as of January 4, 2008.
14.1	Code of Conduct of the Registrant (incorporated by reference to Exhibit 14.1 to the Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on November 10, 2005 (file no. 000-51030)).
14.2	Complaint and Reporting Procedures of the Registrant (incorporated by reference to Exhibit 14.2 to the Registrant’s Quarterly Report on Form 10-Q, filed with the Commission on August 8, 2005 (file no. 000-51030)).
21.1	Subsidiaries of Registrant (incorporated by reference to Exhibit 21.1 to the Registrant’s Registration Statement on Form S-1/A No. 1, filed with the Commission on October 7, 2004 (file no. 333-118024)).
23.1	Consent of Ernst & Young LLP.
24.1	Power of Attorney (included on signature page).
31.1	CEO’s Certification required by Rule 13A-14(a) of the Securities Exchange Act of 1934.
31.2	CFO’s Certification required by Rule 13A-14(a) of the Securities Exchange Act of 1934.
32.1	CEO’s Certification of periodic financial reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, U.S.C. Section 1350.
32.2	CFO’s Certification of periodic financial reports pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, U.S.C. Section 1350.

126

EX-10.30

Exhibit 10.30

TERMS OF BUSINESS

1. DEFINITIONS

In these Terms of Business unless the context requires a different meaning, the following terms have the meanings indicated:

'Agreement' means the agreement that arises between Invetech and the Client consisting of the Proposal and these Terms of Business;

'Assignment' means the assignment to be carried out by Invetech as specified in the Proposal (as varied or extended in any way by agreement in writing from time to time in accordance with clause 15.2);

'Client' means the client identified in the Proposal;

'Invetech' means Invetech Pty Ltd (ABN 45 004 301 839) and its successors and assigns;

'Product' means any article, item, product, equipment, process, data, report or other deliverable developed for the Client by Invetech under the Agreement;

'Project IP' is as defined in clause 8.2; and

'Proposal' means the written proposal accompanied by these Terms of Business.

2. INVOICING AND PAYMENT

2.1 As specified in the Proposal Invoicing Schedule, part of the fee will be invoiced to and payable by the Client upon receipt of the Client’s acceptance of the Proposal and authorisation to proceed with the Assignment.  Further invoices will then be issued as shown in the Proposal Invoicing Schedule, for payment by the Client of fees and expenses incurred.

2.2 The initial invoice in respect of the advance, must be paid by the Client prior to the start of work on the Assignment.  The Client must pay all subsequent invoices within 30 days after the invoice date.  If the Client fails to pay an invoice when it is due, Invetech may charge interest at a rate equivalent to one percent (1%) per month, or the maximum rate permitted by law, whichever is less. Each invoice shall be sufficient evidence of the details therein including the amount owed to Invetech.

3. DISBURSEMENTS

The Client will reimburse Invetech for reasonable out-of-pocket expenses incurred in connection with the performance of the Assignment in respect of materials, the services of third parties, the use of third parties’ equipment and other expenses. Subject to clauses 4.4 and 4.5 of these Terms of Business, the amount payable by the Client will be at cost plus a mark-up as shown in the Proposal.

4. GOODS AND SERVICES TAX

4.1 Interpretation

Words or expressions used in this clause 4 which are defined in the A New Tax System (Goods and Services Tax) Act 1999 (Cth) or, if not so defined, then which are defined in the Trade Practices Act 1974 (Cth), have the same meaning in this clause.

4.2 GST inclusive amounts

For the purposes of these Terms of Business where the expression 'GST inclusive' is used in relation to an amount payable or other consideration to be provided for a supply under these Terms of Business, the amount or consideration will not be increased on account of any GST payable on that supply.

4.3 Consideration is GST exclusive

Any consideration to be paid or provided to Invetech for a supply made by Invetech under or in connection with these Terms of Business unless specifically described in these Terms of Business as 'GST inclusive', does not include an  amount on account of GST.

4.4 Gross up of consideration

Despite any other provision in these Terms of Business, if Invetech makes a supply under or in connection with these Terms of Business on which GST is imposed (not being a supply the consideration for which is specifically described in these Terms of Business as 'GST inclusive'):

(a) the consideration payable or to be provided for that supply under these Terms of Business but for the application of this clause ('GST exclusive consideration') is increased by, and the Client must also pay to Invetech an amount equal to the GST payable by Invetech on that supply; and

(b) the amount by which the GST exclusive consideration is increased must be paid to Invetech by the Client without set off, deduction or requirement for demand, at the same time as the GST exclusive consideration is payable or to be provided.

4.5 Reimbursements (net down)

If a payment to a party under these Terms of Business is a reimbursement or indemnification, calculated by reference to a loss, cost or expense incurred by that party, then the payment will be reduced by the amount of any input tax credit to which that party is entitled for that loss, cost or expense and for which credit that party actually receives the benefit.

4.6 Client Warranty and Indemnity

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The Client warrants that where GST is imposed on a supply made by Invetech under or in connection with these Terms of Business and the consideration for that supply was not increased under clause 4.4 as the parties mistakenly regarded the supply as GST-free, the Client will indemnify Invetech for and in respect of the GST (including any interest or penalty) imposed on that supply.

5. CLIENT INFORMATION

5.1 The Client shall furnish to Invetech all such information including data and drawings relating to theAssignmentas are described in the Proposal promptly after the effective date of this Agreement.  Thereafter, the Client shall furnish to Invetech upon request all such additional information as is reasonably required by Invetech to enable Invetech to provide its services in relation to the Assignment.

5.2 The Client acknowledges Invetech shall not be responsible for delays in the Assignment caused by Client’s failure to comply with clause 5.1.

5.3 The Client acknowledges that if the Client fails to comply with its obligations under this clause that failure may cause or contribute to an increase in any estimated fee advised by Invetech to the Client, Invetech incurring additional costs, charges and expenses and delays in Invetech carrying out the Assignment.

6. CLIENT INFORMATION CONFIDENTIALITY

Invetech and Client have entered into that certain "Mutual Non-Disclosure Agreement" effective as of June 10, 2005 (the "NDA") and agree that the terms and conditions of the NDA shall apply with respect to Confidential Information (as defined in the NDA) disclosed to Invetech in connection with this Agreement (whether disclosed directly by Client or indirectly by The TCI Card Supplier or other third party on behalf of Client); provided, however, the parties agree that (i) the definition of the "Project" as set forth in the NDA shall be amended to include the performance of the services and activities contemplated in this Agreement, (ii) "Confidential Information" under the NDA shall also include research data and results generated by Invetech hereunder that relate to Client's technology or to the development of the Product or prototypes thereof, and (iii) the term of the obligations set forth therein shall continue for a period of five (5) years following the expiration or termination of this Agreement.  Except as expressly modified in this Terms of Business , the NDA shall continue in full force and effect in accordance with its terms.

For clarification but without limitation, Invetech and Client

(i) shall each be entitled to disclose in publicity materials the other party's identity; and

(ii) shall each be entitled to disclose a general description of the nature of the Assignment, provided that such description of the Assignment has first been reviewed and approved,such approval to not be unreasonably withheld, in writing by the other party.

7. INFORMATION AND INVETECH STATEMENTS

7.1 All information contained, and all surveys, forecasts and recommendations made in the Proposal and any other report or letter to the Client, are supplied and have been prepared by Invetech in good faith upon the basis of information, statements, assumptions and representations provided or made to Invetech by or on behalf of the Client or otherwise available to Invetech.  Invetech honestly believes (but has made no inquiry nor undertaken any due diligence) that all information supplied or to be supplied by Invetech in relation to the Assignment will be of commercial value to the Client but Invetech does not warrant or represent that any of it is accurate, fully comprehensive in its field or suitable to the Client’s purposes; nor does Invetech warrant or represent that surveys or forecasts made by Invetech in relation to the Assignment are accurate or will be realised, since the accuracy of surveys and the achievement of results forecast must depend upon matters outside Invetech’s control.

7.2 For the avoidance of doubt, no statement of fact made by Invetech whether in the Proposal or in any report or letter to the Client or whether made orally, is to be construed as a representation, undertaking or warranty.

8. INTELLECTUAL PROPERTY RIGHTS

8.1 The Client shall retain ownership of any pre-existing intellectual property rights in materials and information provided by the Client to Invetech for use by Invetech for the purposes of undertaking the Assignment. Invetech shall retain ownership of any pre-existing intellectual property rights in materials, information, tools and methodologies provided by Invetech for the purposes of undertaking the Assignment (and any improvements to them, except to the extent that those improvements comprisepatented or unpatented intellectual property owned or controlled by the Client or that have application in the field of measuring osmolarity or osmolality of human tear fluid) and Invetech hereby grants the Client a worldwide, non-exclusive, royalty-free licence (with the right to grant and authorize sublicenses) to make, have made, use, offer for sale, sell and otherwise exploit products and services embodying any such pre-existing Invetech intellectual property (and any such improvements therein) as may be embodied in the Product.

8.2 Subject to clause 8.1, with effect from completion of the Assignment and provided that the Client has paid to Invetech all outstanding fees and charges due to Invetech, Invetech assigns to the Client all right, title and interest in and to any trade dress, trademarks and design registrations or design patents, and any inventions, whether patentable or not, and any other discoveries, trade secrets or know-how which:

(a) are embodied in the Product; and

(b) were made, developed, conceived or first reduced to practice by or for Invetech as a direct result of Invetech undertaking the Assignment

along with all patents, copyrights, and any other intellectual property rights therein, including the right to apply for and maintain the rights described in this Section 8.2 in all countries worldwide(such rights comprising the ‘Project IP’) and Invetech will (at the Client's request and cost) do those things that may be reasonably necessary to effect the registration of such intellectual property.  Client must provide to Invetech full details (including copies of all relevant documentation) of any application for registration (whether as a registered patent, a registered design or otherwise) of the Project IP or any part of it.

8.3 Patents and the registration of designs may each confer on the holder thereof substantial protection, including rights to damages in the case of subsequent infringement by others whether intentional or not.  Invetech will, if and only if requested to do so in writing by the Client and at the Client's expense, arrange to carry out searches in relation to the Assignment in order to identify potential infringements of prior patents or design registrations.  Where no such request is made and agreed in writing by Invetech, the Client is deemed to have assumed responsibility for these matters, and the Client indemnifies Invetech against any claims of (i) infringement of any intellectual property rights brought against Invetech as a result of the provision of Invetech’s services in relation to the Assignment, and (ii) misappropriation or misuse of copyrights or trade secrets of a third party caused by the disclosure of any materials or information to Invetech by the Client, in each case unless such claims are covered by the indemnity in clause 8.4.

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8.4 Invetech agrees that it shall not knowingly design, develop or manufacture the Product in a manner such that the sale or intended use thereof would infringe the intellectual property of any third party.  Client shall indemnify Invetech against all losses, claims, proceedings, damages, costs and expenses in respect of or arising directly or indirectly from any breach by the Client of any of its obligations in the preceding sentence.

9. PRODUCT LIABILITY AND CLIENT INDEMNITY

9.1 (a)  Subject only to any liability of Invetech under clause 10, the Client shall indemnify, keep indemnified and save harmless Invetech from and against all losses, claims, proceedings, damages, costs and expenses in respect of or arising directly or indirectly from:

(i) the Product or its use or operation by Client or any Client Related Person;

(ii) the use by Client or any Client Related Person of any system, design, process or procedure recommended, developed or devised by Invetech for or on behalf of the Client;

(iii) the use by Client or any Client Related Person of any information, survey, forecast or recommendation arising out of the Assignment;

and

(iv) any breach by the Client of any of its obligations under the Agreement.

where 'Client Related Person' means any person who directly or indirectly accesses, acquires or possesses by, from or through the Client any Product, system, design, process, procedure, information, survey, forecast, recommendation or advice related to, or arising out of, this Assignment.

(b) Invetech shall indemnify, keep indemnified and save harmless the Client from and against all losses, claims, proceedings, damages, costs and expenses in respect of or arising directly or indirectly from the use by Invetech or any Invetech Related Person of any system, design, process or procedure recommended, developed or devised by Invetech for or on behalf of the Client in connection with the Assignment and used in any way by Invetech other than for the benefit of the Client.

9.2 The Client shall at its own cost and expense procure that the Product complies in all respects with the provisions of all legislation, Acts, regulations, rules and by-laws for the time being in force and all orders or directions which may be made or given by any statutory or any other competent authority in respect of or affecting the Product in any jurisdiction in which it may be manufactured, used or sold.

9.3 The Client acknowledges that Invetech is not responsible to obtain any independent verification of any information whether provided by or on behalf of the Client or obtained from any other source whatsoever, nor to obtain any searches of any matters of public record unless it is specifically required to do so in the Proposal.  The Client agrees that prior to implementing any recommendations or results of the provision of Invetech’s services or using any Product, the Client will itself verify the suitability and safety for implementation or use of those recommendations, results or Product/s.

10. LIABILITY RESTRICTED

10.1 Section 68A of the Trade Practices Act, 1974 ('the Act') has the effect of enabling those who have contracted to supply services to limit their liability in certain circumstances for breach of conditions and warranties implied by the Act.

Subject to the qualifications in Section 68A of the Act, Invetech’s liability for any breach of a condition or warranty implied by Division 2 of Part V of the Act (other than a condition or warranty implied by Section 69 of the Act) in the case of services or goods provided in the course of performing the Assignment shall be limited to Invetech at its discretion either:

(a) in the case of services; supplying the services again or paying the cost of having the services supplied again; or

(b) in the case of goods; replacing the goods, supplying equivalent goods, paying the cost of replacing the goods or paying the cost of acquiring equivalent goods.

10.2 To the extent permitted by law, Invetech's total aggregate liability under or in any way related to the Agreement (including, without limitation, liability for any negligence or carelessness of Invetech or any of its employees, servants or agents or which arises directly or indirectly from the use of the Product or any information, survey, forecast or recommendation arising out of the Assignment or from services or goods supplied by Invetech for or on behalf of the Client or from any advice given to the Client by Invetech or termination of the Agreement, however arising), is limited to the aggregate sum total of fees paid to Invetech by the Client under the Proposal.

10.3 To the extent permitted by law, Invetech excludes its liability for all indirect and consequential damages however arising (including, without limitation, in the circumstances set out in clause 10.2).  For the purposes of this clause, 'consequential damage' shall include, but not be limited to loss of profit or goodwill or similar financial loss, any payment made or due to any third party and any loss or damage caused by delay in the supply of services or goods in relation to the Assignment.

10.4 Except as required by statute (including the Act), all implied conditions and warranties in respect of the Product or any services or goods supplied by Invetech as part of the Assignment are hereby excluded.

Page 3

10.5 Without restricting the ambit of this clause, any liability Invetech may have for any costs, expenses, damages or loss directly or indirectly arising from the Client's reliance on surveys, advice, forecasts or any other information supplied by Invetech under the Proposal is excluded to the full extent permitted by law.

11. INVETECH STAFF

It is a condition of Invetech’s agreement with the Client to provide Invetech’s services in relation to the Assignment that neither the Client nor any firm or company associated with or related to the Client will, for a period of two (2) years after execution of this Agreement, solicit or offer to employ any member of Invetech’s professional staff. The Client's liability to Invetech for any breach of this provision will equate to a year's gross salary for the individual concerned, this amount being a genuine pre-estimate of Invetech's loss in this event.  Notwithstanding the foregoing that it shall not be a violation of this clause 11 for Client or any such related firm to (i) make any general public solicitation for employment for any position, or (ii) hire a member of Invetech’s professional staff who either responds to such a general solicitation for employment or otherwise contacts Client or such related firm on his or her own initiative and without solicitation by Client or any such related firm in contravention of the above provisions.

12. PUBLICITY

Invetech shall be entitled to use in publicity material, including without limitation electronically stored and transmitted material, images of the Product and references to the Assignment and to Invetech's role in it, provided that the use of such images and references do not breach Invetech's obligations under clause 6 or disclose confidential information generated in the course of the Assignment that is not otherwise in the public domain.

13. TERMINATION

13.1 Unless otherwise provided in the Proposal, the Agreement or the Assignment and Invetech’s further services in relation to the Agreement or the Assignment may be terminated either by Invetech or the Client giving four week’s prior notice in writing to the other.

13.2 If the Client becomes insolvent, goes into liquidation, receivership, voluntary or other administration or some similar legal process, fails to make a payment to Invetech when due or is otherwise in breach of any of these Terms of Business or the Agreement in a material way then at any time thereafter (unless Invetech expressly waives that failure, breach or circumstance in writing) Invetech may by written notice to the Client immediately terminate the Agreement or the Assignment and Invetech’s further services in relation to the Assignment.

13.3 If the Agreement or the Assignment is terminated either under this clause or otherwise, the Client must immediately pay all moneys due or payable in relation to work done by Invetech under the Proposal to that date and, where termination is not due in any way to default by Invetech, the Client must also pay or reimburse to Invetech all costs, expenses and charges paid or incurred by Invetech that would otherwise be payable pursuant to clause 3, including any arising out of the cancellation, provided however that the amount due under this clause shall not exceed the next payment due as defined in the proposal payment schedule.

13.4 Clauses 2, 3, 4, 6, 7, 8, 9, 10, 12, 14, 16 and 22 will survive any termination of the Agreement or the Assignment.

14. SEVERANCE

If for any reason any provision of these Terms of Business would render the Agreement ineffective, void, voidable, illegal or unenforceable, that provision or the relevant part thereof shall, without in any way affecting the validity of the remainder of the Agreement, be severable and the Agreement shall be read and construed and take effect for all purposes as if that provision or part were not contained herein.

15. ENTIRE AGREEMENT AND VARIATIONS

15.1 These Terms of Business and the Proposal constitute the entire Agreement between Invetech and the Client.

15.2 Any variation of the Proposal, these Terms of Business or the Agreement will only be effective if it is in writing signed by Invetech and the Client.

16. DISPUTE RESOLUTION

All disputes concerning these Terms of Business or the Assignment, which cannot be resolved by negotiation between Invetech and the Client, must be referred to an independent expert agreed upon by the Client and Invetech before any other proceedings are commenced.  Failing agreement on the choice of expert within 14 days of the dispute arising, the dispute is to be referred to an independent expert nominated by the Victorian Chapter Chairman for the time being of the Institute of Arbitrators and Mediators, Australia in Melbourne, The independent expert shall be regarded as an expert and not as an arbitrator and accordingly no legislation relating to arbitration shall apply.  Unless otherwise agreed in writing by the parties, the location for any meetings or proceedings in connection with such independent expert shall be in Melbourne, Australia if referred by OcuSense, and in Los Angeles California if referred by Invetech.  The terms of the appointment will require the independent expert to use his or her best endeavours to certify in writing to the Client and Invetech the determination that has been made within 30 days of the appointment.  Any costs associated with any such referral and determination will be paid by Invetech and the Client in equal shares unless the expert makes a written determination that one party has been vexatious or frivolous in which case that party shall pay all of those costs.

17. CLIENT AUTHORITY

Any person who purports to enter into the Agreement constituted by the Proposal and these Terms of Business on behalf of the Client hereby warrants that for all purposes of the Agreement he or she is the duly authorised agent of the Client and if such person is not the duly authorised agent of the Client then in consideration of Invetech entering into the Agreement he or she shall be deemed to be the Client and be bound by all the terms, covenants and conditions of the Agreement.

18. LAW AND JURISDICTION

The Agreement is subject to the laws of Victoria and the Commonwealth of Australia and the Client submits to the jurisdiction of the Courts of Victoria and the Commonwealth of Australia. 

Page 4

19. NO ASSIGNMENT

Invetech will carry out the Assignment for the Client only and prior to completion or termination of the Assignment the Client may not assign any of its rights arising under the Agreement to any other entity without Invetech’s prior written consent.  Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the successors or permitted assigns of the parties.

20. NOTICES

A notice to be given by either Invetech or the Client to the other must be in writing and delivered by hand or by post (postage prepaid) or sent by facsimile (with receipt confirmed) to that party’s address or facsimile number as shown in the Proposal.  Each party may change its address for purposes of receiving notice hereunder upon written notice to the other party.

21. SUSPENSION

Invetech’s obligations in relation to the Assignment will be suspended during the time that Invetech is prevented from fully complying with its obligations by causes beyond its reasonable control.

22. CONFLICT

22.1 The Proposal is only capable of acceptance and implementation on the basis of these Terms of Business and, if the Client purports to accept by some other means incorporating different or additional terms, then those different or additional terms will not apply and any work undertaken by Invetech under or in connection with the Assignment shall be on the basis of the conditions contained in the Proposal and these Terms of Business.

22.2 If there is any conflict between these Terms of Business and any conditions contained in the Proposal, these Terms of Business will override those conditions to the extent of the inconsistency unless an inconsistent condition in the Proposal expressly states that it takes precedence over or operates notwithstanding these Terms of Business.

Page 5

EX-10.31

Exhibit 10.31

***Sections 4 and 5 of this Amendment have been omitted pursuant to a request for confidential treatment and have been filed separately with the U.S. Securities and Exchange Commission.

Amendment #5

to

License Agreement 2003-03-0433

This amendment #5 (“Amendment #5”) is made by and between OcuSense, Inc., a Delaware corporation, having an address at 12707 High Bluff Drive, Suite 200, San Diego, California 92130 (“LICENSEE”) and The Regents of The University of California, a California corporation having its statewide administrative offices at 1111 Franklin Street, Oakland, California 94607-5200 (“UNIVERSITY”), represented by its San Diego campus having an address at University of California, San Diego, Technology Transfer & Intellectual Property Services, Mail-code 0910, 9500 Gilman Drive, La Jolla, California 92093-0910 (“UCSD”).

This Amendment #5 is effective on June 29, 2007 (“Amendment #5 Effective Date”).

RECITALS

WHEREAS, LICENSEE and UNIVERSITY previously entered into License Agreement #5003-03-0433 (“License”) as of March 12, 2003 (as amended 6/9/03, 9/5/05, 7/7/06 and 10/9/06) for the commercial development of UCSD invention disclosure SD2002-180 titled, “Volume Independent Tear Film Osmometer” (“Invention”);

WHEREAS, in its efforts to develop market opportunities for the Invention, LICENSEE has requested certain revisions and/or clarifications to the License so as to facilitate LICENSEE’s establishment of meaningful distribution channels and strategic partnerships, furthering the likelihood of realizing broad commercial markets for Invention;

WHEREAS, UNIVERSITY is desirous that LICENSEE achieve the broadest possible commercial success with Invention and therefore UNIVERSITY is amenable to clarifying the terms of LICENSEE’s agreement via the following amendments to License.

Therefore, it is hereby agreed that in consideration of a one-time license amendment fee of seven thousand five hundred dollars (US$7,500.00) payable upon execution of this Amendment #5:

1. A new Paragraph 1.2(m) is added to the License to read:

“use and products for the measurement and/or analysis of biomarkers or other analytes in tears; for the diagnosis and/or management of diseases, but excluding the fields described in any of Paragraphs 1.2(a) through 1.2(l).”

2. Paragraph 1.5 of the License is amended in its entirety to read as follows:

1

“”Patent Rights” shall include all of the patent rights listed in the table below, and: (i) any conversions or utility patent applications claiming priority thereto; (ii) any continuing applications or utility patent applications with respect thereto, including reissues, extensions, substitutions, continuations, divisions, and continuation-in-part applications to the extent the claims in such continuation-in-part applications are supported in the specification; (iii) any corresponding foreign applications or patents; (iv) and all patents filed by UNIVERSITY having claims which are supported by specifications of any of the foregoing.”

UCSD Case #	Application #	Patent #	Inventor(s)	Assignee	Parent
2002-180-1	60/311,198	NA	Sullivan	UC	NA
2002-180-2	60/401,432	NA	Sullivan	UC	NA
2002-180-3	10/400,617	7,017,394	Sullivan	UC	conversion dash 1 and 2
2002-180-4	10/722,084	7,051,569	Sullivan /Donsky	Joint UC/Ocusense	CIP of dash 3
2002-180-5	10/810,780	7,111,502	Sullivan /Donsky	UC	CIP of dash 3
2002-180-6	11/358,986	abandoned	Sullivan	UC	CIP of dash 3
2002-180-7 (2006-296)	60/912,129	NA	Sullivan	UC	CIP of dash 6
2002-180-7 (2006-296)	11/735,935		Sullivan	UC	CIP of dash 8
2002-180-8	11/327,884	7,204,122	Sullivan /Donsky	Joint UC/Ocusense	div of dash 4
2007-211-1	60/869,543		Sullivan /Donsky	Joint UC/Ocusense	CIP of dash 3

3. A new Paragraph 2.2(e) is added to the License to read as follows:

“For so long as LICENSEE is licensed by UNIVERSITY under Section 2.1 above, if LICENSEE grants a license to a third party under its own interest in any of the Patent Rights licensed hereunder that are jointly owned by the parties, LICENSEE shall also concurrently grant a sublicense under this Paragraph 2.2 under UNIVERSITY’s interest in such jointly-owned Patent Rights.”

***Sections 4 and 5 in their entirety have been omitted pursuant to a request for confidential treatment and have been filed separately with the U.S. Securities and Exchange Commission.

6.       A new Paragraph 7.7 is added to the License to read as follows:

“Notwithstanding Paragraph 7.1 above, this Agreement will terminate upon written notice given by UNIVERSITY in its sole discretion, upon the filing of a claim in a court or government agency seeking a determination that any portion of UNIVERSITY’s Patent Rights is valid or unenforceable where the filing is by the LICENSEE, a third party on behalf of the LICENSEE, or a third party at the written urging of the LICENSEE; provided, however, that if any third party files such a claim on behalf of LICENSEE (not at the written urging of LICENSEE) and LICENSEE cooperates reasonably, as requested by the UNIVERSITY, to oppose such claim, then such filing by the third party shall not be grounds for termination; and further provided, however, that the right of termination set forth in this Paragraph 7.7 shall not apply with respect to (i) interference proceedings with respect to Patent Rights and patents or patent applications of LICENSEE or its Affiliates, (ii) any good faith correspondence between LICENSEE and the United States Patent and Trademark Office in the course of LICENSEE’s prosecution of its interest in the Patent Rights or its prosecution of  Patent Rights for which UNIVERSITY has granted LICENSEE prosecution rights and/or (ii) disputes regarding inventorship.  For clarity, the parties acknowledge that the filing of a claim or counterclaim by a third party in response to a suit or threatened suit for enforcement of the Patent Rights shall not be grounds for termination under this Paragraph 7.7.”

2

IN WITNESS WHEREOF, both UNIVERSITY and LICENSEE have executed this Amendment #5, in duplicate originals, by their respective and duly authorized officers on the day and year written.

OCUSENSE INC.		THE REGENTS OF THE
		UNIVERSITY OF CALIFORNIA
By	“Eric Donsky”	By	”Jane Moores”
(signature)		(signature)
Name:	Eric Donsky	Name:	Jane Moores, Ph.D.
Title:	CEO	Title:	Interim Director
			Technology Transfer & Intellectual
			Property Services
Date  7/9/07		Date  7/2/07

3

EX-10.32

Exhibit 10.32

MULTI TENANT OFFICE

STANDARD BUILDING LEASE

PENYORK PROPERTIES III INC.

- and - -

OCCULOGIX, INC.

___________________

LEASE

___________________

Project: 2600 Skymark Avenue, Mississauga, Ontario

Premises: Suites 103 and 201, Building 9

TABLE OF CONTENTS

Section

1. LEASE SUMMARY

2. DEFINITIONS

3. INTENT OF LEASE

3.1 Net Lease

4. LEASE OF PREMISES

4.1 Premises

4.2 Term

4.3 Fixturing Period

4.4 Acceptance of Premises

4.5 Licence to Use Common Facilities

4.6 Quiet Enjoyment

4.7 Fixturing of Premises

5. RENT

5.1 Tenant to Pay

5.2 Basic Rent

5.3 Additional Rent

5.4 Deemed Rent and Allocation

5.5 Monthly Payments of Additional Rent

6. TAXES

6.1 Taxes Payable by Tenant

6.2 Determination of Tenant’s Taxes

6.3 Business Taxes and Sales Taxes

6.4 Tax Bills and Assessment Notices

6.5 Contest of Realty Taxes

7. OPERATION OF PROJECT

7.1 Operation of Project by Landlord

7.2 Tenant’s Payment of Operating Costs

7.3 Adjustments to Operating Costs

8. USE OF PREMISES

8.1 Use of Premises

8.2 Conduct of Business

8.3 Tenant’s Fixtures

8.4 Signs

8.5 Waste Remova

8.6 Pest Control

8.7 Waste and Nuisance

8.8 Compliance with Laws

8.9 Deliveries

8.10 Window Coverings

8.11 Prohibited Uses

9. SERVICES AND UTILITIES

9.1 Utilities

9.2 Heating and Air Conditioning

9.3 Non-Liability of Landlord

9.4 Landlord’s Suspension of Utilities

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10.           MAINTENANCE, REPAIRS AND ALTERATIONS

10.1 Maintenance and Repairs of Premises

10.2 Approval of Repairs and Alterations

10.3 Repair According to Landlord’s Notice

10.4 Notice by Tenant

10.5 Ownership of Leasehold Improvements

10.6 Construction Liens

10.7 Landlord’s Repairs

10.8 Special Services

11. END OF TERM

11.1 Vacating of Possession

11.2 Removal of Trade Fixtures

11.3 Removal of Leasehold Improvements

11.4 Overholding by Tenant

12. DAMAGE AND DESTRUCTION

12.1 Insured Damage to Premises

12.2 Uninsured Damage and Last Two Years

12.3 Damage to Project

12.4 Restoration of Premises or Project

12.5 Determination of Matters

13. INSURANCE AND INDEMNITY

13.1 Landlord’s Insurance

13.2 Tenant’s Effect On Other Insurance

13.3 Tenant’s Insurance

13.4 Landlord’s Right to Place Tenant’s Insurance

13.5 Landlord’s Non-Liability

13.6 Indemnity of Landlord

13.7 Landlord’s Employees and Agents

14. ASSIGNMENT, SUBLETTING AND CHANGE OF CONTROL

14.1 Consent Required

14.2 Obtaining Consent

14.3 Landlord’s Option

14.4 Terms of Transfer

14.5 Effect of Transfer

14.6 No Advertising of Premises

14.7 Mortgage of Lease

14.8 Corporate Tenant

14.9 Assignment by Landlord

15. STATUS AND SUBORDINATION OF LEASE

15.1 Status Statement

15.2 Subordination

15.3 Tenant’s Failure to Comply

15.4 Registration

16. DEFAULT AND REMEDIES

16.1 Default and Remedies

16.2 Interest and Costs

16.3 Bankruptcy and Insolvency

16.4 Distress and Tenant’s Property

16.5 Intentionally Deleted

16.6 Rent Deposit

16.7 Remedies to Subsist

16.8 Impossibility of Performance

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17.           CONTROL OF PROJECT

17.1 Landlord’s Control

17.2 Alterations of the Project

17.3 Use of Common Facilities

17.4 Rules and Regulations

17.5 Access to Premises

17.6 Expropriation

17.7 Landlord’s Consent

18. MISCELLANEOUS

18.1 Notices

18.2 Complete Agreement

18.3 Time of the Essence

18.4 Applicable Law

18.5 Severability

18.6 Section Numbers and Headings

18.7 Interpretation

18.8 Successors

18.9 Monetary Amounts

18.10 Demolition or Substantial Alterations

19.           PRIVACY POLICY

Schedules

"A" LEGAL DESCRIPTION OF PROJECT

"B" OUTLINE PLAN OF PREMISES

"C" SECURITY AGREEMENT - intentionally deleted

"D" SPECIAL PROVISIONS

"E" EXCLUSIVE USES OF OTHER TENANTS

"F" RENT DEPOSIT AGREEMENT

"G" ENVIRONMENTAL QUESTIONNAIRE

"H" TENANT WORK

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THIS LEASE is dated October 17, 2005 and is made,

BETWEEN:

PENYORK PROPERTIES III INC.

(hereinafter called “Landlord”)

OF THE FIRST PART

-and-

OCCULOGIX, INC.

(hereinafter called “Tenant”)

OF THE SECOND PART

1.             LEASE SUMMARY

The following is a summary of some of the basic terms of this Lease, which are elaborated upon in the balance of this Lease. This Section 1 is for convenience and if a conflict occurs between the provisions of this Section 1 and any other provisions of this Lease, the latter shall govern.

(a) Premises: being comprised of:

(i) Suite 103 (“Suite 103 Premises”) being a portion of the first (1st) floor of Building 9, as shown outlined on the floor plan annexed hereto as Schedule “B-1”; and

(ii) Suite 201 (“Suite 201 Premises”), being a portion of the second (2nd) floor of Building 9, as shown outlined on the floor plan annexed hereto as Schedule “B”,

(collectively, the “Premises”), of the project municipally known as 2600 Skymark Avenue, Mississauga, Ontario.

(b) Term: One (1) year and Six (6) months;

(c) Commencement Date: February 1, 2006;

(d) Expiry Date: July 31, 2007;

(e) Basic Rent: Subject to adjustment in accordance with Section 5.2 and, further, subject to Section 3 of Schedule “D”: 

RENTAL PERIOD	RATE PER SQ.FT. PER ANNUM OF RENTABLE AREA
February 1, 2006 to July 31, 2007	$10.00

(f) Rentable Area of Premises:

(i) Suite 103 Premises containing approximately 1,363 square feet; and

(ii) Suite 201 Premises containing approximately 5,237 square feet;

(collectively approximately 6,600 square feet) (subject to determination in accordance with Section 2.24);

(g) Rent Deposit: Twenty Four Thousand Six Hundred and Thirty-Four Dollars and Sixty Two Cents ($24,634.62), to be held by the Landlord in accordance with the provisions of the Rent Deposit Agreement;

(h) Use of Premises: General business offices for an ophthalmic therapeutic company, to the extent permitted by all Laws and to the extent in keeping with the standards of a first-class office building, under the name Occulogix, Inc. and by no other name whatsoever without the Landlord’s prior written consent;

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(i) Address for Service of Notice on Tenant:

at the Premises

Address for Service of Notice on Landlord:

PenYork Properties III Inc.

c/o Bentall Investment Management

55 University Avenue, Suite 300

Toronto, Ontario

M5 V 2H7

Attention:     Investment Manager

With a copy to the Landlord at:

PenYork Properties III Inc.

c/o Bentall Real Estate Services L.P.

10 Carlson Court, Suite 500

Etobicoke, Ontario

M9W 6L2

Attention:         Vice-President, Operations

(j) Special Provisions: See Schedule “D

2. DEFINITIONS

Where used in this Lease, the following words or phrases shall have the meanings set forth in the balance of this Article.

2.1                      “Additional Rent” shall have the meaning given to it in Section 5.3.

2.2                      “Architect” means an architect, engineer, surveyor or other qualified person appointed by the Landlord from time to time.

2.3                      “Basic Rent” shall have the meaning given to it in Section 5.2.

2.4                      “Building” means the building in which the Premises are located.

2.5                      “Business Hours” means normal business hours for the Project as determined by Landlord from time to time and which, unless otherwise determined by Landlord, shall be from 8:00 a.m. to 6:00 p.m., Monday through Friday, excluding holidays, and subject to applicable Laws.

2.6                      “Commencement Date” shall have the meaning given to it in subsection 1(c).

2.7                      “Common Facilities” means: (a) the Project, excluding only Leasable Areas, Storage Areas, and premises at or below grade whether leased or not, used for sports, fitness or other recreational purposes, and including, without limitation: (i) all areas, facilities, systems, improvements, furniture, fixtures and equipment in or on the Project; (ii) the lands forming part of the Project; and (iii) parking areas and facilities, if any, and other service areas and facilities, if any; and (b) all lands, areas, facilities, systems, improvements, furniture, fixtures and equipment serving or benefiting the Project, whether or not located within the Project, to the extent that the same are designated or intended by Landlord to be part of the Common Facilities from time to time.

2.8                      “Environmental Legislation” means all statutes, laws, ordinances, codes, rules, regulations, orders, notices and directives, now or at any time hereafter in effect, made or issued by any municipal, provincial or federal government, or by any department, agency, board or office thereof, or by any board of fire insurance underwriters or any other agency or source whatsoever, regulating, relating to or imposing liability or standards of conduct concerning any matter which may be relevant to the use or occupancy of the Project or any part thereof or the conduct of any business or activity in, on, under or about the Project or any part thereof, or any material, substance or thing which may at any time be in, on, under or about the Project or any part thereof or emanate therefrom.

2.9                      “Expiry Date” shall have the meaning given to it in subsection 1(d).

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2.10         “Fiscal Year” means the period used by Landlord for fiscal purposes in respect of the Project. Unless otherwise determined by Landlord by written notice to Tenant at any time or times, each Fiscal Year shall be a calendar year. In the event of a change in the Fiscal Year, or with respect to a partial Fiscal Year at the beginning or end of the Term, all appropriate adjustments resulting from a Fiscal Year being shorter or longer than twelve (12) months shall be made.

2.11         “Hazardous Materials” means any substance or thing or mixture of them which alone, or in combination, or in concentrations, are flammable, corrosive, reactive or toxic or which might cause adverse effects or be deemed detrimental to living things or to the environment (including, but not limited to, any pollutant, contaminant, toxic or hazardous substance, such as by way of example, urea formaldehyde, asbestos, polychlorinated biphenyl, pesticides, mold, mildew, mycotoxins or microbial growths or any other substance the removal, manufacture, preparation, generation, use, maintenance, storage, transfer, handling or ownership of which is subject to applicable Laws.

2.12         “Landlord’s Work” - intentionally deleted.

2.13         “Laws” means all statutes, regulations, by-laws, orders, rules, requirements and directions of all governmental authorities having jurisdiction.

2.14         “Lease” means this Lease including all of the schedules attached hereto.

2.15         “Lease Year” means each consecutive period of three hundred sixty-five (365) days (or three hundred sixty-six (366) days in the case of a Lease Year which includes the month of February in a leap year), except that the first Lease Year shall commence on the Commencement Date and end on the day before the anniversary of the first day of the first full month of the Term; each successive Lease Year shall commence on the anniversary of the first day of the first full month of the Term.

2.16         “Leasable Areas” means all areas and spaces of the Project to the extent designated or intended from time to time by Landlord to be leased to tenants, whether leased or not, but excluding any parking areas and facilities, Storage Areas, and premises at or below grade.

2.17

(a) “Operating Costs” means the aggregate of all expenses and costs of every kind for each fiscal period designated by Landlord, as determined in accordance with reasonable principles and without duplication, incurred by or on behalf of Landlord with respect to the operation, maintenance, repair, replacement and management of the Project, including structural repairs and replacements, and all insurance relating to the Project, provided that if the Project is less than one hundred (100%) percent completed or occupied during the whole of any fiscal period, Operating Costs shall be adjusted to mean the amount obtained by adding to the actual Operating Costs during such fiscal period such additional costs as would have been incurred, as determined by Landlord acting reasonably, if the Project had been one hundred (100%) percent completed and occupied. For clarification, Landlord shall be entitled to adjust upward only those amounts which may vary depending on occupancy and in no event shall this provision entitle Landlord to recover more costs than Landlord actually incurs in respect of any adjusted item or require Tenant to pay in respect of such adjusted item more than Tenant would have had to pay had the Project been one hundred (100%) percent completed and occupied. Without in any way limiting the generality of the foregoing, Operating Costs shall include all costs in respect of the following:

(i) all remuneration, including wages and fringe benefits, of employees directly engaged in the operation, maintenance, repair, replacement and management of the Project;

(ii) heating, ventilating, air conditioning and humidity control of the Project and fire sprinkler maintenance and monitoring, if any, of the Project;

(iii) cleaning, janitorial services, window cleaning and waste removal;

(iv) operation, maintenance, repair and replacements of elevators and escalators, if any;

(v) all utilities supplied to the Project including, without limitation, water, gas, electricity and sewer charges, excluding those charged directly to tenants of the Project;

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(vi) landscaping and maintenance of all outside areas, including snow and ice clearing and removal and salting of driveways and parking areas and of sidewalks adjacent to the Project;

(vii) depreciation or amortization, over a reasonable period of time in accordance with reasonable principles, of the costs, including capital costs, of all improvements, furnishings, fixtures, equipment, machinery, systems and facilities constructed or installed in or used in connection with the Project and interest on the undepreciated cost of all items in respect of which depreciation or amortization is included herein at two (2%) percent in excess of the prime rate of interest charged by Landlord’s bank at Toronto as of the first day of each Fiscal Year;

(viii) all insurance which Landlord obtains and the cost of any deductible amounts payable by Landlord in respect of any insured risk or claim;

(ix) policing, supervision, security and traffic control;

(x) the cost of repairs and replacements to, and maintenance of, the Project including structural maintenance, repairs, improvements and replacements (with replacements of a capital nature being treated in accordance with the provisions hereof applicable to capital costs), and the cost of all supplies, machinery, equipment, facilities, systems and property installed therein or used in connection therewith, and all repairs and replacements to and maintenance thereof;

(xi) all costs in the nature of Operating Costs in respect of areas, services and facilities outside the Project, such as sidewalks and boulevards, off-site utilities and other service connections, and in respect of areas, services and facilities shared by users of the Project and users of any other property, to the extent Landlord performs or contributes to the same as a result of its ownership of the Project;

(xii) engineering, accounting, legal and other consulting and professional services related to Common Facilities;

(xiii) business taxes, if any, on Common Facilities;

(xiv) capital taxes in respect of Landlord’s ownership or other interest in the Project, namely any tax or taxes exigible under any provincial or federal legislation based upon or computed by reference to the paid-up capital or place of business of Landlord as determined for the purposes of such tax or based upon or computed by reference to the taxable capital employed in Canada, or any similar tax levied, imposed or assessed in the future in lieu thereof or in addition thereto by any governmental authority;

(xv) Sales Taxes payable by Landlord on the purchase of goods and services included in Operating Costs (excluding any such Sales Taxes which are available to and claimed by Landlord as a credit or refund in determining Landlord’s net tax liability on account of Sales Taxes, but only to the extent that such Sales Taxes are included in Operating Costs);

(xvi) the fair rental value of space occupied by Landlord for management, supervisory or administrative purposes relating to the Project; and

(xvii) a management fee of five (5%) percent of gross amounts received or receivable by Landlord in respect of the Project for all items, including all such items as are included in the Lease as Rent, assuming full occupancy and disregarding any reduction, limitation, deferral or abatement of any amounts in the nature of Rent.

(b) Operating Costs, however, shall be reduced by the following to the extent actually received by Landlord:

(i) proceeds of insurance and damages received by Landlord from third parties to the extent of costs otherwise included in Operating Costs;

(ii) contributions from parties other than tenants of the Project, if any, in respect of Operating Costs, such as contributions made by parties for sharing the use of Common Facilities, but not including rent or fees charged directly for the use of any Common Facilities such as parking fees and rent for Storage Areas; and

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(iii) amounts in the nature of Excess Costs, as defined in subsection 7.3(a), to the extent received by Landlord from tenants of the Project.

(c)                      Operating Costs, however, shall exclude the following:

(i) expenses incurred by Landlord in respect of other tenants’ leasehold improvements; and

(ii) repairs or replacements to the extent that the cost of the same is recovered by Landlord pursuant to original construction warranties.

2.18 “Premises” shall have the meaning given to it in Section 4.1.

2.19 “Project” means those lands described in Schedule “A” hereto and all buildings, structures, improvements, equipment and facilities of any kind erected or located thereon from time to time, as such lands, buildings, structures, improvements, equipment and facilities may be expanded, reduced or otherwise altered by Landlord in its sole discretion from time to time.

2.20 “Proportionate Share” means a fraction which has as its numerator the Rentable Area of the Premises and which has as its denominator the aggregate Rentable Area of Leasable Areas within the Project, or such portion or portions of the Leasable Areas within the Project to which Landlord, acting reasonably shall allocate such cost of which Tenant is to pay its Proportionate Share, subject to adjustment pursuant to subsections 7.3(b) and 7.3(c).

2.21 “Realty Taxes” means all taxes, rates, duties, levies, fees, charges, local improvement rates, levies and assessments whatever (“Taxes”), whether municipal, provincial, federal or otherwise, which may be levied, assessed or charged against or in respect of the Project or any part thereof or any fixtures, equipment or improvements therein, or against Landlord in respect of any of the same or in respect of any rental or other compensation receivable by Landlord in respect of the same, and including all Taxes which may be incurred by or imposed upon Landlord or the Project in lieu of or in addition to the foregoing including, without limitation, any Taxes on or in respect of real property rents or receipts as such (as opposed to a tax on such rents as part of the income of Landlord) any commercial concentration levy in respect of the Project, and any licence fee measured by rents or other charges payable by occupants of space in the Project.

2.22 “Rent” shall have the meaning given to it in Section 5.1.

2.23 “Rent Deposit Agreement” means the rent deposit agreement, if any, attached hereto.

2.24 “Rentable Area” of premises shall be the Usable Area of such premises plus the relevant proportion, as determined by Landlord, of all areas not leased to any one tenant such as, without limitation, hallways, elevator lobbies, ground floor lobbies, washrooms, mechanical and service rooms. Every Rentable Area shall be as determined by Landlord from time to time and each such determination shall be binding upon the parties hereto.

2.25 “Sales Taxes” means all business transfer, multi-stage sales, sales, use, consumption, value-added or other similar taxes imposed by any federal, provincial or municipal government upon Landlord, or Tenant, or in respect of this Lease, or the payments made by Tenant hereunder or the goods and services provided by Landlord hereunder including, without limitation, the rental of the Premises and the provision of administrative services to Tenant hereunder.

2.26 “Storage Areas” means all areas, if any, designated by Landlord from time to time to be used by tenants exclusively or primarily for storage purposes.

2.27 “Tenant’s Work” shall have the meaning as set out on Schedule “H” attached hereto.

2.28 “Term” shall have the meaning given to it in Section 4.2.

2.29 “Usable Area” when applied to the Premises or any Leasable Areas means the area measured from the interior face of glass in exterior walls and windows, from the exterior face of all walls and windows dividing any Leasable Areas from Common Facilities, and from the centre line of all interior walls separating any Leasable Areas from other Leasable Areas, all without deduction for any space occupied by structures, columns, beams, conduits, ducts or projections of any kind, and all without deduction for the recessing of any entrance way or boundary wall from the lease line, but excluding therefrom the area occupied by elevator shafts and building standard stairwells, and their enclosing walls, which do not serve exclusively a tenant occupying premises on more than one floor.

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3. INTENT OF LEASE

3.1 Net Lease

It is the intent of the parties hereto that, except as expressly herein set out, this Lease be absolutely net to Landlord and Landlord not be responsible for any expenses or obligations of any kind whatsoever in respect of the Premises or the Project.

4.             LEASE OF PREMISES

4.1                       Premises

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord those premises (“Premises”) being part of the Project and shown outlined on the plans attached hereto as Schedules “B” and “B-1”. The purpose of Schedules “B” and “B-1” is to show the approximate location of the Premises and its contents are not intended as a representation as to the precise size or dimensions of the Premises or any other aspects of the Project. The Premises shall extend from the upper surface of the structural subfloor to the lower surface of the structural ceiling within the boundaries of the Usable Area of the Premises. The Premises shall exclude the exterior faces of all perimeter walls, windows and doors of the Premises, notwithstanding the manner in which Rentable Area is measured.

4.2                       Term

The term of this Lease (the “Term”) shall be for the period described as the Term in subsection 1(b) hereof, commencing on the Commencement Date and ending on the Expiry Date, both dates as described in subsections l (c) and (d).

4.3                       Fixturing Period

From the later of: (i) Tenant’s execution and delivery to Landlord of this Lease; (ii) Tenant’s delivery to Landlord of insurance certificate(s) evidencing the requisite insurance coverage under this Lease, (the “Commencement Date of the Fixturing Period”), the Tenant shall be entitled to possession of Suite 103 Premises until the date preceding the Commencement Date in order to fixture Suite 103 Premises for the Tenant’s business and, thereafter, if Tenant has completed its fixturing, Tenant may be permitted continued occupancy of Suite 103 in order to commence carrying on business in Suite 103 Premises (“Fixturing Period”). During the Fixturing Period, Tenant shall not be obligated to pay Basic Rent, Operating Costs including utilities, or Realty Taxes but shall be liable for all other costs and obligations including the costs of any additional services in accordance with this Lease for which Tenant will continue to be obligated to pay, and Tenant shall be subject to all the other terms and conditions of this Lease insofar as they are applicable including, without limitation, the obligation to maintain insurance, and the provisions relating to the liability of Tenant for its acts and omissions, and the acts and omissions of its servants, employees, agents, contractors, invitees, concessionaires and licensees and the indemnification of Landlord and others under this Lease.

For clarity, as of the date hereof, the Tenant occupies the Suite 201 Premises under a sublease agreement with the current tenant of the Suite 201 Premises and until the Commencement Date hereof shall be bound by the lease thereunder.

4.4                       Acceptance of Premises

Tenant shall accept the Premises in the state and condition in which they are received from Landlord and Tenant’s entering into possession of the Premises shall be conclusive evidence of the acceptance by Tenant of the condition and state of repair of the Premises.

4.5                       Licence to Use Common Facilities

Subject to all other relevant provisions of this Lease, Landlord grants to Tenant the non­exclusive licence during the Term to use for their intended purposes, in common with others entitled thereto, such portions of the Common Facilities as are reasonably required for the use and occupancy of the Premises during Business Hours and such other hours as the Common Facilities are open for use, as determined by Landlord from time to time.

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4.6                      Quiet Enjoyment

Subject to Tenant’s complying with all of the terms of this Lease, Tenant may peaceably possess and enjoy the Premises for the Term without interruption by Landlord or any person claiming through Landlord.

4.7                      Fixturing of Premises

By not later than the Commencement Date, Tenant shall fully finish, furnish, fixture and staff the whole of the Premises and shall commence its business upon the whole of the Premises.

5. RENT

5.1                       Tenant to Pay

(a) Tenant shall pay in lawful money of Canada at such address as shall be designated from time to time by Landlord Basic Rent and Additional Rent (all of which is herein sometimes referred to collectively as “Rent”) as herein provided without any deduction, set-off or abatement whatsoever, Tenant hereby agreeing to waive any set-off rights it may have under any statute or at law. Subject to subsection 5.1(b), on the Commencement Date and the first day of each Fiscal Year thereafter and at any time during any Fiscal Year when required by Landlord, Tenant shall deliver to Landlord as requested by Landlord post-dated cheques for all payments of Basic Rent and estimates by Landlord of Additional Rent or any portions thereof payable during the balance of such Fiscal Year.

(b) Notwithstanding anything contained in this Lease to the contrary, provided Tenant in actual physical occupation of and actively and diligently conducting business in the whole of Premises is Occulogix, Inc., Tenant shall not be required to submit post-dated Rent cheques to Landlord in accordance with the provisions of the preceding paragraph until the earlier to occur of: (i) Landlord’s issuance of a notice of default to Tenant in accordance with the provisions of this Lease; and (ii) the third (3rd) instance of Tenant becoming late with the payment of Rent during the Term, whereupon Tenant shall immediately deliver to Landlord post-dated Rent cheques for each month then remaining in the Rental Year (and thereafter Tenant shall deliver twelve (12) post-dated cheques to Landlord at the beginning of each subsequent Rental Year).

5.2                       Basic Rent

Subject to Section 3 of Schedule “D” to this Lease, commencing on the Commencement Date, Tenant shall pay to Landlord a fixed minimum annual rent (‘Basic Rent”) for each Lease Year of the Term in the annual amount(s) described as Basic Rent in subsection 1(e), to be paid in equal monthly instalments, as described as Basic Rent in subsection 1(e), in advance on the first day of each month during the Term. On the Commencement Date, if it is other than the first day of a calendar month, Tenant shall pay to Landlord for such partial month Basic Rent computed on a per diem basis. If an amount per square foot is specified in the description of Basic Rent in subsection 1(e), then the Basic Rent is intended to be such amount per square foot of Rentable Area of the Premises per annum, and the Basic Rent shall be subject to adjustment based upon the Rentable Area of the Premises determined pursuant to Section 2.24. Within thirty (30) days after such adjustment, if any, being made, Tenant shall pay to Landlord any deficiency in previous payments of Basic Rent and Additional Rent and, if Tenant is not in default under the terms of this Lease, the amount of any overpayment by Tenant of Basic Rent and Additional Rent shall be paid to Tenant or credited to the account of Tenant.

5.3                       Additional Rent

In addition to Basic Rent, Tenant shall pay to Landlord, or as Landlord shall direct, all other amounts as and when the same shall be due and payable pursuant to the provisions of this Lease or pursuant to any other obligation in respect of the Premises, all of which shall be deemed to accrue on a per diem basis; all of such amounts are herein sometimes referred to as “Additional Rent”. Tenant shall promptly deliver to Landlord upon request evidence of due payment of all payments of Additional Rent required to be paid by Tenant hereunder.

5.4                       Deemed Rent and Allocation

If Tenant defaults in payment of any Rent (whether to Landlord or otherwise) as and when the same is due and payable hereunder, Landlord shall have the same rights and remedies against Tenant upon such default as if such sum or sums were rent in arrears under this Lease. Landlord may allocate payments received from Tenant among items of Rent then due and payable by Tenant. No acceptance by Landlord of payment by Tenant of any amount less than the full amount payable to Landlord, and no endorsement or direction on any cheque or other written instruction or statement respecting any payment by Tenant shall be deemed to constitute payment in full or an accord and satisfaction of any obligation of Tenant.

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5.5 Monthly Payments of Additional Rent

Landlord may from time to time by written notice to Tenant estimate or re-estimate any amount(s) payable by Tenant to Landlord hereunder including without limitation, amounts in respect of Operating Costs, Realty Taxes and utilities, for the then current or next following Fiscal Year, provided that the fiscal period used by Landlord in respect of any particular item may correspond to a shorter period within any Fiscal Year where such item, for example Realty Taxes, is payable in full by Landlord over such shorter period. The amounts so estimated shall be payable by Tenant in advance in equal monthly instalments over the Fiscal Year or other fiscal period on the same days as the monthly payments of Basic Rent. Landlord may, from time to time, alter the fiscal period selected in each case. As soon as practical after the expiration of each Fiscal Year, Landlord shall furnish to Tenant an audited statement which sets out the total amount of Operating Costs and Realty Taxes for the Project, together with a statement (“Final Statement”) which sets out the Tenant’s Proportionate Share of Operating Costs, its share of Realty Taxes and the cost of its utilities and other charges that are payable by it under any other relevant provisions of this Lease for such Fiscal Year. Upon written request from Tenant (Tenant agreeing to act reasonably and in a bona fide manner in making a request), Landlord shall, at Tenant’s expense, provide Tenant with reasonable information within Landlord’s possession or control in order to assist Tenant in substantiating Tenant’s Proportionate Share of Operating Costs and its share of Realty Taxes, provided that Tenant makes its request within sixty (60) days after delivery of the Final Statement. If the amount determined to be payable by Tenant as aforesaid shall be greater or less than the payments on account thereof previously made by Tenant, then within thirty (30) days after delivery of such Final Statement the appropriate adjustments will be made and Tenant shall pay any deficiency to Landlord and, if Tenant is not in default under the terms of this Lease, the amount of any overpayment shall be paid to Tenant or credited to the account of Tenant. Such Final Statement of Landlord shall be final and binding and Tenant shall have no right to dispute the accuracy or propriety of any amounts or calculations included therein, except to the extent that Tenant shall have, within sixty (60) days after being given such Final Statement, demonstrated to the satisfaction of Landlord any error in such Final Statement.

6. TAXES

6.1                      Taxes Payable by Tenant

Subject to Section 3 of Schedule “D” to this Lease, commencing on the Commencement Date, and thereafter at all times throughout the Term, Tenant shall pay to Landlord or the relevant taxing authority, as required by Landlord, not later than the time when they fall due all Realty Taxes levied, confirmed, imposed, assessed or charged (herein collectively or individually referred to as “charged”) against or in respect of the Premises and all buildings, furnishings, fixtures, equipment, improvements and alterations in or forming part of the Premises, and including, without limiting the generality of the foregoing, any such Realty Taxes charged against the Premises in respect of:

(i) the land on which the Premises is situate; and

(ii) any Common Facilities.

In addition, Tenant shall pay, in the same manner as it is required to pay or contribute to Operating Costs pursuant to Section 7.2 hereof, the Proportionate Share of Realty Taxes charged against or in respect of Common Facilities, and that portion allocated to the Project by Landlord, acting reasonably, of the amount, if any, of Realty Taxes charged against the Project in excess of the amount of Realty Taxes, in the aggregate, charged against Leasable Areas.

6.2                      Determination of Tenant’s Taxes

Whether or not there is a separate bill for Realty Taxes charged against the Premises or a separate assessment, the Realty Taxes charged against the Premises shall be determined by Landlord acting reasonably, the cost of making such determination to be included in Operating Costs; in making such determination Landlord shall have the right, without limiting its right to do otherwise, to establish separate assessments for the Premises and all other portions of the Project by using such criteria as Landlord, acting reasonably, shall determine to be relevant including, without limitation:

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(a) the then current established principles of assessment used by the relevant assessing authorities and on the same basis as the assessment actually obtained for the Project as a whole or the part thereof in which the Premises are located;

(b) assessments of the Premises and any other portions of the Project in previous periods of time;

(c) the Proportionate Share; and

(d) any act, religion or election of Tenant or any other occupant of the Project which results in an increase or decrease in the amount of Realty Taxes which would otherwise have been charged against the Project or any portion thereof.

6.3 Business Taxes and Sales Taxes

(a) Tenant shall pay to the relevant taxing authority as and when the same are due and payable all taxes charged in respect of any business conducted on, or any use or occupancy of, the Premises.

(b) Tenant shall pay to Landlord when due all Sales Taxes imposed on Landlord or Tenant with respect to Rent payable by Tenant hereunder or in respect of the rental of space under this Lease.

6.4                      Tax Bills and Assessment Notices

Tenant shall deliver to Landlord forthwith upon Tenant’s receiving the same copies of all assessment notices, tax bills, receipts and other documents received by Tenant relating to Realty Taxes on the Premises or the Project.

6.5                      Contest of Realty Taxes

Landlord may contest any Realty Taxes and appeal any assessments related thereto and may withdraw any such contest or appeal or may agree with the relevant authorities on any settlement in respect thereof. Tenant will co-operate with Landlord in respect of any such contest and appeal and shall provide to Landlord such information and execute such documents as Landlord requests to give full effect to the foregoing. All costs of any such contest and appeal by Landlord shall be included in Operating Costs. Tenant will not contest any Realty Taxes or appeal any assessments related thereto.

7. OPERATION OF PROJECT

7.1                      Operation of Project by Landlord

(a) Landlord shall repair, maintain and operate the Project, other than Leasable Areas, in a reasonable manner having regard to its size, age, location and character.

(b) Landlord may at its sole option, provide janitorial and cleaning services to the Premises substantially in accordance with prevailing standards for office buildings of a similar standard in the area in which the Project is located. Landlord shall not be liable for any loss or damage caused in performance of any maintenance or cleaning services provided to the Premises, no matter how caused, whether by theft and whether or not resulting from or contributed to by the negligence of Landlord, its servants, agents, employees, contractors or persons for whom Landlord is in law responsible. Without in any way limiting or affecting the generality or interpretation of the foregoing, Landlord shall in no event be liable for any indirect or consequential damages suffered by Tenant or any others.

7.2                      Tenant’s Payment of Operating Costs

Subject to Section 3 of Schedule “D” to this Lease, commencing on the Commencement Date and thereafter at all times throughout the Term Tenant shall pay to Landlord the Proportionate Share of Operating Costs. Subject to Section 5.5, the amounts payable by Tenant pursuant to this Section 7.2 shall be paid to Landlord within ten (10) days after the submission to Tenant of a statement showing the amount payable by Tenant from time to time. All amounts payable under this Article 7 in respect of any period not falling entirely within the Term shall be adjusted on a per diem basis.

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7.3 Adjustments to Operating Costs

(a) If by reason of the conduct of business on the Premises outside Business Hours, or by reason of the particular use or occupancy of the Premises or any of the Common Facilities by Tenant, its employees, agents or persons having business with Tenant, additional costs in the nature of Operating Costs, such as utility charges, security costs, and costs of heating, ventilating and air conditioning, are incurred in excess of the costs which would otherwise have been incurred for such items (“Excess Costs”), then Landlord shall have the right to determine on a reasonable basis and require Tenant to pay such Excess Costs.

(b) If Tenant or any other tenant of the Project, pursuant to its lease or otherwise by arrangement with Landlord, provides at its cost any goods or services the cost of which would otherwise be included in Operating Costs, or if any goods or services the cost of which is included in Operating Costs benefit any portion of the Project to a materially greater or lesser extent than any other portion of the Project, then either the denominator for determining a Proportionate Share, or alternatively the amount of Operating Costs, may be adjusted as determined by Landlord acting reasonably to provide for the equitable allocation of the cost of such goods and services among the tenants of the Project.

(c) Further, Tenant acknowledges that the Premises may form part of a multi-use project comprising various office towers, and Tenant acknowledges that the Operating Costs and Realty Taxes may be allocated on a reasonable basis between each portion of the Project, based on reasonable cost-sharing principles as applied by Landlord.

8. USE OF PREMISES

8.1                      Use of Premises

(a) To the intent that this covenant shall run with the Premises for the benefit for the Project, excluding the Premises, Tenant covenants that it shall not use and shall not permit the Premises to be used for any purpose other than as described as Use of Premises in subsection 1(h) hereof. Tenant acknowledges that Landlord is making no representation or warranty as to Tenant’s ability to use the Premises for its intended use and Tenant shall, prior to executing this Lease, perform such searches and satisfy itself that its use is permitted under all applicable Laws and that Tenant will be able to obtain an occupancy permit.

(b) Tenant acknowledges that it is aware of the nature of the exclusive use rights granted to certain other tenants of the Building and the Project, more particularly described in Schedule “E” attached hereto, and agrees that it shall not be permitted at any time during the Term and all extensions or renewals thereof to carry out any business in the Premises in such a manner as to infringe upon any such exclusive use provisions. Tenant also agrees that it shall not be permitted at any time during the Term and all extensions or renewals thereof to carry on business in the Premises in such a manner as to infringe upon any future exclusive uses which Landlord may grant from time to time. Tenant shall indemnify and save Landlord harmless from any and all liability, losses, damages and expenses incurred or suffered by Landlord in connection with the infringement or alleged infringement by Tenant of any of such exclusive use provisions listed or in remedying or attempting to remedy such infringement or alleged infringement including, without limitation, Landlord’s legal fees and expenses on a substantial indemnity basis.

(c) Tenant acknowledges and agrees that in no event will an exclusive use or a restrictive covenant be inferred or implied in its favour by reason of any restrictions on Tenant’s business or in the foregoing provisions of this Section 8.1.

8.2                      Conduct of Business

At all times throughout the Term, Tenant shall continuously and actively and diligently conduct its business in the whole of the Premises in a first class and reputable manner.

8.3                      Tenant’s Fixtures

Tenant shall install and maintain in the Premises at all times during the Term first-class trade fixtures including furnishings and equipment adequate and appropriate for the business to be conducted on the Premises, all of which shall be kept in good order and condition. Tenant shall not remove any trade fixtures or other contents from the Premises during the Term except, with the prior written consent of Landlord, in the ordinary course of business or for the purpose of replacing them with others at least equal in value and function to those being removed.

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8.4 Signs

Tenant shall not erect, install or display any sign or display on or visible from the exterior of the Premises except for a building standard sign on the main entry door to the Premises and on the building directory board, if any, both to be installed by Landlord at Tenant’s cost to be paid forthwith upon request.

8.5 Waste Removal

Tenant shall not allow any refuse, garbage or any loose, objectionable material to accumulate in or about the Premises or the Project and will at all times keep the Premises in a clean and neat condition. Tenant at its expense shall at all times comply with Landlord’s rules and regulations regarding the separation, removal and disposal of waste from the Premises. Notwithstanding the foregoing, Landlord shall have the option to take over the function of separating, removing and/or disposing of the waste and the cost to Landlord of same shall be included in Operating Costs and any proceeds obtained may be retained by Landlord for its own account. Until removed from the Project all waste from the Premises shall be kept in appropriate containers within the Premises.

8.6 Pest Control

Tenant shall co-operate with Landlord and with any contractor(s) engaged by Landlord in respect of pest extermination in the Premises and the Building.

8.7 Waste and Nuisance

(a) Tenant shall not cause, suffer or permit any waste or damage to the Premises or leasehold improvements, fixtures or equipment therein nor permit any overloading of the floors thereof and shall not use or permit to be used any part of the Premises for any dangerous, noxious or offensive activity or goods and shall not do or bring anything or permit anything to be done or brought on or about the Premises or the Project which results in undue noise or vibration or which Landlord may reasonably deem to be hazardous or a nuisance or annoyance to any other tenants or any other persons permitted to be on the Project, and Tenant shall immediately take steps to remedy, remove or desist from any activity, equipment or goods or conditions on or  emanating from the Premises to which Landlord objects on a reasonable basis. Tenant shall take every reasonable precaution to protect the Premises and the Project from risk of damage by fire, water or the elements or any other cause.

(b) Tenant shall not itself, and shall not permit any of its employees, servants, agents, contractors or persons having business with Tenant, to obstruct any Common Facilities or use or permit to be used any Common Facilities for other than their intended purposes. Without limiting the foregoing, Tenant shall not permit any equipment, goods or material whatsoever to be placed or stored anywhere in or on the Common Facilities, including without limitation on the loading docks and other outside areas adjacent to the Premises. Tenant shall not, and shall not permit anyone else to, place anything on the roof of the Building or go on to the roof of the Building for any purpose whatsoever, without Landlord’s prior written consent, which may be arbitrarily withheld in Landlord’s sole discretion.

(c) Tenant shall not use any advertising, transmitting or other media or devices which can be heard, seen, or received outside the Premises, or which could interfere with any communications or other systems outside the Premises.

(d) Tenant shall be solely responsible for any contaminant, pollutant or toxic substance at any time affecting the Premises resulting from any act or omission of Tenant or any other person on the Premises or any activity or substance on the Premises during the Term, and any period prior to the Term during which the Premises were used or occupied by or under the control of Tenant, and shall be responsible for the clean-up and removal of any of the same and any damages caused by the occurrence, clean-up or removal of any of the same, and Tenant shall indemnify Landlord in respect thereof.

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(e) Tenant agrees to complete the environmental questionnaire attached hereto as Schedule “G” and to forthwith advise Landlord in writing of any changes in its activities that may alter the information provided herein.

8.8 Compliance with Laws

Tenant shall be solely responsible for obtaining from all authorities having jurisdiction all necessary permits, licences and approvals as may be necessary to permit Tenant to occupy the Premises and conduct its business thereon, as required by all applicable Laws. Tenant shall comply at its own expense with all applicable Laws respecting the use, condition and occupation of the Premises, and all leasehold improvements, fixtures, equipment and contents thereof.

8.9 Deliveries

All deliveries to and from the Premises, and loading and unloading of goods, merchandise, refuse, materials and any other items, shall be made only by way of such driveways, access routes, doorways, corridors and loading docks as Landlord may from time to time designate and shall be subject to all applicable rules and regulations made by Landlord from time to time pursuant to Section 17.4.

8.10 Window Coverings

Tenant shall comply with all rules and regulations from time to time made by Landlord in respect of window coverings on the interior of the Premises, in order to maximize the efficiency of the climate control equipment in or serving the Premises or to maintain an attractive uniform appearance of the Project from the exterior thereof.

8.11 Prohibited Uses

Tenant shall not cause, suffer or permit the Premises or any part thereof to be used at any time during the Term for any of the following businesses or activities:

(a) any retail or wholesale sales activities or any auction;

(b) any vending machines or other coin operated machines, entertainment or games machines or any other mechanical or electrical serving or dispensing machines or devices whatsoever or the sale or supply of food or beverages (other than food or beverages such as are routinely served in office premises without charge to employees such as coffee and soft drinks) unless expressly permitted in writing by Landlord, in its sole discretion;

(c) any sale of tickets for theatre or other entertainment events or lottery tickets;

(d) any type of business or business practice which would, in the sole opinion of Landlord, tend to lower the character or image of the Project or any portion thereof;

(e) any use which in any way contravenes any restrictive covenants in leases granted by Landlord; Tenant covenants and agrees that it will not carry on in the Premises any business which will in any way place Landlord in breach of any such restrictive covenants and Tenant will indemnify and save Landlord harmless from and against all actions, claims, demands and costs with respect thereto; this subsection (e) shall not be interpreted to prevent Tenant from carrying on in the Premises any business to the extent expressly permitted pursuant to Section 8.1 hereof;

(f) any business or activity not in compliance with all Laws;

(g) a consulate, embassy, trade commission or other representative of a foreign government;

(h) a governmental agency, service or office, ministry, social services agency (including a welfare, immigration office or any other governmental office which would result in access to the Premises to the general public);

(i) an office for any political action, lobbying or for the primary purpose of any politically oriented or motivated activities;

(j) an office for a union;

(k) a social services agency;

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(l) in a manner which would result in people waiting in the Common Facilities of the Project;

(m) in any manner which would result in unemployed or homeless people or those in need of social assistance attending at the Project;

(n) for a call centre; or

(o) for a school or training centre of any kind.

The inclusion of the foregoing provisions of this Section 8.11 shall not be deemed to be a representation or warranty of Landlord that any of the foregoing activities will not be authorized by Landlord to be conducted on any part of the Project.

Tenant shall forthwith, upon the request of Landlord, discontinue any business, conduct or practice carried on or maintained in or about the Premises which, in Landlord’s sole opinion, may damage or reflect unfavourably upon Landlord, the Project, or any other tenants or occupants thereof.

If, in the opinion of Landlord, Tenant is in breach of any of the provisions of this Section 8.11, Tenant shall immediately discontinue such use upon Landlord’s written request.

9. SERVICES AND UTILITIES

9.1                      Utilities

(a) Tenant shall promptly pay for, as and when they fall due, to Landlord or as Landlord shall from time to time direct, all costs of supplying water, electricity, gas, and any other utilities which are available and supplied to or in respect of the Premises, and all costs for all fittings, connections and meters and all work performed in connection with any services or utilities provided to the Premises. Tenant shall promptly execute and deliver any agreements required by Landlord or by utilities suppliers in respect of the supply of any utilities to the Premises. Tenant’s use of any such utilities shall not exceed the available capacity of the existing systems from time to time.

(b) Should there be no individual meters for the measurement of the consumption of any utilities supplied to the Premises then Landlord, acting reasonably, may allocate the cost of such utilities among the various users thereof. If required by Landlord, Tenant shall install at its expense a separate meter or meters to measure the consumption of any or all utilities in the Premises. The cost of any utilities which are not charged to tenants of the Building individually shall be included in Operating Costs.

9.2                       Heating and Air Conditioning

(a) Tenant shall be responsible for and promptly pay for as and when due, to Landlord or as Landlord shall from time to time direct, all costs of heating, ventilating, air conditioning and humidity control in the Premises. The said costs payable by Tenant shall be as determined by separate meters, if any, and otherwise as determined by Landlord acting reasonably. Tenant shall install at its expense such meters and in such locations as shall be required by Landlord to measure the supply of or costs to be charged for heating, ventilating, air conditioning and humidity control in the Premises.

(b) Tenant shall operate the heating, ventilating, air conditioning and humidity control equipment within or serving the Premises in such manner as to maintain such reasonable conditions of temperature, air circulation and humidity within the Premises as determined by Landlord and, in any event, in such manner that there shall be no direct or indirect use of heating, ventilating, air conditioning and humidity control from the Common Facilities for the Premises. Tenant shall comply with all rules and regulations as Landlord shall make from time to time respecting the maintenance, repair and operation of all such heating, ventilating and air conditioning equipment.

(c) Landlord shall have the right to require Tenant to pay as Excess Costs, pursuant to subsection 7.3(a), any increase in Operating Costs caused by: (a) the particular use or occupancy of the Premises; (b) above-normal consumption of electrical or other power on the Premises; (c) the configuration of partitions or other items on the Premises; or (d) the failure of Tenant to shade windows.

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9.3                       Non-Liability of Landlord

Landlord shall not be liable for any damages, direct or indirect, resulting from or contributed to by any interruption or cessation in supply of any utilities or heating, ventilating, air conditioning and humidity control. Without limiting the generality of the foregoing, Landlord shall not be liable for and Tenant shall indemnify Landlord against any and all indirect or consequential damages or damages for personal discomfort or illness of Tenant or any persons permitted by it to be on the Premises, by reason of the suspension or non-operation of any utilities, heating, ventilating, air conditioning or humidity control.

9.4                       Landlord’s Suspension of Utilities

In order to effect any maintenance, repairs, replacements or alterations to any of such utilities, heating, ventilating, air conditioning or humidity control equipment or systems, or any other part of the Project, Landlord shall have the right to modify or temporarily discontinue or suspend the operation of any such equipment or systems as required from time to time.

10. MAINTENANCE, REPAIRS AND ALTERATIONS

10.1 Maintenance and Repairs of Premises

At all times throughout the Term, Tenant at its sole expense shall perform such maintenance (including painting and repair or replacement of any interior finishings), repairs and replacements as required to keep the Premises, all contents thereof and all services and equipment located in or primarily serving the Premises, in first-class appearance and condition, and in accordance with all Laws and Landlord’s reasonable requirements, subject only to the obligations of Landlord expressly provided in Section 10.7. For the purposes of this Section 10.1, the Premises shall include, without limitation, all leasehold improvements, perimeter walls and glass and doors.

10.2                     Approval of Repairs and Alterations

(a) Tenant shall not make any repairs, replacements, changes, additions, improvements or alterations (hereinafter referred to as “Alterations”) to the Premises without Landlord’s prior written consent, which consent shall not be unreasonably withheld unless such proposed Alterations might affect the demising walls or entrances of the Premises or the structure of the Building or the coverage of the Project for zoning purposes, or the parking requirements for the Project, or impair the value or usefulness of the Premises or the Project, in any of which cases Landlord’s consent may be unreasonably withheld in Landlord’s sole discretion.

(b) With its request for consent, Tenant shall submit to Landlord details of the proposed Alterations including plans and specifications prepared by qualified architects or engineers, and such Alterations shall be completed in accordance with the plans and specifications approved in writing by Landlord.

(c) All Alterations shall be planned and completed in compliance with all Laws and Tenant shall, prior to commencing any Alterations, obtain at its expense all necessary permits and licences. Prior to the commencement of any such Alterations Tenant shall furnish to Landlord such evidence as reasonably required by Landlord of the projected cost of Alterations and Tenant’s ability to pay for same, together with such indemnification against costs, liens and damages as Landlord shall reasonably require including, if required by Landlord, a performance, completion and labour and materials bond acceptable to Landlord guaranteeing completion of such Alterations.

(d) All Alterations shall be performed at Tenant’s cost, promptly and in a good and workmanlike manner and in compliance with Landlord’s rules and regulations, by competent contractors or workmen who shall be first approved in writing by Landlord, which approval shall not be unreasonably withheld. Unless expressly authorized by Landlord in writing to the contrary, all Alterations which might cost in excess of Ten Thousand ($10,000.00) Dollars to complete or which might require a building permit or which might affect the structure or any mechanical, electrical, utility, sprinkler, communications or other similar systems within the Premises or the Project, shall, at Landlord’s option, be performed at Tenant’s expense by Landlord or by contractors designated by Landlord and under Landlord’s supervision and under the supervision of a qualified architect or engineer approved by Landlord, in advance. For all Alterations performed by Landlord or at Landlord’s expense or under Landlord’s supervision, Tenant shall pay forthwith upon request all amounts paid or payable by Landlord to third parties and all reasonable charges of Landlord for its own personnel plus fifteen (15%) percent of such amounts and charges for Landlord’s inspection and supervision. All Alterations, the making of which might disrupt other tenants or occupants of the Project or the public, shall be performed outside Business Hours.

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(e) If Tenant performs any such Alterations without compliance with all of the foregoing provisions of this Article 10, Landlord shall have the right to require Tenant to remove such Alterations forthwith.

(f) Tenant shall pay to Landlord forthwith upon request all of Landlord’s reasonable costs including, without limitation, fees of architects, engineers and designers, incurred in dealing with Tenant’s request for Landlord’s consent to any Alterations, whether or not such consent is granted, and in inspecting and supervising any such Alterations and Landlord shall have the right to require Tenant to pay Landlord a deposit on account of such costs as a precondition to Landlord’s granting such consent.

10.3                    Repair According to Landlord’s Notice

Landlord or any persons designated by it shall have the right to enter the Premises at any time to view the state of repair and condition thereof and Tenant shall promptly perform according to Landlord’s written notice any maintenance (including painting and repair or replacement of any interior finishings), repairs or replacements in accordance with Tenant’s obligations hereunder.

10.4 Notice by Tenant

Tenant shall give immediate written notice to Landlord of any accident, defect or damage in any part of the Premises or the Project which comes to the attention of Tenant or any of its employees or contractors notwithstanding the fact that Landlord may have no obligation in respect of the same.

10.5 Ownership of Leasehold Improvements

All leasehold improvements installed in or about the Premises shall forthwith upon the installation thereof become the property of Landlord but without Landlord’s thereby accepting any responsibility in respect of the maintenance, repair or replacement thereof. The expression “leasehold improvements” where used in this Lease includes, without limitation, all fixtures, installations, alterations and additions from time to time made or installed in or about the Premises, and includes all of the following, whether or not they are trade fixtures or easily removable: doors, partitions and hardware; mechanical, electrical and utility installations; carpeting, drapes, other floor and window coverings and drapery hardware; heating, ventilating, air conditioning and humidity control equipment; lighting fixtures; built-in furniture and finishings; counters in any way connected to the Premises or to any utility services located therein. The only exclusions from “leasehold improvements” are free-standing furniture, trade fixtures and equipment not in any way connected to the Premises or to any utilities systems located therein.

10.6 Construction Liens

Tenant shall make all payments and take all steps as may be necessary to ensure that no lien is registered against the Project or any portion thereof as a result of any work, services or materials supplied to Tenant or the Premises. Tenant shall cause any such registrations to be discharged or vacated immediately after notice from Landlord, or within ten (10) days after registration, whichever is earlier. Tenant shall indemnify and save harmless Landlord from and against any liabilities, claims, liens, damages, costs and expenses, including legal expenses, arising in connection with any work, services or materials supplied to Tenant or the Premises. If Tenant fails to cause any such registration to be discharged or vacated as aforesaid then, in addition to any other rights of Landlord, Landlord may, but shall not be obliged to, discharge the same by paying the amount claimed into court, and the amounts so paid and all costs incurred by Landlord, including legal fees and disbursements, shall be paid by Tenant to Landlord forthwith upon demand.

10.7 Landlord’s Repairs

Subject to the provisions of Article 12 herein and subject to Tenant’s obligations hereunder, to the extent that the failure to do so would materially detrimentally affect access to or use of the Premises, on reasonable notice from Tenant Landlord shall repair: (a) defects in the structure of the Project and exterior walls of the Building; and (b) transportation, electrical, mechanical and drainage equipment and systems forming part of the Project but not located within the Premises and not serving exclusively the Premises. Landlord’s costs of compliance with this Section 10.7 shall be included in Operating Costs to the extent set out in Section 2.17. Provided that to the extent that such repair is necessitated directly or indirectly by any act or omission of Tenant or any servant, employee, agent, contractor, invitee or licensee of Tenant, Tenant shall be solely responsible for the cost of such repairs in accordance with Section 10.8 and shall indemnify Landlord in respect thereof.

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10.8 Special Services

(a) Tenant shall pay Landlord on demand all charges as determined and allocated by Landlord acting reasonably in respect of all special services provided to or for the benefit of Tenant beyond building standard services the costs of which are included in Operating Costs. Unless otherwise expressly agreed between Landlord and Tenant to the contrary in respect of any specific matter from time to time, all work performed and materials supplied by Landlord for Tenant or otherwise respecting the Premises pursuant to the provisions hereof or otherwise shall be paid for by Tenant to Landlord forthwith on demand at Landlord’s cost for the same plus fifteen (15%) percent of such amounts and charges for inspection and supervision.

(b) Landlord shall be the exclusive supplier in respect of the Premises, at Tenant’s expense, for replacement of tubes, bulbs and ballasts, for any services requiring drilling or otherwise penetrating floors, walls or ceilings, and for locksmithing and security arrangements. If Landlord, in its sole discretion, agrees in writing with Tenant that it shall not be the exclusive supplier of any of the aforesaid services, then only persons approved by Landlord acting reasonably may supply same to the Premises.

11. END OF TERM

11.1                     Vacating of Possession

Forthwith upon the expiry or earlier termination of the Term, Tenant shall deliver to Landlord vacant possession of the Premises in such condition in which Tenant is required to keep the Premises during the Term pursuant hereto and shall leave the Premises in neat and clean condition and shall deliver to Landlord all keys for the Premises and all keys or combinations to locks on doors or vaults in the Premises.

11.2                     Removal of Trade Fixtures

Provided Tenant has paid all Rent and is not otherwise in default hereunder, or if otherwise authorized or requested by Landlord, at the expiry or earlier termination of the Term Tenant shall remove its trade fixtures and repair all damage resulting from the installation or removal of such trade fixtures. If at the expiry or earlier termination of the Term Tenant does not remove its trade fixtures or any of its other property on the Premises, Landlord shall have no obligation in respect thereof and may sell or destroy the same or have  them removed or stored at the expense of Tenant; at the option of Landlord, such trade fixtures or property shall  become the absolute property of Landlord without any compensation to Tenant.

11.3 Removal of Leasehold Improvements

(a) Notwithstanding that the leasehold improvements become the property of Landlord upon installation, at the expiry or earlier termination of the Term Tenant shall remove any or all of such leasehold improvements made or installed in or about the Premises by Tenant, or by  Landlord as Tenant’s contractor, as required by Landlord and in so doing shall repair all damage resulting from, and shall restore the Premises to their condition prior to, the installation and removal of such leasehold improvements.

(b) Notwithstanding anything in the foregoing to the contrary, provided Tenant in actual physical occupancy of and actively and diligently conducting business in the whole of the Premises is Occulogix, Inc., upon the expiry or earlier termination or sooner surrender of this Lease, Tenant’s obligation for removal of leasehold improvements shall extend only to: (i) those leasehold improvements installed by or on behalf of Tenant without Landlord’s prior written consent; and (ii) those Non-Standard Leasehold Improvements as Landlord shall require to be removed, and Tenant shall restore the Premises and the Project to the condition in which they existed prior to the installation and removal of such improvements. The term “Non-Standard Leasehold Improvements” shall mean: computer rooms and/or any other raised-floor environments; non-standard heating, ventilating and air conditioning systems installed for the specific use of the Premises; internal stairwells; custom lighting and electrical installations; dry-wall ceilings; telecommunication equipment (including all cabling, wiring, and conduits which have been installed by or on behalf of the Tenant); oversized boardrooms; training rooms; safes; vaults and, whether located within the Premises or elsewhere in the Project, any back-up and/or emergency power supplies, antennae, satellite dishes or other communication  facilities including, without limitation, creating within the Premises a large number of small offices and corridors which change direction or discontinue. Landlord may do or arrange to have done the work necessary to remove such improvements from the Premises if Tenant fails to do so, and Tenant shall pay for Landlord’s costs of so doing, plus an administration fee representing Landlord’s costs to supervise and inspect such work, in the amount of fifteen (15%) percent of such costs, forthwith upon demand therefor.

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11.4                     Overholding by Tenant

If Tenant remains in possession of all or any part of the Premises after the expiry of the Term with the consent of Landlord but without any further written agreement, this Lease shall not be deemed thereby to have been extended and Tenant shall be deemed to be occupying the Premises as a monthly tenant on the same terms as set forth in this Lease insofar as they are applicable to a monthly tenancy except the monthly Basic Rent shall be one hundred and fifty percent (150%) of the monthly Basic Rent payable during the last twelve months of the Term.

12. DAMAGE AND DESTRUCTION

12.1                     Insured Damage to Premises

(a) If there is damage to or destruction of the Premises caused by an occurrence against which, and to not more than the extent that, Landlord either is required to insure pursuant to this Lease or  is otherwise insured (“Insured Damage”), then the following provisions of this Section 12.1 shall apply.

(b) If such damage or destruction is such as to render the whole or any part of the Premises unusable for the purpose of Tenant’s use and occupancy thereof, Landlord shall deliver to Tenant within thirty (30) days following the occurrence of such damage or destruction its reasonable opinion as to whether or not the same is capable of being repaired, to the extent of Landlord’s repair obligations hereunder, within one hundred eighty (180) days following such occurrence.

(c) If this Lease is not terminated as herein provided, Landlord, to the extent of insurance proceeds which it receives or would have received had it maintained such insurance as it is required to maintain hereunder, and to the extent that any mortgagee(s) entitled to be paid such insurance  proceeds consents to the use of the same for repair of such damage or destruction, shall diligently proceed to perform repairs to the Premises to the extent of its obligations pursuant to Section 10.7 hereof; and Tenant, commencing as soon as practicable but without interfering with Landlord’s repairs, shall diligently perform such repairs as are Tenant’s responsibility pursuant hereto.

(d) If in Landlord’s reasonable opinion, the Premises are not capable of being repaired as aforesaid within one hundred eighty (180) days following such occurrence, Landlord may elect, by written notice to the Tenant within thirty (30) days after delivery by Landlord of the opinion  provided for in subsection 12.1(b) above, to terminate this Lease, whereupon Tenant shall immediately surrender possession of the Premises and Basic Rent and all other payments for which Tenant is liable pursuant hereto shall be apportioned to the effective date of such termination.

(e) If the damage is such as to render the whole or any part of the Premises unusable in whole or in part for the purpose of Tenant’s use and occupancy thereof for a period of five (5) days or more,  then the Basic Rent payable hereunder shall abate for the portion of such period in excess of five (5) days, to the extent that Tenant’s use and occupancy of the Premises is in fact diminished, which determination shall be made by Landlord, until the earlier of: (i) the thirtieth (30th) day after the Premises are determined by Landlord to be ready for Tenant to commence its repairs to the Premises; and (ii) the date on which Tenant first commences the conduct of business in any part of the Premises which had been damaged.

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(f) The respective obligations of Landlord and Tenant with respect to repair of the Premises following any damage or destruction shall be performed with all reasonable speed and in accordance with all applicable obligations to repair contained herein. Tenant acknowledges that its obligations to repair the Premises after such damage or destruction shall be performed at its sole cost without any contribution by Landlord whether or not the damage or destruction was caused by Landlord’s fault and whether or not Landlord had at any time made any contribution to the cost of any leasehold improvements in the Premises. In any event, within thirty (30) days after Landlord has completed its repairs to the Premises as aforesaid, Tenant shall complete its repairs to the Premises and shall recommence the conduct of business thereon.

12.2 Uninsured Damage and Last Two Years

If there is damage to or destruction of the Premises and if, in Landlord’s reasonable opinion, of which notice is given to Tenant within fifteen (15) days after the later of the date of such damage or destruction and the date upon which Landlord is notified by Tenant of such damage or destruction, the Premises are not capable of being repaired to the extent of Landlord’s repair obligations within thirty (30) days following the giving of such notice and if: (a) such damage or destruction is not Insured Damage; or (b) such damage or destruction occurs within the last two (2) Lease Years of the Term and either Tenant has no remaining rights to renew this Lease or, having the right to renew this Lease fails to do so within fifteen (15) days after receipt of the said notice, then Landlord, at its option to be exercised by written notice given to Tenant within thirty (30) days after the later of the date of such damage or destruction and the date upon which Landlord is notified by Tenant of such damage or destruction, may terminate this Lease whereupon Tenant shall immediately surrender possession of the Premises and Basic Rent and all other payments for which Tenant is liable hereunder shall be apportioned to the effective date of such termination. If this Lease is not terminated as aforesaid the parties shall repair as provided in subsection 12.1(c) hereof and there shall be no abatement of any Rent unless the damage or destruction is Insured Damage and then only to the extent expressly provided in subsection 12.1(e) above.

12.3 Damage to Project

If twenty-five (25%) percent or more of the Rentable Area of Leasable Areas of the Project is damaged or destroyed by any cause whatsoever, whether or not there is any damage to the Premises, Landlord may, at its option, by notice given to Tenant within sixty (60) days after such occurrence, terminate this Lease as of a date specified in such notice, which date shall be not less than thirty (30) days and not more than one  hundred eighty (180) days after the giving of such notice. In the event of such termination Tenant shall surrender vacant possession of the Premises by not later than the said date of termination, and Basic Rent and all other payments for which Tenant is liable hereunder shall be apportioned to the effective date of termination. If Landlord does not so elect to terminate this Lease, Landlord shall diligently proceed to repair and rebuild the Project to the extent of its obligations pursuant hereto to the extent of insurance proceeds which Landlord receives or would have received had it maintained such insurance as required hereunder, and to the extent that any mortgagee entitled to be paid such insurance proceeds consents to the use of same for such purpose.

12.4 Restoration of Premises or Project

If there is damage to or destruction of the Premises or the Project and if this Lease is not terminated pursuant hereto, Landlord, in performing its repairs as required hereby, shall not be obliged to repair or rebuild in accordance with the plans or specifications for the Premises or the Project as they existed prior to such damage or destruction; rather, Landlord may repair or rebuild in accordance with any plans and specifications chosen by Landlord in its sole discretion provided that Tenant’s use of and access to the Premises and the general overall quality of the Project are not materially detrimentally affected by any difference in plans or specifications of the Premises or the Project.

12.5 Determination of Matters

For the purposes of this Article 12 all matters requiring determination such as, without limitation, the extent to which any area(s) of the Premises or the Project are damaged or are not capable of being used, or the time within which repairs may be made, unless expressly provided to the contrary, shall be determined by Landlord’s Architect, such determination to be final and binding on the parties.

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13. INSURANCE AND INDEMNITY

13.1 Landlord’s Insurance

Landlord shall obtain and maintain in full force and effect during the Term with respect to the Project insurance against such occurrences and in such amounts, on such terms and with such deductible(s) as would a prudent owner of such a project. Such insurance may include, without limitation: (a) insurance on the Building and any improvements therein which Landlord desires to insure, against damage by fire and other risks covered by extended coverage fire insurance policies or, at Landlord’s option, all risks insurance; (b) boiler and machinery insurance; (c) rental income insurance; (d) public liability insurance; and (e) such other insurance and in such amounts and on such terms as Landlord, in its discretion, may reasonably determine. Notwithstanding that Tenant shall be contributing to the costs of such insurance pursuant to the terms of this Lease, Tenant shall not have any interest in or any right to recover any proceeds under any of Landlord’s insurance policies.

13.2 Tenant’s Effect On Other Insurance

(a) Tenant shall not do or permit anywhere on the Premises or Project anything which might: (i) result in any increase in the cost of any insurance policy of Landlord on the Project; (ii) result in an actual or threatened cancellation of or adverse change in any insurance policy of Landlord on the Project; or (iii) be prohibited by any insurance policy of Landlord on the Project.

(b) If the cost of any insurance policies of Landlord on the Project is increased as a result of any improvements made by Tenant or anything done or permitted by Tenant anywhere on the Premises or Project, Tenant shall pay the full amount of such increase to Landlord forthwith upon demand. Tenant’s responsibility for any increased cost of insurance as aforesaid shall be conclusively determined by a statement issued by the organization, company or insurer establishing the insurance rates for the relevant policy.

(c) If there is an actual or threatened cancellation of or adverse change in any policy of insurance of Landlord on the Project by reason of anything done or permitted by Tenant anywhere on the Premises or Project, and if Tenant fails to remedy the situation giving rise to such actual or threatened cancellation or change within twenty-four (24) hours after notice from Landlord, then Landlord may, at its option, either: (i) terminate this Lease forthwith by written notice; or, (ii) remedy the situation giving rise to such actual or threatened cancellation or change, all at the cost of Tenant to be paid to Landlord forthwith upon demand, and for such purpose Landlord shall have the right to enter upon the Premises without further notice.

13.3 Tenant’s Insurance

(a) Tenant shall, at its sole expense, maintain in full force and effect at all times throughout the Term and such other times, if any, as Tenant occupies the Premises or any portion thereof, such insurance as would be maintained by a prudent tenant of premises such as the Premises, which insurance shall include at least all of the following:

(i) commercial general liability insurance on an occurrence basis with respect to any use and occupancy of or things on the Premises, and with respect to the use and occupancy of any other part of the Project by Tenant or any of its employees, servants, agents, invitees, licensees, subtenants, contractors or persons for whom Tenant is in law responsible, with coverage for any occurrence of not less than Five Million ($5,000,000.00) Dollars or such higher amount as Landlord may reasonably require on not less than one (1) month’s notice;

(ii) all risks insurance covering the leasehold improvements, trade fixtures and contents on the Premises, for not less than the full replacement cost thereof and with a replacement cost endorsement;

(iii) if applicable, broad form comprehensive boiler and machinery insurance on all insurable objects located on or about the Premises or which are the property or responsibility of Tenant, for not less than the full replacement cost thereof and with a replacement cost endorsement;

(iv) business interruption insurance and/or extra expense insurance in such amounts as necessary to fully compensate Tenant for direct or indirect loss of sales or earnings or extra expenses incurred resulting from or attributable to any of the perils required to be  insured against under the policies referred to in subsections 13.3(a)(ii) and (iii) and all circumstances usually insured against by cautious tenants including losses resulting from interference with or prevention of access to the Premises or the Project as a result of such perils or for any other reason;

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(v) tenant’s legal liability insurance for the full replacement cost of the Premises, and the loss of use thereof; and

(vi) any other insurance against such risks and in such amounts as Landlord or any mortgagee of Landlord may from time to time reasonably require upon not less than thirty (30) days’ notice to Tenant.

(b) Each of Tenant’s insurance policies shall name Landlord and Landlord’s Mortgagee as an additional insured with Landlord as loss payee, and shall be taken out with insurers and shall be in such form and on such terms as are satisfactory to Landlord from time to time. Without limiting the generality of the foregoing, each of Tenant’s insurance policies shall contain:

(i) the standard mortgage clause as may be required by any mortgagee of Landlord;

(ii) a waiver by the insurer of any rights of subrogation to which such insurer might otherwise be entitled against Landlord or any person for whom Landlord is in law responsible;

(iii) an undertaking by the insurer that no material change adverse to Tenant or Landlord or any mortgagee of Landlord will be made and the policy will not lapse or be terminated, except after not less than thirty (30) days’ written notice to Tenant and Landlord and to any mortgagee of Landlord;

(iv) a provision stating that Tenant’s insurance policy shall be primary and shall not call into contribution any other insurance available to Landlord;

(v) a disputed loss endorsement, where applicable;

(vi) a severability of interests clause and a cross-liability clause; and

(vii) a waiver, in respect of the interests of Landlord and any mortgagee of Landlord, of any provision with respect to any breach of any warranties, representations, declarations or conditions contained in the said policy.

(c) Tenant shall ensure that Landlord shall at all times be in possession of either certificates or certified copies of Tenant’s insurance policies which are in good standing and in compliance with Tenant’s obligations hereunder.

(d) Tenant hereby releases Landlord and its servants, agents, employees, contractors and those for whom Landlord is in law responsible from all losses, damages and claims of any kind in respect of which Tenant is required to maintain insurance hereunder or is otherwise insured.

13.4 Landlord’s Right to Place Tenant’s Insurance

If Tenant fails to maintain in force, or pay any premiums for, any insurance required to be maintained by Tenant hereunder, or if Tenant fails from time to time to deliver to Landlord satisfactory proof of the good standing of any such insurance or the payment of premiums therefor, then Landlord, without prejudice to any of its other rights and remedies hereunder, shall have the right but not the obligation to effect such insurance on behalf of Tenant and the cost thereof and all other reasonable expenses incurred by Landlord in that regard shall be paid by Tenant to Landlord forthwith upon demand.

13.5 Landlord’s Non-Liability

Tenant agrees that Landlord shall not be liable or responsible in any way for any injury or death to any person or for any loss or damage to any property, at any time on or about the Premises or any property owned by or being the responsibility of Tenant or any of its servants, agents, customers, contractors or persons for whom Tenant is in law responsible elsewhere on or about the Project, no matter how the same shall be caused and whether or not resulting from the negligence of Landlord, its servants, agents, employees, contractors or persons for whom Landlord is in law responsible. Without limiting the generality of the foregoing, Landlord shall not be liable or responsible for any such injury, death, loss or damage to any persons or property caused or contributed to by any of the following: fire, explosion, steam, water, rain, snow, dampness, leakage, electricity or gas. Without limiting or affecting the generality or interpretation of the foregoing, and notwithstanding the foregoing, it is agreed that Landlord shall in no event be liable for any indirect or consequential damages suffered by Tenant.

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13.6 Indemnity of Landlord

Tenant shall indemnify Landlord and all of its servants, agents, employees, contractors and persons for whom Landlord is in law responsible against any and all liabilities, claims, damages, losses and expenses, including all reasonable legal fees and disbursements, arising from: (a) any breach by Tenant of any of the provisions of this Lease; (b) any act or omission of any person on the Premises or any use or occupancy of or any things in the Premises; (c) any act or omission of Tenant or any of its servants, agents, employees, invitees, licensees, sub-tenants, concessionaires, contractors or persons for whom Tenant is in law responsible on the Premises or elsewhere on or about the Project; or (d) any injury or death of persons, or any loss or damage to property of Tenant or any of its servants, agents, employees, invitees, licensees, subtenants, contractors or persons for whom Tenant is in law responsible, on the Premises or elsewhere on or about the Project.

13.7                     Landlord’s Employees and Agents

Every indemnity, exclusion, release of liability and waiver of subrogation contained in this Lease for the benefit of Landlord shall extend to and benefit all of Landlord’s servants, agents, employees, and others for whom Landlord is in law responsible. Solely for such purpose, and to the extent that Landlord expressly chooses to enforce the benefits of this section for the foregoing persons, it is agreed that Landlord is the agent or trustee for such persons.

14.          ASSIGNMENT, SUBLETTING AND CHANGE OF CONTROL

14.1 Consent Required

(a) Tenant shall not assign this Lease in whole or in part and shall not sublet or part with or share possession of all or any part of the Premises and shall not grant any licences or other rights to others to use any portion of the Premises (all of the foregoing being hereinafter referred to as a “Transfer”; a party making a Transfer is referred to as a “Transferor” and a party taking a Transfer is referred to as a “Transferee”) without the prior written consent of Landlord in each instance, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, Landlord shall be entitled to arbitrarily or unreasonably withhold its consent to any Transfer in respect of which Landlord exercises its right to terminate this Lease, or to take a Transfer of the Premises or any portion thereof, pursuant to Section 14.3. The provisions of this Article 14 shall apply to any Transfer which might occur by inheritance or operation of law.

(b) Notwithstanding and without in any way affecting or limiting the interpretation of the foregoing, it is agreed that it shall be reasonable for Landlord to withhold its consent to a Transfer unless it is shown to Landlord’s satisfaction that: (i) the proposed Transferee has a good business and personal reputation; (ii) the proposed Transferee or its principal shareholders has not been bankrupt or the holder of twenty (20%) percent or more of the issued shares of any class of shares of a corporation or of an interest in a partnership, either of which has been bankrupt in the ten (10) years preceding the date of the proposed Transfer; (iii) the proposed Transferee has good financial strength at least equal to that of Tenant at the date of this Lease, and at least sufficient to satisfy all of the obligations of Tenant hereunder; (iv) the proposed Transferee is not an existing occupant of any part of the Project; (v) the proposed Transferee has not then recently been a prospect involved in bona fide negotiations with Landlord respecting the leasing of any premises in the Project and is not in any way affiliated with such bona fide prospect; (vi) the Transfer would not result in a breach of any agreement by which Landlord is bound with respect to any part of the Project; and (vii) without affecting the interpretation of Section 8.1 or any other provision hereof, the business proposed to be carried on by the Transferee on the Premises will not be incompatible with the uses of other tenants of the Project, and will not be more burdensome on the Project, in terms of parking requirements or any other factor, than the business previously carried on by Tenant on the Premises.

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(c) If Landlord withholds, delays or refuses to give consent to any Transfer, whether or not Landlord is entitled to do so, Landlord shall not be liable for any losses or damages in any way resulting therefrom and Tenant shall not be entitled to terminate this Lease or exercise any other remedy whatever in respect thereof except to seek the order of a court of competent jurisdiction compelling Landlord to grant any such consent which Landlord is obliged to grant pursuant to the terms of this Lease.

(d) No Transfer may be made where any portion of Rent is lower than that provided for herein or otherwise on terms more favourable to the Transferee than the terms set forth herein.

14.2 Obtaining Consent

All requests to Landlord for consent to any Transfer shall be made to Landlord in writing together with a copy of the agreement pursuant to which the proposed Transfer will be made, accompanied by such information in writing as a landlord might reasonably require respecting a proposed Transferee including, without limitation, name, business and home addresses and telephone numbers, business experience, credit information and rating, financial position and banking and personal references, description of business proposed to be conducted by the Transferee on the Premises and parking requirements for such business. Tenant shall promptly pay all costs incurred by Landlord in considering and processing the request for consent including legal costs and all costs of completing any documentation to implement any Transfer, which shall be prepared by Landlord or its solicitor if required by Landlord, and as a prior condition to considering any request for consent Landlord may require from Tenant payment of a reasonable deposit, of at least Six Hundred ($600.00) Dollars, on account of Landlord’s said costs.

14.3 Landlord’s Option

Notwithstanding the other provisions contained in this Article 14, after Landlord receives a request for consent to a Transfer with the information and copy of agreement hereinabove required, it shall have the option, to be exercised by written notice to Tenant within fifteen (15) days after the receipt of such request, information, deposit and agreement to: (a) to terminate this Lease as it relates to the portion of the Premises which is the subject of the proposed Transfer (“Transferred Premises”) effective as of the date on which the proposed Transfer was to have occurred; or (b) take a Transfer from Tenant of the Transferred Premises on the same terms as the Transfer in respect of which Tenant has requested Landlord’s consent, as aforesaid. If Landlord gives Tenant notice either electing to terminate this Lease or to take a Transfer of the Transferred Premises, as aforesaid, Tenant shall have the right, to be exercised by written notice to Landlord within ten (10) days after receipt of such Landlord’s notice, to withdraw the request for consent to the Transfer, in which case Tenant shall not proceed with such Transfer, the Landlord’s notice shall be null and void and this Lease shall continue in full force and effect. If, pursuant to this Section 14.3, Landlord terminates this Lease as it relates to a portion of the Premises or takes a Transfer of a portion of the Premises, Tenant hereby grants to Landlord and any others entitled to use the same, to use for their intended purposes all portions of the Premises in the nature of common areas (such as corridors, washrooms, lobbies and the like), or which are reasonably required for proper access to or use of the Transferred Premises (such as reception areas, interior corridors, mechanical or electrical systems and ducts and the like).

14.4 Terms of Transfer

In the event of a Transfer, Landlord shall have the following rights, in default of any of which no such Transfer shall occur or be effective:

(a) to collect a deposit or further deposit to be held as a security deposit pursuant to Section 16.6 such that the security deposit held by Landlord shall be equivalent to at least the Basic Rent payable for the last two (2) months of the Term in respect of the premises which are the subject of the Transfer;

(b) to require Tenant and the Transferee to enter into a written agreement to implement any amendments to this Lease to give effect to Landlord’s exercise of any of its rights hereunder;

(c) to require the Transferee to enter into an agreement with Landlord in writing and under seal to be bound by all of Tenant’s obligations under this Lease in respect of the Transferred Premises, and to waive any right it, or any person on its behalf, may have to disclaim, repudiate or terminate this Lease pursuant to any bankruptcy, insolvency, winding-up or other creditors’ proceeding, including, without limitation, the Bankruptcy and Insolvency Act (Canada) or the Companies’ Creditors Arrangement Act (Canada), and to agree that in the event of any such proceeding Landlord will comprise a separate class for voting purposes;

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(d) to receive all amounts to be paid to Tenant under the agreement in respect of such Transfer less only any consideration which is bona fide being paid to Tenant for equipment, furnishings and other property to be conveyed by Tenant as part of or together with the transaction of Transfer and which is not reasonably attributable to Tenant’s interest in this Lease and less, in the case of a sublease, all amounts receivable by Tenant under the sublease equal to the amounts payable by Tenant hereunder each month during the term of the sublease in respect of the Transferred Premises;

(e) to require the Transferee to waive any right it, or any person on its behalf, may have to disclaim, repudiate or terminate this Lease pursuant to any bankruptcy, insolvency, winding-up or other creditors’ proceedings, and to waive any rights, pursuant to Sections 21 or 39(2) of the Commercial Tenancies Act (Ontario) R.S.O. 1990, c, L7 and any amendments thereto and any other statutory provisions of the same or similar effect, to pay Rent less than any amount payable hereunder;

(f) to require, if the Transfer is a sublease or other transaction other than an assignment, that upon notice from Landlord to the Transferee all amounts payable by the Transferee each month shall be paid directly to Landlord who shall apply the same on account of Tenant’s obligations under this Lease;

(g) to require that this Lease be amended to delete therefrom any right of renewal and any option or right of first refusal to purchase the Premises.

14.5 Effect of Transfer

(a) No consent of Landlord to a Transfer shall be effective unless given in writing and executed by Landlord and no such consent shall be presumed by any act or omission of Landlord or by Landlord’s failure to respond to any request for consent or by Landlord’s accepting any payment of any amount payable hereunder from any party other than Tenant. No Transfer and no consent by Landlord to any Transfer shall constitute a waiver of the necessity to obtain Landlord’s consent to any subsequent or other Transfer.

(b) In the event of any Transfer or any consent by Landlord to any Transfer, Tenant shall not thereby be released from any of its obligations hereunder but shall remain bound by all such obligations pursuant to this Lease for the balance of the Term. If this Lease is renewed or extended by any Transferee or if any Transferee exercises a right to lease additional premises, pursuant to any right of Tenant contained in this Lease, each Transferor shall be liable for all of the obligations of Tenant throughout the Term as renewed or extended.

(c) Every Transferee shall be obliged to comply with all of the obligations of Tenant under this Lease, and any default of any Transferee shall also constitute a default of Tenant hereunder. If this Lease is ever disclaimed, repudiated or terminated by or on behalf of a Transferee pursuant to any bankruptcy, insolvency, winding-up or other creditors’ proceeding, including, without limitation, any proceeding under the Bankruptcy and Insolvency Act (Canada) or the Companies’ Creditors Arrangement Act (Canada), or if this Lease is ever terminated by Landlord as a result of any act or default of any Transferee, Tenant shall nevertheless remain responsible for fulfilment of all obligations of Tenant hereunder for what would have been the balance of the Term but for such disclaimer, repudiation or termination, and shall upon Landlord’s request enter into a new lease of the Premises for such balance of the Term and otherwise on the same terms and conditions as in this Lease.

14.6                     No Advertising of Premises

Tenant shall not advertise this Lease or all or any part of the Premises or the business or fixtures or contents therein for sale without Landlord’s prior written consent.

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14.7 Mortgage of Lease

The restrictions on Transfer as aforesaid shall apply to any assigning, subletting, mortgaging, charging or otherwise transferring of the Premises or this Lease for the purpose of securing any obligation of Tenant.

14.8 Corporate Tenant

(a) If Tenant or any occupant of the Premises at any time is a corporation, no: (I) transfer of the issued shares in the capital stock or transfer, issuance or division of any shares of the corporation or of any affiliate of the corporation sufficient to transfer control to others than the then present shareholders of the corporation (collectively called “Sale”); or (II) merger, amalgamation, consolidation or other corporate restructuring or reorganization (collectively called “Reorganization”) shall take place, without first obtaining the prior written consent of Landlord, not to be unreasonably withheld. Upon request, Tenant shall make the corporate books and records of Tenant and of any affiliate of Tenant available to Landlord and its representatives for inspection in order to ascertain whether or not there has been any Sale or Reorganization. Tenant acknowledges that, in addition to Landlord’s rights under this Lease and at Law to withhold consent to any Transfer, Landlord may withhold consent to any Sale or Reorganization unless it is shown to Landlord’s reasonable satisfaction that the financial strength of Tenant will not be adversely affected by such Sale or Reorganization.

(b) This Section shall not apply to a Sale by Tenant if and as long as Tenant is in occupancy of the Premises and is a corporation whose shares are listed and traded on any recognized public stock exchange in Canada or the United States.

14.9 Assignment by Landlord

If Landlord sells, leases, mortgages or otherwise disposes of the Project or any part thereof or assigns its interest in this Lease, to the extent that the purchaser or assignee agrees with Landlord to assume the covenants and obligations of Landlord hereunder, Landlord shall thereupon be released from all liability pursuant to the terms of this Lease.

15. STATUS AND SUBORDINATION OF LEASE

15.1 Status Statement

Tenant shall, within ten (10) days after written request from Landlord, execute and deliver to Landlord, or to any actual or proposed lender, purchaser or assignee of Landlord, a statement or certificate in such form as requested by Landlord stating (if such is the case, or stating the manner in which such may not be the case): (a) that this Lease is unmodified and in full force and effect; (b) the date of commencement and expiry of the Term and the dates to which Basic Rent and any other Rent, including any prepaid rent, have been paid; (c) whether or not there is any existing default by Landlord under this Lease and, if so, specifying such default; and (d) that there are no defences, counter claims or rights of set-off in respect of the obligations hereunder of Tenant and (e) full details of the financial and credit standing and details of the corporate organization of Tenant, including audited financial statements for such period of time as Landlord may require, it being intended that any such statement delivered pursuant hereto may be relied upon by an actual or prospective lender, purchaser and assignee of any interest of Landlord under this Lease or in the Premises.

15.2 Subordination

At the option of Landlord to be expressed in writing from time to time, this Lease and the rights of Tenant hereunder are and shall be subject and subordinate to any and all mortgages, trust deeds and charges (any of which is herein called “Mortgage”) on the Project or any part thereof now or in the future, including all renewals, extensions, modifications and replacements of any Mortgages from time to time. Tenant shall at any time on notice from Landlord or holder of a Mortgage attorn to and become a tenant of the holder of any such Mortgage upon the same terms and conditions as set forth herein and shall execute promptly on request any certificates, agreements, instruments of postponement or attornment or other such instruments or agreements, including without limitation any short form or notice of this Lease for the purpose of registration on title to the Project, as requested from time to time to give full effect to this Article 15. Provided Tenant is not in default hereunder, Landlord shall use reasonable efforts to obtain from the holder of any Mortgage, in respect of which tenant has executed and delivered an instrument of postponement, subordination or attornment as required hereby, its agreement to permit Tenant to continue to occupy the Premises in accordance with the terms of this Lease.

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15.3 Tenant’s Failure to Comply

If Tenant fails to execute any certificate, agreement, instrument, or other document as required by the foregoing provisions of this Article 15 within ten (10) days after request by Landlord, then Landlord shall have the right, without limiting any other rights of Landlord hereunder or at law, to terminate this Lease or to execute any such certificate, agreement, instrument or document on behalf of Tenant and in Tenant’s name, for which purpose Tenant hereby appoints Landlord as Tenant’s attorney pursuant to the Substitute Decisions Act (Ontario).

15.4 Registration

Tenant shall not register on title to the Project this Lease or any short form or notice hereof except in such form as has been approved by Landlord, acting reasonably, in writing, provided that Tenant shall pay Landlord’s reasonable expenses, including legal fees, of such approval. Tenant shall forthwith provide to Landlord a duplicate registered copy of any short form or notice of this Lease or other document registered on title.

16. DEFAULT AND REMEDIES

16.1                     Default and Remedies

If any of the following shall occur:

(a) Tenant fails, for any reason, to make any payment of Rent as and when the same is due to be paid hereunder and such default continues for five (5) days after notice is given to Tenant;

(b) Tenant fails, for any reason, to observe or perform any obligation of Tenant pursuant to this Lease other than the payment of any Rent, and such default continues for fifteen (15) days, or such shorter period as expressly provided herein, after notice thereof to Tenant, provided that if the default could not, in the reasonable opinion of Landlord, be remedied within fifteen (15) days after notice and provided Tenant has commenced to remedy such failure not later than five (5) days after notice and proceeds thereafter to diligently and continuously remedy it, the number of days shall be extended to that number of days which would in the opinion of Landlord, acting reasonably, then suffice for the remedying of such default;

(c) Tenant shall purport to make a Transfer affecting the Premises, or the Premises shall be used by any person or for any purpose, other than in compliance with this Lease;

(d) Tenant or any other occupant of the Premises makes an assignment for the benefit of creditors or becomes bankrupt or insolvent or takes the benefit of any statute for bankrupt or insolvent debtors or makes any proposal or arrangement with creditors, or Tenant makes any sale in bulk of any property on the Premises (other than in conjunction with a Transfer approved in writing by Landlord and made pursuant to all applicable legislation), or steps are taken for the winding up or other termination of Tenant’s existence or liquidation of its assets;

(e) a trustee, receiver, receiver-manager, or similar person is appointed in respect of the assets or business of Tenant or any other occupant of the Premises;

(f) Tenant attempts to or does abandon the Premises or remove or dispose of any goods from the Premises, so that there would not be sufficient goods on the Premises subject to distress to satisfy all arrears of Rent and all Rent payable hereunder for a further period of at least six (6) months, or if the Premises are vacant or unoccupied for a period of five (5) consecutive days or more without the prior written consent of Landlord;

(g) this Lease or any other property of Tenant is at any time seized or taken in execution which remains unsatisfied for a period of five (5) days or more;

(h) termination or re-entry by Landlord is permitted under any provision of this Lease or at law;

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then the then current and the next three (3) months’ Rent shall be forthwith due and payable and, in addition to any other rights or remedies to which Landlord is entitled hereunder or at law, Landlord shall have the following rights and remedies, which are cumulative and not alternative, namely:

(i) to terminate this Lease in respect of the whole or any part of the Premises by written notice to Tenant;

(ii) as agent of Tenant to relet the Premises and take possession of any furniture, fixtures, equipment or other property thereon and, upon giving notice to Tenant, to store the same at the expense and risk of Tenant or sell or otherwise dispose of the same at public or private sale without further notice, and to make alterations to the Premises to facilitate their reletting and to apply the net proceeds of the sale of any furniture,  fixtures, equipment, or other property or from the reletting of the Premises, less all expenses incurred by Landlord in making the Premises ready for reletting and in reletting the Premises, on account of the Rent due and to become due under this Lease and Tenant shall be liable to Landlord for any deficiency and for all such expenses incurred by Landlord as aforesaid; nothing done by Landlord shall be construed as an election to terminate this Lease unless written notice of such termination is given by Landlord to Tenant;

(iii) to remedy any default of Tenant in performing any repairs, work or other obligations of Tenant hereunder, and in so doing to enter upon the Premises, without any liability to Tenant therefor and without constituting a re-entry of the Premises or termination of this Lease or breach of Landlord’s covenant of quiet enjoyment, and, in such case, Tenant shall pay to Landlord forthwith upon demand all reasonable costs of Landlord in remedying or attempting to remedy any such default plus fifteen (15%) percent of such amounts and charges for inspection and supervision; and

(iv) to obtain damages from Tenant including, without limitation, if this Lease is terminated, all deficiencies between all amounts which would have been payable by Tenant for what would have been the balance of the Term, but for such termination, and all net amounts actually received by Landlord for such period.

16.2 Interest and Costs

(a) All amounts of Rent shall bear interest from their respective due dates until the dates of payment at the rate of five (5%) percent per annum in excess of the prime rate of interest charged by Landlord’s bank in Ontario from time to time.

(b) Further, on each occurrence of default in the payment of Rent, Tenant shall pay to Landlord on demand in addition to the aforesaid interest an administration fee equal to the greater of: (i) Two Hundred ($200.00) Dollars; and (ii) two (2%) percent of the amount of Rent in default.

(c) Tenant shall pay to Landlord forthwith upon demand all costs incurred by Landlord, including, without limitation, legal expenses on a substantial indemnity basis and reasonable compensation for all time expended by Landlord’s own personnel, arising as a result of any default in Tenant’s obligations under this Lease.

16.3 Bankruptcy and Insolvency

Tenant hereby waives any right it, or any person on its behalf, may have to disclaim, repudiate or terminate this Lease pursuant to any bankruptcy, insolvency, winding-up or other creditors’ proceeding, including, without limitation, the Bankruptcy and Insolvency Act (Canada) or the Companies’ Creditors Arrangement Act (Canada), and agrees that in the event of any such proceeding Landlord will comprise a separate class for voting purposes.

16.4 Distress and Tenant’s Property

Tenant hereby waives and renounces the benefit of any present or future statute taking away or limiting Landlord’s right of distress and agrees with Landlord that, notwithstanding any such statute, all goods and chattels from time to time on the Premises shall be subject to distress for Rent. All Tenant’s personal  property on the Premises shall at all times be the unencumbered property of Tenant.

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16.5 Intentionally Deleted

16.6 Rent Deposit

In order to induce Landlord to enter into this Lease, Tenant agrees to execute the Rent Deposit Agreement attached hereto as Schedule “17”.

16.7 Remedies to Subsist

No waiver of any of Tenant’s obligations under this Lease or of any of Landlord’s rights in respect of any default by Tenant hereunder shall be deemed to have occurred as a result of any condoning, overlooking or delay by Landlord in respect of any default by Tenant or by any other act or omission of Landlord including, without limitation, the acceptance of any Rent less than the full amount thereof or the acceptance of any Rent after the occurrence of any default by Tenant. The waiver by Landlord of any default of Tenant or of any rights of Landlord, which shall be effected only by an express written waiver executed by Landlord, shall not be deemed to be a waiver of any term, covenant or condition in respect of which such default or right has been waived and shall not be deemed to be a waiver of any subsequent default of Tenant or right of Landlord. All rights and remedies of Landlord under this Lease and at law shall be cumulative and not alternative, and the exercise by Landlord of any of its rights pursuant to this Lease or at law shall at all times be without prejudice to any other rights of Landlord, whether or not they are expressly reserved. The Tenant’s obligations under this Lease shall survive the expiry or earlier termination of this Lease and shall remain in full force and effect until fully complied with.

16.8 Impossibility of Performance

If and to the extent that either Landlord or Tenant shall be delayed in the fulfillment of any obligation under this Lease, other than the payment by Tenant of any Rent, by reason of unavailability of material, equipment, utilities, services or by reason of any Laws, or by reason of any other similar cause beyond its control and not avoidable by the exercise of reasonable foresight (excluding the inability to pay for the performance of such obligation), then the party being delayed shall be entitled to extend the time for fulfillment of such obligation by a time equal to the duration of such delay and the other party shall not be entitled to any compensation for any loss or inconvenience occasioned thereby. The party delayed will, however, use its best efforts to fulfill the obligation in question as soon as is reasonably practicable by arranging an alternate method of providing the work, services or materials.

17. CONTROL OF PROJECT

17.1                     Landlord’s Control

The Project is at all times subject to the exclusive control and management of Landlord. Without limiting the generality of the foregoing, Landlord shall have the right to obstruct or close off or restrict entry to all or any part of the Project for purposes of performing any maintenance, repairs or replacements or for security purposes or to prevent the accrual of any rights to any person or the public or any dedication thereof, provided that in exercising any such right Landlord shall use reasonable efforts to minimize interference with Tenant’s access to and use of the Premises. The Project shall be open for access to the Premises during Business Hours, and at any other time access to premises in the Building shall be subject to compliance with all applicable rules and regulations of Landlord, including without limitation those related to security.

17.2 Alterations of the Project

(a) At any time or times Landlord shall have the right to make any changes in, additions to, deletions from or relocations of any part of the Project including the Premises and any of the  Common Facilities (any of which are herein referred to as “Changes”) as Landlord shall consider desirable, including the construction of additional floors in the Building. If Landlord makes any Changes to the Premises, including relocation of the Premises, Landlord shall ensure  that the Premises, as affected by such Changes, shall be substantially the same in size and shall be in all other material respects reasonably comparable to the Premises originally demised hereby. If the Premises are relocated as a result of such Changes, Landlord shall be responsible for the direct cost of moving Tenant to the relocated Premises and constructing replacement  leasehold improvements therein, but not for any indirect costs or losses of Tenant. Tenant shall not have the right to object to or make any claim on account of the exercise by Landlord of any of its rights under this Section 17.2, except that Tenant shall be entitled to an abatement of Basic Rent for any period of time in excess of ten (10) consecutive days that Tenant is unable to conduct business in the Premises as a result of the making of such Changes. Landlord shall make any such Changes as expeditiously as is reasonably possible and so as to interfere as little as is reasonably possible with Tenant’s business on the Premises.

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(b) Tenant acknowledges that portions of the Project may be under construction during the Term, and that such construction activities may cause temporary noise and disturbance to existing tenants of the Project. Landlord will use reasonable efforts to minimize interference with Tenant’s occupation of the Premises as a result of such construction activities, but Tenant acknowledges that in no event shall any noise or other disturbance caused by such construction constitute a breach of Tenant’s right to quiet enjoyment of the Premises.

17.3 Use of Common Facilities

Tenant shall not itself and shall not permit any of its employees, servants, agents, contractors or persons having business with Tenant, to obstruct any Common Facilities including driveways, laneways or access routes, or to park vehicles in any portion of the Common Facilities other than such areas as expressly authorized by Landlord, and Landlord shall have the right, at Tenant’s expense payable on demand, to remove any such obstruction or improperly parked vehicles, without liability for any damage caused thereby.

17.4 Rules and Regulations

Landlord may from time to time make and amend reasonable rules and regulations for the management and operation of the Project and Tenant and all persons under its control shall comply with all of such rules and regulations of which notice is given to Tenant from time to time, all of which shall be deemed to be incorporated into and form part of this Lease. Landlord shall not make any rules or regulations which conflict with any express provision of this Lease unless and only to the extent required by any applicable Laws. Landlord shall act reasonably in enforcing such rules and regulations but shall not be liable for their non­enforcement.

17.5 Access to Premises

(a) Without limiting any other rights Landlord may have pursuant hereto or at law, Landlord shall have the right to enter the Premises at any time for any of the following purposes: (i) to examine the Premises and to perform any maintenance, repairs or alterations to any part of the Premises or to any equipment and services serving the Premises or any other part of the Project; (ii) in cases of emergency; (iii) to read any utility or other meters; (iv) during the last twelve (12) months of the Term to show the Premises to prospective tenants and to permit prospective tenants to make inspections, measurements and plans; and (v) at any time during the Term to show the Premises to prospective purchasers or lenders.

(b) Landlord shall have the right to run through the Premises conduits, wires, pipes, ducts and other elements of any systems for utilities, heating, ventilating, air conditioning and humidity control, telephone and other communications systems and any other such systems to serve the Premises or the Project.

(c) Landlord shall exercise its rights pursuant to this Section 17.5 in such manner and at such times as Landlord, acting reasonably but in its sole discretion, shall determine. At any time that entry by Landlord is desired in case of emergency, and if no personnel of Tenant are known by Landlord to be present on the Premises or if such personnel fail for any reason to provide Landlord immediate access at the time such entry is desired, Landlord may forcibly enter the Premises without liability for damage caused thereby.

17.6                     Expropriation

(a) If the Premises or any part thereof shall be expropriated (which for the purposes of this Article 17 shall include a sale by Landlord to any authority with the power to expropriate) by any competent authority, then:

(i) Landlord and Tenant shall co-operate with each other so that Tenant may receive such award to which it is entitled in law for relocation costs, business interruption, and the value of leasehold improvements paid for by Tenant and the amortized portion, if any, of leasehold improvements paid for by Tenant, and so that Landlord may receive the maximum award to which it may be entitled in law for all other compensation arising from such expropriation including, without limitation, all compensation for the value of Tenant’s leasehold interest in the Premises;

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(ii) except for such compensation to which Tenant shall be entitled as aforesaid, all Tenant’s other rights in respect of such expropriation are hereby assigned to Landlord, and within ten (10) days after request by Landlord Tenant shall execute such further documents as requested by Landlord to give effect to such assignment, failing which Landlord is hereby irrevocably appointed, pursuant to the Substitute Decisions Act (Ontario), Tenant’s attorney to do so on behalf of Tenant and in its name; and

(iii) Landlord shall have the option, to be exercised by written notice to Tenant, to terminate this Lease, effective on the date the expropriating authority takes possession of the whole or any portion of the Premises.

(b) If the whole or any part of the Project shall be expropriated, then subject to the foregoing provisions respecting expropriation of the Premises:

(i) all compensation resulting from such expropriation shall be the absolute property of Landlord and all of Tenant’s rights, if any, to any such compensation are hereby assigned to Landlord and within ten (10) days after request by Landlord Tenant shall execute such further documents as requested by Landlord to give effect to such assignment, failing which Landlord is hereby irrevocably appointed, pursuant to the Substitute Decisions Act (Ontario) Tenant’s attorney to do so on behalf of Tenant and in its name; and

(ii) if the expropriation of part of the Project is such as to render undesirable, in Landlord’s reasonable opinion, the continuing operation of the portion of the Project in which the Premises are situate, Landlord shall have the right to terminate this Lease as of the date the expropriating authority takes possession of all or any portion of the Project.

17.7 Landlord’s Consent

If Landlord withholds, delays or refuses to give consent as provided by the terms of this Lease, whether or not Landlord is entitled to do so, Landlord shall not be liable for any losses or damages in any way resulting therefrom and Tenant shall not be entitled to terminate this Lease or exercise any remedy whatever in respect thereof except to seek the order of a court of competent jurisdiction compelling Landlord to grant any such consent which Landlord is obliged to grant pursuant to the terms of this Lease.

18. MISCELLANEOUS

18.1                     Notices

All notices, statements, demands, requests or other instruments (“Notices”) which may be or are required to be given under this Lease shall be in writing and shall be delivered in person or sent by prepaid registered Canadian mail addressed, if to the Tenant, at the Address for Service of Notice on Tenant, and if to the Landlord at the Address for Service of Notice on Landlord, all as provided in subsection 1(i) hereof.

All such Notices shall be conclusively deemed to have been given and received upon the day the same is personally delivered or, if mailed as aforesaid, four (4) business days (excluding Saturdays,  Sundays, holidays and days upon which regular postal service is interrupted or unavailable for any reason) after the same is mailed as aforesaid. Any party may at any time by notice in writing to the other change the Address for Service of Notice on it. If two or more persons are named as Tenant, any Notice given hereunder shall be sufficiently given if delivered or mailed in the foregoing manner to any one of such persons.

18.2 Complete Agreement

There are no covenants, representations, agreements, warranties or conditions in any way relating to the subject matter of this Lease or the tenancy created hereby, expressed or implied, collateral or otherwise, except as expressly set forth herein, and this Lease constitutes the entire agreement between the parties and may not be modified except by subsequent written agreement duly executed by Landlord and Tenant.

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18.3 Time of the Essence

Time is of the essence of all terms of this Lease.

18.4 Applicable Law

This Lease shall be governed by and interpreted in accordance with the laws of the Province of Ontario. The parties agree that the Courts of Ontario shall have jurisdiction to determine any matters arising hereunder.

18.5 Severability

If any provision of this Lease is illegal, unenforceable or invalid, it shall be considered separate and severable and all the remainder of this Lease shall remain in full force and effect as though such provision had not been included in this Lease but such provision shall nonetheless continue to be enforceable to the extent permitted by law.

18.6 Section Numbers and Headings

The table of contents and all section numbers and headings of this Lease are inserted for convenience only and shall in no way limit or affect the interpretation of this Lease. References in this Lease to section numbers refer to the applicable section of this Lease, unless a statute or other document is specifically referred to.

18.7 Interpretation

Whenever a word importing the singular or plural is used in this Lease, such word shall include the plural and singular respectively. Where any party is comprised of more than one entity, the obligations of each of such entities shall be joint and several. Words importing persons of either gender or firms or corporations shall include persons of the other gender and firms or corporations as applicable. Subject to the express provisions contained in this Lease, words such as “hereof”, “herein”, “hereby”, “hereafter”, and “hereunder” and all similar words or expressions shall refer to this Lease as a whole and not to any particular section or portion hereof.

18.8 Successors

This Lease shall enure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors, assigns and other legal representatives except only that this Lease shall not enure to the benefit of any of such parties unless and only to the extent expressly permitted pursuant to the provisions of this Lease.

18.9 Monetary Amounts

Except as may be otherwise expressly provided herein, all monetary amounts set out in this Lease are in Canadian currency and are exclusive of Canadian Goods and Services Tax and any other applicable Sales Taxes.

18.10 Demolition or Substantial Alterations

If Landlord wishes to demolish or substantially alter or renovate all or a substantial portion of the Building containing the Premises, Landlord shall have the right, to be exercised by not less than nine (9) months written notice to Tenant, to terminate its Lease. Tenant agrees that upon the termination date specified in such notice, Tenant shall vacate the Premises and deliver up vacant possession of the Premises in accordance with the terms of this Lease. Tenant acknowledges that it shall have no claim against Landlord as a result of the exercise by Landlord of its right hereunder and upon such termination, all Rent shall be apportioned to the effective date of such termination and upon compliance by each of the parties with their respective obligations under the Lease up to and including the termination date, each of the parties shall thereafter be released from all future obligations arising under this Lease.

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19. PRIVACY POLICY

Tenant hereby consents to the collection, use and disclosure of personal information collected by or on behalf of Landlord by Bentall Real Estate Services Limited Partnership (`Bentall”) or any of Landlord’s or Bentall’s agents, affiliates, or service providers for the purposes of: (i) considering this Lease and determining the suitability of Tenant both for the initial Term and any renewals or extensions thereafter, if applicable; (ii) taking action for collection of Rents in the event of default by Tenant; (iii) facilitating the pre­authorization payment plan, if applicable; and (iv) otherwise complying with Bentall’s Privacy Policy, a copy of which is available at www.Bentall.com.Consent under this Lease includes the disclosure of such information to credit agencies, collection agencies and existing or potential lenders, investors and purchasers. Tenant also consents to, and confirms its authority to consent to Bentall’s collection, use and disclosure, for such purposes, of personal information about employees of Tenant and other individuals whose personal information is provided to or collected by Bentall in connection with this Lease.

IN WITNESS WHEREOF the parties have executed this Lease.

BENTALL REAL ESTATE SERVICES LIMITED PARTNERSHIP (By its General Partner, Bentall Real Estate Services G.P. Ltd.) As Authorized Agent for PENYORK PROPERTIES III INC. (Landlord)
Per:	“Tony Vadacchino”
	(Authorized Signatory)
	c/s
Per:	“Stuart Wanlin”
	(Authorized Signatory)
I/We have the authority to bind the Corporation.

OCCULOGIX, INC. (Tenant)
Per:	“John Caloz”
	Name:	John Caloz
	Title:	Chief Financial Officer
	c/s
Per:	“William G. Dumencu”
	Name:	William G. Dumencu
	Title:	Vice President, Finance
I/We have the authority to bind the Corporation.

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SCHEDULE "A"

LEGAL DESCRIPTION OF PROJECT

ALL AND SINGULAR those lands and premises situated, lying and being in the City of Mississauga, in the Regional Municipality of Peel, and being those parts of Block 10 on a Plan of Subdivision registered in the Land Registry Office for the Land Titles Division of Peel as No. 43M-533 designated as Parts 1 and 2 on a Plan of Survey deposited in the Land Registry Office as No. 43R-14899.

SUBJECT TO an easement over the said Part 2, Plan 43R-14899 save and except Parts I and 2, Plan 43R-16904, as more particularly set out by Instrument No. 495246 as amended by Instrument No. LT 1058959;

SUBJECT TO an easement in favour of Bell Telephone Company of Canada and Mississauga Hydro Electric-Commission, over so much of Block 10 on Plan 43M-523 as is unencumbered by buildings, or other structures, as more particularly set out in Instrument No. 495241;

Being all of Parcel Block 10-5, Section 43M-533.

Schedule "B"

OUTLINE PLAN OF PREMISES

Building 9, Suite 201

Schedule “B-1”

OUTLINE PLAN OF PREMISES

Building 9, Suite 103

Schedule "C"

SECURITY AGREEMENT

Intentionally Deleted

Schedule "D"

SPECIAL PROVISIONS

1. Estimate of Operating Costs and Realty Taxes

The parties agree that Landlord has estimated that Tenant’s obligations hereunder in respect of Operating Costs and Realty Taxes for the year 2005 would be approximately $10.93 per square foot of the Rentable Area of the Premises; it is understood that this estimate by Landlord is a bona fide estimate made September 21, 2005, but that it is not intended by Landlord to be relied upon by Tenant and is not binding and does not impose liabilities on Landlord or affect Tenant’s obligations hereunder.

2. Conditions to Tenant’s Rights

If:

(a) Tenant pays the Rent and other sums payable hereunder and performs each and every of the covenants, provisos and agreements herein contained on the part of Tenant to be paid and performed, punctually and in accordance with the provisions of the Lease;

(b) Tenant has not become insolvent or bankrupt, and has not made any assignment for the benefit of creditors and has not, becoming bankrupt or insolvent, taken the benefit of any Act now or hereafter in force for bankrupt or insolvent debtors;

(c) a petition in bankruptcy has not been filed against Tenant and a receiving order has not been made against Tenant, and no proceedings have been commenced respecting the winding-up or termination of the existence of Tenant;

(d) no receiver or other person has taken possession or effective control of the assets or business of Tenant or a substantial portion thereof pursuant to any security or other agreement or by any other means whatsoever, and there are no outstanding writs of execution against Tenant;

(e) Tenant has not assigned the Lease or sublet or permitted a change in occupancy of any portion or portions of the Premises, and there has been no change in ownership of the majority of the capital stock of Tenant and no change in the name under which the business on the Premises is conducted;

(f) Tenant has continuously, actually physically occupied all of the Premises for the active and diligent conduct of business in accordance with the terms of the Lease; and

(g)           Tenant has executed and delivered to Landlord the Lease in a form satisfactory to Landlord,

then, and only then, Tenant shall have the rights conferred under Sections 3, 4 and 6 of this Schedule “D”.

3. Rent Free Periods

Subject to the provisions of Section 2 of this Schedule “D”, Tenant shall not be responsible for the payment of:

(i) Basic Rent, Operating Costs and Realty Taxes for the first two (2) months of the initial Term of the Lease (the “First Rent Free Period”) but the Tenant shall be responsible for the payment of all other items of Additional Rent during the First Rent Free Period; and

(ii) Basic Rent for the third month of the initial Term of the Lease (the “Second Rent Free Period”) but the Tenant shall be responsible for the payment of all items of Additional Rent during the Second Rent Free Period.

If at any time during the Term:

(a) the Lease is terminated by reason of a default of Tenant;

(b) Tenant has become bankrupt or insolvent or has taken the benefit of any statute for bankrupt or insolvent debtors, or has filed a proposal, or has made an assignment for the benefit of creditors or any arrangement or compromise,

then in such event, and without prejudice to any of Landlord’s other rights and remedies available to it under the Lease and at law, the unamortized portion of the First Rent Free Period and Second Rent Free Period calculated from the date that Landlord no longer actually receives payments of Rent under the Lease (whether by way of Court Order or otherwise) on the basis of an assumed rate of depreciation on a straight line basis to zero over the Term of the Lease shall immediately become due and payable to Landlord as Additional Rent.

4. Right of First Offer

Subject to the provisions of Section 2 of this Schedule “D, and subject to existing tenants’ prior rights, Tenant shall have a one time only right of first offer to lease:

(i) any space in Building 9 (“First ROFO Space”); and/or

(ii) Suite 200 in Building 10 (“Second ROFO Space”) (collectively the “ROFO Space”)

whenever such space becomes available for re-leasing from time to time by the Landlord, after the termination, surrender or expiry of the existing leases of such space to occur following the date of the Lease or the leases of tenants relocated to all or a portion of the ROFO Space (it being hereby acknowledged that, as of the date hereof, the Second ROFO Space is currently available for lease and that despite the foregoing, the Landlord shall be entitled to enter into a lease with a third party for the ROFO Space or any part thereof at any time, from time to time, until the whole of the ROFO Space is leased, without triggering the within right of first offer) have expired or been terminated either by the tenant (pursuant to any rights of termination it may have under its  lease) or by the Landlord (as a result of an event of default) and after any options to renew or extend the ROFO  Space granted to such tenant(s) under the terms of such lease(s) have not been exercised or have expired. Further, if any such tenant(s) either fail(s), or elect(s) not, to exercise its option to renew or extend or if such tenant(s) do(es) not have an option to renew or extend contained in its lease for the ROFO Space, Landlord shall, despite anything contained in this Section 4 to the contrary, be free to enter into an agreement with such tenant(s) extending the term of its lease for the ROFO Space without triggering the within right of first offer.

In the event that ROFO Space becomes available the Landlord shall provide the Tenant with written notice (“Landlord’s Notice”), specifying what space is available (i.e. either the whole or any part of the  ROFO Space, as the case may be) (“Available ROFO Space”) and the availability date for the Available ROFO  Space and the Tenant shall have ten (10) business days from receipt of the Landlord’s Notice within which to deliver written notice (“ROFO Notice”) to the Landlord of its agreement to lease the whole of the Available ROFO Space on the same terms and conditions as contained in the Lease for the Premises save and except that: (a) there shall be no Landlord’s Work, rent free period or other financial inducements; (b) the basic rent payable for the Available ROFO Space shall be ROFO Market Rent (“ROFO Market Rent” means the annual basic rental which could reasonably be obtained by Landlord for the Available ROFO Space from a willing tenant or willing tenants dealing at arms’ length with Landlord in the market prevailing for a term commencing on the commencement date of the term of lease for the Available ROFO Space, having regard to all relevant circumstances including the size and location of the Available ROFO Space, the facilities afforded, the terms of the lease thereof (including its provisions for Additional Rent), the terms aforesaid regarding tenant inducements, the condition of the Available ROFO Space and the use of the Available ROFO Space, and having regard to rentals currently being obtained for space in the Building and for comparable space in other buildings comparably located, and inducements being offered to tenants (including rent free periods, allowances and other inducements); (c) the commencement date shall be as specified by the Landlord in the Landlord’s Notice, and (d) the expiration date shall be coterminous with the expiry date of the Lease, failing which this right of first offer shall be null and void with respect to the Available ROFO Space and the Landlord shall be free to lease the Available ROFO Space or any part thereof to a third party on such terms and conditions as the Landlord, in its sole discretion, determines and this right of first offer shall only apply to the balance of the ROFO Space. For greater certainty, if the ROFO Market Rent is not agreed upon between the parties within thirty (30) days of the delivery of the Landlord’s Notice, the ROFO Market Rent shall be established in the manner set out in Section 5 below and, in such event, there shall be no delay to the commencement date of the Available ROFO Space as set forth in the Landlord’s Notice and, until such time as the ROFO Market Rent is determined, the Tenant shall pay to the Landlord the Basic Rent then payable hereunder for the Premises, as applicable to the Available ROFO Space, and upon determination of the ROFO Market Rent for the Available ROFO Space, either Landlord shall pay to Tenant any excess, or Tenant shall pay to Landlord any deficiency, in the payments of Basic Rent previously made by Tenant with respect to the Available ROFO Space, without interest.

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The Tenant shall execute an agreement (to be prepared by the Landlord) amending the provisions of the Lease in order to incorporate the terms of the foregoing.

Any Available ROFO Space which is made available to the Tenant under this Section 4 shall be dealt with as a whole.

5. ROFO Market Rent

Either Landlord or Tenant (the “Requesting Party”) shall be entitled to notify the other party hereto (the “Receiving Party”) of the name of an expert for the purpose of determining the ROFO Market Rent. Within fifteen (15) days after such notice from the Requesting Party, the Receiving Party shall notify the Requesting Party either approving the expert proposed by the Requesting Party or naming another expert for the purpose of determining the ROFO Market Rent. Should the Receiving Party fail to give notice to the Requesting Party within the said fifteen (15) day period, the expert named in the notice given by the Requesting Party shall perform the expert’s functions hereinafter set forth. If Landlord and Tenant are unable to agree upon the selection of the expert within fifteen (15) days after such notice from the Receiving Party to the Requesting Party, then either party shall be entitled to apply to a court to appoint an expert in the same manner as an arbitrator may be appointed by a court under the Arbitration Act, 1991 (Ontario), as amended or replaced. The expert appointed, either by Landlord and/or Tenant or by a court, shall be qualified by education, experience and training to value real estate for rental purposes in the Province of Ontario and have been ordinarily engaged in the valuation of real property in the municipality in which the Project is located for at least the immediately preceding five (5) years. Within thirty (30) days after being appointed the expert shall make a determination of the Market Rent for the ROFO Space, without receiving evidence from either Landlord or Tenant. The cost of such determination shall be borne by the Tenant. The determination of the expert as to the ROFO Market Rent shall be conclusive and binding upon Landlord and Tenant and not subject to appeal.

6. Parking

(a) Subject to Section 2 of this Schedule “U’, throughout the Term, Tenant shall have the right to use:

(i) seven (7) reserved underground parking spaces; and

(ii)  twelve (12) unreserved surface parking spaces (on a “first-come, first-served” basis)

for parking automobiles (collectively the “Parking Spaces”) in the parking facilities at the Project (the “Parking Facility”), in such locations as designated from time to time by Landlord or the operator of the Parking Facility, and subject to the terms set out below. For each of such Parking Spaces, Tenant shall pay to Landlord, whether or not Tenant actually uses the Parking Spaces or any of them, the prevailing monthly rates charged from time to time by Landlord or the operator of the Parking Facility for the use of reserved and unreserved Parking Spaces respectively. Notwithstanding anything to the contrary contained herein, there shall be no licence fee payable by Tenant to Landlord or Landlord’s parking operator for Tenant’s use of the Parking Spaces in the Parking Facility during the initial Term only, but, for greater certainty, Tenant shall be responsible for payment to Landlord of its Proportionate Share or share, as of the case may be, of Operating Costs and Realty Taxes associated with the Parking Facility.

(b) Tenant shall ensure that Landlord is at all times in possession of up-to-date information as to the owner, licence plate number and description of each automobile authorized to use such Parking Spaces.

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(c) Landlord may from time to time make and amend such rules and regulations for the management and operation of the Parking Facility as Landlord shall determine and Tenant and all persons under its control, including without limitation all users of the Parking Spaces, shall be bound by and shall comply with all of such rules and regulations of which notice is given to Tenant from time to time and all of such rules and regulations shall be deemed to be incorporated into and form a part of the Lease.

(d) For emphasis only, and without affecting or limiting the meaning of any provision of the Lease, it is agreed that the following sections of the Lease apply to the rights granted to Tenant hereunder in respect of the Parking Spaces, namely Sections 13.5 (“Landlord’s Non-Liability”) and 13.6 (“Indemnity of Landlord”).

(e) If Tenant or any person permitted by Tenant to use any of the Parking Spaces fails to comply with the provisions of the Lease in respect of the Parking Spaces, including without limitation the rules and regulations from time to time applicable to the Parking Facility, then Landlord shall have the right to terminate or suspend the privileges of the offending party to use the Parking Facility, provided that the exercise of such right by Landlord shall not limit or affect the obligation of Tenant hereunder to pay for all Parking Spaces.

(f) No motor vehicle other than a private passenger automobile, station wagon or van shall be parked on or in any part of the Common Facilities of the Project, including without limitation the Parking Facility, nor shall any repairs other than emergency repairs immediately necessary for operation of a vehicle be made to any motor vehicle in or on any of the Common Facilities, including without limitation the Parking Facility, and no motor vehicle shall be driven on any part of the Common Facilities other than on a driveway or in the Parking Facility.

(g) It is understood and agreed that Landlord is not responsible for theft of or damage to the vehicle or its equipment or articles left in the vehicle.

(h) It is understood and agreed that no vehicle powered by propane, hydrogen or natural gas are allowed in any underground portion of the Parking Facility.

(i) Tenant may be required to pay to the Landlord a deposit amount for each parking pass issued. Such parking deposit shall be held by the Landlord in the event that any of the parking passes so issued are damaged, lost or destroyed. Upon the expiry or earlier termination of the Lease, if the deposit amounts have not previously been deducted at any time during the Term, the deposit amounts shall be refunded to the Tenant in full upon presentation to the Landlord of the same number of parking passes originally issued to the Tenant, in good condition and repair.

(j) If requested by Landlord, Tenant shall execute Landlord’s standard form of parking agreement to give effect to the foregoing.

7. Landlord’s Conditions

Concurrently with Tenant’s execution and delivery of this Lease to Landlord, Tenant shall deliver to Landlord such information as the Landlord requires (“Information”) to satisfy itself as to the financial  strength of Tenant and Tenant hereby consents to Landlord making independent credit inquiries for that purpose. This Lease is conditional for a period of ten (10) business days after receipt by Landlord of such Information, together with this Lease and the Rent Deposit Agreement duly executed by Tenant, for Landlord to (i) satisfy itself as aforesaid; and (ii) obtain the approval of its senior management.

If Landlord notifies Tenant in writing within such conditional period that either condition has not been satisfied, then this Lease and the Rent Deposit Agreement shall be null and void and of no further force or effect. In the event of such termination, Landlord shall return any deposits received by it to Tenant without interest or deduction and Landlord shall not be liable for any losses, damages or costs whatsoever. These conditions have been inserted for the sole benefit of Landlord and may be waived by Landlord in its sole and absolute discretion at any time on notice in writing to Tenant.

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Schedule "E"

EXCLUSIVE USES OF OTHER TENANTS

2600 Skymark Avenue, Mississauga, Ontario

None as of the date of this Lease.

Schedule "F"

RENT DEPOSIT AGREEMENT

THIS RENT DEPOSIT AGREEMENT is dated October 17, 2005,

BETWEEN:

OCCULOGIX, INC.

(hereinafter called “Tenant”)

OF THE FIRST PART

- and -

PENYORK PROPERTIES III INC.

(hereinafter called “Landlord”)

OF THE SECOND PART

WHEREAS:

A. By a lease of even date (“Lease”) between Landlord and Tenant, Landlord leased to Tenant premises known as Suites 103 and 201, Building 9 (the “Premises”) in the building municipally known as 2600  Skymark Avenue, Mississauga, Ontario, as more particularly described in the Lease, for a term of One (1) Year and Six (6) Months, commencing on February 1, 2006 and expiring on July 31, 2007;

B. To induce Landlord to enter into the Lease, Tenant has agreed to deliver to Landlord a rent deposit in the amount of Twenty Four Thousand Six Hundred and Thirty-Four Dollars and Sixty-Two Cents ($24,634.62) (the “Rent Deposit”), to be held without interest and applied on the terms and conditions set out in this Agreement;

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency whereof is hereby acknowledged by the parties hereto, the parties hereto make the following agreement:

1. Tenant shall deposit with Landlord the Rent Deposit. Provided Tenant is not then in default, the amount of Twelve Thousand Three Hundred and Seventeen Dollars and Thirty-One Cents ($12,317.31) shall be applied towards first Rent accruing due under the Lease, after expiry of the First Rent Free Period and Second Rent Free Period (as both of the foregoing terms are defined in the Lease). Landlord shall hold the balance of the Rent Deposit, without interest, as a prepayment of the Rent payable by Tenant under the Lease during the Term and any renewals or extensions thereof and any tenancy resulting from an overholding, and to secure and may be applied against the other amounts referred to in paragraph 7 below.

2. If at any time any Rent payable under the Lease shall be overdue, all or any portion of the Rent Deposit shall, at Landlord’s option, be applied to the payment of any Rent then due and owing. Further, if Tenant defaults in the performance of any of the terms, covenants, conditions and provisions of the Lease as and when the same are due to be performed by Tenant, then all or any part of the Rent Deposit shall, at Landlord’s option, be applied on account of any losses or damages sustained by Landlord as a result of such default.

3. If all or any part of the Rent Deposit is applied by Landlord on account of the payment of Rent or on account of any default or any losses or damages sustained by Landlord as aforesaid, then Tenant shall, within three (3) days after demand from Landlord, remit to Landlord a sufficient amount in cash or by certified cheque to restore the Rent Deposit to the original sum required to be deposited as set forth herein plus interest on the amount of such default, loss or damages sustained by Landlord at a rate of three (3%) percent per annum in excess of the rate of interest known as the prime rate of interest charged by Landlord’s bank in Ontario and which serves as the basis on which other interests rates are calculated for Canadian dollar loans in Ontario from time to time, from the date of default to the date the Rent Deposit is restored as aforesaid.

4. If Tenant (i) complies with all of the terms, covenants, conditions and provisions under the Lease and promptly pays all Rent therein throughout the term; (ii) the Lease has not been Disclaimed (as hereinafter defined); (iii) the Lease has not terminated for any reason prior to the natural expiry date; and (iv) Tenant has complied with all of the obligations under the Lease to the extent the same remains in Landlord’s possession and is not applied to any of Tenant’s obligations hereunder, Landlord shall return the balance of the Rent Deposit to Tenant within thirty (30) days after the expiry of the Lease.

5. Landlord may deliver the Rent Deposit, or such portion thereof remaining on hand to the credit of Tenant, to any purchaser, mortgagee or assignee of Landlord’s interest in the Premises or the Project under the Lease or in the Lease and thereupon Landlord shall be and is hereby discharged from any further liability with respect to the Rent Deposit.

6. In the event of any bankruptcy, insolvency, winding-up or other creditors’ proceeding, the Rent Deposit shall be the absolute property of Landlord and shall, at Landlord’s option, be automatically appropriated and applied against the Rent and any other amounts referred to in paragraph 7 below.

7. The Rent Deposit shall secure and may, at Landlord’s option, be applied on account of any one or more of the following: (i) the due and punctual payment of all Rent and all other amounts of any kind whatsoever payable under the Lease by Tenant whether to Landlord or otherwise and whether or not relating to or payable in respect of the Premises, including, without limitation, any amount which would have become payable under the Lease to the date of the expiry of the Lease had the Lease not been Disclaimed or terminated; (ii) the prompt and complete performance of all obligations contained in the Lease on the part of Tenant to be kept, observed and performed; (iii) the due and punctual payment of all other amounts payable by Tenant to Landlord; (iv) the indemnification of Landlord in respect of any losses, costs or damages incurred by Landlord arising out of any failure by Tenant to pay any rent or other amounts payable under the Lease or resulting from any failure by Tenant to observe or perform any of the other obligations contained in the Lease; (v) liquidated damages in compensation for the money spent by Landlord with respect to the Premises to make them ready for Tenant’s use and occupancy; (vi) the reduction in value of the Premises as a result of Tenant’s default; (vii) the performance of any obligation which Tenant would have been obligated to perform to the date of the expiry of the Lease had the Lease not been Disclaimed or terminated; (viii) the losses or damages suffered by Landlord as a result of the Lease being Disclaimed or terminated or (ix) the repayment of the unamortized portion as of the date the Lease is disclaimed or terminated of any allowances, inducements or other incentives paid by Landlord in conjunction with the Lease.

8. The rights of Landlord hereunder in respect of the Rent Deposit shall continue in full force and effect and shall not be waived, released, discharged, impaired or affected by reason of the release or discharge of Tenant in any receivership, bankruptcy, insolvency, winding-up or other creditor’s proceedings, including, without limitation, any proceedings under the Bankruptcy and Insolvency Act (Canada) or the Companies Creditors Arrangement Act (Canada), or the surrender, disclaimer, repudiation or termination of the Lease (individually and collectively referred to herein as “Disclaimed”) in any such proceedings and shall continue with respect to the periods thereto and thereafter as if the Lease had not been Disclaimed.

9. Capitalized expressions used herein, unless separately defined herein, have the same meaning as defined in the Lease unless separately defined herein.

10. Time in all respects shall be of the essence.

11. This Agreement shall be binding upon and enure to the benefit of the parties hereto and their respective heirs, administrators, successors and assigns.

- 2 - -

IN WITNESS WHEREOF the parties hereto have executed this Agreement.

OCCULOGIX, INC. (Tenant)
Per:
	Name: Title:
Per:
	Name: Title:
I/We have the authority to bind the Corporation.

BENTALL REAL ESTATE SERVICES LIMITED PARTNERSHIP (By its General Partner, Bentall Real Estate Services G.P. Ltd.) As Authorized Agent for PENYORK PROPERTIES III INC. (Landlord)
Per:
	(Authorized Signatory)
Per:		c/s
	(Authorized Signatory)
I/We have the authority to bind the Corporation.

- 3 - -

Schedule "G"

ENVIRONMENTAL QUESTIONNAIRE

Tenant’s Name: Occulogix, Inc. Premises: Being all of the premises leased from time to time pursuant to the Lease

Address:	2600 Skymark Avenue, Mississauga, Ontario
Telephone:		Fax:
Person Responsible:

a)	Describe the business activities carried in the Premises and specify raw materials used, goods manufactured and any resulting waste materials or by-products that are generated;
b)	Will the business activities to be carried on in the Premises entail the use, generating or storing of any Hazardous Materials (as hereinafter defined) in any quantity? (including but not limited to chemical products, degreasers, corrosives, flammable or combustibles, fuels, solvents, paints, medication, oil, gas, batteries, extinguisher, etc.)
	NO o   YES o (If so, describe…)
c)	Indicate the approximate amounts of Hazardous Materials which will be used or generated, monthly or annually, in the Premises.
d)	How do you intend to store the Hazardous Materials described in c) ?
e)	How will you dispose of the Hazardous Materials generated in the Premises by your business and who will be the carrier?
f)	Will the business activities to be carried on in the Premises require that you obtain any certificate of authorization, permit or environmental approvals, or provide environmental data (ie. NPRI or Ontario Reg. 127) to government agencies?
	NO o   YES o  (If so, give details and attach your certificate)

g)	Will the business activities to be carried on in the Premises entail the discharge of Hazardous Materials into the sewer system, water system or into the air?  If so, will pollution control equipment be required in the Premises to comply with Environmental Legislation and applicable Laws?
	NO o   YES o  (If so, give details and list standards to be met)
h)	Will the business activities to be carried on in the Premises necessitate the installation of an underground or surface storage tank in the Premises or on the Common Facilities?
	NO o  YES o  (If so, describe in detail the tank to be installed and material to be stored)
i)	Do you intend to have a prevention training or emergency plan in place to prevent an environmental incident or to deal with one if it occurs?
	NO o   YES o  (If so, give details and attach a copy of the plan and/or training procedure)
J)	Does your firm have an environmental management program in place?
	NO o   YES o  (If so, give details and attach a copy of the program)
k)	Do you have appropriate insurance to handle Hazardous Materials?
	NO o  YES  o  (If so, give details and attach a copy of the policy)

DATE: TENANT’S SIGNATURE:

All defined terms where used herein shall have the meaning ascribed to them in the lease of with this Schedule forms part.

- 2 - -

Schedule "H"

TENANT WORK

Tenant shall, at its cost and expense, complete or cause the completion of all leasehold improvements which are required to complete the Premises for Tenant’s business operations thereon prior to the Commencement Date (“Tenant’s Work”) in accordance with the following provisions and those provisions of the Lease applicable to the completion of Alterations to the Premises and in accordance with the “Tenant Design Criteria Manual”, if any, applicable to the Project.

Prior to commencing any Tenant’s Work on the Premises, Tenant shall deliver to the Landlord certified copies or certificates of insurance duly executed by Tenant’s insurers evidencing the placement of insurance coverage in compliance with the provisions of the Lease. Tenant shall also deliver to Landlord certified copies or certificates of insurance from its contractors and/or sub-contractors engaged to perform Tenant’s Work, evidencing insurance coverage satisfactory to Landlord, acting reasonably.

Any damage to the Premises, the Building or the Project caused during the performance of Tenant’s Work by Tenant, its contractors, sub-contractors, tradesmen or material suppliers shall immediately be repaired by Tenant to the satisfaction of Landlord, or, at the Landlord’s option, by the Landlord at the expense of Tenant payable on demand, plus fifteen (15%) percent of such costs for Landlord’s supervision.

The opinion in writing of the Landlord’s architect or other qualified consultant shall be binding on both the Landlord and Tenant respecting all matters of dispute regarding the Tenant’s Work, including the state of completion and whether or not work is completed in a good and workmanlike manner and in accordance with plans and specifications for Tenant’s Work as approved by the Landlord and with this Schedule.

Tenant shall furnish to the Landlord forthwith upon demand a statutory declaration or other evidence satisfactory to the Landlord stating that there are no such encumbrances, and that all accounts for work, services and materials have been paid in full with respect to all of Tenant’s Work, together with evidence in writing satisfactory to the Landlord that all assessments under the Worker’s Compensation Act have been paid. In addition to the foregoing, Tenant shall also submit to the Landlord forthwith any other information requested by the Landlord regarding the supply of work, services and materials in connection with Tenant’s Work, including without limitation details of the costs actually expended by Tenant in the performance of Tenant’s Work.

Notwithstanding anything contained herein, including without limitation the provisions relating to Landlord’s approval of the plans and specifications pertaining to the Tenant’s Work and to any rights of Landlord to perform any work or do any other thing on Tenant’s behalf, and notwithstanding any notice which may be received by Landlord from any of Tenant’s contractors or sub-contractors, the Landlord shall not be liable, and no lien or other encumbrance shall attach to the Landlord’s interest in the Premises, pursuant to the Construction Lien Act, in respect of materials supplied or work done by Tenant or on behalf of Tenant or related to Tenant’s Work, and Tenant shall so notify or cause to be notified all its contractors and sub-contractors and shall indemnify the Landlord from any liability whatsoever arising out of the performance of Tenant’s Work. Tenant hereby acknowledges and agrees that the provision of any materials, work or services performed by the Landlord at Tenant’s expense in respect of any Tenant’s Work or pursuant to any provision hereof shall be deemed to be provided by Landlord on Tenant’s behalf as Tenant’s contractor.

EX-10.33

Exhibit 10.33

LEASE AMENDING AGREEMENT

THIS AGREEMENT made as of the 9th day of March, 2007,

B E T W E E N:

OCCULOGIX, INC.

(the “Tenant”)

A N D:

2600 SKYMARK INVESTMENTS INC.

(the “Landlord”)

WHEREAS pursuant to a lease dated the 17th day of October, 2005 (the “Lease”), as supplemented by a Rent Deposit Agreement dated October 17, 2005 (the “Rent Deposit Agreement”), the Landlord, by its predecessor Penyork Properties III Inc., as landlord, leased to the Tenant certain premises containing a Rentable Area of approximately 6,600 square feet as set out in the Lease, being composed of part of the ground floor of Building 9, known as Suite 103, and part of the second floor of Building 9, known as Suite 201, of the Project municipally designated as 2600 Skymark Avenue, Mississauga, Ontario (the Project and Building as more particularly described in the Lease) for a term now expiring July 31, 2007 at the rents and upon the terms and conditions contained in the Lease;

AND WHEREAS 2600 Skymark Investments Inc. is successor in interest and title as owner and landlord of the Project and Building;

AND WHEREAS the Landlord and the Tenant have agreed to extend the Term of the Lease and to certain other amendments to the Lease and to execute this Agreement to give effect thereto;

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual convenants contained herein and the sum of TWO ($2.00) DOLLARS now paid by each party to the other and other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the parties hereby covenant and agree as follows:

1. The above recitals are true in substance and in fact.

2. The Lease shall be and is hereby amended as follows:

(a) Section 1(b) Term is extended for a further Three (3) years from August 1, 2007 to July 31, 2010;

(b) Section 1(d) Expiry Date is extended to July 31, 2010;

(c) Section 1(e) Basic Rent shall be amended by adding the following:

Rental Period	Annual Basic Rent	Monthly Basic Rent	Annual Rate per square foot of Rentable Area
August 1, 2007 to July 31, 2010	$79,200.00	$6,600.00	$12.00

(e) The Landlord’s address for service in Section 1(i) shall be deleted and replaced with the following:

2600 Skymark Investments Inc.

Suite 300

1 St. Clair Avenue West

Toronto, Ontario, M4V 1K6

(d) The Tenant shall have no right or option to extend or renew the Lease or the term of the Lease.

(e) The Tenant accepts the Premises in their current “as is” condition and the Landlord shall not provide any Landlord’s Work.  There shall be no rental credit, rent free period, tenant allowance, Landlord’s Work, Fixturing Period, leasehold improvements or other tenant inducement whatsoever provided by the Landlord.

(f) The Tenant’s right of first offer to lease the ROFO Space is hereby terminated and Sections 4 and 5 of Schedule D to the Lease are hereby deleted from the Lease.

(g) Section 5.5 of the Lease is hereby amended by deleting the word “audited” from the ninth line thereof, so that the statement of Operating Costs and Realty Taxes for the Project to be provided annually by the Landlord to the Tenant shall not be required to be in audited form.

3. The Landlord and the Tenant hereby acknowledge, confirm and agree that in all other respects the terms of the Lease and the Rent Deposit Agreement are to remain in full force and effect, unchanged and unmodified except in accordance with this Agreement.

4. Except as specifically stated in this Agreement, any expression used in this Agreement has the same meaning as the corresponding expression in the Lease.

5. This Agreement shall enure to the benefit of and be binding upon the parties hereto and their respective permitted successors and permitted assigns.

6. This Agreement may be executed by the parties hereto in separate counterparts, each of which so executed shall be deemed to be an original.  Such counterparts together shall constitute one and the same instrument and, notwithstanding the date of execution, shall be deemed to bear the effective date set forth above.

IN WITNESS WHEREOF each of the parties hereto have executed this Agreement as of the date first written above.

Tenant:
OCCULOGIX, INC.
Per:	“TomReeves”
	Name:	Tom Reeves
	Title:	President & COO
Per:	“William Dumencu”
	Name:	William Dumencu
	Title:	CFO & Treasurer
I/We have authority to bind the Corporation
Landlord:
2600 SKYMARK INVESTMENTS INC.
Per:	“Michael Bunston”
	Name:	Michael Bunston
	Title:	President
I have authority to bind the Corporation

EX-10.34

Exhibit 10.34

OCCULOGIX, INC.

(formerly VASCULAR SCIENCES CORPORATION)

2002 STOCK OPTION PLAN, AS AMENDED IN 2007

1.  Establishment, Purpose and Term of Plan.

1.1  Establishment.  The OccuLogix, Inc. 2002 Stock Option Plan (the “Plan”) was established effective as of the effective date of the Delaware reincorporation of OccuLogix Corporation (the predecessor corporation to the Company) (the “Effective Date”) and amended effective as of the closing of the Company’s initial public offering.

1.2  Purpose.  The purpose of the Plan is to advance the interests of the Participating Company Group and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Participating Company Group and by motivating such persons to contribute to the growth and profitability of the Participating Company Group.

1.3  Term of Plan.  The Plan shall continue in effect until the earlier of its termination by the Board or the date on which all of the shares of Stock available for issuance under the Plan have been issued and all restrictions on such shares under the terms of the Plan and the agreements evidencing Options granted under the Plan have lapsed.  However, all Options shall be granted, if at all, within ten (10) years from the earlier of the date the Plan is adopted by the Board or the date the Plan is duly approved by the stockholders of the Company.

2.  Definitions and Construction.

2.1  Definitions. Whenever used herein, the following terms shall have their respective meanings set forth below:

(a)  “Board” means the Board of Directors of the Company.  If one or more Committees have been appointed by the Board to administer the Plan, “Board” also means such Committee(s).

(b)  “Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder.

(c)  “Committee” means the Compensation Committee or other committee of the Board duly appointed to administer the Plan and having such powers as shall be specified by the Board.  Unless the powers of the Committee have been specifically limited, the Committee shall have all of the powers of the Board granted herein, including, without limitation, the power to amend or terminate the Plan at any time, subject to the terms of the Plan and any applicable limitations imposed by law.

(d)  “Company” means OccuLogix, Inc., a Delaware corporation, or any successor corporation thereto.

Updated July 5, 2007

(e)  “Consultant” means a person engaged to provide consulting or advisory services (other than as an Employee or a Director) to a Participating Company, provided that the identity of such person, the nature of such services or the entity to which such services are provided would not preclude the Company from offering or selling securities to such person pursuant to the Plan in reliance on either the exemption from registration provided by Rule 701 under the Securities Act or, if the Company is required to file reports pursuant to Section 13 or 15(d) of the Exchange Act, registration on a Form S-8 Registration Statement under the Securities Act.

(f)  “Director” means a member of the Board or of the board of directors of any other Participating Company.

(g)  “Disability” means the inability of the Optionee, in the opinion of a qualified physician acceptable to the Company, to perform the major duties of the Optionee’s position with the Participating Company Group because of the sickness or injury of the Optionee.

(h)  “Employee” means any person treated as an employee (including an Officer or a Director who is also treated as an employee) in the records of a Participating Company and, with respect to any Incentive Stock Option granted to such person, who is an employee for purposes of Section 422 of the Code; provided, however, that neither service as a Director nor payment of a director’s fee shall be sufficient to constitute employment for purposes of the Plan.  The Company shall determine in good faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee and the effective date of such individual’s employment or termination of employment, as the case may be.  For purposes of an individual’s rights, if any, under the Plan as of the time of the Company’s determination, all such determinations by the Company shall be final, binding and conclusive, notwithstanding that the Company or any court of law or governmental agency subsequently makes a contrary determination.

(i)  “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(j)  “Fair Market Value” means, as of any date, the value of a share of Stock or other property as determined by the Board, in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject to the following:

(i)  If, on such date, the Stock is listed on a national or regional securities exchange or market system, the Fair Market Value of a share of Stock shall be the closing price of a share of Stock (or the mean of the closing bid and asked prices of a share of Stock if the Stock is so quoted instead) as quoted on the Nasdaq National Market, The Nasdaq SmallCap Market or such other national or regional securities exchange or market system constituting the primary market for the Stock, as reported in The Wall Street Journal or such other source as the Company deems reliable.  If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or market system, the date on which the Fair Market Value shall be established shall be the last day on which the Stock was so traded prior to the relevant date, or such other appropriate day as shall be determined by the Board, in its discretion.

Updated July 5, 2007

(ii)  If, on such date, the Stock is not listed on a national or regional securities exchange or market system, the Fair Market Value of a share of Stock shall be as determined by the Board in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse.

(k)  “Incentive Stock Option” means an Option intended to be (as set forth in the Option Agreement) and which qualifies as an incentive stock option within the meaning of Section 422(b) of the Code.

(l)  “Insider” means an Officer, a Director of the Company or other person whose transactions in Stock are subject to Section 16 of the Exchange Act.

(m)  “Nonstatutory Stock Option” means an Option not intended to be (as set forth in the Option Agreement) or which does not qualify as an Incentive Stock Option.

(n)  “Officer” means any person designated by the Board as an officer of the Company.

(o)  “Option” means a right to purchase Stock pursuant to the terms and conditions of the Plan.  An Option may be either an Incentive Stock Option or a Nonstatutory Stock Option.

(p)  “Option Agreement” means a written agreement between the Company and an Optionee setting forth the terms, conditions and restrictions of the Option and Stock Appreciation Right granted to the Optionee and any shares acquired upon the exercise thereof.  An Option Agreement may consist of a form of “Notice of Grant of Stock Option” and a form of “Stock Option Agreement” incorporated therein by reference, or such other form or forms as the Board may approve from time to time.

(q)  “Optionee” means a person who has been granted one or more Options and Stock Appreciation Rights.

(r)  “Parent Corporation” means any present or future “parent corporation” of the Company, as defined in Section 424(e) of the Code.

(s)  “Participating Company” means the Company or any Parent Corporation or Subsidiary Corporation.

(t)  “Participating Company Group” means, at any point in time, all corporations collectively which are then Participating Companies.

Updated July 5, 2007

(u)  “Prior Plan Options” means, any option granted pursuant to the OccuLogix Corporation 1997 Stock Option Plan which is outstanding on or after the date on which the Board adopts the Plan or which is granted thereafter and prior to the Effective Date.

(v)  “Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor rule or regulation.

(w)  “Securities Act” means the Securities Act of 1933, as amended.

(x)  “Service” means an Optionee’s employment or service with the Participating Company Group, whether in the capacity of an Employee, a Director or a Consultant.  An Optionee’s Service shall not be deemed to have terminated merely because of a change in the capacity in which the Optionee renders Service to the Participating Company Group or a change in the Participating Company for which the Optionee renders such Service, provided that there is no interruption or termination of the Optionee’s Service.  Furthermore, an Optionee’s Service with the Participating Company Group shall not be deemed to have terminated if the Optionee takes any military leave, sick leave, or other bona fide leave of absence approved by the Company; provided, however, that if any such leave exceeds ninety (90) days, on the ninety-first (91st) day of such leave the Optionee’s Service shall be deemed to have terminated unless the Optionee’s right to return to Service with the Participating Company Group is guaranteed by statute or contract.  Notwithstanding the foregoing, unless otherwise designated by the Company or required by law, a leave of absence shall not be treated as Service for purposes of determining vesting under the Optionee’s Option Agreement.  The Optionee’s Service shall be deemed to have terminated either upon an actual termination of Service or upon the corporation for which the Optionee performs Service ceasing to be a Participating Company.  Subject to the foregoing, the Company, in its discretion, shall determine whether the Optionee’s Service has terminated and the effective date of such termination.

(y)  “Stock” means the common stock of the Company, as adjusted from time to time in accordance with Section 4.2.

(z)  “Stock Appreciation Right” means a right to surrender to the Company all or a portion of an Option in exchange for an amount equal to the excess, if any, of: (i) the Fair Market Value as of the date such Option or portion thereof is surrendered of the Stock issuable on exercise of such Option or portion thereof over (ii) the exercise price of such Option or portion thereof relating to such stock.

(aa)  “Subsidiary Corporation” means any present or future “subsidiary corporation” of the Company, as defined in Section 424(f) of the Code.

(bb)  “Ten Percent Owner Optionee” means an Optionee who, at the time an Option is granted to the Optionee, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of a Participating Company within the meaning of Section 422(b)(6) of the Code.

Updated July 5, 2007

2.2  Construction.  Captions and titles contained herein are for convenience only and shall not affect the meaning or interpretation of any provision of the Plan.  Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular.  Use of the term “or” is not intended to be exclusive, unless the context clearly requires otherwise.  Where a Stock Appreciation Right has been granted in conjunction with an Option, the term “Option” shall include the related Stock Appreciation Right where the context permits.

3.  Administration.

3.1  Administration by the Board.  The Plan shall be administered by the Board.  All questions of interpretation of the Plan or of any Option shall be determined by the Board, and such determinations shall be final and binding upon all persons having an interest in the Plan or such Option.

3.2  Authority of Officers.  Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election which is the responsibility of or which is allocated to the Company herein, provided the Officer has apparent authority with respect to such matter, right, obligation, determination or election.

3.3  Powers of the Board.  In addition to any other powers set forth in the Plan and subject to the provisions of the Plan, the Board shall have the full and final power and authority, in its discretion:

(a)  to determine the persons to whom, and the time or times at which, Options and Stock Appreciation Rights shall be granted and the number of shares of Stock to be subject to each Option and Stock Appreciation Right;

(b)  to designate Options as Incentive Stock Options or Nonstatutory Stock Options;

(c)  to determine the Fair Market Value of shares of Stock or other property;

(d)  to determine the terms, conditions and restrictions applicable to each Option and Stock Appreciation Right (which need not be identical) and any shares acquired upon the exercise thereof, including, without limitation, (i) the exercise price of the Option, (ii) the method of payment for shares purchased upon the exercise of the Option, (iii) the method for satisfaction of any tax withholding obligation arising in connection with the Option and Stock Appreciation Right or such shares, including by the withholding or delivery of shares of stock, (iv) the timing, terms and conditions of the exercisability of the Option and Stock Appreciation Right or the vesting of any shares acquired upon the exercise thereof, (v) the time of the expiration of the Option and Stock Appreciation Right, (vi) the effect of the Optionee’s termination of Service with the Participating Company Group on any of the foregoing, and (vii) all other terms, conditions and restrictions applicable to the Option or such shares not inconsistent with the terms of the Plan;

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(e)  to approve one or more forms of Option Agreement;

(f)  to amend, modify, extend, cancel, renew, reduce the exercise price of or in any other manner re-price any outstanding Option and Stock Appreciation Right or to waive any restrictions or conditions applicable to any outstanding Option and Stock Appreciation Right or any shares acquired upon the exercise thereof;

(g)  to accelerate, continue, extend or defer the exercisability of any Option and Stock Appreciation Right or the vesting of any shares acquired upon the exercise thereof, including with respect to the period following an Optionee’s termination of Service with the Participating Company Group;

(h)  to prescribe, amend or rescind rules, guidelines and policies relating to the Plan, or to adopt supplements to, or alternative versions of, the Plan, including, without limitation, as the Board deems necessary or desirable to comply with the laws of, or to accommodate the tax policy or custom of, foreign jurisdictions whose citizens may be granted Options and Stock Appreciation Rights; and

(i)  to correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Option Agreement and to make all other determinations and take such other actions with respect to the Plan or any Option and Stock Appreciation Right as the Board may deem advisable to the extent not inconsistent with the provisions of the Plan or applicable law.

3.4  Administration with Respect to Insiders.  With respect to participation by Insiders in the Plan, at any time that any class of equity security of the Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall be administered in compliance with the requirements, if any, of Rule 16b-3.

3.5  Indemnification.  In addition to such other rights of indemnification as they may have as members of the Board or officers or employees of the Participating Company Group, members of the Board and any officers or employees of the Participating Company Group to whom authority to act for the Board or the Company is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same.

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4.  Shares Subject to Plan.

4.1  Maximum Number of Shares Issuable.  Subject to adjustment as provided in Section 4.2, the maximum aggregate number of shares of Stock that may be issued under the Plan shall be 6,456,000.  This share reserve shall consist of authorized but unissued or reacquired shares of Stock or any combination thereof.  However, the share reserve, determined at any time, shall be reduced by the number of shares subject to Prior Plan Options.  If an outstanding Option, including any Prior Plan Option, for any reason expires or is terminated or canceled or if shares of Stock are acquired upon the exercise of an Option, including any Prior Plan Option, subject to a Company repurchase option and are repurchased by the Company at the Optionee’s exercise price, the shares of Stock allocable to the unexercised portion of such Option or Prior Plan Option or such repurchased shares of Stock shall again be available for issuance under the Plan.  However, except as adjusted pursuant to Section 4.2, in no event shall more than 6,456,000 shares of Stock be available for issuance pursuant to the exercise of Incentive Stock Options (the “ISO Share Issuance Limit”).  Notwithstanding the foregoing, at any such time as the offer and sale of securities pursuant to the Plan is subject to compliance with Section 260.140.45 of Title 10 of the California Code of Regulations (“Section 260.140.45”), the total number of shares of Stock issuable upon the exercise of all outstanding Options (together with options outstanding under any other stock option plan of the Company) and the total number of shares provided for under any stock bonus or similar plan of the Company shall not exceed thirty percent (30%) (or such other higher percentage limitation as may be approved by the stockholders of the Company pursuant to Section 260.140.45) of the then outstanding shares of the Company as calculated in accordance with the conditions and exclusions of Section 260.140.45.

4.2  Adjustments for Changes in Capital Structure.  In the event of any stock dividend, stock split, reverse stock split, recapitalization, combination, reclassification or similar change in the capital structure of the Company, appropriate adjustments shall be made in the number and class of shares subject to the Plan and to any outstanding Options, in the ISO Share Issuance Limit set forth in Section 4.1, and in the exercise price per share of any outstanding Options.  If a majority of the shares which are of the same class as the shares that are subject to outstanding Options are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership Change Event, as defined in Section 8.1) shares of another corporation (the “New Shares”), the Board may unilaterally amend the outstanding Options to provide that such Options are exercisable for New Shares.  In the event of any such amendment, the number of shares subject to, and the exercise price per share of, the outstanding Options shall be adjusted in a fair and equitable manner as determined by the Board, in its discretion.  Notwithstanding the foregoing, any fractional share resulting from an adjustment pursuant to this Section 4.2 shall be rounded down to the nearest whole number, and in no event may the exercise price of any Option be decreased to an amount less than the par value, if any, of the stock subject to the Option.  The adjustments determined by the Board pursuant to this Section 4.2 shall be final, binding and conclusive.

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5.  Eligibility and Option Limitations.

5.1  Persons Eligible for Options.  Options may be granted only to Employees, Consultants, and Directors.  For purposes of the foregoing sentence, “Employees,” “Consultants” and “Directors” shall include prospective Employees, prospective Consultants and prospective Directors to whom Options are granted in connection with written offers of an employment or other service relationship with the Participating Company Group.  Eligible persons may be granted more than one (1) Option.  However, eligibility in accordance with this Section shall not entitle any person to be granted an Option, or, having been granted an Option, to be granted an additional Option.

5.2  Option Grant Restrictions.  Any person who is not an Employee on the effective date of the grant of an Option to such person may be granted only a Nonstatutory Stock Option.  An Incentive Stock Option granted to a prospective Employee upon the condition that such person become an Employee shall be deemed granted effective on the date such person commences Service with a Participating Company, with an exercise price determined as of such date in accordance with Section 6.1.

5.3  Fair Market Value Limitation.  To the extent that options designated as Incentive Stock Options (granted under all stock option plans of the Participating Company Group, including the Plan) become exercisable by an Optionee for the first time during any calendar year for stock having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the portions of such options which exceed such amount shall be treated as Nonstatutory Stock Options.  For purposes of this Section 5.3, options designated as Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of stock shall be determined as of the time the option with respect to such stock is granted.  If the Code is amended to provide for a different limitation from that set forth in this Section 5.3, such different limitation shall be deemed incorporated herein effective as of the date and with respect to such Options as required or permitted by such amendment to the Code.  If an Option is treated as an Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in this Section 5.3, the Optionee may designate which portion of such Option the Optionee is exercising.  In the absence of such designation, the Optionee shall be deemed to have exercised the Incentive Stock Option portion of the Option first.  Separate certificates representing each such portion shall be issued upon the exercise of the Option.

6.  Terms and Conditions of Options.

Options shall be evidenced by Option Agreements specifying the number of shares of Stock covered thereby, in such form as the Board shall from time to time establish.  No Option or purported Option shall be a valid and binding obligation of the Company unless evidenced by a fully executed Option Agreement.  Option Agreements may incorporate all or any of the terms of the Plan by reference and shall comply with and be subject to the following terms and conditions:

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6.1  Exercise Price.  The exercise price for each Option shall be established in the discretion of the Board; provided, however, that (a) the exercise price per share for an Incentive Stock Option shall be not less than the Fair Market Value of a share of Stock on the effective date of grant of the Option, (b) the exercise price per share for a Nonstatutory Stock Option shall be not less than eighty-five percent (85%) of the Fair Market Value of a share of Stock on the effective date of grant of the Option, and (c) no Option granted to a Ten Percent Owner Optionee shall have an exercise price per share less than one hundred ten percent (110%) of the Fair Market Value of a share of Stock on the effective date of grant of the Option.  Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may be granted with an exercise price lower than the minimum exercise price set forth above if such Option is granted pursuant to an assumption or substitution for another option in a manner qualifying under the provisions of Section 424(a) of the Code.

6.2  Exercisability and Term of Options.  Options shall be exercisable at such time or times, or upon such event or events, and subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Board and set forth in the Option Agreement evidencing such Option; provided, however, that (a) no Option shall be exercisable after the expiration of ten (10) years after the effective date of grant of such Option, (b) no Incentive Stock Option granted to a Ten Percent Owner Optionee shall be exercisable after the expiration of five (5) years after the effective date of grant of such Option, (c) no Option granted to a prospective Employee, prospective Consultant or prospective Director may become exercisable prior to the date on which such person commences Service with a Participating Company, and (d) with the exception of an Option granted to an Officer, a Director or a Consultant, no Option shall become exercisable at a rate less than twenty percent (20%) per year over a period of five (5) years from the effective date of grant of such Option, subject to the Optionee’s continued Service.  Subject to the foregoing, unless otherwise specified by the Board in the grant of an Option, any Option granted hereunder shall terminate ten (10) years after the effective date of grant of the Option, unless earlier terminated in accordance with its provisions.

6.3  Payment of Exercise Price.

(a)  Forms of Consideration Authorized.  Except as otherwise provided below, payment of the exercise price for the number of shares of Stock being purchased pursuant to any Option shall be made (i) in cash, by check or cash equivalent, (ii) by tender to the Company, or attestation to the ownership, of shares of Stock owned by the Optionee having a Fair Market Value not less than the exercise price, (iii) by delivery of a properly executed notice together with irrevocable instructions to a broker providing for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of the shares being acquired upon the exercise of the Option (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System) (a “Cashless Exercise”), (iv) by such other consideration as may be approved by the Board from time to time to the extent permitted by applicable law, or (v) by any combination thereof.  The Board may at any time or from time to time, by approval of or by amendment to the standard forms of Option Agreement described in Section 7, or by other means, grant Options which do not permit all of the foregoing forms of consideration to be used in payment of the exercise price or which otherwise restrict one or more forms of consideration.

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(b)  Limitations on Forms of Consideration.

(i)  Tender of Stock.  Notwithstanding the foregoing, an Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of the Company’s stock.  Unless otherwise provided by the Board, an Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the Optionee for more than six (6) months (and not used for another Option exercise by attestation during such period) or were not acquired, directly or indirectly, from the Company.

(ii)  Cashless Exercise.  The Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to establish, decline to approve or terminate any program or procedures for the exercise of Options by means of a Cashless Exercise.

(iii)  Payment by Promissory Note.  No promissory note shall be permitted if the exercise of an Option using a promissory note would be a violation of any law.  Any permitted promissory note shall be on such terms as the Board shall determine.  The Board shall have the authority to permit or require the Optionee to secure any promissory note used to exercise an Option with the shares of Stock acquired upon the exercise of the Option or with other collateral acceptable to the Company.  Unless otherwise provided by the Board, if the Company at any time is subject to the regulations promulgated by the Board of Governors of the Federal Reserve System or any other governmental entity affecting the extension of credit in connection with the Company’s securities, any promissory note shall comply with such applicable regulations, and the Optionee shall pay the unpaid principal and accrued interest, if any, to the extent necessary to comply with such applicable regulations.

6.4  Tax Withholding.  The Company shall have the right, but not the obligation, to deduct from the shares of Stock issuable upon the exercise of an Option, or to accept from the Optionee the tender of, a number of whole shares of Stock having a Fair Market Value, as determined by the Company, equal to all or any part of the federal, state, local and foreign taxes, if any, required by law to be withheld by the Participating Company Group with respect to such Option or the shares acquired upon the exercise thereof.  Alternatively or in addition, in its discretion, the Company shall have the right to require the Optionee, through payroll withholding, cash payment or otherwise, including by means of a Cashless Exercise, to make adequate provision for any such tax withholding obligations of the Participating Company Group arising in connection with the Option or the shares acquired upon the exercise thereof.  The Fair Market Value of any shares of Stock withheld or tendered to satisfy any such tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory withholding rates.  The Company shall have no obligation to deliver shares of Stock or to release shares of Stock from an escrow established pursuant to the Option Agreement until the Participating Company Group’s tax withholding obligations have been satisfied by the Optionee.

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6.5  Repurchase Rights.  Shares issued under the Plan may be subject to a right of first refusal, one or more repurchase options, or other conditions and restrictions as determined by the Board in its discretion at the time the Option is granted.  The Company shall have the right to assign at any time any repurchase right it may have, whether or not such right is then exercisable, to one or more persons as may be selected by the Company.  Upon request by the Company, each Optionee shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to the Company any and all certificates representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing any such transfer restrictions.

6.6  Effect of Termination of Service.

(a)  Option Exercisability.  Subject to earlier termination of the Option as otherwise provided herein and unless otherwise provided by the Board in the grant of an Option and set forth in the Option Agreement, an Option shall be exercisable after an Optionee’s termination of Service only during the applicable time period determined in accordance with this Section 6.6 and thereafter shall terminate:

(i)  Disability.  If the Optionee’s Service terminates because of the Disability of the Optionee, the Option, to the extent unexercised and exercisable on the date on which the Optionee’s Service terminated, may be exercised by the Optionee (or the Optionee’s guardian or legal representative) at any time prior to the expiration of twelve (12) months (or such longer period of time as determined by the Board, in its discretion) after the date on which the Optionee’s Service terminated, but in any event no later than the date of expiration of the Option’s term as set forth in the Option Agreement evidencing such Option (the “Option Expiration Date”).

(ii)  Death.  If the Optionee’s Service terminates because of the death of the Optionee, the Option, to the extent unexercised and exercisable on the date on which the Optionee’s Service terminated, may be exercised by the Optionee’s legal representative or other person who acquired the right to exercise the Option by reason of the Optionee’s death at any time prior to the expiration of twelve (12) months (or such longer period of time as determined by the Board, in its discretion) after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date.  The Optionee’s Service shall be deemed to have terminated on account of death if the Optionee dies within three (3) months (or such longer period of time as determined by the Board, in its discretion) after the Optionee’s termination of Service.

(iii)  Other Termination of Service.  If the Optionee’s Service terminates for any reason, except Disability or death, the Option, to the extent unexercised and exercisable by the Optionee on the date on which the Optionee’s Service terminated, may be exercised by the Optionee at any time prior to the expiration of three (3) months (or such longer period of time as determined by the Board, in its discretion) after the date on which the Optionee’s Service terminated, but in any event no later than the Option Expiration Date.

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(b)  Extension if Exercise Prevented by Law.  Notwithstanding the foregoing, if the exercise of an Option within the applicable time periods set forth in Section 6.6(a) is prevented by the provisions of Section 10 below, the Option shall remain exercisable until three (3) months (or such longer period of time as determined by the Board, in its discretion) after the date the Optionee is notified by the Company that the Option is exercisable, but in any event no later than the Option Expiration Date.

(c)  Extension if Optionee Subject to Section 16(b).  Notwithstanding the foregoing, if a sale within the applicable time periods set forth in Section 6.6(a) of shares acquired upon the exercise of the Option would subject the Optionee to suit under Section 16(b) of the Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth (10th) day following the date on which a sale of such shares by the Optionee would no longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day after the Optionee’s termination of Service, or (iii) the Option Expiration Date.

(d)  Extension during Blackout Period.  Notwithstanding the foregoing, if there is in effect during the applicable time periods set forth in Section 6.6(a) a Company-imposed trading blackout to which the Optionee is subject (including an Optionee that is an Insider) and provided that neither Section 6.6(b) nor Section 6.6(c) is applicable to the circumstances at hand, the Option shall remain exercisable until the end of the tenth business day following the end of the trading blackout.

6.7  Transferability of Options.  During the lifetime of the Optionee, an Option shall be exercisable only by the Optionee or the Optionee’s guardian or legal representative.  No Option shall be assignable or transferable by the Optionee, except by will or by the laws of descent and distribution.  Notwithstanding the foregoing, to the extent permitted by the Board, in its discretion, and set forth in the Option Agreement evidencing such Option, a Nonstatutory Stock Option shall be assignable or transferable subject to the applicable limitations, if any, described in Section 260.140.41 of Title 10 of the California Code of Regulations, Rule 701 under the Securities Act, and the General Instructions to Form S-8 Registration Statement under the Securities Act.

7.  terms and conditions of stock appreciate rights.

7.1  The Committee may, from time to time, grant Stock Appreciation Rights to any Employee, Consultant or Director in connection with the grant of any Option.  Any such grant of Stock Appreciation Rights shall be included in the Option Agreement.

7.2  Stock Appreciation Rights shall be exerciseable only at the same time, by the same person and to the same extent, that the Option related thereto is exerciseable.  Upon exercise of any Stock Appreciation Right, the corresponding portion of the related Option shall be surrendered to the Company.

7.3  The Company has the absolute right, at any time and from time to time, to require an Optionee to exercise an Option in lieu of the related Stock Appreciation Right.

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8.  Standard Forms of Option Agreement.

8.1  Option Agreement.  Unless otherwise provided by the Board at the time the Option is granted, an Option shall comply with and be subject to the terms and conditions set forth in the form of Option Agreement approved by the Board concurrently with its adoption of the Plan and as amended from time to time.

8.2  Authority to Vary Terms.  The Board shall have the authority from time to time to vary the terms of any standard form of Option Agreement described in this Section 7 either in connection with the grant or amendment of an individual Option or in connection with the authorization of a new standard form or forms; provided, however, that the terms and conditions of any such new, revised or amended standard form or forms of Option Agreement are not inconsistent with the terms of the Plan.

9.  Change in Control.

9.1  Definitions.

(a)  An “Ownership Change Event” shall be deemed to have occurred if any of the following occurs with respect to the Company:  (i) the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of more than fifty percent (50%) of the voting stock of the Company; (ii) a merger or consolidation in which the Company is a party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company; or (iv) a liquidation or dissolution of the Company.

(b)  A “Change in Control” shall mean an Ownership Change Event or a series of related Ownership Change Events (collectively, a “Transaction”) wherein the stockholders of the Company immediately before the Transaction do not retain immediately after the Transaction, in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately before the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting securities of the Company or, in the case of a Transaction described in Section 8.1(a)(iii), the corporation or other business entity to which the assets of the Company were transferred (the “Transferee”), as the case may be.  For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business entities.  The Board shall have the right to determine whether multiple sales or exchanges of the voting securities of the Company or multiple Ownership Change Events are related, and its determination shall be final, binding and conclusive.

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9.2  Effect of Change in Control on Options.  In the event of a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiring Corporation”), may, without the consent of the Optionee, either assume the Company’s rights and obligations under outstanding Options or substitute for outstanding Options substantially equivalent options for the Acquiring Corporation’s stock.  Any Options which are neither assumed or substituted for by the Acquiring Corporation in connection with the Change in Control nor exercised as of the date of the Change in Control shall terminate and cease to be outstanding effective as of the date of the Change in Control.  Notwithstanding the foregoing, shares acquired upon exercise of an Option prior to the Change in Control and any consideration received pursuant to the Change in Control with respect to such shares shall continue to be subject to all applicable provisions of the Option Agreement evidencing such Option except as otherwise provided in such Option Agreement.  Furthermore, notwithstanding the foregoing, if the corporation the stock of which is subject to the outstanding Options immediately prior to an Ownership Change Event described in Section 8.1(a)(i) constituting a Change in Control is the surviving or continuing corporation and immediately after such Ownership Change Event less than fifty percent (50%) of the total combined voting power of its voting stock is held by another corporation or by other corporations that are members of an affiliated group within the meaning of Section 1504(a) of the Code without regard to the provisions of Section 1504(b) of the Code, the outstanding Options shall not terminate unless the Board otherwise provides in its discretion.

10.  Provision of Information.

At least annually, copies of the Company’s balance sheet and income statement for the just completed fiscal year shall be made available to each Optionee and purchaser of shares of Stock upon the exercise of an Option.  The Company shall not be required to provide such information to key employees whose duties in connection with the Company assure them access to equivalent information.  Furthermore, the Company shall deliver to each Optionee such disclosures as are required in accordance with Rule 701 under the Securities Act.

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11.  Compliance with Securities Law.

The grant of Options and the issuance of shares of Stock upon exercise of Options shall be subject to compliance with all applicable requirements of federal, state and foreign law with respect to such securities.  Options may not be exercised if the issuance of shares of Stock upon exercise would constitute a violation of any applicable federal, state or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Stock may then be listed.  In addition, no Option may be exercised unless (a) a registration statement under the Securities Act shall at the time of exercise of the Option be in effect with respect to the shares issuable upon exercise of the Option or (b) in the opinion of legal counsel to the Company, the shares issuable upon exercise of the Option may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act.  The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares hereunder shall relieve the Company of any liability in respect of the failure to issue or sell such shares as to which such requisite authority shall not have been obtained.  As a condition to the exercise of any Option, the Company may require the Optionee to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company.

12.  Termination or Amendment of Plan.

Without the approval of the Company’s stockholders, the Board may terminate or amend the Plan at any time.  However, subject to changes in applicable law, regulations or rules that would permit otherwise, without the approval of the Company’s stockholders, there shall be (a) no increase in the maximum aggregate number of shares of Stock that may be issued under the Plan (except by operation of the provisions of Section 4.2), (b) no change in the class of persons eligible to receive Incentive Stock Options, (c) no extension of the term of an Option granted to an Insider, other than as provided for in Section 6.6(d), (d) no reduction in the exercise price of an Option granted to an Insider, other than in connection with adjustments for changes in the Company’s capital structure as permitted pursuant to Section 4.2 and (e) no other amendment of the Plan that would require approval of the Company’s stockholders under any applicable law, regulation or rule.  No termination or amendment of the Plan shall adversely affect any then outstanding Option unless expressly agreed to by the affected Participant or required by applicable law, legislation or rule.  In any event, no termination or amendment of the Plan may adversely affect any then outstanding Option without the consent of the Optionee, unless such termination or amendment is required to enable an Option designated as an Incentive Stock Option to qualify as an Incentive Stock Option or is necessary to comply with any applicable law, regulation or rule.

13.  Stockholder Approval.

The Plan or any increase in the maximum aggregate number of shares of Stock issuable thereunder as provided in Section 4.1 (the “Authorized Shares”) shall be approved by the stockholders of the Company within twelve (12) months of the date of adoption thereof by the Board.  Options granted prior to stockholder approval of the Plan or in excess of the Authorized Shares previously approved by the stockholders shall become exercisable no earlier than the date of stockholder approval of the Plan or such increase in the Authorized Shares, as the case may be.

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PLAN HISTORY

June 2002 Board of Directors of OccuLogix Corporation, a Florida corporation (“OccuLogix”) adopts Plan, with an initial reserve of Two Million Six Hundred Seventy-Eight Thousand Nine Hundred and Ninety-Seven (2,678,997) shares.  This share reserve includes the number of shares of stock underlying outstanding options and the number of shares available for grant as options under the OccuLogix Corporation 1997 Stock Option Plan.  However, this share reserve, at any time, shall be reduced by the number of shares subject to Prior Plan Options.

June 2002 Stockholders of OccuLogix approve Plan, with an initial reserve of Two Million Six Hundred Seventy-Eight Thousand Nine Hundred and Ninety-Seven (2,678,997)shares.  This share reserve includes the number of shares of stock underlying outstanding options and the number of shares available for grant as options under the OccuLogix Corporation 1997 Stock Option Plan.  However, this share reserve, at any time, shall be reduced by the number of shares subject to Prior Plan Options.

June 2002 Effective date of Delaware reincorporation of OccuLogix.

December 2004 Board of Directors of OccuLogix, Inc. amends Plan to increase the share reserve to 4,456,000.

April 2007 Board of Directors of OccuLogix, Inc. resolves to submit to the stockholders of OccuLogix, Inc., for their authorization at the 2007 Annual Meeting, a proposal to increase the share reserve under the Plan by 2,000,000, from 4,456,000 to 6,456,000.

June 2007 Stockholders of OccuLogix, Inc. approve the proposal to increase the share reserve under the Plan by 2,000,000, from 4,456,000 to 6,456,000.

Updated July 5, 2007

EX-10.35

Exhibit 10.35

� Deacons

***Sections 3.3(2), 3.3(3), 3.3(7), 3.3(8) and 4.1, Schedule 1 and Annexures A and B in their entirety have been omitted pursuant to a request for confidential treatment and have been filed separately with the U.S. Securities and Exchange Commission.

Dated October 25, 2007

Manufacturing and development agreement

Parties

MiniFAB (Aust) Pty Ltd

ACN 100 768 474

OcuSense, Inc.

Contact

Bernard O'Shea

Partner

Level 15, RACV Tower, 485 Bourke Street, Melbourne, Victoria 3000

Telephone: +61 (0)3 8686 6573

Email: bernard.oshea@deacons.com.au

Website: www.deacons.com.au

Our ref: 2626784

Contents
1.	Definitions and interpretation	1
2.	Development of the First Product	6
3.	Supply of Products	6
4.	Price	13
5.	Development of New Products	14
6.	OcuSense Licence	18
7.	Obligations of MiniFAB	20
8.	Meeting	20
9.	Payment and invoicing	21
10.	Amendments to Specifications	21
11.	Registrations, safety and Product liability	22
12.	Insurance	23
13.	Warranties	23
14.	Third party licensors and contractors; Technology Transfer.	23
15.	Term, breach and termination	26
16.	Liability and indemnity	27
17.	Goods and services tax	29
18.	Confidentiality	29
19.	Disputes	31
20.	Force Majeure	33
21.	Notices	33
22.	General	34
Schedule 1 First Product		36
Schedule 2 Form of Development Order		37

Manufacturing and Development Agreement dated October 25, 2007

Parties MiniFAB (Aust) Pty Ltd ACN 100 768 474

of 9 The Centreway, Mount Waverley, Victoria  3149, Australia (MiniFAB)

OcuSense, Inc.

of 12707 High Bluff Dr., Suite 200, San Diego, CA 92130,

U.S.A. (OcuSense)

Introduction

A. MiniFAB is a micro-nano-bio company that offers customised manufacturing and advanced product development services.

B. OcuSense is an in-vitro diagnostics company that is developing and desires to commercialise a proprietary tear testing platform, TearLab™, capable of accurately and rapidly diagnosing various eye diseases at the point-of-care.

C. MiniFAB and OcuSense are parties to that certain development agreement for a tear collection interface (“TCI”) device comprised of Terms of Business and the Project Proposal for Project Tear-Sense (Stage 0), each dated 17 November 2006 (collectively, the "Development Agreement").

D. OcuSense wishes to acquire the services of MiniFAB in the manufacture and supply  of the TCI Device developed under the Development Agreement, as well as potential development and manufacture of other TCI Devices, and MiniFAB has agreed to provide such services, on the terms of this Agreement.

It is agreed

1. Definitions and interpretation

1.1  Definitions

In this Agreement:

(1) Agreement means this document, including any schedule or annexure to it;

(2) Annual Production Capacity means, in respect of each Product, the quantity

of the Product that MiniFAB is reasonably capable of manufacturing each year, and as varied in accordance with clause 3.5. The Annual Production Capacity for the First Product is specified in Schedule 1 and the Annual Production Capacity for the New Products is to be agreed between the parties pursuant to clause 5.8;

(3) Business Day means a day that is not a Saturday, Sunday or any other day which is a public holiday or a bank holiday in Melbourne, Australia;

(4) cGMP means current Good Manufacturing Practices, as established by the FDA;

(5) Commencement Date means October 19, 2007;

(6) Commercially Reasonable Efforts means the exercise of such efforts and commitment of such resources by MiniFAB as would be expended on, or committed by MiniFAB for, a comparable development or manufacturing program of a similar scope and at a similar stage in development or product lifecycle, comparable profit margin and potential, competitive landscape, and risk profile, in each case with due regard to the nature of efforts and cost required for such development or manufacturing and taking into account payments made by OcuSense, or obligated to be made by OcuSense, under this Agreement;

(7) Confidential Information of a party means any Information (and all tangible and intangible embodiments thereof of any kind whatsoever) provided by that party or its Representatives to the other party or its Representatives whether provided orally or in any form and is marked, identified as or otherwise acknowledged to be confidential at the time of disclosure to the other party; provided, however, that information, data and results generated by MiniFAB under the Development Agreement, or in the course of performing activities under this Agreement, that relate to OcuSense's technology or to the development of Products or prototypes thereof shall be deemed the Confidential Information of OcuSense;

(8) Default Rate means 10% per annum;

(9) Delivery Point means the premises of MiniFAB located at 1 Dalmore Drive, Scoresby, Victoria, AUSTRALIA;

(10) Development Expenses means all costs and expenses incurred by MiniFAB for the development of a New Product as more particularly described in clause 5.5(1)(a), but does not include the capital expenditures referred to in clause 5.5(1)(b);

(11) Development Order means a document substantially in the form set out in Schedule 2 executed by or on behalf of MiniFAB and OcuSense which details a New Product to be developed by MiniFAB in accordance with clause 5;

(12) Development Request has the meaning given in clause 5.2;

(13) EXW means "ex works", according to the Incoterms 2000 published by the International Chamber of Commerce (ICC) as amended from time to time;

(14) FDA means the United States Food and Drug Administration;

(15) First Product means the TCI Device developed under the Development Agreement, together with the capsule and applicable packaging, all as further described in Schedule 1;

(16) Force Majeure means any cause which is not within the reasonable control of the party affected by it including, but not limited to, acts of God, war declared or undeclared, civil disturbance, acts or omissions of government or other competent authority, fire, lightning, explosion or flood, but excludes any cause due to lack of demand or market success for the Products;

(17) Governmental Agency means any court, administrative agency or commission or other governmental agency, body or instrumentality, domestic or foreign;

(18) Information means any information or know-how pertaining to, or in the possession or control of, a party including, but not limited to, information concerning its business, systems, technology and afairs, such as:

(a) financial, technological, strategic or business information, concepts, plans, strategies, directions or systems;

(b) research, development, operational, legal, marketing or accounting information, concepts, plans, strategies, directions or systems;

(c) technology, source and object codes for computer sofware, intellectual property rights and technical and historical information relating thereto;

(d) customer and supplier information; and

(e) information relating to the Products;

(19) Insolvency Event in the context of a person means:

(a) a receiver, receiver and manager, official manager, trustee, administrator, other controller (as defined in the Corporations Act 2001 (Cth)) or similar official is appointed, or steps are taken for such appointment, over any of the equipment or undertaking of the person;

(b) the person is or becomes unable to pay its debts when they are due or is or becomes unable to pay its debts within the meaning of the Corporations Act 2001 (Cth) or is presumed to be insolvent under the Corporations Act 2001 (Cth);

(c) the person ceases or threatens to cease to carry on business; or

(d) an application or order is made for the liquidation of the person or a resolution is passed or any steps are taken to liquidate or pass a resolution for the liquidation of the person otherwise than for the purpose of an amalgamation or reconstruction;

(20) Intellectual Property means any copyright, design (whether registered or unregistered), trademark (whether registered or unregistered), patent or patent application or invention, circuit layout, know-how, confidential information (whether such information is in writing or recorded in any other form) and other proprietary or personal rights arising from intellectual activity in the business, industrial, scientific or artistic fields;

(21) Supply Start Date has the meaning given in clause 3.2(2);

(22) Loss means any loss, damage, cost, interest, expense, fee, penalty, fine, forfeiture, assessment, demand, liability or damages incurred by a person to the extent resulting from any action, suit, claim, proceeding or cause of action brought against such party by a third party.

(23) Minimum Orders means, in respect of each Product, the minimum quantity of Product that OcuSense must purchase from MiniFAB during a specified period. The Minimum Orders are specified in clause 3.3(7);

(24) New Products means any TCI Devices developed pursuant to this Agreement and any other goods that the parties agree are New Products. For the avoidance of doubt, New Products do not include the First Product;

(25) OcuSenseIPhas the meaning given in clause 6.1;

(26) Price means, in respect of each Product, the price payable by OcuSense to MiniFAB for the supply of that Product, inclusive of all packaging, labelling and all other handling charges (other than the freight costs);

(27) Products means the First Product and any New Products;

(28) Prototype First Product means a pre-production prototype of the First Product conforming to the First Product Requirement Definitions, and mayinclude prototype units of the First Product at different stages of development (such as, for example, alpha prototypes and beta prototypes).

(29) Purchase Order has the meaning given in clause 3.4;

(30) Quarter means a period of three months commencing on 1 January, 1 April, 1 July or 1 October;

(31) R&D Services means those development services for New Products as specified in clause 5.1;

(32) Registrations means all registrations or approvals required from the relevant Regulatory Authority or Authorities for the export, import, storage, promotion, supply, sale or other distribution in the of the Products;

(33) Regulatory Authority means any Governmental Agency having responsibility for the regulation of, oversight of or whose approval is required for the manufacture, marketing, sale or supply of the Products or the facilities in which it is manufactured;

(34)  Regulatory Requirements means, collectively:

(a) all laws and regulations and any and all other requirements of the FDA or any other Regulatory Authority that are mandatory to the manufacture, packaging, labelling, storage, handling and shipment of the Products by MiniFAB and, subject to clause 2.1, includes cGMP; and

(b) all standards set by the International Organization for Standardization (ISO) that are mandatory to the manufacture, packaging, labelling, storage, handling and shipment of the Products by MiniFAB, including without limitation ISO 13485:2003 (Medical Devices Quality Management System), ISO 10993-1 (Biocompatibility), ISO 10993-5 (Biocompatibility: Cytotoxicity), and ISO 10993-10 (Biocompatibility: Sensitization and Irritation), but excludes

(c) any law, regulation, requirement or standards that apply to the design, trials, marketing, sales or supply of the Products (and which do not also apply to the manufacture of Products and/or to MiniFAB's supply to OcuSense hereunder);

(35) Representative of a party means the employees, directors, agents or advisors of that party;

(36) Requirement Definitions means, with respect to any Product, the written documentation guiding MiniFAB's development of such Product, including detailed requirement definitions for such Product, as agreed by the parties. The initial Requirement Definitions for the First Product have been agreed by the parties as of the Commencement Date. The Requirement Definitions may be modified from time to time by mutual agreement of OcuSense and MiniFAB in the course of development work for such Product, and MiniFAB agrees to use Commercially Reasonable Efforts to accommodate changes to the Requirement Definitions as OcuSense may from time to time request;

(37) Second Product means the first New Product developed pursuant to this Agreement, which the parties intend to be a TCI Device similar to the First Product, provided that such product would be designed to measure either (i) a marker other than osmolarity, or (ii) both osmolarity and one other additional marker;

(38) Specifications means, with respect to any Product, the definitive written documentation guiding MiniFAB's manufacture, packaging, labelling, storage and handling of such Product, prepared and agreed in accordance with clause 3.1; in each case, and as modified from time to time by mutual agreement of OcuSense and MiniFAB in accordance with clause 10;

(39) Successful Completion has the meaning provided in clause 5.10;

(40) TCI Device means any tear collection interface device or any microfluidicbased device;

(41) Technical Agreement means the technical agreement entered into between MiniFAB and OcuSense with respect to each Product, as may be amended from time to time, which specifies their respective responsibilities for quality control and quality assurance and related activities and qualifications with respect to the applicable Product. The Technical Agreement for the First Product shall be entered into concurrently with this Agreement. Mutually agreed Technical Agreements for other Products shall be entered into prior to commercial manufacture and supply of such Products;

(42) Term means the term of this Agreement, including any extended term underclause 15.1; and

(43) Wholesale Price of a Product at a particular time means the highest wholesale price at which OcuSense has sold such Product to third parties during the previous 3 months period.

1.2 Interpretation

(1) Reference to:

(a) one gender includes the others;

(b) a person includes a body corporate;

(c) a party includes the party's executors, administrators, successors and permitted assigns;

(d) a statute, regulation, code or other law or a provision of any of them includes:

(i) any amendment or replacement of it; and

(ii) another regulation or other statutory instrument made under it, or made under it as amended or replaced; and

(e) dollars means Australian dollars unless otherwise stated.

(2) "Including" and similar expressions are not words of limitation.

(3) Where a capitalized word or expression is given a particular meaning, other parts of speech and grammatical forms of that capitalized word or expression have a corresponding meaning.

(4) Headings and any table of contents or index are for convenience only and do not form part of this Agreement or affect its interpretation.

(5) A provision of this Agreement must not be construed to the disadvantage of a party merely because that party was responsible for the preparation of the Agreement or the inclusion of the provision in the Agreement.

(6) If an act must be done on a specified day which is not a Business Day, it must be done instead on the next Business Day.

1.3 Parties

(1) If a party consists of more than 1 person, this Agreement binds each of them separately and any 2 or more of them jointly.

(2) An obligation, representation or warranty in favour of more than 1 person is for the benefit of them separately and jointly.

(3) A party which is a trustee is bound both personally and in its capacity as a trustee.

2. Development of the First Product

2.1 Regulatory approvals and exemptions

As between the parties, OcuSense shall be responsible, in its discretion, for activities in seeking Registrations and other regulatory approvals from applicable Regulatory Authorities with respect to Products (including any CLIA waiver from the FDA in respect of the FDA 510(k) application for the OcuSense system which uses the Products developed under this Agreement).

2.2 Design Development completed

The parties agree that the development of the design for the First Product has been completed, and the Requirement Definitions of the First Product are as annexed to Annexure A.

2.3  Prototype Acceptance Testing

(1) The parties agree that MiniFAB has manufactured and supplied to OcuSense sufficient units of the Alpha Prototype First Product for the purposes of testing on or about 26 July 2007, and that prior to the Commencement Date, OcuSense has tested such units to determine whether the Alpha Prototype First Product is as described in "Design Specification Stage 1 Work package

1.1 Final Report", and has generated and provided MiniFAB with feedback regarding areas of improvement with respect to the First Product, to be addressed by MiniFAB prior to manufacturing and supplying OcuSense with the Beta Prototype First Product.

(2) The parties acknowledge that, as of the Commencement Date, manufacture, supply and testing of units of the Beta Prototype First Product has not yet occurred, and further acknowledge that the terms and conditions of the Development Agreement continue to apply with respect to such activities.

(3) MiniFAB will, in accordance with its obligations under the Development Agreement, develop and optimise its manufacturing process such that MiniFAB can manufacture the First Product to meet the Minimum Orders of the First Product.

3. Supply of Products

3.1 Specifications

(1) The initial Specifications for the First Product have been agreed by the parties prior to execution of this Agreement. Promptly after OcuSense's Acceptance of a New Product as set forth in clause 5.9, MiniFAB shall prepare, on the basis of the most recent Requirement Definitions for such New Product, and provide to OcuSense for approval, the definitive Specifications for the applicable Product, for MiniFAB's use to manufacture, package, label, store and handle the applicable Product.

(2) OcuSense will review the Specifications submitted by MiniFAB under clause 3.1(1) and may request amendments or modifications to the Specifications if:

(a) the Specifications are inconsistent with the Requirement Definitions;

(b) the Specifications are inconsistent with the Regulatory Requirements;

(c) the requirements of the Specifications are unreasonable or uncommercial having regard to the Price or proposed Price of the relevant Product; or

(d) the requirements of the Specifications are unrelated to the Product.

(3) MiniFAB must act reasonably and accommodate any requests for amendment to the Specifications made by OcuSense under clause 3.1(2).

(4) OcuSense must accept the Specifications when it is satisfied that the Specifications are consistent with the Requirement Definitions and the Regulatory Requirements, and are reasonable and commercial having regard to the Price or proposed Price of the relevant Product.

(5) The parties agree that the definitive Specifications for the First Product are set forth in Annexure B.

(6) The Specifications for any Product may be modified or amended by mutual written agreement of the Parties. In the event that OcuSense requests changes to the Specifications for reasons other than those set forth in clause 3.1(2) above, MiniFAB agrees to use Commercially Reasonable Efforts to accommodate such requested changes.

3.2 Capital investments and Supply Start Date

(1)  MiniFAB will:

(a) in respect of the First Product - from the Commencement Date; and

(b) in respect of each New Product - in accordance with the project plan specified in the Development Order for that New Product,

use Commercially Reasonable Eforts to acquire, construct or develop such plant, equipment, raw materials, labour, utilities and capital improvements as are necessary to manufacture the Product to meet the Minimum Orders of that Product. MiniFAB shall set up the manufacturing process, manufacture the Products, and assemble and package the Products, all in accordance with the Specifications and all Regulatory Requirements. MiniFAB shall label the Products with such labels, tradenames, and trademarks as directed by OcuSense.

(2) MiniFAB will notify OcuSense when MiniFAB reasonably believes that it has the necessary plant and equipment to manufacture a particular Product to meet the Minimum Orders of that Product. Promptly following such notification by MiniFAB, the parties shall mutually agree on and set the date (Supply Start Date for that Product) on which OcuSense may begin placing binding Purchase Orders for that Product pursuant to clause 3.4.

(3) It is the intention of the parties that the Supply Start Date for the First Product shall take place no later than March 15, 2008 (the initial "Cut-Off Date"). If the Supply Start Date for the First Product has not taken place on or prior to the Cut-Off Date, then, provided that MiniFAB has used Commercially Reasonable Efforts to meet the Cut-Off Date, the parties will:

(a) meet and discuss the reasons for the failure;

(b) negotiate a mutually agreed remedy plan to address the reasons for the failure; and

(c) acting reasonably, agree on a revised Cut-Off Date, subject to clause 3.2(4) .

MiniFAB must implement the remedy plan and use Commercially Reasonable Efforts to meet the revised Cut-Off Date.

(4) The procedures described in clause 3.2(3) will apply for at least two times, but the revised Cut-Off Date shall not be later than sixty (60) days following the initial Cut-Off Date specified in clause 3.2(3), above. If MiniFAB fails to meet the Cut-Off Date for the third time, then OcuSense may immediately terminate this Agreement, which shall be effective upon written notice to MiniFAB.

3.3  Supply and Purchase Obligations

(1) MiniFAB shall manufacture the Products exclusively for OcuSense; and MiniFAB shall sell the Products exclusively to OcuSense or its designee; and MiniFAB shall not otherwise manufacture, sell, or distribute the Products to any third party. MiniFAB acknowledges that OcuSense may manufacture Products itself and/or engage one or more third parties in addition to MiniFAB to supply the Products to OcuSense.

***Section 3.3(2) and 3.3(3) in their entirety have been omitted pursuant to a request for confidential treatment and have been filed separately with the U.S. Securities and Exchange Commission.

(4) MiniFAB hereby acknowledges that OcuSense needs to obtain a reliable supply of the Products that meets certain quality, quantity and timing requirements, and agrees to comply with the following Supply Requirements:

(a) subject to clause 3.2(3), ensure that the Supply Start Date for the First Product occurs on or prior to the Cut-Off Date;

(b) ensure that the Supply Start Date for the Second Product occurs on or prior to the applicable cut-off date as specified in the Development Order for the Second Product;

(c) ensure that each batch of Product are in full compliance with the Specifications (including without limitation any failure rates specified therein), the Technical Agreement, and the Regulatory Requirements; and

(d) ensure that, for each 3 month period, at least 95% of shipments of Products are delivered by the delivery date required under clause 3.6.

(5) If MiniFAB fails to comply with the Supply Requirements then, subject to clause 3.3(6):

(a) MiniFAB must provide OcuSense with the reasons for the non-compliance;

(b) the parties must meet and discuss the reasons given by MiniFAB;

(c) the parties must, acting reasonably, negotiate a mutually agreed remedy plan to address the reasons for the non-compliance; and

(d) MiniFAB must implement the agreed remedy plan.

(6) If MiniFAB fails to comply with the same Supply Requirement again within a period of 3 months after the first non-compliance, then MiniFAB is deemed to have committed a material breach of this Agreement for the purposes of clause 15.2(1).

***Section 3.3(7) and 3.3(8) in their entirety have been omitted pursuant to a request for confidential treatment and have been filed separately with the U.S. Securities and Exchange Commission.

(9) OcuSense shall have no purchase obligations under this Agreement, except as expressly set forth in this clause 3.3. For the avoidance of doubt, subject to clauses 3.3(2), 3.3(7) and 3.3(8), OcuSense shall have the right to engage any third party to manufacture and supply any Products.

3.4 Forecast and ordering

(1) Not less than 3 months prior to the Supply Start Date for a Product and on or before the 1st date of each calendar month thereafter, OcuSense must submit to MiniFAB a non-binding forecast of the quantity of each of the Products that OcuSense expects to purchase in each of the 3rd through the 6th month following the month for which the forecast is due (e.g., the forecast due on January 1, 2010 would contain a forecast for April through June of 2010).

(2) OcuSense must order the Products 45 days prior to their requested deliverydates (as determined in accordance with clause 3.6) by sending binding written purchase orders to MiniFAB stating the Product, unit quantities and any other information reasonably required by MiniFAB from time to time (Purchase Orders). OcuSense may begin placing Purchase Orders for any particular Product commencing with the Supply Start Date for that Product. OcuSense shall use reasonable endeavours to ensure that the quantities of Products set forth in its Purchase Orders are consistent with the then-current forecast.

(3) A Purchase Order constitutes an irrevocable offer made by OcuSense to MiniFAB for the supply of the Products specified in the Purchase Order on the terms and conditions of this Agreement. Once received by MiniFAB, the Purchase Order is firm and may not be cancelled or modified without MiniFAB's prior written consent.

(4) Subject to clauses 3.4(5) or 3.5, MiniFAB must accept a Purchase Order if the quantity of the Product the subject of the Purchase Order is between 80% and 150% of the most recent forecast. In addition, MiniFAB agrees to use Commercially Reasonable Efforts to accept and satisfy Purchase Orders exceeding 150% of the most recent forecast. In the event that OcuSense places a Purchase Order that exceeds 150% of the most recent forecast, MiniFAB shall (i) accept the Purchase Order with respect to quantities at least equal to 150% of the most recent Purchase Order, and (ii) notify OcuSense in writing of those quantities (if any) exceeding 150% of the most recent forecast with respect to which MiniFAB is rejecting the Purchase Order.

(5) If MiniFAB believes, on reasonable grounds, that a Purchaser Order is materially incorrect or, to the extent a Purchase Order exceeds 150% of forecast amounts, it is not capable of satisfying the Purchase Order with respect to excess amounts so ordered, then MiniFAB may reject the Purchase Order and must notify OcuSense as soon as possible. If MiniFAB does not reject to a Purchaser Order within 5 Business Days of receipt of the Purchase Order, then MiniFAB is deemed to have accepted the Purchaser Order. Any rejection by MiniFAB of a Purchase Order that is not provided for in this clause 3.4(5) or 3.5 is deemed to be a material breach of this Agreement for the purposes of clause 15.2(1).

3.5 Annual Production Capacity

(1) Despite clause 3.4(4), MiniFAB may, in its absolute discretion, refuse to accept any Purchase Order for a particular Product if the Purchase Order would require MiniFAB to exceed the Annual Production Capacity of that Product during that year.

(2) The parties may, from time to time, vary the Annual Production Capacity of a particular Product by agreement in writing. If OcuSense requests MiniFAB to increase the Annual Product Capacity, the parties shall promptly confer and discuss such matter in good faith, and MiniFAB shall endeavor to inform OcuSense within thirty (30) days whether MiniFAB will agree to the requested increase in the Annual Production Capacity.

3.6 Delivery

MiniFAB will manufacture and deliver the Products EXW (Incoterms 2000) the Delivery Point within 45 days afer the date of Purchase Order, unless the Purchase Order specifies a later delivery date. MiniFAB shall pay pre-pay all freight, insurance charges, taxes, import and export duties, inspection fees and other charges applicable to the transport and delivery of the Products, and add all such charges to invoices to OcuSense as a separate line item at pass-through cost.MiniFAB shall use such shipping method and carrier, and shall provide such carrier with such shipping instructions, as specified by OcuSense. In the even that any two or more consecutive shipments ordered by OcuSense in accordance with clause 3.4 are delivered more than five (5) business days after the delivery date indicated in the first sentence of this clause 3.6, then OcuSense shall be entitled to a thirty percent (30%) discount on the Price of the actual Products in such shipments which were not actually delivered by the required delivery date. The parties acknowledge and agree that such discount is independent of, and without prejudice to, other applicable remedies that may be available to OcuSense for failures of MiniFAB to supply Products in accordance with this Agreement.

3.7 Inspection and Nonconforming Goods

(1) OcuSense must inspect the Products within 14 days after delivery (or such longer time as provided in the Technical Agreement) and must accept the Products if they meet the Specifications, the requirements of the Technical Agreement, and the Regulatory Requirements. If OcuSense fails to object in writing within the applicable period, then OcuSense must accept the delivered Products. OcuSense may reject the delivered Products only if the Products fail to meet the Specifications, the requirements of the Technical Agreement,and/or the Regulatory Requirements. If OcuSense rejects the delivered Products, OcuSense must provide MiniFAB in writing the reasons for the rejection and the reasonably available evidence to substantiate those reasons.

(2) If OcuSense rejects the relevant Product, then MiniFAB shall promptly supply conforming replacement Products as soon as possible, whether or not MiniFAB agrees that OcuSense properly rejected such Products. MiniFAB agrees to notify OcuSense in writing if such replacement Products will not be shipped within five (5) business days.

(3) If OcuSense properly rejected the original Products, then OcuSense's payment for the rejected Products shall be deemed payment for the replacement Products. If OcuSense was not entitled to reject the original Products, then OcuSense shall pay for both the rejected Products and the replacement Products.

(4) If the parties disagree whether OcuSense properly rejected the original Products, then the parties shall refer such matter to a mutually acceptable, independent testing laboratory (the Testing Lab) to determine whether such Products were properly rejected. The fees and costs of the Testing Lab shall be borne by OcuSense if the Testing Lab determines that the Products were improperly rejected and by MiniFAB if the Testing Lab determines that the Products were properly rejected. If the Testing Lab is unable to determine whether the rejected Products met the Specifications, the requirements of the Technical Agreement or the Regulatory Requirements, then either party may submit the matter to the dispute resolution process in clause 19.

(5) OcuSense may withhold payment for any rejected Products (and only the rejected Products) until:

(a) MiniFAB re-delivers conforming Products, or

(b) the Testing Lab or dispute resolution process determines that the Products rejected by OcuSense met the Specifications, the requirements of the Technical Agreement and the Regulatory Requirements.

3.8 Technical Agreements

MiniFAB and OcuSense shall enter into a Technical Agreement with respect to the First Product promptly following (and no later than sixty (60) days after) the Commencement Date, and the manufacture, production and supply of the First Product shall be conducted in accordance with such Technical Agreement. The parties shall enter into a Technical Agreement with respect to each New Product promptly following agreement upon the applicable Requirement Definitions, and no later than ninety (90) days prior to the applicable Supply Start Date for such New Product. MiniFAB and OcuSense shall determine in good faith those subcontractors (if any) performing any manufacturing activities with respect to Products with whom OcuSense shall enter into separate written technical or quality agreements. Technical Agreement will address matters such as shelf life, storage, release requirements, facility registrations, recordkeeping, retention and review of documentation, annual product review, shipping products only upon release, and the like, which are not addressed in this Agreement.

3.9 Quality Control

MiniFAB shall conduct all quality control testing of the Products supplied hereunder prior to shipment in accordance with the Technical Agreements and applicable Laws. MiniFAB shall, and shall cause its subcontractors to, retain records and samples of Products relating to such testing, and samples (identified by batch number) of Products supplied to OcuSense, in each case in conditions and for times as required by applicable Law (collectively, "Shipment Samples"), and shall provide OcuSense with reasonable access to the Shipment Samples for testing and other purposes on OcuSense's request. If OcuSense conducts quality control testing of Products supplied hereunder afer delivery thereof to OcuSense, OcuSense shall also use the same analytical methodology as used by MiniFAB. Upon written request from OcuSense, MiniFAB shall provide a reasonably detailed description of the analytical methodology used by MiniFAB for quality control testing of the Products.

4. Price

***Section 4.1 has been omitted in its entirety pursuant to a request for confidential treatment and has been filed separately with the U.S. Securities and Exchange Commission.

4.2 Price revisions

(1) When the Minimum Orders requirement for the Second Product has been satisfied, the parties will meet and discuss any revision to the Price of the Second Product, with the intent that the price will be adjusted as mutually agreed by the parties to reflect:

(a) the fact that the initial capital expenses incurred by MiniFAB have been amortised;

(b) any further capital expenses incurred by MiniFAB to meet expected demand; and

(c) any cost savings and efficiency improvements (which will be shared equally unless otherwise agreed between the parties).

(2) The parties agree to act reasonably when negotiating the revision to the Price of the Second Product.

5. Development of New Products

5.1 R&D Services

(1) R&D Services for New Products include:

(a) project management services relating to the development of the New Product;

(b) assisting OcuSense in the development, validation and finalisation of the Requirement Definitions for the New Product;

(c) assisting OcuSense in the development, validation and finalisation of the Specifications for the New Product;

(d) using Commercially Reasonable Efforts to develop processes, methodology and technology to manufacture the New Product;

(e) using Commercially Reasonable Efforts to evaluate and recommend appropriate technology necessary to manufacture the New Product;

(f) using Commercially Reasonable Efforts to develop and construct plant and equipment necessary to manufacture the New Product; and

(g) such other services as specified in a Development Order.

(2) R&D Services exclude:

(a) the initial formulation of and research on the Requirement Definitions for the New Product;

(b) carrying out experiments, clinical tests or other validation methodologies in relation to the New Product;

(c) preparations or filings relating to obtaining Registration for the New Product;

(d) sales, distribution, marketing or public release of the New Product;

(e) patent review; and

(f) legal or other professional advisory services.

5.2 Request for development

(1) OcuSense may, from time to time, request MiniFAB in writing to provide R&D Services to develop a New Product (Development Request).

(2) Subject to clause 5.2(4), if and when OcuSense elects, in its discretion, to develop a Second Product, OcuSense agrees that it will provide an opportunity for MiniFAB to provide the R&D Services with respect to the Second Product, as follows:

(a) OcuSense shall provide a written Development Request for the Second Product pursuant to clauses 5.2(1) and 5.2(3);

(b) the parties shall discuss in good faith the anticipated activities under the Development Request and capabilities required to perform such activities;

(c) if MiniFAB does not wish to undertake to perform the applicable R&D Services for the Second Product, MiniFAB agrees to promptly notify OcuSense in writing;

(d) if MiniFAB wishes to perform the applicable R&D Activities for the Second Product, MiniFAB shall propose the financial terms under which it is willing to undertake the R&D Services specified in the Development Request; and

(e) if MiniFAB has appropriate capability to perform such R&D Activities for the Second Product as set forth in the Development Request, and offers to perform such activities on financial terms that are at least as favorable to OcuSense as other bids for conducting such R&D Services OcuSense receives from third parties with capability of performing such R&D Services, then OcuSense shall engage MiniFAB for the conduct of such R&D Services for the Second Product. In such event, the parties shall prepare and sign a mutually agreed written Development Order, which shall set forth the activities to be conducted, timelines, deliverables, financial terms, and other mutually agreed terms and conditions regarding such R&D Services. Such Development Order shall be consistent with the intellectual property provisions and other applicable terms and conditions of this Agreement.

Subject to the foregoing, OcuSense may engage any other person to provide R&D Services and OcuSense shall have no obligation to offer to MiniFAB the opportunity, or to engage MiniFAB, to perform any R&D Services. For clarity, OcuSense shall not be obligated to engage MiniFAB to perform R&D Services for any New Product other than the Second Product.

(3) A Development Request must include:

(a) a detailed description of the New Product;

(b) draft Requirement Definitions for the New Product; and

(c) a draft project plan including a proposed timetable.

(4) MiniFAB will consider a Development Request and notify OcuSense in writing whether or not MiniFAB accepts the Development Request within 20 Business Days of receipt of the request. If MiniFAB fails to respond within that time period, then it is deemed to have rejected the Development Request. To avoid doubt, MiniFAB is not required to provide any reason for rejecting a Development Request. It is understood that the Development Request is intended as an opportunity for the parties to negotiate terms and conditions on which MiniFAB may conduct the applicable R&D Services for OcuSense. Accordingly, (i) MiniFAB shall not be obligated to accept any Development Request, and (ii) except as expressly set forth in clause 5.2(2)(e) with respect to the Second Product, OcuSense shall not be obligated to engage MiniFAB to conduct R&D Services. Without limiting the foregoing, if MiniFAB rejects (or is deemed to have rejected) the Development Request for the Second Product, then despite clause 5.2(2), OcuSense may engage another service provider to provide R&D Services in respect of that Development Request. OcuSense shall have no obligation to offer to MiniFAB any further opportunity, or to engage MiniFAB, to perform any R&D Services except as expressly set forth under clause 5.2(2).

5.3 Development Order

(1) If MiniFAB accepts a Development Request, then:

(a) MiniFAB will provide OcuSense with a revised draft project plan. including proposed milestones and payment milestones; and

(b) the parties must meet within 20 Business Days of the acceptance to meet and discuss the Development Request with the intent to finalise a Development Order.

(2) The parties will act reasonably in negotiating the terms of the Development Order.

(3) To avoid doubt, neither party is bound by a Development Request, a Development Order or any obligations to develop a New Product until the relevant Development Order is signed by both parties.

5.4 Provision of R&D Services

(1) MiniFAB will provide the R&D Services in accordance with the relevant Development Order in a diligent and ethical manner, with due care and skill and to a high professional standard, in accordance with this Agreement, and all applicable Regulatory Requirements.

(2) MiniFAB will use Commercially Reasonable Efforts to meet any milestones agreed in the relevant Development Order. Each Development Order may specify the agreed-upon remedies that shall apply for any failure by MiniFAB to meet such milestones, or otherwise fail to perform the R&D Services in accordance with clause 5.4(1).

5.5 Responsibilities of each party

(1) MiniFAB is responsible for and will bear the costs and expenses associated with:

(a) the provision of the R&D Services in accordance with the relevant Development Order (Development Expenses); and

(b) the construction and acquisition of any plant and equipment and other related capital expenditures relating to the R&D Services.

(2) OcuSense will develop, validate and finalise the Requirement Definitions and the Specifications of the New Product in consultation with MiniFAB. MiniFAB will assist OcuSense in accordance with the R&D Services.

(3) OcuSense is solely responsible for and will bear all costs and expenses associated with all activities relating to the research and development of the New Product that are not expressly included as part of R&D Services or that are expressly excluded from the R&D Services.

5.6 Ownership of Requirement Definitions and Specifications

The Requirement Definitions and the Specifications of any Product and all Intellectual Property rights relating to any Product, the Requirement Definitions and the Specifications therefor are and will remain to be owned solely by OcuSense. MiniFAB hereby assigns all Intellectual Property subsisting in the foregoing to OcuSense.

5.7 Payment for R&D Services

OcuSense will pay MiniFAB for the provision of the R&D Services in accordance with payment milestones specified in. the relevant Development Order.

5.8 Other matters relating to Development Order

Prior to the Successful Completion of a New Product, the parties will meet and negotiate (acting reasonably) the following items relating to the New Product:

(1) the Price for the New Product (provided that the Price for the Second Product is set in accordance with clause 4.1(2));

(2) the percentage applicable to calculating the amount payable under clause 3.3(8)(c)

(3) the Minimum Orders requirement for the New Product, if any (provided that the Minimum Order for the Second Product is set in accordance with clause 3.3(7)(c)); and

(4) the Annual Production Capacity for the New Product.

5.9 Prototype Acceptance Testing

(1) If required under the relevant Development Order, the parties will conduct acceptance testing of the New Product in accordance with this clause 5.9.

(2) Promptly upon completion of the development of the New Product, MiniFAB shall manufacture and supply to OcuSense a reasonable number of prototype units for the purposes of OcuSense's testing and evaluation, together with such documentation (including without limitation the QA test report), materials and equipment reasonably necessary for OcuSense to perform testing and evaluation of the prototype. It is understood that the mutually agreed Development Order may provide for the supply and testing of multiple sets of prototype units for the New Product at different stages of development (such as, for example, alpha prototypes and beta prototypes).

(3) OcuSense may reject the prototype of the New Product only if it does not conform to the Requirement Definitions. OcuSense must accept the prototype of the New Product if it conforms to the Requirement Definitions.

(4) If OcuSense rejects the prototype then OcuSense must notify MiniFAB of the reasons for such rejection and MiniFAB will have thirty (30) days to cure such defect or non-conformance or dispute Ocusense's rejection pursuant to the dispute resolution process under clause 19. OcuSense may require MiniFAB to resubmit revised prototype units to OcuSense for testing and evaluation until the prototype fully conforms to the Requirement Definitions of the Product.

(5) Upon OcuSense's acceptance of the New Product (“Acceptance”), OcuSense shall promptly inform MiniFAB in writing.

5.10 Successful Completion

Successful Completion in relation to a New Product means:

(1) if the relevant Development Order provides a definition - the meaning ascribed to that term in the Development Order; or

(2) the Acceptance of a New Product by OcuSense, as such term is defined in clause 5.9.

5.11 Discontinuance - Unable to finalise Requirement Definitions

If the parties are unable to finalise the Requirement Definitions for the New Products by the deadline specified in the relevant Development Order (or after a reasonable time if no such deadline is specified), then either party may discontinue the relevant Development Order by notifying the other party in writing, in which case OcuSense will be solely responsible for all Development Expenses incurred up to that point in time and any other unavoidable costs reasonably incurred by MiniFAB in connection with the discontinuance.

5.12 Discontinuance - OcuSense

OcuSense may discontinue the development of any New Product at any time upon written notice, in which case MiniFAB will invoice, and OcuSense must pay, all outstanding amounts that are payable in accordance with the payment milestones specified in the Development Order for the R&D Services actually rendered by MiniFAB prior to the termination of the relevant Development Order. It is understood and agreed that any R&D Services with respect to the Second Product and any other New Product will be undertaken in reasonable stages in order to provide OcuSense an opportunity to evaluate the results of the R&D Services in each such stage and to determine whether OcuSense, in its discretion, wishes to cease development of the Second Product or other New Product. In the event that OcuSense unilaterally discontinues development of the Second Product and terminates the corresponding R&D Services (other than as a result of MiniFAB's inability or unwillingness to conduct such R&D Services, or as set forth in clause 15.2) prior to MiniFAB's shipment of beta prototypes, then OcuSense agrees that it will provide an opportunity for MiniFAB to provide the R&D Services with respect to development of its next subsequent New Product (excluding any New Products then already under contract for development by third parties) as set forth in clause 5.2(2), subject to the terms of clause 5.2(4).

6. OcuSense Licence

6.1 Limited licence

(1) Subject to the terms and conditions of this Agreement, OcuSense grants to MiniFAB during the Term a limited, royalty free, non-exclusive licence (without the right to sublicense) under any Intellectual Property, know-how and technical information owned (or licensed with the right to sublicense) by OcuSense relating to the development or manufacture of the Products (OcuSense IP) to use OcuSense IP to perform MiniFAB's obligations under this Agreement (OcuSense Licence).

(2) MiniFAB may only use OcuSense IP to the extent necessary or desirable to develop and manufacture the Products and New Products or otherwise necessary for the purposes of this Agreement.

6.2 Provision of OcuSenseIP materials

OcuSense will provide or otherwise make available all information and materials relating to the OcuSense IP known to or possessed by OcuSense that are reasonably necessary to enable MiniFAB to perform its obligations under this Agreement.

6.3 Ownership of OcuSenseIP and Improvements to OcuSenseIP

All OcuSense IP, and all improvements to OcuSense IP, including any modifications and developments made thereto by MiniFAB shall be the sole property of OcuSense and MiniFAB hereby assigns to OcuSense its entire right, title and interest therein. Such improvements, modifications and developments will be included in OcuSense IP and covered by the OcuSense Licence. All injection moulds directed to the Products, and all rights in and to such injection moulds, shall be owned by OcuSense and part of the OcuSense IP. MiniFAB will cooperate with OcuSense in good faith to assist OcuSense in such manner as OcuSense may reasonably request if such moulds are required to be duplicated, but may otherwise retain them whilst MiniFAB has an obligation to continue to manufacture the relevant Product. All OcuSense IP shall be treated by MiniFAB as Confidential Information of OcuSense. MiniFAB shall promptly disclose to OcuSense all improvements, modifications and developments to OcuSense IP made or conceived by or on behalf of MiniFAB, and provide OcuSense with copies of all information available to MiniFAB regarding such improvements, modifications and developments. To the extent any of the rights that the parties intend to be assigned by MiniFAB to OcuSense (as set forth in clause 5.6 and this clause 6.3) cannot be assigned by MiniFAB to OcuSense, MiniFAB hereby grants to OcuSense an exclusive, royalty-free, transferable, irrevocable, worldwide license (with rights to sublicense through multiple tiers of sub-licensees) to practice such non-assignable rights, title and interest. To the extent any of such rights can be neither assigned nor licensed by MiniFAB to OcuSense, MiniFAB hereby irrevocably waives and agrees never to assert such non-assignable and non-licensable rights, title and interest against OcuSense or any of OcuSense's licensees or successors in interest to such non-assignable and non-licensable rights.

6.4 IP Warranties and indemnity

(1) OcuSense warrants that OcuSense has the right and authority to grant MiniFAB the OcuSense Licence.

(2) OcuSense shall indemnify and at all times holds harmless MiniFAB against any Losses resulting from a third person's claim against MiniFAB alleging that the use of OcuSense IP by MiniFAB constitutes an infringement of any Intellectual Property of that third person; provided, however, that OcuSense shall not be obligated to indemnify MiniFAB, and MiniFAB shall indemnify and at all times hold harmless OcuSense against any such Losses (i.e., Loses arising from third party claims of infringement), to the extent the alleged infringement results from any modifications and developments made to OcuSense IP by MiniFAB other than in accordance with instructions contained in any Specifications.

6.5 Termination of licence

The OcuSense Licence terminates automatically upon the termination or expiry of this Agreement for any reason.

6.6 Infringement and protection of OcuSenseIP

OcuSense is solely responsible for the protection, defence and maintenance of the OcuSense IP. However, MiniFAB will promptly notify OcuSense if MiniFAB is aware of any infringement of the OcuSense IP by any third person.

7. Obligations of MiniFAB

7.1 Cooperation with OcuSense

MiniFAB will (a) provide OcuSense with analytical and manufacturing documentation, internal progress reports, regulatory compliance files and quality assurance files, and other relevant information as requested by OcuSense regarding quality control for the Products supplied under this Agreement, (b) reasonably cooperate with OcuSense in responding to all requests for information from customers and the relevant Regulatory Authorities having jurisdiction to make such requests, and (c) on a quarterly basis, prepare and submit to OcuSense a production capacity development plan addressing MiniFAB's efforts to increase production capacity to meet OcuSense's forecasts, and participate in a review thereof with OcuSense. OcuSense must bear any reasonable pre-approved out-of-pocket costs incurred by MiniFAB pursuant to this clause 7.1. If OcuSense refuses to pre-approve any such reasonable costs described in the preceding sentence on request by MiniFAB, then MiniFAB is released from its obligations under this clause 7.1 in respect of the obligations that are subject of, and to the extent subject of, those costs that OcuSense refused to pre-approve.

7.2 Regulatory licences

MiniFAB must at its own cost obtain and comply with all necessary licences, consents, permits and regulations which may from time to time be required by the relevant Regulatory Authorities in Australia to carry out its development and manufacturing services under this Agreement. Without limiting the generality of the foregoing, prior to commencing the manufacture of the First Product, MiniFAB shall be certified to meet ISO 13485 for manufacturing. OcuSense is responsible for obtaining all Registrations and approvals for the export of the Products from Australia or supply of the Products anywhere in the world.

7.3 Batch records

Without limiting the generality of clause 7.1, on a monthly basis, MiniFAB must retain and furnish to OcuSense for analysis by OcuSense's Quality Department:

(1) samples of each batch of Products manufactured under this Agreement; and

(2) batch production and quality control records,

to the extent required by the Specifications and all applicable Regulatory Requirements.

7.4 Facility Audits

OcuSense shall have the right, during normal business hours and upon reasonable notice, to audit MiniFAB's facility at which the Products are manufactured for compliance with the Specifications, the Regulatory Requirements, and the terms and conditions of this Agreement. MiniFAB shall give OcuSense prior written notice (whenever reasonably feasible) of any Governmental Agency inspection of the MiniFAB facility, and MiniFAB shall permit a representative of OcuSense to be present at such inspection. MiniFAB shall promptly provide to OcuSense copies of all notices, correspondence and other materials delivered to or received from the Governmental Agency regarding such MiniFAB facility or the Products.

8. Meeting

8.1 During the Term, the parties will endeavour to meet at least every 6 months to discuss and review the state of the relationship between them.  Each party must ensure that at least one of its senior representatives attend each meeting. Any meeting may be teleconferenced.

8.2 Each party will alternate to organise the meeting. The party responsible for organising the meeting must prepare a formal agenda prior to the meeting and organise formal minutes to be taken and distributed to all attendees after the meeting takes place. Each party may provide its suggest agenda items. The compulsory topics for the agenda are as follows:

(1) review of previous minutes; and

(2) progress of any development and registration.

9. Payment and invoicing

9.1 Invoice

(1) In relation to the supply of Products, MiniFAB will invoice OcuSense on a monthly in arrears basis.

(2) In relation to the provision of R&D Services, MiniFAB will invoice OcuSense in accordance with the Development Agreement for the First Product and the payment milestone specified in the relevant Development Order for New Products.

9.2 Payment

OcuSense must pay all undisputed invoices within 40 days after receipt of the invoice or, if later, within 40 days after delivery of the relevant Products to the Delivery Point.

9.3 Interest

If OcuSense fails to pay an amount on the due date for any undisputed payment, OcuSense must pay MiniFAB interest at the Default Rate on that amount, calculated and payable monthly, computed from the due date until the amount is paid in full.

10. Amendments to Specifications

10.1 Compliance with Regulatory Requirements

In the event that OcuSense or MiniFAB becomes aware of any changes or any pending changes in any applicable Regulatory Requirements which could affect the manufacture of a Product, OcuSense or MiniFAB, as applicable must promptly notify the other party in writing of any such change or proposed change and the Specifications of that Product must then, if necessary be amended by mutual written agreement of the parties. Such change will become effective and binding on MiniFAB from a date agreed by the parties. Costs and expenses reasonably incurred by MiniFAB to implement the amendments to the Specifications required under this clause 10.1 may be reflected in the Price of Products as set forth in clause 10.3.

10.2 Voluntary changes

Either party may suggest changes in the Specifications of any of the Products by notifying the other party in writing in reasonable detail of such suggested changes. The parties must negotiate in good faith with a view to agreeing to the same and who will bear the cost of the same. If the parties agree in writing upon the suggested changes, including the lead-time for implementing such changes, the Specifications must be amended accordingly, and any such change will become effective and binding on MiniFAB from a date agreed by the parties. Notwithstanding the foregoing, OcuSense shall not be obligated to agree to any change to Specifications proposed by MiniFAB.

10.3 Cost of amendments to Specifications or changes in Regulatory Requirements

Unless otherwise agreed by the parties, it is understood that the Price of applicable Products will be adjusted up or down by an amount equal to the increase or decrease in MiniFAB's costs (as determined by the parties' mutually agreed cost model, which shall not include amounts allocable to other products or to facilities or equipment not utilized for Products) as a result of changes in Regulatory Requirements and/or changes in the Specifications. Subject to clauses 10.1 and 10.2, OcuSense is responsible for all pre-approved reasonable out-of-pocket costs and expenses incurred by MiniFAB to implement any changes to the Specifications under this clause 10. It is understood and agreed that if OcuSense pays for the purchase of capital equipment under this clause 10.3, then (i) OcuSense shall be the owner of such equipment, (ii) such equipment shall not be used in the manufacture or testing of any products other than Products, and (iii) and the parties shall reasonably cooperate to execute and file such documents as are reasonably required to evidence and protect OcuSense's ownership interest in such equipment. In the event MiniFAB proposes an upward adjustment in the Price of any Product under this clause 10.3, OcuSense shall have the right, at its sole cost, to designate an independent accounting firm reasonably acceptable to MiniFAB to audit MiniFAB's books and records to verify the amount of the cost increase claimed by MiniFAB to determine the rights of the parties as described above in this clause 10.3.

11. Registrations, safety and Product liability

11.1 Registrations of Products

OcuSense is responsible for the sales, marketing and distribution of the Products, and is also responsible for:

(1) obtaining all necessary Registrations for the Products; and

(2) maintaining records of all sales of Product sufficient to adequately administer a recall, market withdrawal or correction for such period as is required under applicable regulations.

MiniFAB agrees to maintain all applicable records relating to the manufacture of the Products supplied hereunder for a period of 5 years after the Product is supplied hereunder, as more particularly set forth in the Technical Agreement. Thereafter, MiniFAB shall notify OcuSense in writing before destroying any such records and, if requested by OcuSense, agrees to transfer all such records to OcuSense or its designee at OcuSense's expense.

11.2 Adverse events

OcuSense must promptly disclose to MiniFAB during the Term any information it acquires which relates to the safety of the Product, including, inter alia, all side effects, injury, toxicity or sensitivity reactions including unexpected or increased incidence and severity thereof. All such information will be treated as Confidential Information of OcuSense.

11.3 Notification of defects

In the event that MiniFAB becomes aware of any defect in the Product it will immediately notify OcuSense in writing and provide it with a full disclosure of the defect or non-compliance.

11.4 Recalls

(1) The parties each must notify the other promptly and in writing if any Product is requested or required to be the subject of a recall, market withdrawal or correction (Recall).

(2) OcuSense is solely responsible for the handling and disposition of any Recall and will assume all regulatory responsibility for such matters, including responsibility for all communications with the relevant Governmental Agencies. MiniFAB shall diligently cooperate with OcuSense in the administration of any recall.

(3) If a Recall is due to a non compliance with the Specifications or the Regulatory Requirements of the Product that is caused by the fault MiniFAB then MiniFAB will bear the reasonable cost of the Recall. In all other cases OcuSense is solely responsible for the cost of the Recall.

12. Insurance

12.1 Required Insurance from MiniFAB

MiniFAB must take out prior to the Cut-Off Date, and thereafter maintain during the Term:

(1) all insurances required by law, including workers compensation insurance in accordance with relevant law; and

(2) public liability insurance for an amount of not less than A$5 Million per claim and in the aggregate.

12.2 Required Insurance from OcuSense

OcuSense must take out prior to the Cut-Off Date, and thereafter maintain during the Term:

(1) all insurances required by law, including workers compensation insurance in accordance with relevant law; and

(2) product liability insurance for an amount of not less than US$5 Million per claim in the aggregate.

12.3 Evidence of insurance

Each party must, if reasonably requested by the other party, provide the other party with evidence that the each insurance required to be taken out by the party pursuant to this clause 12 exists and is current.

13. Warranties

13.1 Product warranties

MiniFAB warrants that (a) the Products manufactured by MiniFAB under this Agreement will comply with the Specifications of the Products and shall be free from defects in material and workmanship, and (b) MiniFAB's facility for manufacture of Products shall be maintained and operated in compliance with all applicable Regulatory Requirements, and all Products shall be manufactured, packaged, labelled, stored, handled, and shipped by MiniFAB in compliance with all applicable Regulatory Requirements and the applicable Technical Agreement.

14. Third party licensors and contractors; Technology Transfer

14.1 Sub-Contractors

Except with respect to laser ablation and etching and injection molding activities, which activities shall be conducted at MiniFAB's facilities unless otherwise agreed by the parties, MiniFAB may engage sub-contractors to perform MiniFAB's obligations under this Agreement upon express prior written consent of OcuSense, which consent shall not be unreasonably withheld. Without limitation, it is agreed that if OcuSense is not comfortable that a proposed sub-contractor has the requisite capabilities and that such proposed sub-contractor will protect OcuSense's intellectual property rights and that such proposed sub-contractor will comply with the terms and conditions set forth in this Agreement (including assignment of intellectual property), or if such proposed sub-contractor is involved in the manufacture, development or commercialization of products competing with the Products, then it shall be reasonable for OcuSense to withhold approval of such proposed subcontractor. The appointment of sub-contractors shall not affect or diminish MiniFAB's responsibilities and obligations under this Agreement, and MiniFAB shall ensure the compliance of each such subcontractor with the confidentiality obligations and other obligations of MiniFAB set forth in this Agreement. If OcuSense engages a third party to manufacture the Products, it will impose similar restrictions to the foregoing on that third party.

14.2 Cooperation with Sensortec

MiniFAB acknowledges that OcuSense has entered into that certain development and option agreement with Sensortec Limited (“Sensortec”), pursuant to which Sensortec may provide certain services and a license with respect to certain of its technology, in each case pertaining to the manufacture of the Products. MiniFAB agrees that upon request of OcuSense, MiniFAB shall coordinate its activities under this Agreement with Sensortec, as may be necessary or useful for MiniFAB's and Sensortec's performance of their respective obligations to OcuSense regarding the Product. Upon request of MiniFAB, OcuSense shall act as a liaison between MiniFAB and Sensortec to facilitate productive cooperation between them.

14.3 Non exclusive arrangement

Nothing in clause 14.2 prevents either party from contracting with Sensortec independently for purposes unrelated to this Agreement.

14.4 Evaluation and licensing of other third party technology

If the parties agree or MiniFAB recommends (pursuant to the provision of R&D Services) that a particular technology is necessary to manufacture any New Product, then OcuSense will evaluate such recommendation, and if OcuSense determines in its sole discretion that licensing of such technology is desirable, OcuSense will be solely responsible for procuring (at its own cost and expenses) the requisite licences from the owner of that technology for the purposes of including the relevant technology in the New Product.

14.5 Technology Ownership and Licensing; Technology Transfer

(1) OcuSense shall retain ownership of any pre-existing intellectual property rights in materials and information provided by OcuSense to MiniFAB for use by MiniFAB for the purposes of undertaking activities under this Agreement. MiniFAB shall retain ownership of any pre-existing intellectual property rights in materials, information, tools and methodologies provided by MiniFAB for the purposes of undertaking activities under this Agreement (and any improvements to them, except to the extent that those improvements comprise patented or unpatented intellectual property owned or controlled by OcuSense or that have application in the field of measuring osmolarity or osmolality of, or other characteristic of or any biomarker in, human tear fluid) (collectively, "MiniFAB Background IP") and MiniFAB hereby grants OcuSense a worldwide, non-exclusive, royalty-free license (with the right to grant and authorize sublicenses) to make, have made, use, offer for sale, sell and otherwise exploit MiniFAB Background IP as may be required to make, have made, use, offer for sale, sell and otherwise exploit Licensed Products or incorporated into processes or procedures for manufacturing or testing Licensed Products. As used herein, "Licensed Product" means any article, item, product, equipment, process, data, report or other deliverable designed or developed in whole or part for OcuSense by MiniFAB under the Development Agreement or this Agreement, whether or not such development or design is completed or successfully meets intended criteria, including without limitation the First Product, Second Product and any other New Products developed in whole or part under the Development Agreement or in R&D Services performed by MiniFAB under this Agreement.

(2) Subject to clause 14.5(1) and the requirement for OcuSense to pay MiniFAB all outstanding fees and charges due to MiniFAB, MiniFAB agrees to assign and hereby assigns to OcuSense all right, title and interest in and to any trade dress, trademarks and design registrations or design patents, and any inventions, whether patentable or not, and any other discoveries, trade secrets or know-how which:

(a) are embodied in a Licensed Product; and

(b) were made, developed, conceived or first reduced to practice by or for MiniFAB as a direct result of MiniFAB undertaking activities under the Development Agreement or this Agreement

along with all patents, copyrights, and any other intellectual property rights therein, including the right to apply for and maintain the rights described in this clause 14.5(2) in all countries worldwide (such rights comprising the 'Project IP') and MiniFAB will (at the OcuSense's request and cost) do those things that may be reasonably necessary to effect the registration of such intellectual property. OcuSense must provide to MiniFAB full details (including copies of all relevant documentation) of any application for registration (whether as a registered patent, a registered design or otherwise) of the Project IP or any part of it.

(3) At any time during the term of this Agreement, or in the event of any termination of this Agreement, OcuSense shall have the right to require MiniFAB:

(a) to provide all reasonable assistance as requested by OcuSense, including without limitation transfer of technology, materials, information and documentation, to enable OcuSense to manufacture the Products internally or to secure the production and supply of the Products by a third party contractor (whether or not all or part of such technology, materials, information and documentation falls within the MiniFAB Background IP owned by MiniFAB); and

(b) to provide OcuSense with the consultancy services of all key engineering personnel of MiniFAB to effect or support such transfer of technology and/or the license to MiniFAB Background IP.

OcuSense shall pay MiniFAB for the time spent by MiniFAB's key personnel in conducting such technology transfer activities as may be requested by OcuSense, at MiniFAB's reasonable and customary rates for similar consultancy, and shall reimburse MiniFAB's out-of-pocket expenses incurred in conducting such technology transfer.

(4) All MiniFAB Background IP shall be treated by OcuSense and its sublicensees  and their third party manufacturers as Confidential Information of MiniFAB;  provided, however, that (i) OcuSense may disclose the MiniFAB Background  IP to actual and potential investors, sublicensees, advisors and/or contract  manufacturers of Licensed Products, in each case under reasonable and  customary terms of confidentiality; and (ii) OcuSense and its sublicensees and  contract manufacturers may disclose such information as is reasonably  necessary in seeking regulatory approvals in connection with the manufacture,  clinical development, use or commercialization of Licensed Products. For clarity, this clause 14.5(4) shall not be construed to prevent the use of MiniFAB Background IP in under authority of the license set forth in clause 14.5(1) above.

(5) This clause 14.5 will survive termination of this Agreement.

15. Term, breach and termination

15.1 Term

(1) This Agreement commences on the Commencement Date and continues for an initial period of ten (10) years after the Commencement Date.

(2) This Agreement shall automatically renew for additional terms of three (3) years each, unless either party provides the other party with a written notice of non-renewal at least 180 days prior to the scheduled expiration of the then current term.

15.2 Termination for cause

Notwithstanding clause 15.1, either party may terminate this Agreement effective immediately upon the giving of written notice to the other party (Defaulting Party) if:

(1) the Defaulting Party commits a material breach of this Agreement and fails to correct the breach within 30 days after written notice to do so;

(2) the Defaulting Party fails to carry out any material provision of this Agreement and the failure is not capable of remedy; and/or

(3)  an Insolvency Event occurs in relation to the Defaulting Party.

In the event that OcuSense is entitled to terminate this Agreement under clause 15.2(1) or 15.2(2) above and the applicable default or breach relates to the R&D Services under one or more Development Orders, OcuSense may, in its discretion, elect to terminate such Development Orders without terminating this Agreement with respect to manufacture and supply of Products.

15.3 Effect of termination

(1) Upon termination or expiry of this Agreement for any reason other than for material breach by MiniFAB or due to an Insolvency Event in relation to OcuSense, MiniFAB will complete the delivery of all outstanding Purchase Orders.

(2) Upon termination of this Agreement for material breach by MiniFAB, OcuSense may elect to cause MiniFAB to complete the delivery of all outstanding Purchase Orders or to cancel any or all outstanding Purchase Orders (in whole or in part).

(3) Upon termination or expiry of this Agreement for any reason

(a)  OcuSense must pay all outstanding undisputed invoices for allcompleted Purchase Orders;

(b) all Development Orders are deemed to be discontinued and:

(i) if this Agreement is terminated under clause 15.2 and MiniFAB is the Defaulting Party, then MiniFAB will be responsible for all Development Expenses incurred; and

(ii) if this Agreement is terminated for any other reason, then OcuSense must pay MiniFAB all Development Expenses incurred and any other unavoidable costs incurred by MiniFAB in connection with the termination, as set forth in clause 5.12; and

(c) each party must immediately return the Confidential Information of the other party to the other party.

(4) Except as provided in clause 15.4, termination is without prejudice to the rights of either party for any prior breach.

15.4 Termination Fee

(1) If this Agreement is terminated for any reason, other than where MiniFAB is the Defaulting Party, and the Minimum Orders requirements set forth in clause 3.3(7) have not been satisfied on or before the effective date of termination (other than as a result of the inability or failure of MiniFAB to timely supply conforming Products in quantities ordered by OcuSense), then OcuSense shall be deemed to have failed to meet the Minimum Orders requirement, and shall pay MiniFAB the amounts specified in clause 3.3(8) (Termination Fee); provided, however, the Termination Fee shall not include any amounts with respect to Minimum Orders requirements for Second Products as set forth in clause 3.3(7)(c) and 3.3(8)(c) unless such termination is effective after the date MiniFAB notifies OcuSense pursuant to clause 3.2(2) that MiniFAB has put in place the necessary plant and equipment to manufacture the Second Product to meet the Minimum Orders of that Product.

(2) The parties acknowledge and agree that (i) the Termination Fee is a genuine pre-estimate of the anticipated loss or damage which would be suffered by MiniFAB as a result of the early termination of this Agreement, (ii) the agreed upon Termination Fee shall be in lieu of any actual or alleged damages, losses or harm to MiniFAB resulting from such Termination and/or from any failure of OcuSense to order or purchase Products from MiniFAB under this Agreement (Termination Losses), and (iii) MiniFAB waives its right to seek recovery or reimbursement of all Termination Losses other than the Termination Fee.

15.5 Survival

All clauses that by their nature survive expiration or termination of this Agreement will remain in force. For the avoidance of doubt, clauses 1, 5.6, 6.3, 6.4(2), 11.1, 11.4, 13, 14.5, 15, 16, 17, 18, 19, 21 and 22 survive termination.

16.  Liability and indemnity

16.1  Indemnity by OcuSense

OcuSense shall indemnify MiniFAB and its Representatives against all Lossesincurred by them as result of claims by third persons against MiniFAB arising directly or indirectly as a result of:

(1)  any grossly negligent, unlawful, fraudulent or wilful misconduct committed byOcuSense or its Representatives in the performance of this Agreement;

(2)  the marketing, promotion, sale or supply of the Product by OcuSense; or

(3) OcuSense's failure to obtain, maintain or comply in any respect with any Registrations,

except, in each case, to the extent Losses result from any event described in clause 16.2.

16.2 Indemnity by MiniFAB

MiniFAB shall indemnify OcuSense and its Representatives against all Losses incurred by them as a result of claims by third persons against OcuSense arising directly or indirectly, to the extent resulting from:

(1) any grossly negligent, unlawful, fraudulent or wilful misconduct committed by MiniFAB or its Representatives in the performance of this Agreement;

(2) any manufacturing defect in any Product supplied by MiniFAB to OcuSense, or any failure of any such Product to conform to the Specifications or the Regulatory Requirements therefor; or

(3) MiniFAB's failure to obtain and maintain all necessary governmental permits for the development and manufacture of Products hereunder.

16.3 General provisions applicable to indemnities

A party (the "Indemnitee") that intends to claim indemnification under this clause 16 shall promptly notify the other party (the "Indemnitor") of any claim, demand, action or other proceeding for which the Indemnitee intends to claim such indemnification. The Indemnitor shall have the right to assume and control the defense thereof with counsel selected by the Indemnitor; provided, however, that the Indemnitee shall have the right to retain its own counsel to participate in the defense, subject to Indemnitor's right to control the defense. The indemnity obligations under this clause 16 shall not apply to amounts paid in settlement of any Loss if such settlement is effected without the prior express written consent of the Indemnitor, which consent shall not be unreasonably withheld or delayed. The failure to deliver notice to the Indemnitor within a reasonable time after notice of any relevant claim, or the commencement of any such action or other proceeding shall not relieve such Indemnitor of all liability to the Indemnitee under this clause 16 with respect thereto, but if such failure is prejudicial to the Indemnitor's ability to defend such claim, and if such prejudice results in Losses that otherwise would likely have been avoided or reduced if timely notice had been given, then the Indemnitor shall be relieved of said part of the Losses. The Indemnitor may not settle or otherwise consent to an adverse judgment in any such claim, that diminishes the rights or interests of the Indemnitee without the prior express written consent of the Indemnitee, which consent shall not be unreasonably withheld or delayed (it being understood that no consent by the Indemnitee is required for the Indemnitor to obtain a full release of all claims by a third person against an Indemnitee in exchange solely for the payment of a settlement amount by Indemnitor). The Indemnitee, its employees and agents, shall reasonably cooperate with the Indemnitor and its legal representatives in the investigation of any claim covered by this clause 16. The indemnities contained in this clause 16 do not negate the obligation of the party having the benefit of such indemnity to mitigate its losses; and are continuing obligations on each party, separate and independent of any other obligation.

16.4 No consequential damages

Except for any liability under clause 18 or the indemnity provided under clauses 16.1 or 16.2, to the extent permitted by law, neither party will be liable to the other party in any circumstances for any special, incidental, punitive, exemplary, consequential or any other indirect loss or damage, or in any event for any loss of revenue, loss of production, loss of profit or loss of data.

17. Goods and services tax

17.1 In this clause 17:

(1) GST means GST as defined in A New Tax System (Goods and Services Tax) Act 1999 as amended (GST Act) or any replacement or other relevant legislation and regulations;

(2) words or expressions used in this clause which have a particular meaning in the GST law (as defined in the GST Act, and also including any applicable legislative determinations and Australian Taxation Office public rulings) have the same meaning, unless the context otherwise requires;

(3) any reference to GST payable by a party includes any corresponding GST payable by the representative member of any GST group of which that party is a member;

(4) any reference to an input tax credit entitlement by a party includes any corresponding input tax credit entitlement by the representative member of any GST group of which that party is a member; and

(5) if the GST law treats part of a supply as a separate supply for the purpose of determining whether GST is payable on that part of the supply or for the purpose of determining the tax period to which that part of the supply is attributable, such part of the supply is to be treated as a separate supply.

17.2 Unless GST is expressly included, the consideration to be paid or provided under any other clause of this Agreement for any supply made under or in connection with this Agreement does not include GST.

17.3 To the extent that any supply made under or in connection with this Agreement is a taxable supply, the GST exclusive consideration otherwise to be paid or provided for that taxable supply is increased by the amount of any GST payable in respect of that taxable supply and that amount must be paid at the same time and in the same manner as the GST exclusive consideration is otherwise to be paid or provided. A party's right to payment under this clause is subject to a valid tax invoice being delivered to the recipient of the taxable supply.

17.4 To the extent that one party is required to reimburse or indemnify another party for aloss, cost or expense incurred by that other party, that loss, cost or expense does notinclude any amount in respect of GST for which that other party is entitled to claim aninput tax credit.

18. Confidentiality

18.1 Prohibited acts

Neither party may, without the other party's prior written consent, copy or disclose or cause to be copied or disclosed any Confidential Information of the other party other than to the extent that such Confidential Information must be disclosed:

(1) to the party's sub-contractors, employees, legal advisers, auditors, investors or other consultants in order for this Agreement to be performed, provided that the recipients of the information undertake in writing to the party to keep that information strictly confidential; or

(2) to Regulatory Authorities as required to obtain or maintain any regulatory approvals.

18.2 Permitted uses

Each party may only make use of Confidential Information of the other party to the extent necessary to enable the party to perform its obligations or exercise its rights under this Agreement.

18.3 Excluded information

For the purposes of this clause, Confidential Information does not include any information which the receiving party can establish:

(1) was in the public domain when it was disclosed to the receiving party;

(2) becomes, after being disclosed to the receiving party, part of the public domain, except through disclosure contrary to this Agreement;

(3) was already in the receiving party's possession when it was disclosed to the receiving party and was not otherwise acquired from the other party directly or indirectly; or

(4) was lawfully disclosed to the receiving party by a third party having the unrestricted legal right to disclose that information without requiring the maintenance of confidentiality.

Prior to making a disclosure of information which the receiving party alleges is no longer or never was Confidential Information by virtue of falling within one of the above exceptions, the receiving party must give to the other party 10 Business Days notice of the proposed disclosure and the reasons for the exception applying.

18.4 Compulsory disclosures

The obligations of confidentiality in this clause do not apply to a receiving party where the receiving party is required under the lawful compulsion of any court, tribunal, authority or regulatory body to disclose any Confidential Information of the other party. Provided that before a party discloses any Confidential Information pursuant to the foregoing it must provide the other party with reasonable notice to enable it to seek a protective court order or other remedy in respect of the Confidential Information, and it must provide the other party with all assistance and co operation which the other party considers necessary to obtain such protective court order or other remedy.

18.5 Protection of information

Each party must notify the other party in writing immediately upon the discovery of any apparent unauthorised use or disclosure of any Confidential Information and take all reasonable steps to enforce the confidentiality obligations imposed or required to be imposed by this clause 18 including diligently prosecuting at its cost any breach or threatened breach of any such confidentiality obligations by any person to whom it has disclosed or allowed access to the Confidential Information or at the other party's option making all reasonable efforts to assist the other party to help regain possession of the Confidential Information and prevent any further unauthorised disclosure or use.

18.6 Confidentiality of agreement

The parties must maintain absolute confidentiality concerning the existence and subject matter of this Agreement and no public announcement or communication relating to the negotiations of the parties or the existence, subject matter or terms of this Agreement may be made or authorised by a party without the prior written approval of the other party except that the following disclosures may be made in relation to this Agreement:

(1) by either party to its sub-contractors, employees, auditors, consultants, professional advisers, bankers, financial advisers, financiers, investors and potential investors upon those persons undertaking to keep confidential any information so disclosed; or

(2) to comply with any applicable law or requirement of any Governmental Agency or of any public stock exchange on which shares of the disclosing party are listed.

18.7 Return of Confidential Information

Each party agrees that on termination or expiration of this Agreement it will deliver to that other party any and all materials containing or embodying that other party's Confidential Information and any copies thereof; provided that each party shall be entitled to retain one (1) copy of the other party's Confidential Information, to be kept at such party's legal files for use solely for the purpose of ensuring continued compliance with the terms of this Agreement.

19. Disputes

19.1 Attempt to Settle

If a dispute arises between the parties in connection with this Agreement then the parties must use all reasonable endeavours acting in good faith to settle the dispute as soon as practicable.

19.2 Limitations on Court Proceedings

A party must not commence court proceedings in relation to a dispute arising in connection with this Agreement until it has exhausted the procedures in this clause 19, unless the party seeks urgent interlocutory relief.

19.3 Disputes relating to Product

If the dispute relates to whether or not a particular Product meets the Specifications and the Regulatory Requirements, then the parties must submit the dispute to an independent laboratory, which will act as an expert in determining whether or not the Product meets the Specifications and the Regulatory Requirements; provided, however, that if it is not technically feasible to make such independent laboratory determination in connection with a particular dispute (e.g., if insufficient number of samples of a relevant batch of Products is available), then such dispute shall be determined by arbitration under clause 19.5

19.4 Other disputes

If a dispute does not relate to whether or not a particular Product meets the Specifications and the Regulatory Requirements and the parties are unable in good faith to settle the dispute within 20 Business Days after the dispute arose, then either party may submit the matter to arbitration under clause 19.5.

19.5  Arbitration

(1) If any dispute arises under, or in connection with, this Agreement and/or any Development Order, or in connection with any breach or alleged breach of this Agreement or any Development Order, and such matter is not resolved pursuant to clause 19.1 or 19.3 or by other agreement of the parties, such matter shall be finally resolved through binding arbitration as set forth in this clause 19.5. Either party may initiate arbitration of such a matter, and the party initiating arbitration of such dispute must give to the other party or parties to the dispute notice specifying the dispute and requiring its resolution under this clause 19.5 (Notice of Dispute). Such Notice of Dispute shall be given in accordance with the arbitration rules specified under this clause 19.5.

(2) Each such dispute is by this clause 19.5 referred to binding arbitration for final resolution. The arbitration must be conducted in:

(a) Melbourne, Australia if the Notice of Dispute is given by OcuSense; and

(b) San Diego California, USA, if the Notice of Dispute is given by MiniFAB.

(3) If the parties have not agreed upon the arbitrator within 7 days after the Notice of Dispute is given, the arbitrator is the person appointed by the Chair of the Victorian Chapter of the Institute of Arbitrators and Mediators Australia (Principal Appointor) or the Principal Appointor's nominee, acting on the request of any party to the dispute.

(4) The arbitrator must not be a present or former member, officer, employee or agent of a party to the dispute or a person who has acted as a mediator or advised any party in connection with the dispute.

(5) The arbitration shall be conducted in accordance with the then-current rules of the International Centre for Dispute Resolution by one (1) arbitrator appointed in accordance with such rules. The arbitrator shall determine what discovery will be permitted, consistent with the goal of limiting the cost and time which the parties must expend for discovery; provided the arbitrator shall permit such discovery as the arbitrator deems necessary to permit an equitable resolution of the dispute. The arbitrator shall not order or require discovery against either party of a type or scope that is not permitted against the other party. The costs of the arbitration, including administrative and arbitrators' fees, shall be shared equally by the parties, and each party shall bear its own costs and attorneys' and witness' fees incurred in connection with the arbitration. Any arbitration subject to this Article shall be completed within one (1) year from the filing of notice of a request for such arbitration. No punitive damages may be granted by the arbitrator. The arbitration proceedings and the decision shall not be made public without the joint consent of the parties, and each party shall maintain the confidentiality of such proceedings and decision unless otherwise permitted by the other party, except to the extent (and solely to the extent) either party is required to disclose such information by applicable securities or other laws. The parties agree that the decision shall be the sole, exclusive and binding remedy between them regarding any and all disputes, controversies, claims and counterclaims presented to the arbitrator. Any award may be entered in a court of competent jurisdiction for a judicial recognition of the decision and applicable orders of enforcement, and either party may apply to any court of competent jurisdiction for appropriate temporary injunctive relief pending resolution of any arbitration proceeding. The arbitrator shall provide a written arbitration award setting forth the arbitrator's findings on material questions of law and of fact, including references to the evidence on which the findings of fact were based. Each party may be represented by a qualified legal practitioner or other representative.

(6) This clause 19.5 applies even where the Agreement is otherwise void or voidable.

19.6 Continuing Obligations

19.7 Except as specifically provided in this Agreement, the parties must continue to perform their obligations under this Agreement despite the existence of a dispute or any steps being taken under this clause 19.

20. Force Majeure

20.1 Party not liable

Where a party is required under this Agreement to perform an obligation or do any act or thing by a designated time or date (Obligation), the party is not liable for any delay in performing or for failure to perform an Obligation where the delay or failure arises from Force Majeure and that party has complied with this clause.

20.2 Notice of Force Majeure

A party who claims Force Majeure must:

(1) give the other party prompt notice of the Force Majeure with reasonably full particulars and an estimate of the extent and duration of its delay in performance, or inability to perform; and

(2) use all possible diligence to resume normal performance of the delayed obligations as quickly as possible.

20.3 Termination in case of Force Majeure

If the delay continues beyond 30 days after the notice given under clause 20.2, the parties must meet to discuss in good faith a mutually satisfactory resolution of the problem and, if unable to achieve such a resolution within a further 60 days, either party may elect to terminate this Agreement by 30 days prior written notice to the other.

21. Notices

21.1 A notice or other communication connected with this Agreement (Notice) has no legal effect unless it is in writing.

21.2 In addition to any other method of service provided by law, the Notice may be:

(1) sent by prepaid post to the address of the addressee set out in this Agreement or subsequently notified;

(2) sent by facsimile to the facsimile number of the addressee;

(3) sent via email to the email address of the addressee; or

(4) delivered at the address of the addressee set out in this Agreement or subsequently notified.

21.3 If the Notice is sent or delivered in a manner provided by clause 21.2, it must be treated as given to and received by the party to which it is addressed:

(1) if sent by facsimile or email, on the next Business Day at the place of receipt, unless a transmission failure notice is received by the sender; or

(2) if sent by post or otherwise, upon receipt by the addressee.

21.4 Despite clause 21.3(1):

(1) a facsimile is not treated as given or received unless at the end of the transmission the sender's facsimile machine issues a report confirming the transmission of the number of pages in the Notice;

(2) a facsimile is not treated as given or received if it is not received in full and in legible form and the addressee notifies the sender of that fact by the close of the Business Day on which it would otherwise be treated as given and received.

22. General

22.1 Further assurance

Each party must promptly at its own cost do all things (including executing and if necessary delivering all documents) necessary or desirable to give full effect to this Agreement, to the extent commercially reasonable to do so.

22.2 Entire understanding

This Agreement is the entire agreement and understanding between the parties on everything connected with the subject matter of this Agreement and supersedes any prior agreement or understanding on anything connected with that subject matter. Notwithstanding the foregoing, the Development Agreement continues to govern the development of the First Product; provided, however, that in the event of a conflict between any provision of the Development Agreement and any provision of this Agreement, the relevant provision of this Agreement shall govern.

22.3 Variation

An amendment or variation to this Agreement is not effective unless it is in writing and signed by the parties.

22.4 Waiver

A party's failure or delay to exercise a power or right does not operate as a waiver of that power or right. The exercise of a power or right does not preclude either its exercise in the future or the exercise of any other power or right. A waiver is not effective unless it is in writing. Waiver of a power or right is effective only in respect of the specific instance to which it relates and for the specific purpose for which it is given.

22.5 Costs and outlays

Each party must pay its own costs and outlays connected with the negotiation, preparation and execution of this Agreement.

22.6 Governing law and jurisdiction

This Agreement shall be governed and construed in accordance with the laws of England, United Kingdom.

[Signature page follows]

Executed as an agreement.

Executed by MiniFAB (Aust) Pty Ltd

ACN 100 768 474 in accordance with

section 127 of the Corporations Act

2001:

/s/ Michael Wilkinson	/s/ Erol Harvey
Director/company secretary	Director
Michael Wilkinson	Erol Harvey
Name of director/company secretary	Name of director
(BLOCK LETTERS)	(BLOCK LETTERS)

Signed for and on behalf of

OcuSense, Inc. by its authorised

representative in the presence of:

/s/ Stephen Zmina	/s/ Eric Donsky
Signature of witness	Signature of authorised representative
Stephen Zmina	ERIC DONSKY, CEO
Name of witness	Name of authorised representative
(BLOCK LETTERS)	(BLOCK LETTERS)

Address of witness

12707 High Bluff Dr. #200

San Diego, CA 92130

U.S.A.

***Schedule 1 in its entirety has been omitted pursuant to a request for confidential treatment and has been filed separately with the U.S. Securities and Exchange Commission.

Schedule 2

Form of Development Order

Development Order made between MiniFAB and OcuSense pursuant to the Manufacturing and Development Agreement dated ###

Date of Development Order

1.  Description of New Product

###

2. Draft New Product Development Requirements

#Insert draft#

3. Estimated Development Expenses

###

4. Project Plan

#Please insert a project plan for carrying out the development.#

5. Development Milestones and Payments (if not included in the Project Plan)

#Each payment milestone should specify the amount payable and when it is payable. Other payment terms (if any) should be specified.#

6. Successful Completion

#Please insert criteria for Successful Completion. If this is left blank, then the default provisions in clause 5.10 will apply.#

7. Other terms

#Insert any other applicable terms relevant to the development of the new product.#

MiniFAB and OcuSense agree that MiniFAB will provide the R&D Services pursuant to the Manufacturing and Development Agreement between the parties to develop the New Product as detailed in this Development Order.

Signed for and on behalf of MiniFAB

Signed for and on behalf of OcuSense

***Annexures A and B in their entirety have been omitted pursuant to a request for confidential treatment and have been filed separately with the U.S. Securities and Exchange Commission.

EX-10.37

Exhibit 10.37

*The identity of the counterparty to this Agreement and certain other pieces of information that could reasonably be expected to identify the counterparty to this Agreement have been omitted pursuant to a request for confidential treatment and have been filed separately with the U.S. Securities and Exchange Commission.

**Quantitative information contained in Sections IV(c) of this Agreement and in Paragraphs 1 and 9 of Exhibit A to this Agreement has been omitted pursuant to a request for confidential treatment and has been filed separately with the U.S. Securities and Exchange Commission.

***Paragraphs 5 and 7 of Exhibit A to this Agreement have been omitted in their entirety pursuant to a request for confidential treatment and have been filed separately with the U.S. Securities and Exchange Commission.

RESEARCH AGREEMENT

THIS AGREEMENT, made as of the 13th day of December, 2007 (the “Effective Date”), by and between *, a Delaware corporation with a principal place of business at * and OcuSense, Inc. (“Contractor”), a Delaware corporation having its principal place of business at 12707 High Bluff Dr, Suite 200, San Diego, California 92130.

WITNESSETH:

WHEREAS, * and Contractor desire to engage in research regarding the clinical validation of Contractor’s TearLab™ system for the measurement of osmolarity in the tear film (“TearLab™ System”); and

WHEREAS, * and the Contractor desire to engage in such research in accordance with the terms and conditions contained herein.

NOW, THEREFORE, in consideration of the mutual covenants and promises set forth herein, it is agreed by and between * and Contractor as follows:

SECTION I

NATURE OF RESEARCH

* and Contractor shall engage in research regarding Contractor’s TearLab™ System via validation activities and clinical studies of osmolarity in ocular tears as set forth in Exhibit A (the “Research”). * and Contractor agree to use their commercially reasonable efforts on and to keep each other informed regarding the Research. * and Contractor agree that all Research shall be performed in accordance with Good Clinical Practices and all applicable laws and regulations. Exhibit A is incorporated into this Agreement and made an essential part of this Agreement by this reference.

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SECTION II

TIME DEVOTED TO RESEARCH

The parties agree that the amount of time devoted by Contractor in performance of Research will be entirely within the control of Contractor, and that the amount of time devoted by * in performance of the Research will be entirely within the control of *.

SECTION III

PAYMENT

* will pay Contractor as set forth in Exhibit A. Such payment shall be made within thirty (30) days of *’s receipt of Contractor’s invoice.

SECTION IV

TERM AND TERMINATION

This Agreement shall begin on the Effective Date and shall expire on December 31, 2009. Notwithstanding the above, the Agreement may be terminated as follows:

(a) In the event that any material term or condition of this Agreement is breached by either party, the non-breaching party upon thirty (30) days’ written notice to the other may terminate this Agreement. If any such breach is corrected within the applicable notice period, this Agreement shall continue in force.

(b) * may terminate this Agreement at any time and for any reason upon written notice to Contractor. Upon such termination of the Agreement, * shall be entitled to retain all beta units of the TearLab™ System and associated test cards set forth in Paragraph 5 of Exhibit A and use such units solely for *’s internal business purposes.

(c) Contractor may terminate the Agreement for safety reasons associated with the Research upon written notice to *. In the event of such termination by Contractor, *’s option set forth in Paragraph 9 of Exhibit A shall survive the termination by thirty (30) days. In the event of such termination by Contractor before the beginning of the Contractor clinical studies set forth in Paragraph 1 of Exhibit A, Contractor shall refund $** to *. In the event of such termination by Contractor before delivery of all beta units of the TearLab™ System and associated test cards as set forth in Paragraph 5 of Exhibit A, Contractor shall refund to * a pro rata portion of the $** payment made by * for the beta TearLab™ System and associated test cards. For the purposes of any such refund, $** shall be allocated to the beta TearLab™ Systems ($** per unit), and $** shall be allocated to the associated test cards ($** per unit).

2

**Quantitative information contained in Section IV(c) has been omitted pursuant to a request for confidential treatment and has been filed separately with the U.S. Securities and Exchange Commission.

(d) In the event of any termination of this Agreement other than material breach by Contractor, all rights of * and obligations of Contractor under Paragraphs 2, 3, 4, and 6 of Exhibit A shall terminate.

(e) In the event of any termination of this Agreement other than material breach by *, all rights of Contractor and obligations of * under Paragraph 7 of Exhibit A shall terminate.

SECTION V

INDEPENDENT CONTRACTOR

In the performance of the Research, the status of the parties, including their respective employees and agents, shall be that of independent contractors and not as employees or agents, or fiduciaries of the other party, and as such each party shall have no right to make any commitments for or on behalf of the other party. Nothing in this Agreement shall create any association, partnership, or joint venture between the parties.

SECTION VI

CONFIDENTIALLITY AND DOCUMENTS

The parties entered into a confidentiality agreement dated November 26, 2007 regarding the potential use of the TearLab™ System in * and Contractor clinical studies of osmolarity in ocular tears (the “Confidentiality Agreement”). The parties hereby agree that the Confidentiality Agreement shall be applicable to the Research and this Agreement; provided, however that the permitted use by * and Contractor as receiving parties of the Confidential Information of the other party shall include the use of Confidential Information of the other party to the extent necessary for the purposes of this Agreement.

Each party shall maintain records, in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, which shall be complete and accurate and shall fully and properly reflect all work done and results achieved in the performance of the Research. Each party shall maintain such records and all Confidential Information of the other party contained therein in confidence in accordance with the Confidentiality Agreement. Subject to the terms and conditions of this Agreement, all files, records, documents, and other materials prepared by a party in connection with the Research are and shall remain the exclusive property of such party.

3

Except as expressly provided in this Agreement, nothing contained herein shall be construed as conferring any license or other rights by implication, estoppel or otherwise. Without limiting the generality of the non-use restrictions set forth in the Confidentiality Agreement, neither party shall (or cause, assist or permit any third party to): (a) use the Confidential Information of the other party, or any data, information or materials derived directly therefrom, to reproduce, generate, create or produce, through reverse-engineering or otherwise, the technology of the party or any derivatives thereof, or (b) file, prosecute, or maintain, in any country, any patent application which directly claims, uses, or relies for support upon the Confidential Information of the other party, or any data, information or materials derived directly therefrom. For sake of clarity, the exceptions to the obligations of confidentiality and non-use assumed by the parties on page 2 of the Confidentiality Agreement are applicable to the immediately preceding sentence.

SECTION VII

INDEMNIFICATION

Contractor shall indemnify, defend, and hold * harmless from and against all third party claims and actions, and all expenses incidental to such claims or actions, including reasonable attorney’s fees, based upon or arising out of damage to property or injuries or death to persons or other tortious acts directly caused or contributed to by Contractor or anyone acting under its direction or control, or on its behalf in the course of the Research provided Contractor’s aforesaid indemnity and hold harmless agreement shall not be applicable to the extent any such claims or actions are based upon the negligence or intentional malfeasance of *.

* shall indemnify, defend, and hold Contractor harmless from and against all third party claims and actions, and all expenses incidental to such claims or actions, including reasonable attorney’s fees, based upon or arising out of damage to property or injuries or death to persons or other tortious acts caused or contributed to by * or anyone acting under its direction or control, or on its behalf in the course of the Research provided *’s aforesaid indemnity and hold harmless agreement shall not be applicable to the extent any such claims or actions are based upon the negligence or intentional malfeasance of Contractor.

SECTION VIII

NOTICE

For the purposes of this Agreement, notices and demands shall be deemed given when received at the following address:

To *:	*
To Contractor:		OCUSENSE, INC.
		12070 High Bluff Dr., Suite 200
		San Diego, California 92130
		Attention:	Eric Donsky, CEO

4

Either party may change such address by giving the other party notice of such change in the aforesaid manner, except notices of changes of address shall only be effective upon receipt.

SECTION IX

SEVERABILITY

The invalidity of any such provision or provisions of this Agreement shall not affect any other provisions of this Agreement, which shall remain in full force and effect, nor shall the invalidity of a portion of any provision of this Agreement affect the balance of such provision.

SECTION X

REMEDIES

Nothing in the Agreement shall be construed to limit the parties’ remedies at law or in equity.

SECTION XI

INSURANCE

Contractor and * shall maintain at their expense appropriate insurance or self-insurance adequate to meet their respective obligations under Section VII hereinabove. Each party shall furnish certificates of insurance showing compliance with the foregoing requirement upon the other party’s written request.

SECTION XII

FORCE MAJEURE

Neither party shall be responsible or liable for its failure to perform its obligations during any period in which such performance is prevented by acts of God, fire, flood, war, embargo, strikes, explosion, riots, or laws, rules, regulations, instructions, or orders of any governmental authority not brought on by the party unable to perform.

SECTION XIII

MISCELLANEOUS

No provisions of this Agreement may be modified, waived, or discharged unless such modification, waiver, or discharge is agreed to in writing signed by officers of Contractor and *. No waiver by either party hereto at any time of any breach by the other party hereto or of compliance with any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreement or representations, oral, or otherwise, express or implied, have been made by either party with respect to the subject matter hereof that are not set forth expressly in this Agreement (other than the Confidentiality Agreement.) This Agreement shall be governed by and construed in accordance with the laws of the State of *. This Agreement supersedes, amends, restates and replaces any prior agreement(s) entered into between Contractor and * relating to the subject matter hereof, and all such prior agreement(s) are hereby canceled and terminated and are of no further force of effect, with the exception that the Confidentiality Agreement shall remain in effect in accordance with its terms and shall apply to the Research and this Agreement. Except as otherwise specifically provided herein, neither party shall assign this Agreement or any rights hereunder without the consent of the other party, such consent to not be unreasonably withheld, and any attempted or purported assignment without such consent shall be void, except that either party may assign this Agreement without the other party’s consent to any parent, affiliate, or subsidiary of such party, or in connection with a merger, acquisition, sale of controlling interest, or similar event. This Agreement shall otherwise bind and inure to the benefit of the parties hereto and their respective successors and assigns. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY OR ANY THIRD PARTY IN ANY MANNER, UNDER ANY THEORY OF LIABILITY, WHETHER IN CONTRACT, TORT (INCLUDING WITHOUT LIMITATION NEGLIGENCE), INDEMNITY, BREACH OF WARRANTY OR OTHER THEORY, FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL, EXEMPLARY, PUNITIVE, STATUTORY OR SPECIAL DAMAGES ARISING IN CONNECTION WITH THIS AGREEMENT, INCLUDING LOST PROFITS AND LOSS OF DATA, REGARDLESS OF WHETHER SUCH PARTY WAS ADVISED OF OR WAS AWARE OF THE POSSIBILITY OF SUCH DAMAGES.

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the parties as of the date first above written.

*

By:
	*
	*
Date:	12-13-07

OCUSENSE, INC.

By:	“Eric Donsky”
	Eric Donsky
	Chief Executive Officer
Date:	12-13-07

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EXHIBIT A

1) * shall pay Contractor $** for (a) the support of Contractor clinical studies of osmolarity in ocular tears using Contractor’s TearLab™ System, including without limitation the study entitled “A Prospective Study to Establish Normative Values, Demographic Variations, Referent Diagnostic Values, Disease Severity Correlations for Dry Eye Disease, and Tearlab Osmometry” ($**) and (b) the items outlined in Paragraph 5 ($**). Contractor shall invoice * for such payment upon execution of this Agreement.

**Quantitative information contained in Paragraph 1 has been omitted pursuant to a request for confidential treatment and has been filed separately with the U.S. Securities and Exchange Commission.

2) Contractor agrees that * shall be the sole third party corporate sponsor of such Contractor clinical studies and that * shall receive appropriate acknowledgement in the publication of such studies.

3) Contractor agrees to provide *, under the confidentiality terms of the Agreement, access to all data at the completion of the supported clinical studies described in Paragraph 1 above. * shall have the right to use such data solely for the purposes of evaluating same in connection with consideration of a continuing business relationship with Contractor relating to the results of the Research. * shall not make any other use of such data without the prior written consent of Contractor.

4) * shall be the only third party corporate institution to have access to the data described in Paragraph 3 above prior to the publication of the data. Notwithstanding the foregoing, * agrees that such data can be shared with and presented by corporate entities that do not compete with * in the field of ophthalmology (or their Key Opinion Leaders) for the purpose of supporting product launch of the TearLab™ System.

***Paragraph 5 in its entirety has been omitted pursuant to a request for confidential treatment and has been filed separately with the U.S. Securities and Exchange Commission.

6) Contractor agrees to provide * with a limited exclusive access to Contractor’s TearLab™ System solely as follows: Until FDA clearance of the first 510(k) for Contractor’s TearLab™ System osmolarity equipment, Contractor agrees that * shall be only third party corporate entity that will have access to the beta units of the TearLab™ System osmolarity equipment for the purpose of conducting dry eye clinical studies for the commercial development of therapeutic compounds indicated for the treatment of dry eye in countries where the TearLab™ System is not approved for commercial sale and use. Contractor reserves the right to provide third parties with access to Contractor’s TearLab™ System in any manner that does not conflict with the foregoing restriction, including without limitation (a) providing commercial units of Contractor’s TearLab™ System to any third parties in countries where Contractor’s TearLab™ System is approved for commercial sale and use, (b) providing access to Contractor’s TearLab™ System to any academic or other non-profit institutions (but not for the purpose of participating in dry eye clinical studies of a third party for the commercial development of therapeutic compounds indicated for the treatment of dry eye), and (c) providing access to the beta units of the TearLab™ System to any third party, including countries where the TearLab™ System is not approved for commercial sale and use, for any purpose other than conducting clinical studies for the commercial development of therapeutic compounds indicated for the treatment of dry eye.

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***Paragraph 7 has been omitted in its entirety pursuant to a request for confidential treatment and has been filed separately with the U.S. Securities and Exchange Commission.

8) If * desires to publish or make public any results of the Research or any data disclosed by Contractor to * under Paragraph 3 above, * shall first submit to Contractor for comment any such proposed manuscript or public release of information at least 45 days prior to its submission or release. No publication or presentation shall be made unless and until all of Contractor’s comments on the proposed publication or presentation have been considered by * and any Contractor Confidential Information has been removed. If requested in writing by Contractor, * shall withhold material from submission for publication or presentation for an additional 90 days to allow for the filing of a patent application or the taking of other measures to establish and preserve Contractor’s proprietary rights. In any publication of studies described in Paragraph 7, * shall acknowledge Contractor’s provision of the beta units.

9) During the term of the Agreement, Contractor hereby grants * an option to enter into a supply agreement for the purchase of up to ** commercial units of the Contractor’s TearLab™ System and up to ** commercial units of the associated test cards for use in * clinical studies at prices not to exceed $** per commercial unit of the TearLab™ System and $** per commercial unit of the test cards. *, in its sole discretion, shall exercise this option via written notice to the Contractor. Upon receipt of such notice, * and Contractor shall negotiate in good faith an appropriate supply agreement for such TearLab™ Systems and test cards with estimated quantity forecasts and other commercially reasonable terms and conditions.

**Quantitative information contained in Paragraph 9 has been omitted pursuant to a request for confidential information and has been filed separately with the U.S. Securities and Exchange Commission.

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EX-10.38

Exhibit 10.38

Execution Copy

STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of the 19th day of December, 2007, by and between OccuLogix, Inc., a Delaware corporation (“OccuLogix”), and Solx Acquisition, Inc., a Delaware corporation (the “Company”).

For good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.             Purchase and Sale.

(a)           Authorization.  The Board of Directors of OccuLogix, on or before the Closing (as defined below), shall have duly authorized the sale of one thousand (1,000) shares of Common Stock, $.001 par value per share, of Solx, Inc. (“Solx”), a Delaware corporation and wholly owned subsidiary of OccuLogix (the “Solx Stock”), which consists of all of the issued and outstanding capital stock of Solx, and which currently is owned by OccuLogix, to the Company pursuant to the terms and conditions of this Agreement.

(b)           Sale of Shares.  On the terms and subject to the conditions set forth in this Agreement, at the Closing (as defined below), the Company will acquire 100% of the issued and outstanding Solx Stock (the “Transaction”).

(c)           The Closing.  The closing of the Transaction shall take place at the offices of Rackemann, Sawyer & Brewster, P.C., 160 Federal Street, Boston, Massachusetts (the “Closing”), at 11 a.m., eastern time, on December 19, 2007 or such other date and place as is mutually agreeable to the Company and OccuLogix (the “Closing Date”).  At the Closing, OccuLogix shall deliver to the Company a stock certificate representing the Solx Stock, duly endorsed in blank for transfer and accompanied by all required stock transfer taxes (if any).  By making such transfer, OccuLogix (i) warrants and represents that the Solx Stock is being sold free and clear of all liens, claims, options, charges, encumbrances or rights of others, other than the rights established by this Agreement, and (ii) further warrants and represents that OccuLogix is the record and beneficial owner of such Solx Stock and that the acquisition by the Company of the Solx Stock is in compliance with or exempt from the registration requirements of U.S. federal and state securities laws and, if applicable, from the prospectus and registration requirements of the securities laws of the provinces of Canada.

(d)           Purchase Price.  The consideration for the acquisition of the Solx Stock will consist of:  (i) on the Closing Date, the assumption by the Company of all of the liabilities of OccuLogix, as they relate to Solx’s business, incurred on or after December 1, 2007 (the “Assumed Liabilities”), including, among other things, the payroll liabilities of Solx incurred on and after December 1, 2007, and the obligation to make future payments to the Participating Rights Holders under the Agreement and Plan of Merger, dated as of August 1, 2006, by and among OccuLogix, OccuLogix Mergeco, Inc., Solx, Inc. and Doug P. Adams, John Sullivan and Peter M. Adams, as amended (the “Merger Agreement”) and the loan and security documents delivered pursuant to the Merger Agreement (the “PRH Payment”); (ii) on or prior to February 15, 2008, the payment by the Company of all of the expenses that OccuLogix has paid to the Closing Date, as they relate to Solx’s business during the period commencing on December 1, 2007, and as set forth in Schedule A to this Agreement (the “Pre-paid Expenses”); (iii) during the period commencing on the Closing Date and ending on the date on which Solx achieves a positive cash flow, the payment by the Company of a royalty equal to 3% of the worldwide Net Sales (as defined in Section 6) of Solx’s Ti-Sapphire Laser and Shunt products (as defined in Section 6) (together, the “Royalty Products”), to be paid on a quarterly basis and in accordance with Section 6; and (iv) following the date on which Solx achieves a positive cash flow, the payment by the Company of a royalty equal to 5% of Net Sales of the Royalty Products, to be paid on a quarterly basis and in accordance with Section 6.  The payments referred to in (iii) and (iv) are hereinafter referred to as the “Royalty Payments”.

Notwithstanding the assumption by the Company of the Assumed Liabilities on the Closing Date, OccuLogix will continue to cover the payroll liabilities of Solx during the period between the Closing Date and December 31, 2007 inclusive (the “December Payroll”), but, on or prior to January 15, 2008, the Company will reimburse OccuLogix for the total amount of the December Payroll.  Without OccuLogix’s prior written consent, the Company shall not increase, or cause or allow to increase, the payroll liabilities of Solx during the period between the Closing Date and December 31, 2007.  For greater certainty, the term “December Payroll” shall be understood to include the costs of providing benefits to the individuals on Solx’s payroll, consistent with past practice.

(e)           Royalty Payments.  The Royalty Payments shall be calculated and paid as provided in Section 6.  In the event that OccuLogix believes that a Royalty Payment received from the Company is inaccurate, OccuLogix shall inform the Company of such issue in writing no later than fourteen (14) business days after receipt of the Royalty Payment.  In such written notice, OccuLogix may request to review and audit the financial records of the Company solely with regards to the payment of the Royalty Payments hereunder, and shall request such review at a reasonable time and place.  The Company shall grant such request promptly but shall have the right to postpone OccuLogix’s review and audit for up to fourteen (14) days if to grant OccuLogix’s request for a review and audit, at the originally requested time, would place an undue burden upon the Company.  The parties shall work amicably to determine the correct amounts of all Royalty Payments, and, in the event of any shortfall in payment, the Company shall provide all additional amounts due to OccuLogix within ten (10) days of the determination of such discrepancy.  If it is determined that the Company has overpaid any amounts for Royalty Payments, OccuLogix shall return such overpaid amounts to the Company within ten (10) days of the determination of such discrepancy.

(f)           Great Plains Software.   No later than ten (10) days after the Closing Date, OccuLogix shall re-assign to Solx, or otherwise return to Solx, all right, title and interest in the Great Plains accounting software that Solx had assigned, or otherwise transferred to, OccuLogix on or after September 1, 2006 (the “Merger Date”).  In this regard, OccuLogix shall return to Solx all materials, in OccuLogix’s possession, in whatever form, relating to the Great Plains software to be re-assigned or otherwise returned to Solx pursuant to this Section 1(f), including, without limitation, but only to the extent applicable, all codes, programs and software.  The parties shall cooperate in regards to the transition of the Great Plains Software.

(g)          Discharge of Pre-December 1, 2007 Liabilities.  OccuLogix agrees that it shall discharge fully all of the outstanding liabilities of Solx and OccuLogix, as they relate to Solx’s business, that were incurred prior to December 1, 2007, consistent with OccuLogix’s payment practice; provided, however, that (i) OccuLogix shall be obligated to pay only 50% of the amount stated to be owing under the November 2007 invoice of the McGarvey Group for services rendered by the McGarvey Group during the period between November 1, 2007 and November 30, 2007 inclusive (being 50% of $37,800) and (ii) OccuLogix shall owe no obligation to the Company in respect of the letter of OccuLogix, dated May 1, 2007, addressed to Mr. Michael Davin of Cynosure, Inc., and all related purchase orders (collectively, the “Cynosure PO”).

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(h)           Cynosure.  The Company shall use commercially reasonable efforts to obtain Cynosure, Inc.’s agreement to release OccuLogix from all obligations under the Cynosure PO, in consideration of the Company’s agreement to purchase products from Cynosure, Inc. or such other consideration as the Company and Cynosure, Inc. may agree.  For greater certainty, it is acknowledged and agreed that all obligations under the Cynosure PO are, and shall continue to be, those of OccuLogix solely and not those of Solx or the Company.

(i)           Employees.  Notwithstanding OccuLogix’s agreement to cover the December Payroll pursuant to Section 1(d) and to be reimbursed the total amount thereof on or prior to January 15, 2008, on the Closing Date, the Company shall employ the individuals listed in Schedule 1(i), all of whom are employees of OccuLogix who are engaged primarily in Solx’s business, on terms and conditions substantially equivalent, taken as a whole, to the terms and conditions of their employment immediately prior to the Closing.  In addition, the Company hereby assumes all of the employer’s obligations under the employment offer letter of Solx, Inc., dated on or about February 1, 2006, addressed to Kim Tietz.  The Company will not assume any liability for the accrued but unpaid vacation pay, to the Closing Date, of the individuals listed in Schedule 1(i), which liability will remain with OccuLogix.  With respect to Kevin Lamarche, it is understood that, notwithstanding the Company’s employment of Mr. Lamarche on the Closing Date, Mr. Lamarche has informed OccuLogix and the Company, and the Company has agreed, that he will take most of his accrued but unused vacation during December 2007, and OccuLogix hereby agrees to cover Mr. Lamarche’s wages during December 2007.  Accordingly, the December Payroll shall not include wages paid to Mr. Lamarche during December 2007, and the Company shall not be obligated to reimburse OccuLogix with respect to such wages pursuant to Section 1(d).

(j)           Purdue University Research Agreement.  As partial consideration for OccuLogix entering into this Agreement and consummating the Transaction, the Company agrees to cause Doug P. Adams, or an entity to be organized by Doug P. Adams, to execute and deliver to OccuLogix, promptly following the Closing, the Term Sheet, of even date herewith, pursuant to which, among other things, OccuLogix shall be entitled to receive a certain royalty on the commercialization of Joint Intellectual Property (as such term is defined in the Research Agreement, dated as of October 30, 2006, between Solx and Purdue University).

(k)           Removal of Officers and Directors.  As of the Closing, (i) Elias Vamvakas and Thomas P. Reeves shall be removed as directors of Solx, and (ii) Elias Vamvakas and William G. Dumencu shall be removed from their respective offices of Chief Executive Officer of Solx and Chief Financial Officer of Solx.

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2.             Guaranty.  Doug P. Adams, President and sole stockholder of the Company, hereby guarantees (i) the payment by the Company of the Prepaid Expenses and (ii) the reimbursement by the Company to OccuLogix of the total amount of the December Payroll, as set forth in Section 1(d), and pursuant to the terms and conditions set forth in the Limited Guaranty by and between Doug P. Adams and OccuLogix of even date herewith.

3.             Security; Effect of OccuLogix Bankruptcy. In order to induce OccuLogix to enter into the Transaction, immediately following the Closing, the Company shall cause Solx to grant to OccuLogix a subordinated security interest in certain existing and future intellectual property of Solx associated with the Royalty Products as provided in the Security Agreement of even date herewith (the “Security Agreement”), as specifically described therein, and on the terms and conditions thereof.  In the event that OccuLogix or any successor in interest (voluntarily or involuntarily) files for bankruptcy or similar legal and/or administrative action in the United States or equivalent in Canada and the Transaction is adjudicated to be a voidable preferential transaction, fraudulent transfer, or otherwise voidable, and it is so voided, the Solx Stock, along with all of the Assumed Liabilities of the Transaction, including, but not limited to the PRH Payment, shall be returned to the bankruptcy estate or similar body, and all Royalty Payments, obligations and liabilities to OccuLogix hereunder shall immediately cease as of the date of such filing.

4.             Representations and Warranties of the Company.

In order to induce OccuLogix to enter into this Agreement and to sell the Solx Stock, the Company hereby represents and warrants that the statements contained in this Section 4 are complete and accurate as of the Closing Date.

(a)           Organization.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all required power and authority to own its property, carry on its business as presently conducted and contemplated to be conducted, to enter into and perform this Agreement and to carry out the transactions contemplated by this Agreement.

(b)           Authorization of this Agreement.  This Agreement has been duly authorized, executed and delivered by the Company and is the legal, valid and binding obligation of the Company, enforceable in accordance with its terms.  The execution, delivery and performance of this Agreement by the Company, the consummation of the transactions contemplated hereby and the compliance with provisions of this Agreement by the Company have been duly authorized by all corporate and stockholder action and do not and will not result in any violation of or conflict with, or constitute a default under, (i) the Certificate of Incorporation or Bylaws of the Company, (ii) any contract, agreement, document or instrument to which the Company is party or by which it or any of its properties is bound or (iii) any law, rule, regulation, judgment or order to which the Company or any of its properties is subject.

(c)           Authorization of the Security Agreement.  Following the Closing, the Security Agreement will have been duly authorized by Solx and, when executed and delivered by Solx, will be the legal, valid and binding obligation of Solx, enforceable in accordance with its terms.  The execution, delivery and performance of the Security Agreement by Solx, the consummation of the transactions contemplated thereby and the compliance with the provisions of the Security Agreement will be duly authorized by all corporate and stockholder action and will not result in any violation of or conflict with, or constitute a default under, (i) the Certificate of Incorporation or Bylaws of Solx, (ii) any contract, agreement, document or instrument to which Solx is party or by which it or any of its properties is bound or (iii) any law, rule, regulation, judgment or order to which Solx or any of its properties is subject.

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(d)           Governmental Consents.  No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any governmental authority is required on the part of the Company in connection with the execution and delivery of this Agreement or the transactions contemplated by this Agreement.

(e)           Compliance.  The Company has, in all material respects, complied with all laws, regulations and orders applicable to its business and has obtained all material permits, licenses and other authorizations required thereby.

(f)           Accredited Investor Status.  Each of the Company and Doug P. Adams is an “accredited investor” as such term is defined in Regulation D promulgated under the Securities Act of 1933, as amended.

(g)           Pre-December 1, 2007 Liabilities.  Schedule B to this Agreement (the “Non-Assumed Liabilities Schedule”) discloses all of the outstanding liabilities of Solx and OccuLogix, as they relate to Solx’s business, that were incurred prior to December 1, 2007, except for current liabilities incurred in the ordinary course of business consistent with past practice.  Other than as disclosed on the Non-Assumed Liabilities Schedule, there are no liabilities of Solx or OccuLogix of the type described in the immediately preceding sentence incurred by, or under the direction or authorization of, an Excluded Individual (as defined in Section 5).

5.             Representations and Warranties of OccuLogix.

In order to induce the Company to enter into this Agreement and to buy the Solx Stock, OccuLogix hereby represents and warrants that the statements contained in this Section 5 are complete and accurate as of the Closing Date.  For purposes of this Section 5, “Knowledge of OccuLogix” means the actual knowledge of any of Thomas P. Reeves, Bill Dumencu, Nozhat Choudry, Suh Kim and Bunmi Dosunmu (being the President and Chief Operating Officer, the Chief Financial Officer and Treasurer, the Vice President, Clinical Research, the General Counsel and the Controller of OccuLogix, respectively), after reasonable investigation and inquiry.  For purposes of this Section 5, a “Non-Solx Representative” means (i) an employee of OccuLogix, other than Doug P. Adams and the individuals named in Schedule 1(i) (each, an “Excluded Individual”), acting under his or her own authority or direction or under the authority or direction of one or more other employees of OccuLogix, none of whom is an Excluded Individual, or (ii) an agent or representative of OccuLogix acting under the authority or direction of one or more employees of OccuLogix, none of whom is an Excluded Individual.

(a)           Organization, Good Standing and Qualification.  Solx is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as now conducted.  OccuLogix has all requisite corporate power and authority to own and operate its properties and assets, to execute and deliver this Agreement, to perform its obligations under, and to carry out the provisions of, this Agreement.

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(b)           Capitalization.  The total number of shares of Solx Stock (all of which are held by OccuLogix) is one thousand (1,000) shares of Common Stock, $.001 par value, and there are not outstanding any options, warrants, instruments, rights (including conversion or pre-emptive rights and rights of first refusal), proxy or stockholder agreements, or other agreements or instruments of any kind, including convertible debt instruments, for the purchase or acquisition of Solx Stock.

(c)           Authorization; Binding Obligations; Governmental Consents.  All corporate action on the part of OccuLogix, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement, and the performance of all obligations of OccuLogix hereunder, have been taken prior to the Closing Date.  This Agreement is a valid and legally binding obligation of OccuLogix, enforceable in accordance with its terms, except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.   No consent, approval, permit, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of OccuLogix is required in connection with the execution and delivery of this Agreement or the consummation of the Transaction contemplated hereby, except for (i) such consents, approvals, orders, authorizations, registrations, declarations and filings as may be required under applicable state and federal securities laws and the securities laws of any foreign country in connection with the Transaction, and (ii) such other consents, authorizations, filings, approvals and registrations which, if not obtained or made, would not have a change or effect that, when taken individually or together with all other adverse changes or effects, is or is reasonably likely to be materially adverse to the business, results of operations and financial condition of Solx, taken as a whole (“Material Adverse Effect”), and would not prevent, or materially alter or delay, any of the transactions contemplated by this Agreement.

(d)           Assumed Liabilities.  Schedule C to this Agreement (the “Assumed Liabilities Schedule”) discloses all of the outstanding liabilities of Solx and OccuLogix, as they relate to Solx’s business, that were incurred on and after December 1, 2007, and that either were incurred by OccuLogix or were brought to OccuLogix’s attention by the Company.  Since December 1, 2007, OccuLogix has not incurred, on behalf of Solx, any contingent liabilities not disclosed in the Assumed Liabilities Schedule, except current liabilities incurred in the ordinary course of business consistent with past practice.

(e)           Indebtedness.  Except as disclosed in the Non-Assumed Liabilities Schedule and the Assumed Liabilities Schedule, Solx has no indebtedness outstanding on the date hereof that was incurred by, or under the direction or authorization of, a Non-Solx Representative.  Except as disclosed in Schedule 5(e), neither OccuLogix on behalf of Solx nor, to the Knowledge of OccuLogix, Solx is in default with respect to any outstanding indebtedness or any instrument relating thereto, nor is there any event which, with the passage of time or giving of notice, or both, would (i) result in a default under or termination of any such instrument, (ii) cause the indebtedness under such instrument to become due and payable prior to its stated maturity or (iii) give rise to any other remedies by a counterparty to any such instrument.  Complete and correct copies of all instruments (including all amendments, supplements, waivers and consents) relating to any indebtedness of Solx incurred by a Non-Solx Representative have been furnished to the Company.

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(f)            Litigation.  Except as disclosed on Schedule 5(f) or as may be known by an Excluded Individual, there is no action, suit, proceeding or investigation pending with respect to Solx which was not pending prior to the Merger Date or, to the Knowledge of OccuLogix, currently threatened against Solx or any of its officers, directors or employees, nor, to the Knowledge of OccuLogix, is there any basis for any of the foregoing.  Other than as may be known by an Excluded Individual, OccuLogix (with respect to Solx) and/or Solx is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality.  There is no action, suit, proceeding or investigation by OccuLogix (with respect to Solx) currently pending or that OccuLogix intends to initiate, and there is no action, suit, proceeding or investigation by a Non-Solx Representative, on behalf of Solx, currently pending.

(g)           Changes.  Except as reflected in the unaudited financial statements of Solx (including balance sheet, income statement and statement of cash flows) as of November 30, 2007 (the “Financial Statements”), since the date of the Financial Statements, none of the following has been caused or effected (directly or indirectly) by a Non-Solx Representative:

(i)           Any change in the assets, liabilities, financial condition or operations of Solx from that reflected in the Financial Statements, other than changes in the ordinary course of business consistent with past practice, none of which, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect;

(ii)          Any material change, except in the ordinary course of business consistent with past practice, in the contingent obligations of Solx by way of guaranty, endorsement, indemnity, warranty or otherwise;

(iii)         Any waiver by OccuLogix of a right or of a debt owed to or by Solx;

(iv)         Any indebtedness, obligation or liability incurred, assumed or guaranteed by Solx, except those for immaterial amounts and for current liabilities incurred in the ordinary course of business consistent with past practice and except also for the Assumed Liabilities;

(v)          Any sale, assignment, transfer or license of any patents, trademarks, copyrights, trade secrets or other intangible assets of Solx;

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(vi)        Any change in any material agreement to which Solx is a party, or by which it is bound, which has had, or could reasonably be expected to have, a Material Adverse Effect; or

(vii)        Any other event or condition of any character that, either individually or cumulatively, has had, or could reasonably be expected to have, a Material Adverse Effect.

(h)           Disclosure.  OccuLogix has provided the Company with all the information that the Company has requested for deciding whether to execute and deliver this Agreement.  Except as set forth in this Agreement, to the Knowledge of OccuLogix, there is no material fact with respect to Solx that OccuLogix has not disclosed to the Company , or that is otherwise known to the Company, and of which any of its officers or directors is aware that could reasonably be expected to result in a Material Adverse Effect or which could reasonably be expected to be material to the Company.

(i)            FDA and Regulatory Matters.  From and after the Merger Date:

(i)           Other than as may be known by an Excluded Individual, Solx is in compliance with all requirements of the U.S. Food and Drug Administration (the “FDA”) and non-United States equivalent agencies and similar state and local laws applicable to the maintenance, compilation and filing of reports, including medical device reports, with regard to any products currently under development by Solx (collectively, the “Products”);

(ii)          Other than as may be known by an Excluded Individual, neither Solx nor OccuLogix has received any written notice or other written communication from the FDA or any other governmental authority (i) contesting the pre-market clearance or approval of, the uses of or the labeling and promotion of any of the Products or (ii) otherwise alleging any violation of any laws by Solx or OccuLogix;

(iii)         Other than as may be known by an Excluded Individual, each of Solx and OccuLogix, on behalf of Solx, has conducted, and is continuing to conduct, all clinical trials sponsored by Solx with reasonable care and in accordance with all applicable laws and the stated protocols for such clinical trials; and

(iv)         Subject to the statement made in the immediately following sentence, all filings with and submissions to the FDA and any corollary entity in any other jurisdiction made by each of Solx and OccuLogix with regard to the Products, whether oral, written or electronically delivered, were true, accurate and complete as of the date made and, to the extent required to be updated, as so updated, remain true, accurate and complete as of the date hereof and do not materially misstate any of the statements or information included therein or omit to state a material fact necessary to make the statements therein not misleading.  The statement made in the immediately preceding sentence, with respect to those of Solx’s filings and submissions made by, or under the direction or authorization of an Excluded Individual, is qualified entirely to the Knowledge of OccuLogix.

(j)           Taxes.

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(i)           Filing of Tax Returns and Payment of Taxes.  With respect to Solx, OccuLogix has timely filed all tax returns required to be filed by it for all periods subsequent to the Merger Date, each such tax return has been prepared in compliance with all applicable laws and regulations, and all such tax returns are true, accurate and complete in all material respects.  All taxes that have become due and payable by OccuLogix with respect to Solx have been timely paid, and Solx is not and will not be liable for any additional taxes in respect of any taxable period or any portion thereof, beginning on the Merger Date and ending on or before the date of the Financial Statements and any taxes of Solx arising after such date have been or will be incurred in the ordinary course of Solx’s business.  OccuLogix has delivered to the Company true, correct and complete copies of all tax returns with respect to income taxes filed by, or with respect to, Solx subsequent to the Merger Date and has delivered or made available to the Company all relevant documents and information with respect thereto.

(ii)          Liens.  There are no liens for taxes (other than current taxes not yet due and payable), for any period subsequent to the Merger Date, on any of the assets of Solx.

(iii)         Pending Proceedings.  There is no action, suit, proceeding or audit with respect to any tax related to Solx, for any period subsequent to the Merger Date, now in progress, pending or, to the Knowledge of OccuLogix, threatened against or with respect to Solx.

(iv)         Withholding Taxes.  OccuLogix has timely withheld and timely paid all taxes which are required to have been withheld and paid by it in connection with Solx and with amounts paid or owing to any employee, independent contractor, creditor or other person.

(k)           Insurance.  OccuLogix agrees to work in good faith with the Company and its insurers to separate the policies related to Solx from the policies related to OccuLogix and its affiliates and subsidiaries so that such Solx-related policies may be provided to the Company as soon as reasonably possible, but in any event, no later than January 15, 2008.

(l)            No Default.  Other than as disclosed on Schedule 5(l), Solx is not in default, nor, to the Knowledge of OccuLogix, is any third party in default, under or with respect to any contract, agreement, lease or other instrument to which it is a party with respect to Solx.

6.             Royalty Payments; Calculation.  As provided in Section 1(d), the Company shall make Royalty Payments, which will consist of:  (i) during the period commencing on the Closing Date and ending on the date on which Solx achieves a positive EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization), adjusted for items considered to be non-cash items under generally accepted accounting principles in the U.S. (“GAAP”), consistently applied, an amount equal to 3% of the worldwide Net Sales (as defined below) of the Royalty Products; and (ii) following the date on which Solx achieves a positive cash flow (determined in accordance with GAAP, consistently applied), an amount equal to 5% of worldwide Net Sales of the Royalty Products.  The Company shall make the Royalty Payments on a quarterly basis, on the forty-fifth (45th) day following the end of Solx’s preceding fiscal quarter (and, in the event that the forty-fifth (45th) day following the end of Solx’s preceding fiscal quarter is not a business day, the next succeeding business day).  “Net Sales” means the aggregate dollar amounts recorded as having been received by the Company or Solx from the sales of Royalty Products to unaffiliated third parties, either directly or through one or more affiliates, in accordance with GAAP, consistently applied, in connection with the preparation of the Company’s financial statements, less 2% of such amounts to compensate the Company for possible returns and bad debt deductions.  “Net Sales” shall not include any amounts received by the Company or Solx in connection with (i) sales taxes, tariff duties and/or use or excise taxes, value added taxes, custom or import duties, imposed with reference to sales or (ii) outbound transportation prepaid or allowed and transportation insurance.  All Royalty Payments will be paid in United States Dollars, and the rate of exchange to be used in computing the amount of currency equivalent to the United States Dollars due as a Royalty Payment, if necessary, shall be the commercial exchange rate in effect in New York, New York on the last business day of the calendar quarter for which payment is being made.  As used herein, the term “Royalty Products” shall be limited:  (i) with respect to the “Ti-Sapphire Laser”, to Solx’s titanium sapphire flashlamp pumped laser intended for use in treatment of glaucoma, whether alone or in combination with other devices or drugs, including, without limitation, in the performance of laser trabeculoplasty and the titration of the Shunt (defined below); and (ii) with respect to the “Shunt”, to Solx’s implantable device intended for use in the reduction and/or management of intraocular pressure.  For greater certainty, the term “Royalty Products” includes next-generation or future models or versions of the Ti-Sapphire Laser and the Shunts that are in existence on the Closing Date.  Without derogating from the generality of the foregoing, the parties acknowledge and agree that a titratable version of the Shunt is being contemplated to be developed and that such version would be considered a “Royalty Product” when and if it ever comes into existence.

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7.             Strategic Transaction.  In the event of any proposed transaction (an “Acquisition Transaction”), the consummation of which would be reasonably likely to result in any person or entity, other than the Company, assuming control or exerting influential decision-making authority over the manufacture and sale of the Royalty Products (the “Acquiror”) (including, but not limited to, (i) a sale or transfer of the Company or Solx, (ii) a sale, transfer or license of the business, or all or substantially all of the assets, of the Company or Solx or (iii) a sale, transfer or license of the business, or all or substantially all of the assets, of the Company or Solx as they relate only to Royalty Products), the Company shall not consummate such Acquisition Transaction unless and until the Acquiror assumes all of the Company’s outstanding obligations under this Agreement as though the Acquiror were the Company hereunder, including, without limitation, the obligation to make the Royalty Payments pursuant to Section 6.  This Section 7 shall apply regardless of the form and structure of the Acquisition Transaction in question, whether it may consist of a single transaction or a related series of transactions or whether it may be effected by merger, consolidation, sale or other transaction or whether it may be for valuable consideration or not.

8.             Indemnification; Set-Off.  Each of the parties (the “Indemnifying Party”) agrees to indemnify and hold harmless the other party (the “Indemnified Party”) and each of the Indemnified Party’s officers, directors, employees, stockholders and agents, from and against all liabilities, damages, claims, actions, suits, proceedings, demands, judgments, losses, costs and expenses (including reasonable attorneys’ fees) (“Claims”) arising from or in connection with any breach of, or inaccuracy in, any representation or warranty of the Indemnifying Party set forth in this Agreement or (ii) any breach or non-fulfillment of any agreement on the part of the Indemnifying Party contained herein.  In a case where OccuLogix is the Indemnifying Party, any amounts judicially determined to be due and payable to the Company pursuant to this Section 8 may be set off and deducted by the Company, at the sole discretion of the Company, from any Royalty Payments due to OccuLogix as set forth herein.  Each of the parties shall provide the other party with timely written notice of all Claims and reasonable cooperation and further assurances with regards to all Claims.  The indemnification obligations under this Section 8 shall survive the Closing Date for a period of eighteen (18) months.

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9.             Arbitration.  All controversies and/or disputes arising under or in connection with, or relating to any dispute under, or alleged breach of, this Agreement shall be decided by arbitration in the City of Boston, Massachusetts in accordance with the Commercial Arbitration Rules of the American Arbitration Association by a single arbitrator selected in accordance with the guidelines of the American Arbitration Association.  Such arbitrator shall be selected by the parties or, failing agreement within one month of the demand for arbitration, by the American Arbitration Association.  The arbitrator shall be a qualified U.S. lawyer, law professor or retired judge experienced in U.S. corporate and commercial matters.  The findings and decision of the arbitrator shall be conclusive and binding on the parties hereto and may be entered before and enforced by any court of competent jurisdiction.  Each party shall bear its own costs, expenses and fees, including, without limitation, attorneys’ fees and expert fees with respect to any such arbitration; provided, that the final decision of the arbitrator shall assign such costs to one or more or the parties in proportions as the arbitrator deems fair and reasonable in the circumstances.

10.           General Provisions.

(a)           Further Actions.  The parties hereto agree to execute such further instruments and to take such further actions as may reasonably be necessary to carry out the intent of this Agreement.

(b)           Notices.  All notices in connection with this Agreement shall be in writing and shall be personally delivered or sent by recognized overnight delivery service or facsimile transmission:

to the Company at:	Solx Acquisition, Inc. c/o Doug P. Adams 890 Winter Street, Suite 115 Waltham, MA Tel:  (800) 939-7659 Fax:  (781) 547-4099 Email:  doug@solx.com
with a copy to:	Jamey A. Wachta Rackemann, Sawyer & Brewster 160 Federal Street Boston, MA  02110 Tel:  (617) 951-1141 Fax:  (617) 542-7437 Email:  jwachta@rackemann.com
to OccuLogix at:	Elias Vamvakas OccuLogix, Inc. 2600 Skymark Avenue, Building 9, Suite 201 Mississauga, Ontario L4W 5B2 Tel:  (905) 602-0887 Fax:  (905) 602-7623 Email:  elias.vamvakas@occulogix.com
with a copy to:	Andrew J. Beck Torys LLP 237 Park Avenue New York, NY  10017-3142 Tel:  (212) 880-6010 Fax:  (212) 682-0200 Email:  abeck@torys.com

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All such notices shall be deemed delivered (i) upon personal delivery, (ii) three (3) business days after being deposited with a recognized overnight delivery service, or (iii) upon receipt of confirmation of facsimile transmission.

(c)           Expenses.  Each party to the Agreement will pay its own expenses in connection with the transactions contemplated by this Agreement, whether or not the transactions are consummated.

(d)           Assignment; Binding Effect.  This Agreement may not be assigned by either party without the prior written consent of the other party.  This Agreement shall inure to the benefit of and shall be binding upon the parties and their respective successors and permitted assigns.

(e)           Jurisdiction.  This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without regard to any conflicts of laws principles that would require application of the laws of another jurisdiction.

(f)            Entire Agreement; Amendment.  This Agreement represents the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings with respect to the subject matter hereof.

(g)           Survival of Representations and Warranties.  The representations and warranties of the parties contained herein shall survive the Closing and shall not be affected thereby.

(h)           Exhibits.  Any Exhibits or Schedules to this Agreement are incorporated herein by reference and made a part hereof.

(i)            Captions.  The section and paragraph headings used herein are for convenience only and shall not affect the interpretation hereof.

(j)            Gender.   For purposes of this Agreement, the singular shall include the plural, and the masculine gender shall include the feminine and neuter, and vice versa, as the context requires.

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(k)           Counterparts.  This Agreement may be executed in counterparts, including by facsimile copy and copy communicated by e-mail, all of which together shall constitute one and the same instrument.

11.           Further Assurances.  The parties shall execute, acknowledge and deliver such further instruments and do such further acts and things as may be reasonably required to carry out the intent and purpose of this Agreement and the Transaction.

[Signatures to follow]

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IN WITNESS WHEREOF, the parties hereto have executed this Stock Purchase Agreement under seal as of the day and year first above written.

OCCULOGIX, INC.		SOLX ACQUISITION, INC.
By:	“Elias Vamvakas”	By:	“Doug P. Adams”
Name:	Elias Vamvakas	Name:	Doug P. Adams
Title:	Chief Executive Officer	Title:	President

ACKNOWLEDGED AND AGREED BY DOUG P. ADAMS SOLELY WITH RESPECT TO SECTIONS 1(g) and 2:
Witness:
	“Doug P. Adams”
	Doug P. Adams
Print Name of Witness

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EX-10.39

Exhibit 10.39

Execution Copy

AMENDING AGREEMENT

THIS AMENDING AGREEMENT is made and entered into as of December 19, 2007 by and among (i) OccuLogix, Inc. (the “Parent”), a Delaware corporation, (ii) Solx, Inc. (the “Company”), a Delaware corporation, and (iii) Peter M. Adams, acting for and on behalf of the Stockholder Representative Committee referred to in the Merger Agreement (defined below).

WHEREAS, the Parent, OccuLogix Mergeco, Inc., the Company and Doug P. Adams, John Sullivan and Peter M. Adams, acting, in each case, in his capacity as a member of the Stockholder Representative Committee, referred to therein, entered into an Agreement and Plan of Merger dated as of August 1, 2006;

WHEREAS, such Agreement and Plan of Merger dated as of August 1, 2006 was amended subsequently;

WHEREAS, such Agreement and Plan of Merger, dated as of August 1, 2006, as amended, is referred to hereinafter as the “Merger Agreement”;

WHEREAS, at the Effective Time (defined below), OccuLogix Mergeco, Inc. merged with and into Solx, Inc., following which time the Company continued as the surviving corporation;

WHEREAS, the Parent proposes to sell to Solx Acquisition, Inc. (“Acquireco”), a Delaware corporation owned or controlled by Doug P. Adams, all of the issued and outstanding shares of the capital stock of the Company for, among other things, the assumption by Acquireco of certain of the Parent’s liabilities incurred in connection with, or otherwise relating, to the Company’s business, including the Parent’s obligation, under Section 1.7(b) of the Merger Agreement and as evidenced by the Secured Promissory Note (defined below), to pay $5,000,000 from the Holdback Amount (defined below) to the Participating Rights Holders (defined below) on September 1, 2008 (the “Outstanding Payment Obligation”);

WHEREAS, Section 10.5 of the Merger Agreement provides, in part, that the Parent may assign all of its rights and obligations thereunder to a person that acquires all of the capital stock, or substantially all of the assets, of the Company or any division or business unit of the Parent responsible for the business of the Company (provided that, in the event of such an assignment, the amount of the Holdback Amount theretofore unpaid, less the amount of the Indemnity Holdback Amount (defined below) permitted to be withheld pursuant to Section 1.7(b), if any, shall be paid immediately to the Participating Rights Holders and allocated among them in accordance with Section 2.1, and provided, further, that such person assumes the Merger Agreement, in writing, and agrees to be bound by and to comply with all of the terms and conditions thereof);

WHEREAS, the parties hereto acknowledge that, without such assumption of the Outstanding Payment Obligation by Acquireco, it is unlikely that the Outstanding Payment Obligation would be paid by the Parent to the Participating Rights Holders;

WHEREAS, the parties hereto do not wish the assignment of the Outstanding Payment Obligation by the Parent to Acquireco, and the assumption thereof by Acquireco, to cause any amount owing to the Participating Rights Holders under the Merger Agreement to become due and payable immediately;

WHEREAS, the Parent executed and delivered a Secured Promissory Note, dated September 1, 2006 and in the aggregate principal amount of $13,000,000, to the Stockholder Representative Committee (the “Secured Promissory Note”) in order to evidence the Parent’s obligation to pay the Holdback Amount pursuant to the Merger Agreement, including, among other obligations, the Outstanding Payment Obligation and the FDA Milestone Payment;

WHEREAS, Peter M. Adams has been duly designated, pursuant to Section 2.5(a) of the Merger Agreement, the single member representative of the Stockholder Representative Committee upon whose instruction the Parent and the Company are entitled to rely without investigation or inquiry (the “Single Member Representative”);

WHEREAS,pursuant to Section 2.5(b) of the Merger Agreement, the Stockholder Representative Committee has the authority to execute and deliver this Amending Agreement for and on behalf of the Participating Rights Holders;

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained and intending to be legally bound hereby, the Parent, the Company and Peter M. Adams, acting in his capacity as the Single Member Representative for and on behalf of the Stockholder Representative Committee, hereby agree as follows:

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1. Capitalized terms used in this Amending Agreement but not otherwise defined herein have the respective meanings attributed to such terms in the Merger Agreement.

2. Section 10.5 of the Merger Agreement is hereby amended by deleting the following words from the second sentence thereof:

(provided that, in the event of such an assignment, the amount of the Holdback Amount theretofore unpaid, less the amount of the Indemnity Holdback Amount permitted to be withheld pursuant to Section 1.7(b), if any, shall be paid immediately to the Participating Rights Holders and allocated among them in accordance with Section 2.1, and provided, further, that such person assumes this Agreement, in writing, and agrees to be bound by and to comply with all of the terms and conditions hereof).

3. The parties hereto acknowledge and agree that the FDA Milestone will not be met and that, accordingly, the FDA Milestone Payment will never become due and payable.

4. Peter M. Adams, in his capacity as the Single Member Representative acting for and on behalf of the Stockholder Representative Committee, hereby acknowledges and confirms:  (i) the agreement of the Stockholder Representative Committee to the assignment by the Parent to Acquireco, and the assumption by Acquireco, of all of the outstanding obligations and liabilities of the Parent under the Secured Promissory Note, including, without limitation, the Outstanding Payment Obligation; and (b) the full and final release and discharge, by the Stockholder Representative Committee, of the Parent and its affiliates and subsidiaries, and their respective officers, directors, shareholders, agents, servants, representatives, successors, heirs and assigns, from the Outstanding Payment Obligation and from any and all claims, demands, obligations, suits and causes of action, of any nature whatsoever, whether known or unknown, which the Stockholder Representative Committee or any of the Participating Rights Holders ever had, now has or might have in the future in connection with, or as a result of or otherwise arising from, any or all of the outstanding obligations and liabilities of the Parent under the Secured Promissory Note, including, without limitation, the Outstanding Payment Obligation.

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5. The Merger Agreement remains in full force and effect, unamended, other than as amended by this Amending Agreement.

6. This Amending Agreement may be executed and delivered (including by facsimile transmission and e-mail communication) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which, when executed and delivered, shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.

7. This Amending Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware applicable to contracts executed and performed in that state.

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IN WITNESS WHEREOF, the Parent, the Company and Peter M. Adams, acting in his capacity as the Single Member Representative for and on behalf of the Stockholder Representative Committee, have duly executed this Amending Agreement as an instrument under seal as of the date first above written.

Occulogix, Inc.
By:	“EliasVamvakas”
Name:	Elias Vamvakas
Title:	Chief Executive Officer
Solx, Inc.
By:	“DouglasP.Adams”
Name:	Douglas P. Adam
Title:	President
Single Member Representative, Acting for and on behalf of the Stockholder Representative Committee
“Peter M. Adams”
Peter M. Adams

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EX-10.40

Exhibit 10.40

Execution Copy Version #3

TERMINATION AGREEMENT

THIS AGREEMENT is made as of the 19th day of December, 2007 by and between Doug P. Adams (the “Employee”), a resident of the Commonwealth of Massachusetts, and OccuLogix, Inc. (the “Employer”), a corporation incorporated under the laws of the State of Delaware, and having its executive offices at 2600 Skymark Avenue, Building 9, Suite 201, Mississauga, Ontario, L4W 5B2.

WHEREAS, the Employer and the Employee entered into an employment agreement dated as of September 1, 2006 (the “Employment Agreement”);

AND WHEREAS, the Employee has been serving the Employer as its President & Founder, Glaucoma Division pursuant to the Employment Agreement;

AND WHEREAS, the Employer is intending to sell to Solx Acquisition, Inc., a Delaware corporation, owned by the Employee, all of the issued and outstanding shares in the capital stock of Solx, Inc. (“Solx”), the wholly owned subsidiary of the Employer that has carried on the Employer’s glaucoma business the (“Transaction”);

AND WHEREAS, in anticipation of the closing of the Transaction, the Employee’s employment with the Employer shall be terminated pursuant to Section 8.1.3 of the Employment Agreement, effective on the date hereof (the “Termination Date”);

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement (the receipt and sufficiency of which are hereby acknowledged by the parties hereto), the parties hereto agree as follows:

1. TERMINATION

1.1           The Employee hereby resigns his employment with the Employer, and the Employee’s employment with the Employer shall be terminated pursuant to Section 8.1.3 of the Employment Agreement, effective on the Termination Date.  The Employer hereby waives the requirement, under Section 8.1.3 of the Employment Agreement, to provide one month’s prior written notice to the Employer of the Employee’s intention to terminate his employment with the Employer.

2. RETURN OF PROPERTY

2.1           The Employee hereby certifies that he has returned to the Employer all property of the Employer (other than property of Solx, any of which property shall be retained by the Employee) in the Employee’s possession, including, without limitation, all keys, business cards, computer hardware, including, without limitation, Blackberry units, printers, mice and other hardware accessories, and computer software.  The Employee hereby further certifies that he has returned to the Employer, or destroyed, all tangible material embodying Confidential Information (as such term is defined in the Employment Agreement, as modified below) in any form whatsoever, including, without limitation, all paper copy copies, summaries and excerpts of Confidential Information and all electronic media or records containing or derived from Confidential Information.  For purposes of this Section 2.1, the term “property of the Employer” does not include any property of Solx, and the term “Confidential Information” does not include Confidential Information relating to the business or affairs of Solx.

3. NO SEVERANCE

3.1           The Employee hereby acknowledges and agrees that no amounts are due or payable to him by the Employer pursuant to Sections 9 or 10 of the Employment Agreement.

4. VACATION PAY

4.1           In full and complete compromise and settlement of a disputed claim regarding accrued but unpaid vacation during the current Year of Employment (as such term is defined in the Employment Agreement), the Employee and the Employer hereby agree that the Employer shall pay to the Employee two weeks’ of accrued but unpaid vacation pay.

5. MUTUAL RELEASE AND TERMINATION

5.1           In consideration of the Employer entering into the Transaction, the Employee, on behalf of himself and his administrators, assigns and anyone claiming through him, hereby releases completely and forever discharges the Employer and its affiliates and subsidiaries, and their respective officers, directors, shareholders, agents, servants, representatives, underwriters, successors, heirs and assigns (collectively, the “Employer Representatives”), from any and all claims, demands, obligations and causes of action, of any nature whatsoever, whether known or unknown, which the Employee ever had, now has or might have in the future as a result of the Employee’s employment with the Employer or the termination thereof, including, without limitation, any claim relating to the Employment Agreement or the termination thereof pursuant to Section 5.2 of this Agreement or any claim relating to any violation of any U.S. federal or state statute or regulation, any claim for wrongful discharge or breach of contract or any claim relating to U.S. state or federal laws (including, without limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1968, the Employment Retirement Income and Security Act, the Fair Labor Standards Act, the Americans with Disabilities Act and the Rehabilitation Act).  Notwithstanding the foregoing, nothing herein shall be construed as depriving the Employee of any indemnification rights to which he is entitled under the Amended and Restated By-laws of the Employer on or prior to the Termination Date or of any protection to which he may be entitled, on, prior to or after the Termination Date, under the Employer’s directors’ and officers’ liability insurance policy from time to time.

5.2           The Employment Agreement is hereby terminated and rendered null and void, save and except for those provisions thereof that are expressly stated to survive the termination thereof, with the exception of Sections 12 (Non-competition), 13 (No Solicitation of Customers), 14 (No Solicitation of Employees).  Notwithstanding the fact that Sections 12, 13 and 14 of the Employment Agreement are expressly stated to survive the termination of the Employment Agreement, they are hereby terminated and rendered null and void.  Although Section 15 (Confidentiality) of the Employment Agreement shall survive the termination of the Employment Agreement, the term “Confidential Information” as used therein is hereby amended to exclude Confidential Information of Solx.  Although Section 16 (Remedies) of the Employment Agreement also shall survive the termination of the Employment Agreement, it shall be read and construed to apply only to a breach of threatened breach by the Employee of the provisions of Section 15 of the Employment Agreement, as such Section 15 has been amended pursuant to this Section 5.2.  The Employee hereby agrees to abide by the provisions of Sections 15 and 16 of the Employment Agreement, as such Sections 15 and 16 have been amended pursuant to this Section 5.2.

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5.3           The Employer, on behalf of itself, the Employer Representatives and anyone claiming through any of them, hereby releases completely and forever discharges the Employee and his administrators, heirs and assigns from any and all claims, demands, obligations and causes of action, of any nature whatsoever, whether known or unknown, which the Employer ever had, now has or might have in the future as a result of the Employee’s employment with the Employer or the termination thereof, including, without limitation, any claim relating to the Employment Agreement or the termination thereof pursuant to Section 5.2 of this Agreement or any claim relating to any violation of any U.S. federal or state statute or regulation.

6. THIRD PARTY COMMUNICATIONS

6.1           In consideration of the mutual promises and covenants contained herein, each of the parties hereto hereby agrees that he and it will not make any statements to, or initiate or participate in any discussions with, any other person, including, without limitation, the Employer’s customers, which are derogatory, disparaging or injurious to the reputation of the Employee or the Employer.  This Section 6.1, in no way, shall be construed as prohibiting either party hereto from responding truthfully to any question or interrogatory to which such party is requested to respond.

7. ACKNOWLEDGEMENT

7.1           The Employee hereby acknowledges that:

(a) He has had sufficient time to review and consider this Agreement thoroughly;

(b) He has read and understands the terms of this Agreement and his obligations hereunder;

(c) He has been given an opportunity to obtain independent legal advice, or such other advice as he may desire, concerning the interpretation and effect of this Agreement; and

(d) He is entering this Agreement voluntarily and without any pressure from the Employer.

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8. MISCELLANEOUS

8.1           The headings in this Agreement are included solely for convenience of reference and shall not affect the construction or interpretation hereof.

8.2           The parties hereto expressly agree that nothing in this Agreement shall be construed as an admission of liability.

8.3           This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective trustees, administrators, successors and assigns.

8.4           This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter of the termination of the Employee’s employment with the Employer.  This Agreement supersedes and replaces all prior agreements, if any, written or oral, with respect to such subject matter and any rights which the Employee may have by reason of any such prior agreements or by reason of the Employee’s employment with the Corporation.  There are no representations, warranties or agreements between the parties hereto in connection with the subject matter of this Agreement, except as specifically set forth in this Agreement.  No reliance is placed on any representation, opinion, advice or assertion of fact made by the Employer or any of its officers, directors, agents or employees to the Employee, except to the extent that the same has been reduced to writing and included as a term of this Agreement.  Accordingly, there shall be no liability, either in tort or in contract, assessed in relation to any such representation, opinion, advice or assertion of fact, except to the extent aforesaid.

8.5           Each of the provisions contained in this Agreement is distinct and severable, and a declaration of invalidity or unenforceability of any provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.

8.6           This Agreement shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts, without regard to its conflicts of laws rules which shall be deemed inapplicable to this Agreement.

8.7           This Agreement may be signed in counterparts and delivered by facsimile transmission or other electronic means, and each of such counterparts shall constitute an original document, and such counterparts, taken together, shall constitute one and the same instrument.

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IN WITNESS WHEREOF the parties hereto have executed this Agreement.

OCCULOGIX, INC.
By:	“Elias Vamvakas”
	Elias Vamvakas
	Chairman and Chief Executive Officer

	“Doug P. Adams”
Signature of Witness	Doug P. Adams
Name of Witness (please print)

5

EX-10.41

Exhibit 10.41

Execution Copy

LIMITED GUARANTY

This LIMITED GUARANTY (the “Guaranty”) is made and entered into as of the 19th day of December, 2007 by Doug P. Adams (“Guarantor”), for the benefit of OccuLogix, Inc., a Delaware corporation (“Seller”).

RECITALS

1. Guarantor is the sole stockholder of Solx Acquisition, Inc., a Delaware corporation (“Buyer”).

2. Pursuant to a Stock Purchase Agreement (the “Agreement”), dated as of the date hereof, by and between Buyer and Seller, Buyer has agreed to purchase all of the issued and outstanding capital stock of Solx, Inc., a wholly owned Delaware corporation subsidiary of Seller.

3. Notwithstanding the assumption by Buyer, pursuant to the Agreement, of liabilities relating to the business of Solx, Inc. as of December 1, 2007, the Agreement provides that Seller will cover the payroll of the employees of Solx, Inc. during the period from December 1, 2007 to December 31, 2007, inclusive, and that Buyer will reimburse Seller the December Payroll (as such term is defined in the Agreement) on or before January 15, 2008 (the “December Payroll Reimbursement Date”).  In addition, pursuant to the Agreement, Buyer is obligated to pay the Pre-paid Expenses (as such term is defined in the Agreement) on or prior to February 15, 2008 (the “Pre-paid Expenses Reimbursement Date”).  Such obligations of Buyer, as they may be amended, modified or extended from time to time, are hereinafter referred to, collectively, as the “Obligations”.

NOW, THEREFORE, FOR AND IN CONSIDERATION of the benefits derived by Guarantor under the Agreement by virtue of his status as the sole stockholder of Buyer, Guarantor absolutely, unconditionally and irrevocably guarantees to Seller and its successors and assigns, the prompt payment by Buyer of the Obligations on the December Payroll Reimbursement Date and the Pre-paid Expenses Reimbursement Date, as applicable.

1.           Consideration.  This Guaranty is made for good and valuable consideration and in order to induce Seller to enter into the Agreement.  Guarantor acknowledges the receipt and adequacy of the consideration received by Guarantor for this Guaranty.

2.           Unconditional Nature of Guaranty.

(a)           This is a guaranty of payment and performance of the Obligations, and not only of collection.  The liability of Guarantor under this Guaranty shall be primary, direct and immediate and not conditional or contingent upon the pursuit of any remedies against Buyer or any other person or entity, nor against any security or liens that may be available to Seller.  Seller may proceed to enforce or collect the Obligations directly against Guarantor without first proceeding against Buyer, and Guarantor hereby waives any right to require that an action be brought against Buyer or any other person or entity or to require that resort be had to any security or liens.

(b)           The liability of Guarantor hereunder shall not be waived, limited, diminished, discharged or otherwise reduced by: (i) any release, compromise or indulgence granted by Seller with respect to the Obligations or any of them; (ii) the release, discharge, addition or substitution of any other guarantor of the Obligations or any of them; (iii) any modification, discharge or extension of the Obligations, or any of them, or any amendment, modification, stay or cure of Seller’s rights that may occur in any bankruptcy or reorganization case or proceeding concerning Buyer or any other guarantor; (iv) the granting of forbearance or extension of time to Buyer or any other guarantor; (v) any course of dealing, delay, abstention, failure, neglect or omission by Seller concerning the Obligations or any of them; (vi) any agreement or arrangement among Seller and Buyer or any other guarantor; (vii) the bankruptcy, insolvency, termination or dissolution of Buyer or any other guarantor; or (viii) any of the Obligations being illegal, invalid or unenforceable or, for any reason, limited, modified, voided, released or discharged or subject to any set-off, counterclaim or defense by Buyer.  If any full or partial payment of the Obligations or any of them is voided, rescinded, limited or otherwise required to be returned, reversed or disgorged by Seller as a result of any bankruptcy or reorganization or otherwise, Guarantor’s liability hereunder shall be revived and reinstated with respect to such payment.

3. Payment of Expenses of Collection

Guarantor agrees to pay Seller, on demand, all expenses, including reasonable attorneys’ fees, paid or incurred by Seller in enforcing this Guaranty against Guarantor.

4. Waiver of Defenses by Guarantor

Guarantor agrees that his obligations hereunder shall not be affected or impaired by all or any of the following and hereby waives all and any defense based thereon: (i) all notices and rights to notice to which he might be entitled as a guarantor, including notice of acceptance hereof, notice of default and notice of any action taken by Seller in reliance hereon; (ii) presentment, demand and protest of any instrument; (iii) all suretyship and equitable defenses; (iv) all rights of counterclaims, defenses and set-offs against Seller; (v) all claims against Buyer whether in the nature of subrogation or otherwise as a creditor resulting from this Guaranty or any payments hereunder; (vi) any statute of limitations in any action hereunder or for the collection of amounts owing in connection with the Obligations, or any of them, or the performance thereof; (vii) the incapacity or lack of authority of Buyer, Guarantor or any other person or entity or the failure of Seller to file or enforce a claim against the estate (either in bankruptcy or any other proceeding) of Buyer or Guarantor or any other person or entity; (viii) any election of remedies by Seller which destroys or otherwise impairs any subrogation rights of Guarantor or the right of Guarantor to proceed against Buyer for reimbursement, or both; (ix) the illegality, invalidity or unenforceability of the Obligations or any of them; or (x) any other cause or facts similar or dissimilar to the foregoing, it being the intention that the obligation of Guarantor to guaranty payment of the Obligations is absolute, unconditional and irrevocable.

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5. Representations and Warranties.

Guarantor represents, warrants and covenants to Seller that, as of the date hereof and at all times hereafter until the Obligations have been satisfied in full:

(a)           This Guaranty has been duly executed and delivered by Guarantor and constitutes the legal, valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with its respective terms, subject to laws of general application affecting creditors’ rights.

(b)           Guarantor is not contemplating the filing of a petition or proceeding under any state or federal bankruptcy or insolvency or reorganization laws or the liquidating of all or a major portion of Guarantor’s property.

(c)           The entering into of the Agreement by Buyer and Seller constitutes a material economic benefit to Guarantor.

6.             Termination.  This Guaranty will terminate and be of no further force and effect without any action of Seller upon payment in full of the Obligations.

7.             General Provisions

(a)            Entire Agreement; Amendment.  This Guaranty sets forth the entire agreement of Guarantor with respect to the subject matter hereof and supersedes all other agreements and understandings, whether oral or written, with respect to such subject matter.  The provisions of this Guaranty may be amended, modified, or waived only by a writing signed by Guarantor and Seller.  No waiver of Seller’s right on any one occasion shall constitute a continuing waiver or a waiver of any rights for any subsequent occasion.

(b)            Severability.  If any provision of this Guaranty shall be determined by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the remaining provisions of this Guaranty, all of which shall remain in full force and effect.

(c)            Governing Law.  This Guaranty shall be governed by, and be construed and enforced in accordance with, the laws of the State of Delaware, without regard to any conflict of law principles that would require the application of the laws of another jurisdiction.

(d)            Assignment; Binding Effect.  This Guaranty may not be assigned by either Seller or Guarantor.  The provisions of this Guaranty shall be binding upon Guarantor and its successors and assigns and shall inure to the benefit of Seller and his successors and assigns.

(f)            Captions. Captions are used for convenience of reference only and are not to be construed as part of the terms of this Guaranty.

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Executed under seal as of the day and year first above written.

Witness:

“Doug P. Adams”

Doug P. Adams

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EX-10.42

Exhibit 10.42

SECURITY AGREEMENT

SOLX, INC.

This SECURITY AGREEMENT dated as of December 19, 2007 is made by Solx, Inc. (“Solx”), a Delaware corporation, in favor of OccuLogix, Inc. (“OccuLogix”), a Delaware corporation.

WHEREAS:

A. On the date hereof, Solx Acquisition, Inc. (“Solx Acquisition”) acquired all of the issued and outstanding shares of the capital stock of Solx pursuant to the Stock Purchase Agreement, of even date herewith, between Solx Acquistion and OccuLogix (the “Stock Purchase Agreement”);

B. Solx Acquisition owes certain enumerated obligations to OccuLogix under the Stock Purchase Agreement, including the obligation to pay the Royalty Payments (as such term is defined in the Stock Purchase Agreement); and

C. Pursuant to the Stock Purchase Agreement, and as an inducement to OccuLogix to enter into the same, Solx Acquisition agreed to cause Solx to execute and deliver this Security Agreement.

NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of payment of the sum of $1.00 by OccuLogix to Solx and of the premises and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged by Solx), Solx hereby covenants and agrees in favor of OccuLogix as follows:

1.           INTERPRETATION

1.1          Definitions

In this Agreement, unless the context shall otherwise require, all capitalized terms used but not expressly defined herein shall have the meanings ascribed thereto in the Stock Purchase Agreement, as it may be amended, supplemented, replaced and/or amended and restated from time to time, and the following words and terms shall have the following meanings:

“Event of Default” has the meaning given to it in Section 4.1;

“Intellectual Property” means the IP Collateral, other than any proceeds or payments;

“License” means any license, sub-license, lease, right of use or control, agreement to license or sub-license, or to lease or to grant a right of use or control, in respect of or in connection with the acquisition, ownership, use, control or exploitation, of the Intellectual Property, together with any amendments, supplements, modifications, extensions, renewals or replacements thereof;

“Lien” means any mortgage, pledge, deed of trust, pledge, hypothecation, assignment, security interest, lien (whether statutory or otherwise), charge, claim or encumbrance, or preference, priority or other security agreement or preferential arrangement held or asserted in respect of any asset of any kind or nature whatsoever, including, without limitation, any conditional sale or other title retention agreement, or any lease having substantially the same economic effect as any of the foregoing, or the filing of, or agreement to give, any financing statement under the Uniform Commercial Code (as adopted in the State of Delaware from time to time) or a comparable law of any jurisdiction;

“Merger Agreement” means the Agreement and Plan of Merger, dated as of August 1, 2006, by and among OccuLogix, Inc., OccuLogix Mergeco, Inc., Solx, Inc. and Doug P. Adams, John Sullivan and Peter M. Adams, acting, in each case, in his capacity as a member of the Stockholder Representative Committee referred to therein, as amended;

“Obligations”has the meaning given to it in Section 2.2(a);

“PRH Security Agreement” has the meaning given to it in Section 2.5; and

“Security Interest” has the meaning given to it in Section 2.2(a).

1.2 Governing Law

This Security Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to any conflicts of laws principles that would require application of the laws of another jurisdiction.

1.3 Incorporation of Schedules

The schedules attached hereto are incorporated into, and form part of, this Security Agreement.

1.4           Captions

The section and paragraph headings used herein are for convenience only and shall not affect the interpretation hereof.

2. SECURITY

2.1 Grant of Security Interest in IP Collateral

As collateral security for the prompt and complete payment and performance when due (whether at the stated maturity, by acceleration or otherwise) of the Obligations, Solx hereby grants, transfers, collaterally assigns and sets over to OccuLogix a fully perfected, priority security interest in, assignment of, general lien on and right of set-off of, all of the collateral set forth on Schedule “A” hereto, solely as the same is directly related to the Royalty Products (collectively, the “IP Collateral”), in each case, whether now existing or hereafter arising and whether now owned or hereafter acquired.

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2.2 Obligations Secured

(a) The security interests granted hereby (collectively, the “Security Interest”) are granted as continuing collateral security for the due payment and performance of Solx Acquisition’s obligations to pay the Royalty Payments, at any time due or accruing due, to OccuLogix under the Stock Purchase Agreement, or any of such obligations (collectively, and together with the expenses, costs and charges set out in Section 2.2(b) (collectively, the “Obligations”).

(b) All reasonable expenses, costs and charges incurred by or on behalf of OccuLogix in connection with the enforcement of OccuLogix’s rights and remedies hereunder, including the realization of the IP Collateral, and including all reasonable legal fees and disbursements, court costs, receiver’s or agent’s remuneration and other expenses of taking possession of, repairing, protecting, insuring, preparing for disposition, realizing, collecting, selling, licensing, transferring, delivering or obtaining payment of the IP Collateral, will be added to and form a part of the Obligations.

2.3 Attachment

Solx and OccuLogix hereby acknowledge that:  (i) value has been given; (ii) Solx has rights in the IP Collateral (other than hereafter acquired IP Collateral); and (iii) Solx and OccuLogix have not agreed to postpone the time of attachment of the Security Interest.

2.4 Scope of Security Interest

(a) Until the Security Interest will have become enforceable, the grant of the Security Interest in the Intellectual Property will not affect, in any way, Solx’s rights to exploit commercially the Intellectual Property, to defend the Intellectual Property, to enforce Solx’s rights in or with respect to the Intellectual Property against third parties in any court or to claim and be entitled to receive any damages with respect to any infringement or violation thereof.

(b) OccuLogix will not be deemed in any manner to have assumed any obligation of Solx under any License or otherwise relating to or arising in connection with any of the IP Collateral, nor will OccuLogix be liable to any official body or party to a license or any other third party by reason of any default by any person under any contract.

2.5 Subordination of Security Interest

OccuLogix hereby acknowledges and agrees that the first priority security interest granted by Solx in the IP Collateral pursuant to the Security Agreement (the “PRH Security Agreement”), dated as of September 1, 2006, by Solx in favor of Doug P. Adams, John Sullivan and Peter M. Adams, acting, in each case, in his capacity as a member of the Stockholder Representative Committee under the Merger Agreement, is, and shall remain, superior in priority and rank to the Security Interest.  For avoidance of doubt, under the PRH Security Agreement, Solx granted rights to the Secured Party (as defined therein) in all of the intellectual property of Solx.  OccuLogix agrees to do, from time to time, whether before or after the Security Interest will have become enforceable, all such acts and things and execute and deliver all such deeds, transfers, assignments and instruments as Solx may reasonably require for assuring the superior rank of the first priority security interest granted by Solx pursuant to the PRH Security Agreement.  Solx hereby agrees to give OccuLogix prompt notice of any change or amendment to the collateral described in, or covered by, the PRH Security Agreement.  In the event that any such change or amendment affects the description of all or any part of the collateral described in, or covered by, the PRH Security Agreement that coincides or overlaps with all or any part of the IP Collateral, if requested by OccuLogix, Solx shall amend the definition of “IP Collateral” in this Agreement to conform it to the collateral description or coverage provided in and by the PRH Security Agreement, provided, however, that IP Collateral shall always remain directly related to the Royalty Products.

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OccuLogix hereby furthermore acknowledges and agrees that the Security Interest will be subordinate to any and all Liens that Solx proposes to grant in the IP Collateral to persons or entities proposing to provide financing to Solx Acquisition or Solx, upon terms and conditions to be mutually agreed among the parties interested in such subordination.  Solx hereby agrees to give OccuLogix prompt notice of any such future Liens, and OccuLogix hereby agrees that it will take all actions reasonably requested by Solx Acquisition or Solx to evidence the subordination of the Security Interest to such Liens.

3. COVENANTS

3.1 Borrower’s Dealing with IP Collateral

Solx will not, without the prior written consent of OccuLogix, sell, exchange, license, release or abandon or otherwise dispose of the IP Collateral or create, assume or permit any Lien in, on or of the IP Collateral, except as provided in Section 2.5.

3.2 Maintenance of Registrations

Solx will keep all registrations and applications of the Intellectual Property in good standing and will renew all registrations and file new applications, where commercially reasonable.  Solx will not allow any material registered or pending patent or trademark forming part of the IP Collateral to lapse, expire, become abandoned, expunged or cancelled.

3.3 Reporting

Solx agrees to provide to OccuLogix, within 60 days after the acquisition by Solx of any rights in or to any registrable or unregistrable Intellectual Property, including the entitlement to the benefit of any application or registration for a patent or trademark, written notice of such acquisition containing a detailed description of the Intellectual Property so acquired, and Solx agrees to execute and deliver, from time to time, amendments to this Security Agreement or the schedules hereto or additional security agreements or schedules as may be reasonably required by OccuLogix.  Solx will advise OccuLogix of the occurrence of any event which adversely affects the status of the Intellectual Property, including, without limitation, any changes to the status of the Intellectual Property resulting from expungement, cancellation, expiration, non-renewal, abandonment of, or opposition to, or claim, action or suit against, any of the Intellectual Property.

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3.4 Litigation and Proceedings

Solx will:

(a) commence and diligently prosecute such suits, administrative proceedings or other actions for infringement or other causes of action as are, in its reasonable business judgment, necessary to protect the IP Collateral; and

(b) diligently defend all suits, administrative proceedings, oppositions or other actions brought by third parties in respect of the IP Collateral or use thereof.

Solx hereby agrees to provide to OccuLogix, on reasonable request, any information with respect to any such suits, administrative proceedings or other action.  Following Solx becoming aware thereof, Solx will promptly notify OccuLogix of the institution of, or any adverse determination in, any proceeding in any patent or trade-mark office or by another regulatory authority or a court or other adjudicative body, whether in the United States or elsewhere.

3.5 Protective Disbursements

If Solx fails to perform any covenant on its part contained in this Security Agreement, then OccuLogix, in its absolute discretion, may perform (but has no obligation to perform) any such covenant capable of being performed by it.  If any such covenant requires the payment or expenditure of money, OccuLogix may make, but will be under no obligation to make, such payment or expenditure, and all sums so paid or expended by OccuLogix will be immediately payable by Solx, will bear interest at the per annum rate equal to the “Prime Rate” as announced from time to time by Bank of America, N.A., or its successor, plus 2%, until paid and will be secured hereby, having the benefit of the Security Interest hereby created in priority to the other indebtedness secured by this Security Agreement.  No such performance or payment will relieve Solx from any default under this Security Agreement or any consequences of such default.

4. ENFORCEMENT

4.1 Default

The Security Interest will be and become enforceable against Solx (i) upon the failure to pay, when due and payable, any of the Royalty Payments; or (ii) if any petition should be filed by or against Solx or Solx Acquisition for liquidation or reorganization, if Solx or Solx Acquisition becomes insolvent or makes an assignment for the benefit of any creditor or creditors, if a receiver or trustee is appoited for all or any signficant part of the assets of either Solx or Solx Acquisition or if either of Solx or Solx Acquisition consents to the winding up, liquidation or dissolution of its affairs (each, an “Event of Default”).

4.2 Remedies

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Whenever the Security Interest has become enforceable, OccuLogix may realize upon the IP Collateral and enforce its rights by:

(a) sale, assignment, license, sub-license, grant of rights or options to purchase or any other disposal of the IP Collateral and, if applicable, any goodwill associated therewith;

(b) collection of any proceeds arising in respect of the IP Collateral;

(c) the exercise of any of Solx’s contractual, legal or other rights or interests under or in respect of the IP Collateral;

(d) the institution of proceedings in a court of competent jurisdiction for the appointment of a receiver of the IP Collateral;

(e) the appointment by instrument in writing of a receiver or agent of the IP Collateral and the removal or replacement of such receiver or agent from time to time;

(f) the institution of proceedings in any court of competent jurisdiction for sale or foreclosure of the IP Collateral;

(g) filing proof of claim and other documents to establish claims and any proceeding relating to Solx; and

(h) any other remedy or proceeding authorized or permitted by any applicable laws.

In addition, upon the occurrence of an Event of Default, Solx will grant to OccuLogix a royalty-free non-exclusive license to use the Intellectual Property.

Such remedies may be exercised from time to time separately or in combination and are in addition to and not in substitution for any other rights of OccuLogix, however created.  OccuLogix may proceed by way of any action, suit or other proceeding available at law, and no right, remedy or power OccuLogix will be exclusive of, or dependent on, any other.  OccuLogix may exercise any of its rights, remedies or powers separately or in combination and at any time.  OccuLogix will not be bound to exercise any such rights or remedies, and the exercise of such rights and remedies will be without prejudice to the rights of OccuLogix in respect of the Obligations, including the right to any claim for any deficiency.

4.3 Additional Rights

In addition to the remedies of OccuLogix set forth in Section 4.2, whenever the Security Interest has become enforceable, OccuLogix may demand, commence, continue or defend any judicial or administrative proceedings for the purpose of protecting, seizing, collecting, realizing or obtaining possession or payment of the IP Collateral, and give valid and effectual receipts and discharges therefor, and compromise or give time for the payment or performance of all or any part of the accounts or any contact or any other obligation of any third party to Solx relating to the IP Collateral.

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5. GENERAL

5.1 No Merger

No judgment recovered by OccuLogix will operate by way of merger of or in any way affect the Security Interest, which is in addition to and not in substitution for any other security now or hereafter held by OccuLogix in respect of the Obligations.

5.2 Waivers

No amendment, consent or waiver by OccuLogix will be effective unless made in writing and signed by an authorized officer of OccuLogix, and then such amendment, waiver or consent will be effective only in the specific instance and for the specific purpose for which it is given.

5.3 Further Assurances

Solx, from time to time, whether before or after the Security Interest will have become enforceable, will do all such acts and things and execute and deliver all such deeds, transfers, assignments and instruments as OccuLogix may reasonably require for the protection of the IP Collateral or perfecting the Security Interest and for exercising all rights, remedies, powers, authorities and discretions hereby conferred upon OccuLogix, and Solx, from time to time after the Security Interest has become enforceable, will do all such acts and things and execute and deliver all such deeds, transfers, assignments and instruments as OccuLogix may require for facilitating the sale or other dealing with the IP Collateral in connection with any realization thereof, including, without limitation, the execution and delivery of assignments of the Intellectual Property in form acceptable to OccuLogix for filing with the United States Patent and Trademark Office.

5.5 Successors and Assigns

This Security Agreement will be binding upon Solx, its successors and permitted assigns and will enure to the benefit of OccuLogix and its successors and assigns.  Solx may not assign or novate any of its rights or obligations under this Security Agreement without the prior written consent of OccuLogix.

IN WITNESS WHEREOF Solx hereto has caused this Agreement to be duly executed and delivered by its officer thereunto duly authorized as of the day and year first above written.

SOLX, INC.

“Doug P. Adams”

Name: Doug P. Adams

Title: President

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Schedule “A”

IP Collateral

“IP Collateral” means, solely as the same is directly related to the Royalty Products, intellectual property or proprietary rights of any description, including (i) rights in any patent, patent application (including any provisionals, continuations, divisions, continuations-in-part, extensions, renewals, reissues, revivals and reexaminations, any national phase PCT applications, any PCT international applications and all foreign counterparts), copyright, industrial design, URL, website, domain name, trademark, service mark, logo, trade dress or trade name, (ii) related registrations and applications for registration, (iii) trade secrets, moral rights or publicity rights, (iv) inventions, discoveries, improvements, modification, know-how, technique, methodology, writing, work of authorship, design or data, whether or not patented, patentable, copyrightable or reduced to practice, including any inventions, discoveries, improvements, modification, know-how, technique, methodology, writing, work of authorship, design or data embodied or disclosed in any (1) computer source codes (human readable format) and object codes (machine readable format), (2) specifications, (3) manufacturing, assembly, test, installation, service and inspection instructions and procedures, (4) engineering, programming, service and maintenance notes and logs, (5) technical, operating and service and maintenance manuals and data, (6) hardware reference manuals and (7) user documentation, help files or training materials and (v) goodwill related to any of the foregoing.

EX-10.43

Exhibit 10.43

December 20, 2007

BY E-MAIL

Mr. Doug Adams

Solx Acquisition, Inc.

890 Winter Street, Suite 115

Waltham, MA  02451

U.S.A.

Dear Doug:

Re:           Section 1(d) of the Stock Purchase Agreement

As we agreed on the phone this morning, the business deal between OccuLogix, Inc. (“OccuLogix”) and Solx Acquisition, Inc. (“Solx Acquisition”) is, and had always been, that Solx Acquisition would reimburse the payroll liabilities of Solx, Inc. (“Solx”) during the period between December 1, 2007 and December 31, 2007 (including the costs of providing benefits to the individuals on Solx’s payroll, consistent with past practice).  It was brought to my attention that the defined term “December Payroll” in the second paragraph of Section 1(d) the Stock Purchase Agreement, dated as of December 19, 2007, between OccuLogix and Solx Acquisition, Inc. (the “Stock Purchase Agreement”) refers to the period between the Closing Date and December 31, 2007.

In order to avoid confusion in the future regarding this point, I would appreciate it if you would confirm our mutual understanding that Solx Acquisition will reimburse Solx’s payroll liabilities during the period between December 1, 2007 (as opposed to the Closing Date) and December 31, 2007 (including the costs of providing benefits to the individuals on Solx’s payroll, consistent with past practice) on or prior to January 15, 2008 and that the defined term “December Payroll” in the Stock Purchase Agreement should be read accordingly.

Please indicate your acknowledgement by signing this letter, in the appropriate signature block below, and returning a signed copy to me.

Sincerely,

“Bill Dumencu”

Bill Dumencu

Chief Financial Officer & Treasurer

OccuLogix, Inc.

International Corporate Office:2600 Skymark Ave., Bldg. 9, Ste. 201, Mississauga, Ontario  Canada L4W 5B2

T905 602-0887F905 602-7623

U.S. Corporate Office:  890 Winter Street, Suite 115, Waltham, Massachusetts   02451   T781 547-4050     F 781 547-4099

www.occulogix.com

ACKNOWLEDGED AND AGREED TO

this 20th day of December, 2007

SOLX ACQUISITION, INC.

By:	“Doug P. Adams”
	Name:	Doug P. Adams
	Title:	President

OccuLogix, Inc.

International Corporate Office:2600 Skymark Ave., Bldg. 9, Ste. 201, Mississauga, Ontario  Canada L4W 5B2

T905 602-0887F905 602-7623

U.S. Corporate Office:  890 Winter Street, Suite 115, Waltham, Massachusetts   02451   T781 547-4050     F 781 547-4099

www.occulogix.com

EX-10.44

Exhibit 10.44

Execution Copy Version #5

TERMINATION AGREEMENT

THIS AGREEMENT is made as of the 4th day of January, 2008 by and between John Cornish (the “Employee”), a resident of the State of Florida, and OccuLogix, Inc. (the “Employer”), a corporation incorporated under the laws of the State of Delaware, and having its executive offices at 2600 Skymark Avenue, Building 9, Suite 201, Mississauga, Ontario, L4W 5B2.

WHEREAS, the Employer and the Employee entered into an employment agreement dated as of April 1, 2005, pursuant to which the Employee has been serving the Employer as its Vice President, Operations, which employment agreement was amended as of June 1, 2005 and then further amended as of April 13, 2006 (as so amended, the “Employment Agreement”);

AND WHEREAS, capitalized terms used in this Agreement, but not otherwise defined, shall have the respective meanings attributed to such terms in the Employment Agreement;

AND WHEREAS, the Employment Agreement entitles the Employee to receive from the Employer, in addition to accrued but unpaid Salary, if any, a lump sum payment equal to 12 months’ of his Salary and 2.5% of his Salary in respect of his entitlement to Benefits (the “Employee’s Severance”), less any amounts owing by the Employee to the Employer for any reason, when the Employee’s employment under the Employment Agreement has been terminated by the Employer for any reason other than Just Cause (including the occurrence of Disability) pursuant to Section 8.1.2 of the Employment Agreement;

AND WHEREAS, the Employee and the Employer mutually have agreed that the services of the Employee no longer are required and, accordingly, have agreed to the termination of the Employee’s employment with the Employer pursuant to Section 8.1.2 of the Employment Agreement;

AND WHEREAS, each of the Employee and the Employer agrees that it would not be in the bests interests of either of them to obligate the Employer to pay all of the Employee’s Severance upon the termination of the Employee’s employment with the Employer pursuant to Section 8.1.2 of the Employment Agreement;

AND WHEREAS, the Employment Agreement is further amended by this Agreement;

AND WHEREAS, the Employee has been granted an aggregate of 135,000 time-based stock options (the “Stock Options”) pursuant to the Employer’s 2002 Stock Option Plan, as amended (the “Stock Option Plan”);

AND WHEREAS, notwithstanding the proposed termination of the Employee’s employment with the Employer and subject to the Employer obtaining the requisite approval of its stockholders therefor, the Compensation Committee of the Employer’s board of directors and the Employer’s board of directors have approved the extension of the term of the Stock Options to the tenth anniversaries of their respective dates of grant;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement (the receipt and sufficiency of which are hereby acknowledged by the parties hereto), the parties hereto agree as follows:

1. TERMINATION

1.1           The Employee and the Employer hereby agree that the Employee’s employment with the Employer is terminated pursuant to Section 8.1.2 of the Employment Agreement, effective at the close of business on the date hereof (the “Termination Date”).

2. RETURN OF PROPERTY

2.1           Subject to Section 2.2, the Employee hereby agrees that, by no later than the end of the Salary Continuance Period (defined below), he will certify, in writing, that he has returned to the Employer, and he will have returned to the Employer, all property of the Employer in the Employee’s possession, including, without limitation, all keys, business cards, computer hardware, including, without limitation, Blackberry units, printers, mice and other hardware accessories, and computer software.  The Employee hereby further agrees that, by no later than the end of the Salary Continuance Period (defined below), he will certify, in writing, that he has returned to the Employer or destroyed, and he will have returned to the Employer or destroyed, all tangible material embodying Confidential Information in any form whatsoever, including, without limitation, all paper copy copies, summaries and excerpts of Confidential Information and all electronic media or records containing or derived from Confidential Information.

2.2           Notwithstanding Section 2.1, on or prior to the last day of the Salary Continuance Period (defined below), the Employee may purchase from the Employer, at its then present net book value, as determined by the Employer acting in good faith, the Blackberry unit of the Employer that is in the Employee’s possession on the Termination Date (the “Blackberry Unit”).

3. SEVERANCE

3.1           The Employee and the Employer hereby agree that, notwithstanding Section 9 of the Employment Agreement, the Employee’s Severance shall not be paid to him in a lump sum on the Termination Date.  In lieu thereof, during the period from the Termination Date to March 31, 2008 inclusive (the “Salary Continuance Period”), the Employer shall pay the Employee, on a semi-monthly basis according to the Employer’s regular payroll practices, amounts equal to the basic wages that the Employee was earning from the Employer immediately prior to the Termination Date (less applicable deductions and withholdings).  The aggregate net amount paid by the Employer to the Employee during (i) the period between December 31, 2007 and the date immediately preceding the Termination Date inclusive and (ii) the Salary Continuance Period, together with the aggregate amount of deductions and withholdings withheld by the Employer, in accordance with its regular payroll practices and pursuant to this Section 3.1, are hereinafter referred to, collectively, as the “Salary Continuance Amount”.

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3.2           Subject to Section 3.3, on the earliest to occur of (i) June 30, 2008, (ii) the date on which the Employer closes a financing for total gross proceeds in an aggregate amount of at least U.S.$10,000,000, whether by way of debt, equity or otherwise, and whether such financing is effected in a single transaction or a series of related or unrelated transactions, and (iii) a Change of Control (defined below), the Employer shall pay the Employee, in a lump sum, an amount equal to (A) the Employee’s Severance minus (B) the Salary Continuance Amount, less applicable deductions and withholdings (the “Severance Balance”).  If the Employee advises the Employer that he wishes to exercise his right to purchase the Blackberry Unit pursuant to Section 2.2, the Employer may set off against, or deduct from, the Severance Balance the purchase price of the Blackberry Unit.  “Change of Control” shall be deemed to have occurred when:  (a) any Person, other than a Person or a combination of Persons presently owning, directly or indirectly, more than 20% of the issued and outstanding voting securities of the Employer, acquires or becomes the beneficial owner of, or a combination of Persons acting jointly and in concert acquires or becomes the beneficial owner of, directly or indirectly, more than 50% of the voting securities of the Employer, whether through the acquisition of previously issued and outstanding voting securities or of voting securities that have not been previously issued, or any combination thereof, or any other transaction having a similar effect; (b) the Employer merges with one or more corporations, including, without limitation, any Subsidiary or Affiliate of the Employer; (c) the Employer sells, leases or otherwise disposes of all or substantially all of its assets and undertaking, whether pursuant to one or more transactions; (d) any Person not part of existing management of the Employer or any Person not controlled by existing management of the Employer enters into any arrangement to provide management services to the Employer which results in either (Y) the termination by the Employer, for any reason other than Just Cause, of the employment of any two of the Chairman and Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer and General Counsel within three months of the date such arrangement is entered into or (Z) the termination by the Employer, for any reason other than Just Cause, of the employment of all such senior executive personnel within six months of the date that such arrangement is entered into; or (e) the Employer enters into any transaction or arrangement which would have the same, or similar, effect as the transactions referred to in (a), (b), (c) or (d) of this sentence.

3.3           If, prior to the end of the Salary Continuance Period, any petition should be filed by or against the Employer for liquidation or reorganization, or should the Employer become insolvent or make an assignment for the benefit of any creditor or creditors, or should a receiver or trustee be appointed for all or any significant part of the Employer’s assets, or should the Employer consent to the winding-up, liquidation or dissolution of itself or its affairs (each, a “Bankruptcy Event”), then an amount equal to (i) the Employee’s Severance minus (ii) the aggregate net amount paid by the Employer to the Employee to the date of the Bankruptcy Event, together with the aggregate amount of deductions and withholdings withheld by the Employer, pursuant to Section 3.1, shall become due and payable immediately to the Employee.  If a Bankruptcy Event occurs on or after March 31, 2008, then the Severance Balance shall become due and payable immediately to the Employee.

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3.4           The Employer hereby agrees that, in the event that any of Elias Vamvakas, Tom Reeves, Nozhat Choudry, Bill Dumencu, David Eldridge, Julie Fotheringham, Stephen Kilmer, Suh Kim, Stephen Parks or Stephen Westing (each, an “OLT Member”) should become entitled to receive severance pursuant to his or her executive employment agreement at any time before the Employer has paid, in full, the amount due and payable to him pursuant to Section 3.2 or 3.3, as the case may be, the Employer shall not pay any OLT Member a percentage of his or her severance entitlement (without regard to applicable deductions and withholdings) that exceeds the percentage that (i) the Salary Continuance Amount plus the aggregate amount paid to the Employee pursuant to Sections 3.2 and 3.3, together with the aggregate amount of deductions and withholdings withheld by the Employer, represents of (ii) the amount of the Employee’s Severance.

3.5           For greater certainty, all amounts due and payable by the Employer to the Employee pursuant to this Article 3 shall be paid, net of applicable deductions and withholdings.

4. TRANSITION MATTERS AND E-MAIL ACCOUNT

4.1           The Employee hereby agrees to make himself available to the Employer during the Salary Continuance Period, whenever reasonably requested by the Employer, in order to assist the Employer with respect to transition matters falling within the scope of the Employee’s duties and responsibilities prior to the Termination Date.

4.2           The Employee shall be entitled to continued access to his Occulogix.com e-mail account during the Salary Continuance Period.  However, such access may be denied by the Employer at any time for reason of Just Cause or if the Employer determines, in good faith and acting reasonably, that such access could give rise to or result in, or lead to, any harm or legal liability to or for the Employer.

5. STOCK OPTIONS

5.1           Notwithstanding the termination hereunder of the Employee’s employment with the Employer but subject to the Employer obtaining the requisite approval of its stockholders therefor in accordance with the provisions of the Stock Option Plan and all applicable laws, regulations and rules (including, without limitation, the rules of the Toronto Stock Exchange) (the “Requisite Stockholder Approval”), the term of the Stock Options shall be extended to, and the Stock Options shall remain exercisable until, the tenth anniversaries of their respective dates of grant, being (i) August 12, 2012 for 25,000 of the Stock Options, (ii) July 1, 2013 for 80,000 of the Stock Options and (iii) July 3, 2017 for 30,000 of the Stock Options.  Such term extension shall become effective on the date on which the Requisite Stockholder Approval is obtained, if ever, and all of the agreements pursuant to which the Stock Options were granted shall be deemed to be amended accordingly on the date on which the Requisite Stockholder Approval is obtained, if ever.

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5.2           The Employer shall use commercially reasonable efforts to obtain the Requisite Stockholder Approval, which covenant shall terminate and become null and void, and be of no more force or effect, upon the earlier to occur of (i) the date on which a meeting of the Employer’s stockholders may be convened to obtain the Requisite Stockholder Approval and (ii) June 30, 2008.

6. RELEASE AND TERMINATION

6.1           The Employee hereby agrees, on behalf of himself and his administrators, heirs, assigns and anyone claiming through him, to release completely and forever discharge the Employer and its affiliates and subsidiaries, and their respective officers, directors, shareholders, agents, servants, representatives, underwriters, successors, heirs and assigns, from any and all claims, demands, obligations and causes of action, of any nature whatsoever, whether known or unknown, which the Employee ever had, now has or might have in the future as a result of the Employee’s employment with the Employer or the termination thereof hereunder, including, without limitation, any claim relating to the Employment Agreement or the termination thereof hereunder or any claim relating to any violation of any U.S. federal or state statute or regulation, any claim for wrongful discharge or breach of contract or any claim relating to U.S. state or federal laws (including, without limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1968, the Employment Retirement Income and Security Act, the Fair Labor Standards Act, the Americans with Disabilities Act and the Rehabilitation Act), provided, however, that such release and discharge shall be effective only upon the payment in full by the Employer of the Severance Balance pursuant to Article 3.  For greater certainty, the release and discharge by the Employee pursuant to this Section 6.1 shall have no force or effect whatsoever until such time, if ever, that the Severance Balance is paid in full by the Employer to the Employee.  Notwithstanding the foregoing, nothing herein shall be construed as depriving the Employee of any indemnification rights to which he is entitled under the Amended and Restated By-laws of the Employer on or prior to the Termination Date or of any protection to which he may be entitled, on, prior to or after the Termination Date, under the Employer’s directors’ and officers’ liability insurance policy from time to time.

6.2           Section 12 of the Employment Agreement (Non-Competition) is hereby amended by replacing the words “the business carried on during the Employment Period or at the end thereof, as the case may be, by the Corporation or any of its Subsidiaries.” with the words “(i) the Corporation’s RHEO business and/or (ii) the business of OcuSense, Inc., as each of them was carried on during the Employment Period.”.

6.3           The Employment Agreement is hereby terminated and rendered null and void, save and except for those provisions thereof that are expressly stated to survive the termination thereof, including, without limitation, Section 12 (Non-Competition), as amended by Section 6.2 of this Agreement, and Sections 13 (No Solicitation of Patients), 14 (No Solicitation of Employees) 15 (Confidentiality) and 16 (Remedies).  The Employee hereby agrees to abide by such provisions, including, for greater certainty, Section 12 of the Employment Agreement (Non-Competition), as amended by Section 6.2 of this Agreement.

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7. FUTURE EMPLOYMENT

7.1           The mitigation by the Employee of any damages or losses arising from the termination hereunder of his employment with the Employer and the termination of the Employment Agreement hereunder (including, without limitation, by obtaining other employment) shall not, in any way, derogate from, or otherwise affect, the Employee’s rights or the Employer’s obligations under this Agreement.  For greater certainty, and without derogating from the generality of the foregoing statement, no amount to be paid by the Employer under this Agreement shall be reduced by any compensation earned by the Employee as a result of employment by another employer or otherwise after the Termination Date.

8. THIRD PARTY COMMUNICATIONS

8.1           In consideration of the mutual promises and covenants contained herein, each of the parties hereto hereby agrees that he and it will not make any statements to, or initiate or participate in any discussions with, any other person, including, without limitation, the Employer’s customers, which are derogatory, disparaging or injurious to the reputation of the Employee or the Employer.  This Section 8.1, in no way, shall be construed as prohibiting either party hereto from responding truthfully to any question or interrogatory to which such party is requested to respond.

9. ACKNOWLEDGEMENT

9.1 The Employee hereby acknowledges that:

(a) He has had sufficient time to review and consider this Agreement thoroughly;

(b) He has read and understands the terms of this Agreement and his obligations hereunder;

(c) He has been given an opportunity to obtain independent legal advice, or such other advice as he may desire, concerning the interpretation and effect of this Agreement; and

(d) He is entering this Agreement voluntarily and without any pressure from the Employer.

10. MISCELLANEOUS

10.1          The headings in this Agreement are included solely for convenience of reference and shall not affect the construction or interpretation hereof.

10.2          The parties hereto expressly agree that nothing in this Agreement shall be construed as an admission of liability.

10.3          This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, trustees, administrators, successors and assigns.

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10.4          This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter of the termination of the Employee’s employment with the Employer.  This Agreement supersedes and replaces all prior agreements, if any, written or oral, with respect to such subject matter and any rights which the Employee may have by reason of any such prior agreements or by reason of the Employee’s employment with the Corporation.  There are no representations, warranties or agreements between the parties hereto in connection with the subject matter of this Agreement, except as specifically set forth in this Agreement.  No reliance is placed on any representation, opinion, advice or assertion of fact made by the Employer or any of its officers, directors, agents or employees to the Employee, except to the extent that the same has been reduced to writing and included as a term of this Agreement.  Accordingly, there shall be no liability, either in tort or in contract, assessed in relation to any such representation, opinion, advice or assertion of fact, except to the extent aforesaid.

10.5          Each of the provisions contained in this Agreement is distinct and severable, and a declaration of invalidity or unenforceability of any provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.

10.6          This Agreement shall be governed by, and construed in accordance with, the laws of the State of Florida, without regard to its conflicts of laws rules which shall be deemed inapplicable to this Agreement.

10.7          This Agreement may be signed in counterparts and delivered by facsimile transmission or other electronic means, and each of such counterparts shall constitute an original document, and such counterparts, taken together, shall constitute one and the same instrument.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties have executed this Agreement.

OCCULOGIX, INC.
By:	“Suh Kim”
	Suh Kim
	General Counsel

	“John Cornish”
Signature of Witness	John Cornish
Name of Witness (please print)

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EX-10.45

Exhibit 10.45

TERMINATION AGREEMENT

THIS AGREEMENT is made as of the 4th day of January, 2008 by and between Julie A. Fotheringham (the “Employee”), a resident of the Province of Ontario, and OccuLogix, Inc. (the “Employer”), a corporation incorporated under the laws of the State of Delaware, and having its executive offices at 2600 Skymark Avenue, Building 9, Suite 201, Mississauga, Ontario, L4W 5B2.

WHEREAS, the Employer and the Employee entered into an employment agreement dated as of September 2004 (the “Employment Agreement”) pursuant to which the Employee has been serving the Employer as its Vice President, Marketing;

AND WHEREAS, capitalized terms used in this Agreement, but not otherwise defined, shall have the respective meanings attributed to such terms in the Employment Agreement;

AND WHEREAS, the Employee and the Employer mutually have agreed that the services of the Employee no longer are required and, accordingly, have agreed to the termination of the Employee’s employment with the Employer pursuant to Section 8.1.2 of the Employment Agreement;

AND WHEREAS, when the Employee’s employment under the Employment Agreement has been terminated by the Employer for any reason other than Just Cause pursuant to Section 8.1.2 of the Employment Agreement, the Employee is entitled to receive from the Employer, in addition to accrued but unpaid Salary, if any, a lump sum payment equal to 12 months’ of her Basic Salary and 2.5% of her Basic Salary in respect of her entitlement to Benefits (the “Employee’s Severance”), less any amounts payable to the Employee in lieu of notice where a Stop Work Notice has been given pursuant to Section 8 of the Employment Agreement and any amounts owing by the Employee to the Employer for any reason;

AND WHEREAS, the Employee has not been given a Stop Work Notice pursuant to Section 8 of the Employment Agreement;

AND WHEREAS, each of the Employee and the Employer agrees that it would not be in the bests interests of either of them to obligate the Employer to pay all of the Employee’s Severance upon the termination of the Employee’s employment with the Employer pursuant to Section 8.1.2 of the Employment Agreement;

AND WHEREAS, the Employment Agreement is further amended by this Agreement;

AND WHEREAS, the Employee has been granted an aggregate of 110,000 time-based stock options (the “Stock Options”) pursuant to the Employer’s 2002 Stock Option Plan, as amended (the “Stock Option Plan”);

AND WHEREAS, notwithstanding the proposed termination of the Employee’s employment with the Employer and subject to the Employer obtaining the requisite approval of its stockholders therefor, the Compensation Committee of the Employer’s board of directors and the Employer’s board of directors have approved the extension of the term of the Stock Options to the tenth anniversaries of their respective dates of grant;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement (the receipt and sufficiency of which are hereby acknowledged by the parties hereto), the parties hereto agree as follows:

1. TERMINATION

1.1           The Employee and the Employer hereby agree that the Employee’s employment with the Employer is terminated pursuant to Section 8.1.2 of the Employment Agreement, effective at the close of business on the date hereof (the “Termination Date”).  For greater certainty, the Employee hereby waives the requirement, under Section 8.1.2 of the Employment Agreement, to provide 12 months’ prior written notice to the Employee of the Employer’s intention to terminate her employment with the Employer.

2. RETURN OF PROPERTY

2.1           Subject to Section 2.2, the Employee hereby agrees that, by no later than the end of the Salary Continuance Period (defined below), she will certify, in writing, that she has returned to the Employer, and she will have returned to the Employer, all property of the Employer in the Employee’s possession, including, without limitation, all keys, business cards, computer hardware, including, without limitation, Blackberry units, printers, mice and other hardware accessories, and computer software.  The Employee hereby further agrees that, by no later than the end of the Salary Continuance Period (defined below), she will certify, in writing, that she has returned to the Employer or destroyed, and she will have returned to the Employer or destroyed, all tangible material embodying Confidential Information in any form whatsoever, including, without limitation, all paper copy copies, summaries and excerpts of Confidential Information and all electronic media or records containing or derived from Confidential Information.

2.2           Notwithstanding Section 2.1, on or prior to the last day of the Salary Continuance Period (defined below), the Employee may purchase from the Employer at their then present net book value, as determined by the Employer acting in good faith, the Employer’s laptop computer and Blackberry unit that are in the Employee’s possession on the Termination Date (collectively, the “Computer Equipment”).

3. SEVERANCE

3.1           The Employee and the Employer hereby agree that, notwithstanding Section 9 of the Employment Agreement, the Employee’s Severance shall not be paid to her in a lump sum on the Termination Date.  In lieu thereof, during the period from the Termination Date to March 31, 2008 inclusive (the “Salary Continuance Period”), the Employer shall pay the Employee, on a semi-monthly basis according to the Employer’s regular payroll practices, amounts equal to the basic wages that the Employee was earning from the Employer immediately prior to the Termination Date (less applicable deductions and withholdings).  The aggregate net amount paid by the Employer to the Employee during (i) the period between December 31, 2007 and the date immediately preceding the Termination Date inclusive and (ii) the Salary Continuance Period, together with the aggregate amount of deductions and withholdings withheld by the Employer, in accordance with its regular payroll practices and pursuant to this Section 3.1, are hereinafter referred to, collectively, as the “Salary Continuance Amount”.

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3.2           Subject to Section 3.3, on the earliest to occur of (i) June 30, 2008, (ii) the date on which the Employer closes a financing for total gross proceeds in an aggregate amount of at least U.S.$10,000,000, whether by way of debt, equity or otherwise, and whether such financing is effected in a single transaction or a series of related or unrelated transactions, and (iii) a Change of Control (defined below), the Employer shall pay the Employee, in a lump sum, an amount equal to (A) the Employee’s Severance minus (B) the Salary Continuance Amount, less applicable deductions and withholdings (the “Severance Balance”).  If the Employee advises the Employer that she wishes to exercise her right to purchase the Computer Equipment pursuant to Section 2.2, the Employer may set off against, or deduct from, the Severance Balance the purchase price of the Computer Equipment.  “Change of Control” shall be deemed to have occurred when:  (a) any Person, other than a Person or a combination of Persons presently owning, directly or indirectly, more than 20% of the issued and outstanding voting securities of the Employer, acquires or becomes the beneficial owner of, or a combination of Persons acting jointly and in concert acquires or becomes the beneficial owner of, directly or indirectly, more than 50% of the voting securities of the Employer, whether through the acquisition of previously issued and outstanding voting securities or of voting securities that have not been previously issued, or any combination thereof, or any other transaction having a similar effect; (b) the Employer merges with one or more corporations, including, without limitation, any Subsidiary or Affiliate of the Employer; (c) the Employer sells, leases or otherwise disposes of all or substantially all of its assets and undertaking, whether pursuant to one or more transactions; (d) any Person not part of existing management of the Employer or any Person not controlled by existing management of the Employer enters into any arrangement to provide management services to the Employer which results in either (Y) the termination by the Employer, for any reason other than Just Cause, of the employment of any two of the Chairman and Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer and General Counsel within three months of the date such arrangement is entered into or (Z) the termination by the Employer, for any reason other than Just Cause, of the employment of all such senior executive personnel within six months of the date that such arrangement is entered into; or (e) the Employer enters into any transaction or arrangement which would have the same, or similar, effect as the transactions referred to in (a), (b), (c) or (d) of this sentence.

3.3           If, prior to the end of the Salary Continuance Period, any petition should be filed by or against the Employer for liquidation or reorganization, or should the Employer become insolvent or make an assignment for the benefit of any creditor or creditors, or should a receiver or trustee be appointed for all or any significant part of the Employer’s assets, or should the Employer consent to the winding-up, liquidation or dissolution of itself or its affairs (each, a “Bankruptcy Event”), then an amount equal to (i) the Employee’s Severance minus (ii) the aggregate net amount paid by the Employer to the Employee to the date of the Bankruptcy Event, together with the aggregate amount of deductions and withholdings withheld by the Employer, pursuant to Section 3.1, shall become due and payable immediately to the Employee.  If a Bankruptcy Event occurs on or after March 31, 2008, then the Severance Balance shall become due and payable immediately to the Employee.

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3.4           The Employer hereby agrees that, in the event that any of Elias Vamvakas, Tom Reeves, Nozhat Choudry, John Cornish, Bill Dumencu, David Eldridge, Stephen Kilmer, Suh Kim, Stephen Parks or Stephen Westing (each, an “OLT Member”) should become entitled to receive severance pursuant to his or her executive employment agreement at any time before the Employer has paid, in full, the amount due and payable to her pursuant to Section 3.2 or 3.3, as the case may be, the Employer shall not pay any OLT Member a percentage of his or her severance entitlement (without regard to applicable deductions and withholdings) that exceeds the percentage that (i) the Salary Continuance Amount plus the aggregate amount paid to the Employee pursuant to Sections 3.2 and 3.3, together with the aggregate amount of deductions and withholdings withheld by the Employer, represents of (ii) the amount of the Employee’s Severance.

3.5           For greater certainty, all amounts due and payable by the Employer to the Employee pursuant to this Article 3 shall be paid, net of applicable deductions and withholdings.

4. TRANSITION MATTERS AND E-MAIL ACCOUNT

4.1           The Employee hereby agrees to make herself available to the Employer during the Salary Continuance Period, whenever reasonably requested by the Employer, in order to assist the Employer with respect to transition matters falling within the scope of the Employee’s duties and responsibilities prior to the Termination Date.

4.2           The Employee shall be entitled to continued access to her Occulogix.com e-mail account during the Salary Continuance Period.  However, such access may be denied by the Employer at any time for reason of Just Cause or if the Employer determines, in good faith and acting reasonably, that such access could give rise to or result in, or lead to, any harm or legal liability to or for the Employer.

5. STOCK OPTIONS

5.1           Notwithstanding the termination hereunder of the Employee’s employment with the Employer but subject to the Employer obtaining the requisite approval of its stockholders therefor in accordance with the provisions of the Stock Option Plan and all applicable laws, regulations and rules (including, without limitation, the rules of the Toronto Stock Exchange) (the “Requisite Stockholder Approval”), the term of the Stock Options shall be extended to, and the Stock Options shall remain exercisable until, the tenth anniversaries of their respective dates of grant, being (i) December 16, 2014 for 80,000 of the Stock Options and (ii) July 3, 2017 for 30,000 of the Stock Options.  Such term extension shall become effective on the date on which the Requisite Stockholder Approval is obtained, if ever, and all of the agreements pursuant to which the Stock Options were granted shall be deemed to be amended accordingly on the date on which the Requisite Stockholder Approval is obtained, if ever.

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5.2           The Employer shall use commercially reasonable efforts to obtain the Requisite Stockholder Approval, which covenant shall terminate and become null and void, and be of no more force or effect, upon the earlier to occur of (i) the date on which a meeting of the Employer’s stockholders may be convened to obtain the Requisite Stockholder Approval and (ii) June 30, 2008.

6. RELEASE AND TERMINATION

6.1           The Employee hereby agrees, on behalf of herself and her administrators, heirs, assigns and anyone claiming through her, to release completely and forever discharge the Employer and its affiliates and subsidiaries, and their respective officers, directors, shareholders, agents, servants, representatives, underwriters, successors, heirs and assigns, from any and all claims, demands, obligations and causes of action, of any nature whatsoever, whether known or unknown, which the Employee ever had, now has or might have in the future as a result of the Employee’s employment with the Employer or the termination thereof hereunder, including, without limitation, any claim relating to the Employment Agreement or the termination thereof hereunder or any claim relating to any violation of any Canadian federal or provincial statute or regulation, any claim for wrongful discharge or breach of contract or any claim relating to Canadian federal or provincial laws (including, without limitation, the Employment Standards Act (Ontario) and the Ontario Human Rights Code), provided, however, that such release and discharge shall be effective only upon the payment in full by the Employer of the Severance Balance pursuant to Article 3.  For greater certainty, the release and discharge by the Employee pursuant to this Section 6.1 shall have no force or effect whatsoever until such time, if ever, that the Severance Balance is paid in full by the Employer to the Employee.  Notwithstanding the foregoing, nothing herein shall be construed as depriving the Employee of any indemnification rights to which she is entitled under the Amended and Restated By-laws of the Employer on or prior to the Termination Date or of any protection to which she may be entitled, on, prior to or after the Termination Date, under the Employer’s directors’ and officers’ liability insurance policy from time to time.

6.2           Section 12 of the Employment Agreement (Non-Competition) is hereby amended by replacing, in the first paragraph thereof, the words “the business carried on during the Employment Period or at the end thereof, as the case may be, by the Corporation or any of its Subsidiaries.” with the words “(i) the Corporation’s RHEO business and/or (ii) the business of OcuSense, Inc., as each of them was carried on during the Employment Period.”.

6.3           The Employment Agreement is hereby terminated and rendered null and void, save and except for those provisions thereof that are expressly stated to survive the termination thereof, including, without limitation, Section 12 (Non-Competition), as amended by Section 6.2 of this Agreement, and Sections 13 (No Solicitation of Patients), 14 (No Solicitation of Employees) 15 (Confidentiality) and 16 (Remedies).  The Employee hereby agrees to abide by such provisions, including, for greater certainty, Section 12 of the Employment Agreement (Non-Competition), as amended by Section 6.2 of this Agreement.

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7. FUTURE EMPLOYMENT

7.1           The mitigation by the Employee of any damages or losses arising from the termination hereunder of her employment with the Employer and the termination of the Employment Agreement hereunder (including, without limitation, by obtaining other employment) shall not, in any way, derogate from, or otherwise affect, the Employee’s rights or the Employer’s obligations under this Agreement.  For greater certainty, and without derogating from the generality of the foregoing statement, no amount to be paid by the Employer under this Agreement shall be reduced by any compensation earned by the Employee as a result of employment by another employer or otherwise after the Termination Date.

8. THIRD PARTY COMMUNICATIONS

8.1           In consideration of the mutual promises and covenants contained herein, each of the parties hereto hereby agrees that she and it will not make any statements to, or initiate or participate in any discussions with, any other person, including, without limitation, the Employer’s customers, which are derogatory, disparaging or injurious to the reputation of the Employee or the Employer.  This Section 8.1, in no way, shall be construed as prohibiting either party hereto from responding truthfully to any question or interrogatory to which such party is requested to respond.

9. ACKNOWLEDGEMENT

9.1 The Employee hereby acknowledges that:

(a) She has had sufficient time to review and consider this Agreement thoroughly;

(b) She has read and understands the terms of this Agreement and her obligations hereunder;

(c) She has been given an opportunity to obtain independent legal advice, or such other advice as she may desire, concerning the interpretation and effect of this Agreement; and

(d) She is entering this Agreement voluntarily and without any pressure from the Employer.

10. MISCELLANEOUS

10.1         The headings in this Agreement are included solely for convenience of reference and shall not affect the construction or interpretation hereof.

10.2         The parties hereto expressly agree that nothing in this Agreement shall be construed as an admission of liability.

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10.3           This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, trustees, administrators, successors and assigns.

10.4           This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter of the termination of the Employee’s employment with the Employer.  This Agreement supersedes and replaces all prior agreements, if any, written or oral, with respect to such subject matter and any rights which the Employee may have by reason of any such prior agreements or by reason of the Employee’s employment with the Corporation.  There are no representations, warranties or agreements between the parties hereto in connection with the subject matter of this Agreement, except as specifically set forth in this Agreement.  No reliance is placed on any representation, opinion, advice or assertion of fact made by the Employer or any of its officers, directors, agents or employees to the Employee, except to the extent that the same has been reduced to writing and included as a term of this Agreement.  Accordingly, there shall be no liability, either in tort or in contract, assessed in relation to any such representation, opinion, advice or assertion of fact, except to the extent aforesaid.

10.5           Each of the provisions contained in this Agreement is distinct and severable, and a declaration of invalidity or unenforceability of any provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.

10.6           This Agreement shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein.

10.7           This Agreement may be signed in counterparts and delivered by facsimile transmission or other electronic means, and each of such counterparts shall constitute an original document, and such counterparts, taken together, shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the parties have executed this Agreement.

OCCULOGIX, INC.
By:	“Suh Kim”
	Suh Kim
	General Counsel

	“Julie A. Fotheringham”
Signature of Witness	Julie A. Fotheringham
Name of Witness (please print)

8

EX-10.46

Exhibit 10.46

Execution Copy Version #3

TERMINATION AGREEMENT

THIS AGREEMENT is made as of the 4th day of January, 2008 by and between Stephen Parks (the “Employee”), a resident of the State of Mississippi, and OccuLogix, Inc. (the “Employer”), a corporation incorporated under the laws of the State of Delaware, and having its executive offices at 2600 Skymark Avenue, Building 9, Suite 201, Mississauga, Ontario, L4W 5B2.

WHEREAS, the Employer and the Employee entered into an employment agreement dated as of October 4, 2005 (the “Employment Agreement”) pursuant to which the Employee has been serving the Employer as its Vice President, Sales;

AND WHEREAS, capitalized terms used in this Agreement, but not otherwise defined, shall have the respective meanings attributed to such terms in the Employment Agreement;

AND WHEREAS, the Employment Agreement entitles the Employee to receive from the Employer, in addition to accrued but unpaid Salary, if any, a lump sum payment equal to 12 months’ of his Basic Salary and 2.5% of his Basic Salary in respect of his entitlement to Benefits (the “Employee’s Severance”), less any amounts owing by the Employee to the Employer for any reason, when the Employee’s employment under the Employment Agreement has been terminated by the Employer for any reason other than Just Cause (including the occurrence of Disability) pursuant to Section 8.1.2 of the Employment Agreement;

AND WHEREAS, the Employee and the Employer mutually have agreed that the services of the Employee no longer are required and, accordingly, have agreed to the termination of the Employee’s employment with the Employer pursuant to Section 8.1.2 of the Employment Agreement;

AND WHEREAS, each of the Employee and the Employer agrees that it would not be in the bests interests of either of them to obligate the Employer to pay all of the Employee’s Severance upon the termination of the Employee’s employment with the Employer pursuant to Section 8.1.2 of the Employment Agreement;

AND WHEREAS, the Employment Agreement is further amended by this Agreement;

AND WHEREAS, the Employee has been granted an aggregate of 230,000 time-based stock options (the “Stock Options”), 200,000 of which were granted pursuant to the Option Agreement, dated as of October 4, 2005, between the Employer and the Employee (the “Option Agreement”) and 30,000 of which were granted pursuant to the Employer’s 2002 Stock Option Plan, as amended (the “Stock Option Plan”);

AND WHEREAS, notwithstanding the proposed termination of the Employee’s employment with the Employer and subject to the Employer obtaining the requisite approval of its stockholders therefor, the Compensation Committee of the Employer’s board of directors and the Employer’s board of directors have approved the extension of the term of the Stock Options to the tenth anniversaries of their respective dates of grant;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement (the receipt and sufficiency of which are hereby acknowledged by the parties hereto), the parties hereto agree as follows:

1. TERMINATION

1.1           The Employee and the Employer hereby agree that the Employee’s employment with the Employer is terminated pursuant to Section 8.1.2 of the Employment Agreement, effective at the close of business on the date hereof (the “Termination Date”).

2. RETURN OF PROPERTY

2.1           The Employee hereby certifies that he has returned to the Employer all property of the Employer in the Employee’s possession, including, without limitation, all keys, business cards, computer hardware, including, without limitation, Blackberry units, printers, mice and other hardware accessories, and computer software.  The Employee hereby further certifies that he has returned to the Employer, or destroyed, all tangible material embodying Confidential Information in any form whatsoever, including, without limitation, all paper copy copies, summaries and excerpts of Confidential Information and all electronic media or records containing or derived from Confidential Information.

3. SEVERANCE

3.1           The Employee and the Employer hereby agree that, notwithstanding Section 9 of the Employment Agreement, the Employee’s Severance shall not be paid to him in a lump sum on the Termination Date.  In lieu thereof, during the period from the Termination Date to March 31, 2008 inclusive (the “Salary Continuance Period”), the Employer shall pay the Employee, on a semi-monthly basis according to the Employer’s regular payroll practices, amounts equal to the basic wages that the Employee was earning from the Employer immediately prior to the Termination Date (less applicable deductions and withholdings).  The aggregate net amount paid by the Employer to the Employee during (i) the period between December 31, 2007 and the date immediately preceding the Termination Date inclusive and (ii) the Salary Continuance Period, together with the aggregate amount of deductions and withholdings withheld by the Employer, in accordance with its regular payroll practices and pursuant to this Section 3.1, are hereinafter referred to, collectively, as the “Salary Continuance Amount”.

3.2           Subject to Section 3.3, on the earliest to occur of (i) June 30, 2008, (ii) the date on which the Employer closes a financing for total gross proceeds in an aggregate amount of at least U.S.$10,000,000, whether by way of debt, equity or otherwise, and whether such financing is effected in a single transaction or a series of related or unrelated transactions, and (iii) a Change of Control (defined below), the Employer shall pay the Employee, in a lump sum, an amount equal to (A) the Employee’s Severance minus (B) the Salary Continuance Amount, less applicable deductions and withholdings (the “Severance Balance”).  “Change of Control” shall be deemed to have occurred when:  (a) any Person, other than a Person or a combination of Persons presently owning, directly or indirectly, more than 20% of the issued and outstanding voting securities of the Employer, acquires or becomes the beneficial owner of, or a combination of Persons acting jointly and in concert acquires or becomes the beneficial owner of, directly or indirectly, more than 50% of the voting securities of the Employer, whether through the acquisition of previously issued and outstanding voting securities or of voting securities that have not been previously issued, or any combination thereof, or any other transaction having a similar effect; (b) the Employer merges with one or more corporations, including, without limitation, any Subsidiary or Affiliate of the Employer; (c) the Employer sells, leases or otherwise disposes of all or substantially all of its assets and undertaking, whether pursuant to one or more transactions; (d) any Person not part of existing management of the Employer or any Person not controlled by existing management of the Employer enters into any arrangement to provide management services to the Employer which results in either (Y) the termination by the Employer, for any reason other than Just Cause, of the employment of any two of the Chairman and Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer and General Counsel within three months of the date such arrangement is entered into or (Z) the termination by the Employer, for any reason other than Just Cause, of the employment of all such senior executive personnel within six months of the date that such arrangement is entered into; or (e) the Employer enters into any transaction or arrangement which would have the same, or similar, effect as the transactions referred to in (a), (b), (c) or (d) of this sentence.

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3.3           If, prior to the end of the Salary Continuance Period, any petition should be filed by or against the Employer for liquidation or reorganization, or should the Employer become insolvent or make an assignment for the benefit of any creditor or creditors, or should a receiver or trustee be appointed for all or any significant part of the Employer’s assets, or should the Employer consent to the winding-up, liquidation or dissolution of itself or its affairs (each, a “Bankruptcy Event”), then an amount equal to (i) the Employee’s Severance minus (ii) the aggregate net amount paid by the Employer to the Employee to the date of the Bankruptcy Event, together with the aggregate amount of deductions and withholdings withheld by the Employer, pursuant to Section 3.1, shall become due and payable immediately to the Employee.  If a Bankruptcy Event occurs on or after March 31, 2008, then the Severance Balance shall become due and payable immediately to the Employee.

3.4           The Employer hereby agrees that, in the event that any of Elias Vamvakas, Tom Reeves, Nozhat Choudry, John Cornish, Bill Dumencu, David Eldridge, Julie Fotheringham, Stephen Kilmer, Suh Kim or Stephen Westing (each, an “OLT Member”) should become entitled to receive severance pursuant to his or her executive employment agreement at any time before the Employer has paid, in full, the amount due and payable to him pursuant to Sections 3.2 or 3.3, as the case may be, the Employer shall not pay any OLT Member a percentage of his or her severance entitlement (without regard to applicable deductions and withholdings) that exceeds the percentage that (i) the Salary Continuance Amount plus the aggregate amount paid to the Employee pursuant to Sections 3.2 and 3.3, together with the aggregate amount of deductions and withholdings withheld by the Employer, represents of (ii) the amount of the Employee’s Severance.

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4. BENEFITS

4.1           On or prior to January 15, 2008, the Employer shall pay the Employee U.S.$2,172.33, in a lump sum, being the amount equal to the aggregate amount that the Employer would have disbursed in respect of the Benefits to which the Employee would have been entitled during the Salary Continuance Period, had the Employee’s employment with the Employer not terminated on the Termination Date and instead continued throughout the Salary Continuance Period.  The Employer shall have no other obligation to the Employee with respect to Benefits during the Salary Continuance Period.

4.2           For greater certainty, all amounts due and payable by the Employer to the Employee pursuant to Article 3 and this Article 4 shall be paid, net of applicable deductions and withholdings.

5. TRANSITION MATTERS AND E-MAIL ACCOUNT

5.1           The Employee hereby agrees to make himself available to the Employer during the Salary Continuance Period, whenever reasonably requested by the Employer, in order to assist the Employer with respect to transition matters falling within the scope of the Employee’s duties and responsibilities prior to the Termination Date.

5.2           The Employee shall be entitled to continued access to his Occulogix.com e-mail account during the Salary Continuance Period.  However, such access may be denied by the Employer at any time for reason of Just Cause or if the Employer determines, in good faith and acting reasonably, that such access could give rise to or result in, or lead to, any harm of legal liability to or for the Employer.

6. STOCK OPTIONS

6.1           Notwithstanding the termination hereunder of the Employee’s employment with the Employer but subject to the Employer obtaining the requisite approval of its stockholders therefor in accordance with the provisions of the Stock Option Plan and all applicable laws, regulations and rules (including, without limitation, the rules of the Toronto Stock Exchange) (the “Requisite Stockholder Approval”), the term of the Stock Options shall be extended to, and the Stock Options shall remain exercisable until, the tenth anniversaries of their respective dates of grant, being (i) October 4, 2015 for 200,000 of the Stock Options and (ii) July 3, 2017 for 30,000 of the Stock Options.  Such term extension shall become effective on the date on which the Requisite Stockholder Approval is obtained, if ever, and all of the agreements pursuant to which the Stock Options were granted (including, without limitation, the Option Agreement) shall be deemed to be amended accordingly on the date on which the Requisite Stockholder Approval is obtained, if ever.

6.2           The Employer shall use commercially reasonable efforts to obtain the Requisite Stockholder Approval, which covenant shall terminate and become null and void, and be of no more force or effect, upon the earlier to occur of (i) the date on which a meeting of the Employer’s stockholders may be convened to obtain the Requisite Stockholder Approval and (ii) June 30, 2008.

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7. RELEASE AND TERMINATION

7.1           The Employee hereby agrees, on behalf of himself and his administrators, heirs, assigns and anyone claiming through him, to release completely and forever discharge the Employer and its affiliates and subsidiaries, and their respective officers, directors, shareholders, agents, servants, representatives, underwriters, successors, heirs and assigns, from any and all claims, demands, obligations and causes of action, of any nature whatsoever, whether known or unknown, which the Employee ever had, now has or might have in the future as a result of the Employee’s employment with the Employer or the termination thereof hereunder, including, without limitation, any claim relating to the Employment Agreement or the termination thereof hereunder or any claim relating to any violation of any U.S. federal or state statute or regulation, any claim for wrongful discharge or breach of contract or any claim relating to U.S. state or federal laws (including, without limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1968, the Employment Retirement Income and Security Act, the Fair Labor Standards Act, the Americans with Disabilities Act and the Rehabilitation Act), provided, however, that such release and discharge shall be effective only upon the payment in full by the Employer of the Severance Balance pursuant to Article 3.  For greater certainty, the release and discharge by the Employee pursuant to this Section 7.1 shall have no force or effect whatsoever until such time, if ever, that the Severance Balance is paid in full by the Employer to the Employee.  Notwithstanding the foregoing, nothing herein shall be construed as depriving the Employee of any indemnification rights to which he is entitled under the Amended and Restated By-laws of the Employer on or prior to the Termination Date or of any protection to which he may be entitled, on, prior to or after the Termination Date, under the Employer’s directors’ and officers’ liability insurance policy from time to time.

7.2           Section 12 of the Employment Agreement (Non-Competition) is hereby amended by replacing, in the first paragraph thereof, the words “the business carried on during the Employment Period or at the end thereof, as the case may be, by the Corporation or any of its Subsidiaries.” with the words “(i) the Corporation’s RHEO business and/or (ii) the business of OcuSense, Inc., as each of them was carried on during the Employment Period.”.

7.3           The Employment Agreement is hereby terminated and rendered null and void, save and except for those provisions thereof that are expressly stated to survive the termination thereof, including, without limitation, Section 12 (Non-Competition), as amended by Section 7.2 of this Agreement, and Sections 13 (No Solicitation of Customers), 14 (No Solicitation of Employees) 15 (Confidentiality) and 16 (Remedies).  The Employee hereby agrees to abide by such provisions, including, for greater certainty, Section 12 of the Employment Agreement (Non-Competition), as amended by Section 7.2 of this Agreement.

8. FUTURE EMPLOYMENT

8.1           The mitigation by the Employee of any damages or losses arising from the termination hereunder of his employment with the Employer and the termination of the Employment Agreement hereunder (including, without limitation, by obtaining other employment) shall not, in any way, derogate from, or otherwise affect, the Employee’s rights or the Employer’s obligations under this Agreement.  For greater certainty, and without derogating from the generality of the foregoing statement, no amount to be paid by the Employer under this Agreement shall be reduced by any compensation earned by the Employee as a result of employment by another employer or otherwise after the Termination Date.

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9. THIRD PARTY COMMUNICATIONS

9.1           In consideration of the mutual promises and covenants contained herein, each of the parties hereto hereby agrees that he and it will not make any statements to, or initiate or participate in any discussions with, any other person, including, without limitation, the Employer’s customers, which are derogatory, disparaging or injurious to the reputation of the Employee or the Employer.  This Section 9.1, in no way, shall be construed as prohibiting either party hereto from responding truthfully to any question or interrogatory to which such party is requested to respond.

10. ACKNOWLEDGEMENT

10.1 The Employee hereby acknowledges that:

(a) He has had sufficient time to review and consider this Agreement thoroughly;

(b) He has read and understands the terms of this Agreement and his obligations hereunder;

(c) He has been given an opportunity to obtain independent legal advice, or such other advice as he may desire, concerning the interpretation and effect of this Agreement; and

(d) He is entering this Agreement voluntarily and without any pressure from the Employer.

11. MISCELLANEOUS

11.1         The headings in this Agreement are included solely for convenience of reference and shall not affect the construction or interpretation hereof.

11.2         The parties hereto expressly agree that nothing in this Agreement shall be construed as an admission of liability.

11.3         This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, trustees, administrators, successors and assigns.

11.4         This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter of the termination of the Employee’s employment with the Employer.  This Agreement supersedes and replaces all prior agreements, if any, written or oral, with respect to such subject matter and any rights which the Employee may have by reason of any such prior agreements or by reason of the Employee’s employment with the Corporation.  There are no representations, warranties or agreements between the parties hereto in connection with the subject matter of this Agreement, except as specifically set forth in this Agreement.  No reliance is placed on any representation, opinion, advice or assertion of fact made by the Employer or any of its officers, directors, agents or employees to the Employee, except to the extent that the same has been reduced to writing and included as a term of this Agreement.  Accordingly, there shall be no liability, either in tort or in contract, assessed in relation to any such representation, opinion, advice or assertion of fact, except to the extent aforesaid.

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11.5          Each of the provisions contained in this Agreement is distinct and severable, and a declaration of invalidity or unenforceability of any provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.

11.6          This Agreement shall be governed by, and construed in accordance with, the laws of the State of Mississippi, without regard to its conflicts of laws rules which shall be deemed inapplicable to this Agreement.

11.7          This Agreement may be signed in counterparts and delivered by facsimile transmission or other electronic means, and each of such counterparts shall constitute an original document, and such counterparts, taken together, shall constitute one and the same instrument.

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7

IN WITNESS WHEREOF, the parties have executed this Agreement.

OCCULOGIX, INC.
By:	“Suh Kim”
	Suh Kim
	General Counsel

	“Stephen Parks”
Signature of Witness	Stephen Parks
Name of Witness (please print)

8

EX-10.47

Exhibit 10.47

Execution Copy

TERMINATION AGREEMENT

THIS AGREEMENT is made as of the 8th day of January, 2008 by and between David C. Eldridge (the “Employee”), a resident of the State of Oklahoma, and OccuLogix, Inc. (the “Employer”), a corporation incorporated under the laws of the State of Delaware, and having its executive offices at 2600 Skymark Avenue, Building 9, Suite 201, Mississauga, Ontario, L4W 5B2.

WHEREAS, the Employer and the Employee entered into an employment agreement dated as of November 9, 2004 (the “Employment Agreement”) pursuant to which the Employee has been serving the Employer as its Vice President, Science and Technology;

AND WHEREAS, capitalized terms used in this Agreement, but not otherwise defined, shall have the respective meanings attributed to such terms in the Employment Agreement;

AND WHEREAS, the Employment Agreement entitles the Employee to receive from the Employer, in addition to accrued but unpaid Salary, if any, a lump sum payment equal to 12 months’ of his Basic Salary and 2.5% of his Basic Salary in respect of his entitlement to Benefits (the “Employee’s Severance”), less any amounts owing by the Employee to the Employer for any reason, when the Employee’s employment under the Employment Agreement has been terminated by the Employer for any reason other than Just Cause (including the occurrence of Disability) pursuant to Section 8.1.2 of the Employment Agreement;

AND WHEREAS, the Employee and the Employer mutually have agreed that the services of the Employee no longer are required and, accordingly, have agreed to the termination of the Employee’s employment with the Employer pursuant to Section 8.1.2 of the Employment Agreement;

AND WHEREAS, each of the Employee and the Employer agrees that it would not be in the bests interests of either of them to obligate the Employer to pay all of the Employee’s Severance upon the termination of the Employee’s employment with the Employer pursuant to Section 8.1.2 of the Employment Agreement;

AND WHEREAS, the Employment Agreement is further amended by this Agreement;

AND WHEREAS, the Employee has an aggregate of 126,722 time-based stock options that remain unexercised (the “Stock Options”);

AND WHEREAS, the Stock Options were granted pursuant to the Employer’s 2002 Stock Option Plan, as amended (the “Stock Option Plan”);

AND WHEREAS, notwithstanding the proposed termination of the Employee’s employment with the Employer and subject to the Employer obtaining the requisite approval of its stockholders therefor, the Compensation Committee of the Employer’s board of directors and the Employer’s board of directors have approved the extension of the term of the Stock Options to the tenth anniversaries of their respective dates of grant;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement (the receipt and sufficiency of which are hereby acknowledged by the parties hereto), the parties hereto agree as follows:

1. TERMINATION

1.1           The Employee and the Employer hereby agree that the Employee’s employment with the Employer is terminated pursuant to Section 8.1.2 of the Employment Agreement, effective at the close of business on the date hereof (the “Termination Date”).

2. RETURN OF PROPERTY

2.1           Subject to Section 2.2, the Employee hereby agrees that, by no later than the end of the Salary Continuance Period (defined below), he will certify, in writing, that he has returned to the Employer, and he will have returned to the Employer, all property of the Employer in the Employee’s possession, including, without limitation, all keys, business cards, computer hardware, including, without limitation, Blackberry units, printers, mice and other hardware accessories, and computer software.  The Employee hereby further agrees that, by no later than the end of the Salary Continuance Period (defined below), he will certify, in writing, that he has returned to the Employer or destroyed, and he will have returned to the Employer or destroyed, all tangible material embodying Confidential Information in any form whatsoever, including, without limitation, all paper copy copies, summaries and excerpts of Confidential Information and all electronic media or records containing or derived from Confidential Information.

2.2           Notwithstanding Section 2.1, on or prior to the last day of the Salary Continuance Period (defined below), the Employee may purchase from the Employer, at their then present net book value, as determined by the Employer acting in good faith, the Employer’s laptop computer and Blackberry unit that are in the Employee’s possession on the Termination Date (collectively, the “Computer Equipment”).

3. SEVERANCE

3.1           The Employee and the Employer hereby agree that, notwithstanding Section 9 of the Employment Agreement, the Employee’s Severance shall not be paid to him in a lump sum on the Termination Date.  In lieu thereof, during the period from the Termination Date to March 31, 2008 inclusive (the “Salary Continuance Period”), the Employer shall pay the Employee, on a semi-monthly basis according to the Employer’s regular payroll practices, amounts equal to the basic wages that the Employee was earning from the Employer immediately prior to the Termination Date (less applicable deductions and withholdings).  The aggregate net amount paid by the Employer to the Employee during (i) the period between December 31, 2007 and the date immediately preceding the Termination Date inclusive and (ii) the Salary Continuance Period, together with the aggregate amount of deductions and withholdings withheld by the Employer, in accordance with its regular payroll practices and pursuant to this Section 3.1, are hereinafter referred to, collectively, as the “Salary Continuance Amount”.

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3.2           Subject to Section 3.3, on the earliest to occur of (i) June 30, 2008, (ii) the date on which the Employer closes a financing for total gross proceeds in an aggregate amount of at least U.S.$10,000,000, whether by way of debt, equity or otherwise, and whether such financing is effected in a single transaction or a series of related or unrelated transactions, and (iii) a Change of Control (defined below), the Employer shall pay the Employee, in a lump sum, an amount equal to (A) the Employee’s Severance minus (B) the Salary Continuance Amount minus (C) U.S.$1,225.41, less applicable deductions and withholdings (the “Severance Balance”).   If the Employee advises the Employer that he wishes to exercise his right to purchase the Computer Equipment pursuant to Section 2.2, the Employer may set off against, or deduct from, the Severance Balance the purchase price of the Computer Equipment.  “Change of Control” shall be deemed to have occurred when:  (a) any Person, other than a Person or a combination of Persons presently owning, directly or indirectly, more than 20% of the issued and outstanding voting securities of the Employer, acquires or becomes the beneficial owner of, or a combination of Persons acting jointly and in concert acquires or becomes the beneficial owner of, directly or indirectly, more than 50% of the voting securities of the Employer, whether through the acquisition of previously issued and outstanding voting securities or of voting securities that have not been previously issued, or any combination thereof, or any other transaction having a similar effect; (b) the Employer merges with one or more corporations, including, without limitation, any Subsidiary or Affiliate of the Employer; (c) the Employer sells, leases or otherwise disposes of all or substantially all of its assets and undertaking, whether pursuant to one or more transactions; (d) any Person not part of existing management of the Employer or any Person not controlled by existing management of the Employer enters into any arrangement to provide management services to the Employer which results in either (Y) the termination by the Employer, for any reason other than Just Cause, of the employment of any two of the Chairman and Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer and General Counsel within three months of the date such arrangement is entered into or (Z) the termination by the Employer, for any reason other than Just Cause, of the employment of all such senior executive personnel within six months of the date that such arrangement is entered into; or (e) the Employer enters into any transaction or arrangement which would have the same, or similar, effect as the transactions referred to in (a), (b), (c) or (d) of this sentence.

3.3           If, prior to the end of the Salary Continuance Period, any petition should be filed by or against the Employer for liquidation or reorganization, or should the Employer become insolvent or make an assignment for the benefit of any creditor or creditors, or should a receiver or trustee be appointed for all or any significant part of the Employer’s assets, or should the Employer consent to the winding-up, liquidation or dissolution of itself or its affairs (each, a “Bankruptcy Event”), then an amount equal to (i) the Employee’s Severance minus (ii) U.S.$1,225.41 minus (iii) the aggregate net amount paid by the Employer to the Employee to the date of the Bankruptcy Event, together with the aggregate amount of deductions and withholdings withheld by the Employer, pursuant to Section 3.1, shall become due and payable immediately to the Employee.  If a Bankruptcy Event occurs on or after March 31, 2008, then the Severance Balance shall become due and payable immediately to the Employee.

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3.4           The Employee may direct, in a written direction in form and substance satisfactory to the Employer, the Employer to pay all amounts due and payable pursuant to Sections 3.1, 3.2 or 3.3 to the Employee’s professional corporation, David C. Eldridge, O.D., P.C.  Nothing herein shall be construed in such a manner so as to prevent or prohibit the Employer from making the required or advisable deductions and withholdings, if any, from such amounts or from reporting such amounts on the appropriate Internal Revenue Service forms.

3.5           The Employer hereby agrees that, in the event that any of Elias Vamvakas, Tom Reeves, Nozhat Choudry, John Cornish, Bill Dumencu, Julie Fotheringham, Stephen Kilmer, Suh Kim, Stephen Parks or Stephen Westing (each, an “OLT Member”) should become entitled to receive severance pursuant to his or her executive employment agreement at any time before the Employer has paid, in full, the amount due and payable to him pursuant to Section 3.2 or 3.3, as the case may be, the Employer shall not pay any OLT Member a percentage of his or her severance entitlement (without regard to applicable deductions and withholdings) that exceeds the percentage that (i) the Salary Continuance Amount plus the aggregate amount paid to the Employee pursuant to Sections 3.2 and 3.3, together with the aggregate amount of deductions and withholdings withheld by the Employer, represents of (ii) the amount of the Employee’s Severance.

4. BENEFITS

4.1           On or prior to January 15, 2008, the Employer shall pay the Employee U.S.$4,901.64, in a lump sum, being the amount equal to the aggregate amount that the Employer would have disbursed in respect of the Benefits to which the Employee would have been entitled during the Salary Continuance Period, had the Employee’s employment with the Employer not terminated on the Termination Date and instead continued throughout the Salary Continuance Period, or U.S.$3,676.23 (the “Employer’s Benefits Contribution”), grossed up by U.S.$1,225.41, which represents an additional amount that, after deduction by the Employer of applicable withholding tax on the Employer’s Benefits Contribution, will result in the Employee receiving a net amount equal to the Employer’s Benefits Contribution pursuant to this Section 4.1 .  The Employer shall have no other obligation to the Employee with respect to Benefits during the Salary Continuance Period.

4.2           For greater certainty, all amounts due and payable by the Employer to the Employee pursuant to Article 3 and this Article 4 shall be paid, net of applicable deductions and withholdings.

5. TRANSITION MATTERS AND E-MAIL ACCOUNT

5.1           The Employee hereby agrees to make himself available to the Employer during the Salary Continuance Period, whenever reasonably requested by the Employer, in order to assist the Employer with respect to transition matters falling within the scope of the Employee’s duties and responsibilities prior to the Termination Date.

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5.2           The Employee shall be entitled to continued access to his Occulogix.com e-mail account during the Salary Continuance Period.  However, such access may be denied by the Employer at any time for reason of Just Cause or if the Employer determines, in good faith and acting reasonably, that such access could give rise to or result in, or lead to, any harm or legal liability to or for the Employer.

6. STOCK OPTIONS

6.1           Notwithstanding the termination hereunder of the Employee’s employment with the Employer but subject to the Employer obtaining the requisite approval of its stockholders therefor in accordance with the provisions of the Stock Option Plan and all applicable laws, regulations and rules (including, without limitation, the rules of the Toronto Stock Exchange) (the “Requisite Stockholder Approval”), the term of the Stock Options shall be extended to, and the Stock Options shall remain exercisable until, the tenth anniversaries of their respective dates of grant, being (i) October 1, 2012 for 36,924 of the Stock Options, (ii) July 1, 2013 for 59,798 of the Stock Options and (iii) July 3, 2017 for 30,000 of the Stock Options.  Such term extension shall become effective on the date on which the Requisite Stockholder Approval is obtained, if ever, and all of the agreements pursuant to which the Stock Options were granted shall be deemed to be amended accordingly on the date on which the Requisite Stockholder Approval is obtained, if ever.

6.2           The Employer shall use commercially reasonable efforts to obtain the Requisite Stockholder Approval, which covenant shall terminate and become null and void, and be of no more force or effect, upon the earlier to occur of (i) the date on which a meeting of the Employer’s stockholders may be convened to obtain the Requisite Stockholder Approval and (ii) June 30, 2008.

7. RELEASE AND TERMINATION

7.1           The Employee hereby agrees, on behalf of himself and his administrators, heirs, assigns and anyone claiming through him, to release completely and forever discharge the Employer and its affiliates and subsidiaries, and their respective officers, directors, shareholders, agents, servants, representatives, underwriters, successors, heirs and assigns, from any and all claims, demands, obligations and causes of action, of any nature whatsoever, whether known or unknown, which the Employee ever had, now has or might have in the future as a result of the Employee’s employment with the Employer or the termination thereof hereunder, including, without limitation, any claim relating to the Employment Agreement or the termination thereof hereunder or any claim relating to any violation of any U.S. federal or state statute or regulation, any claim for wrongful discharge or breach of contract or any claim relating to U.S. state or federal laws (including, without limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1968, the Employment Retirement Income and Security Act, the Fair Labor Standards Act, the Americans with Disabilities Act and the Rehabilitation Act), provided, however, that such release and discharge shall be effective only upon the payment in full by the Employer of the Severance Balance pursuant to Article 3.  For greater certainty, the release and discharge by the Employee pursuant to this Section 7.1 shall have no force or effect whatsoever until such time, if ever, that the Severance Balance is paid in full by the Employer to the Employee.  Notwithstanding the foregoing, nothing herein shall be construed as depriving the Employee of any indemnification rights to which he is entitled under the Amended and Restated By-laws of the Employer on or prior to the Termination Date or of any protection to which he may be entitled, on, prior to or after the Termination Date, under the Employer’s directors’ and officers’ liability insurance policy from time to time.

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7.2           Section 12 of the Employment Agreement (Non-Competition) is hereby amended by replacing, in the first paragraph thereof, the words “the business carried on during the Employment Period or at the end thereof, as the case may be, by the Corporation or any of its Subsidiaries.” with the words “(i) the Corporation’s RHEO business and/or (ii) the business of OcuSense, Inc., as each of them was carried on during the Employment Period.”.

7.3           The Employment Agreement is hereby terminated and rendered null and void, save and except for those provisions thereof that are expressly stated to survive the termination thereof, including, without limitation, Section 12 (Non-Competition) and Sections 13 (No Solicitation of Patients), 14 (No Solicitation of Employees) 15 (Confidentiality) and 16 (Remedies).  The Employee hereby agrees to abide by such provisions, including, for greater certainty, Section 12 of the Employment Agreement (Non-Competition), as amended by Section 7.2 of this Agreement.

8. FUTURE EMPLOYMENT

8.1           The mitigation by the Employee of any damages or losses arising from the termination hereunder of his employment with the Employer and the termination of the Employment Agreement hereunder (including, without limitation, by obtaining other employment) shall not, in any way, derogate from, or otherwise affect, the Employee’s rights or the Employer’s obligations under this Agreement.  For greater certainty, and without derogating from the generality of the foregoing statement, no amount to be paid by the Employer under this Agreement shall be reduced by any compensation earned by the Employee as a result of employment by another employer or otherwise after the Termination Date.

9. THIRD PARTY COMMUNICATIONS

9.1           In consideration of the mutual promises and covenants contained herein, each of the parties hereto hereby agrees that he and it will not make any statements to, or initiate or participate in any discussions with, any other person, including, without limitation, the Employer’s customers, which are derogatory, disparaging or injurious to the reputation of the Employee or the Employer.  This Section 9.1, in no way, shall be construed as prohibiting either party hereto from responding truthfully to any question or interrogatory to which such party is requested to respond.

10. ACKNOWLEDGEMENT

10.1 The Employee hereby acknowledges that:

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(a) He has had sufficient time to review and consider this Agreement thoroughly;

(b) He has read and understands the terms of this Agreement and his obligations hereunder;

(c) He has been given an opportunity to obtain independent legal advice, or such other advice as he may desire, concerning the interpretation and effect of this Agreement; and

(d) He is entering this Agreement voluntarily and without any pressure from the Employer.

11. MISCELLANEOUS

11.1         The headings in this Agreement are included solely for convenience of reference and shall not affect the construction or interpretation hereof.

11.2         The parties hereto expressly agree that nothing in this Agreement shall be construed as an admission of liability.

11.3         This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, trustees, administrators, successors and assigns.

11.4         This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter of the termination of the Employee’s employment with the Employer.  This Agreement supersedes and replaces all prior agreements, if any, written or oral, with respect to such subject matter and any rights which the Employee may have by reason of any such prior agreements or by reason of the Employee’s employment with the Corporation.  There are no representations, warranties or agreements between the parties hereto in connection with the subject matter of this Agreement, except as specifically set forth in this Agreement.  No reliance is placed on any representation, opinion, advice or assertion of fact made by the Employer or any of its officers, directors, agents or employees to the Employee, except to the extent that the same has been reduced to writing and included as a term of this Agreement.  Accordingly, there shall be no liability, either in tort or in contract, assessed in relation to any such representation, opinion, advice or assertion of fact, except to the extent aforesaid.

11.5         Each of the provisions contained in this Agreement is distinct and severable, and a declaration of invalidity or unenforceability of any provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.

11.6         This Agreement shall be governed by, and construed in accordance with, the laws of the State of Oklahoma, without regard to its conflicts of laws rules which shall be deemed inapplicable to this Agreement.

11.7         This Agreement may be signed in counterparts and delivered by facsimile transmission or other electronic means, and each of such counterparts shall constitute an original document, and such counterparts, taken together, shall constitute one and the same instrument.

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OCCULOGIX, INC.
By:	“Suh Kim”
	Suh Kim
	General Counsel

	“David C. Eldridge”
Signature of Witness	David C. Eldridge
Name of Witness (please print)

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EX-10.48

Exhibit 10.48

Execution Copy

TERMINATION AGREEMENT

THIS AGREEMENT is made as of the 31st day of January, 2008 by and between Nozhat Choudry (the “Employee”), a resident of the Province of Ontario, and OccuLogix, Inc. (the “Employer”), a corporation incorporated under the laws of the State of Delaware, and having its executive offices at 2600 Skymark Avenue, Building 9, Suite 201, Mississauga, Ontario, L4W 5B2.

WHEREAS, the Employer and the Employee entered into an employment agreement dated as of February 10, 2006, pursuant to which the Employee has been serving the Employer as its Vice President, Clinical Research, which employment agreement was amended as of April 1, 2006 (as so amended, the “Employment Agreement”);

AND WHEREAS, capitalized terms used in this Agreement, but not otherwise defined, shall have the respective meanings attributed to such terms in the Employment Agreement;

AND WHEREAS, the Employee and the Employer mutually have agreed that the services of the Employee no longer are required and, accordingly, have agreed to the termination of the Employee’s employment with the Employer pursuant to Section 8.1.3 of the Employment Agreement;

AND WHEREAS, the Employee and the Employer hereby acknowledge and agree that the reference to Section 8.1.2, contained in Section 9 of the Employment Agreement, is the result of a typographical error and instead should have been a reference to Section 8.1.3;

AND WHEREAS, the Employee and the Employer hereby further acknowledge and agree that, when the Employee’s employment under the Employment Agreement has been terminated by the Employer for any reason other than Just Cause pursuant to Section 8.1.3 of the Employment Agreement, the Employee is entitled to receive from the Employer, in addition to accrued but unpaid Salary, if any, a lump sum payment equal to 12 months’ of her Basic Salary and 2.5% of her Basic Salary in respect of her entitlement to Benefits (the “Employee’s Severance”), less any amounts payable to the Employee in lieu of notice where a Stop Work Notice has been given pursuant to Section 8.2 of the Employment Agreement and any amounts owing by the Employee to the Employer for any reason;

AND WHEREAS, the Employee has not been given a Stop Work Notice pursuant to Section 8.2 of the Employment Agreement;

AND WHEREAS, each of the Employee and the Employer agrees that it would not be in the bests interests of either of them to obligate the Employer to pay all of the Employee’s Severance upon the termination of the Employee’s employment with the Employer pursuant to Section 8.1.3 of the Employment Agreement;

AND WHEREAS, the Employment Agreement is further amended by this Agreement;

AND WHEREAS, the Employee has been granted an aggregate of 110,000 time-based stock options (the “Stock Options”) pursuant to the Employer’s 2002 Stock Option Plan, as amended (the “Stock Option Plan”);

AND WHEREAS, notwithstanding the proposed termination of the Employee’s employment with the Employer and subject to the Employer obtaining the requisite approval of its stockholders therefor, the Compensation Committee of the Employer’s board of directors and the Employer’s board of directors have approved the extension of the term of the Stock Options to the tenth anniversaries of their respective dates of grant;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement (the receipt and sufficiency of which are hereby acknowledged by the parties hereto), the parties hereto agree as follows:

1. TERMINATION

1.1           The Employee and the Employer hereby agree that the Employee’s employment with the Employer is terminated pursuant to Section 8.1.3 of the Employment Agreement, effective at the close of business on the date hereof (the “Termination Date”).  For greater certainty, the Employee hereby waives the requirement, under Section 8.1.3 of the Employment Agreement, to provide 12 months’ prior written notice to the Employee of the Employer’s intention to terminate her employment with the Employer.

2. RETURN OF PROPERTY

2.1           Subject to Section 2.2, the Employee hereby agrees that, by no later than the end of the Salary Continuance Period (defined below), she will certify, in writing, that she has returned to the Employer, and she will have returned to the Employer, all property of the Employer in the Employee’s possession, including, without limitation, all keys, business cards, computer hardware, including, without limitation, Blackberry units, printers, mice and other hardware accessories, and computer software.  The Employee hereby further agrees that, by no later than the end of the Salary Continuance Period (defined below), she will certify, in writing, that she has returned to the Employer or destroyed, and she will have returned to the Employer or destroyed, all tangible material embodying Confidential Information in any form whatsoever, including, without limitation, all paper copy copies, summaries and excerpts of Confidential Information and all electronic media or records containing or derived from Confidential Information.

2.2           Notwithstanding Section 2.1, on or prior to the last day of the Salary Continuance Period (defined below), the Employee may purchase from the Employer at their then present net book value, as determined by the Employer acting in good faith, the Employer’s laptop computer and Blackberry unit that are in the Employee’s possession on the Termination Date (collectively, the “Computer Equipment”).

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3. SEVERANCE

3.1           The Employee and the Employer hereby agree that, notwithstanding Section 9 of the Employment Agreement, the Employee’s Severance shall not be paid to her in a lump sum on the Termination Date.  In lieu thereof, during the period from the Termination Date to March 31, 2008 inclusive (the “Salary Continuance Period”), the Employer shall pay the Employee, on a semi-monthly basis according to the Employer’s regular payroll practices, amounts equal to the basic wages that the Employee was earning from the Employer immediately prior to the Termination Date (less applicable deductions and withholdings).  The aggregate net amount paid by the Employer to the Employee during the Salary Continuance Period, together with the aggregate amount of deductions and withholdings withheld by the Employer, in accordance with its regular payroll practices and pursuant to this Section 3.1, are hereinafter referred to, collectively, as the “Salary Continuance Amount”.

3.2           Subject to Section 3.3, on the earliest to occur of (i) June 30, 2008, (ii) the date on which the Employer closes a financing for total gross proceeds in an aggregate amount of at least U.S.$10,000,000, whether by way of debt, equity or otherwise, and whether such financing is effected in a single transaction or a series of related or unrelated transactions, and (iii) a Change of Control (defined below), the Employer shall pay the Employee, in a lump sum, an amount equal to (A) the Employee’s Severance minus (B) the Salary Continuance Amount, less applicable deductions and withholdings (the “Severance Balance”).  If the Employee advises the Employer that she wishes to exercise her right to purchase the Computer Equipment pursuant to Section 2.2, the Employer may set off against, or deduct from, the Severance Balance the purchase price of the Computer Equipment.  “Change of Control” shall be deemed to have occurred when:  (a) any Person, other than a Person or a combination of Persons presently owning, directly or indirectly, more than 20% of the issued and outstanding voting securities of the Employer, acquires or becomes the beneficial owner of, or a combination of Persons acting jointly and in concert acquires or becomes the beneficial owner of, directly or indirectly, more than 50% of the voting securities of the Employer, whether through the acquisition of previously issued and outstanding voting securities or of voting securities that have not been previously issued, or any combination thereof, or any other transaction having a similar effect; (b) the Employer merges with one or more corporations, including, without limitation, any Subsidiary or Affiliate of the Employer; (c) the Employer sells, leases or otherwise disposes of all or substantially all of its assets and undertaking, whether pursuant to one or more transactions; (d) any Person not part of existing management of the Employer or any Person not controlled by existing management of the Employer enters into any arrangement to provide management services to the Employer which results in either (Y) the termination by the Employer, for any reason other than Just Cause, of the employment of any two of the Chairman and Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer and General Counsel within three months of the date such arrangement is entered into or (Z) the termination by the Employer, for any reason other than Just Cause, of the employment of all such senior executive personnel within six months of the date that such arrangement is entered into; or (e) the Employer enters into any transaction or arrangement which would have the same, or similar, effect as the transactions referred to in (a), (b), (c) or (d) of this sentence.

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3.3           If, prior to the end of the Salary Continuance Period, any petition should be filed by or against the Employer for liquidation or reorganization, or should the Employer become insolvent or make an assignment for the benefit of any creditor or creditors, or should a receiver or trustee be appointed for all or any significant part of the Employer’s assets, or should the Employer consent to the winding-up, liquidation or dissolution of itself or its affairs (each, a “Bankruptcy Event”), then an amount equal to (i) the Employee’s Severance minus (ii) the aggregate net amount paid by the Employer to the Employee to the date of the Bankruptcy Event, together with the aggregate amount of deductions and withholdings withheld by the Employer, pursuant to Section 3.1, shall become due and payable immediately to the Employee.  If a Bankruptcy Event occurs on or after March 31, 2008, then the Severance Balance shall become due and payable immediately to the Employee.

3.4           The Employer hereby agrees that, in the event that any of Elias Vamvakas, Tom Reeves, John Cornish, Bill Dumencu, David Eldridge, Julie Fotheringham, Stephen Kilmer, Suh Kim, Stephen Parks or Stephen Westing (each, an “OLT Member”) should become entitled to receive severance pursuant to his or her executive employment agreement at any time before the Employer has paid, in full, the amount due and payable to her pursuant to Section 3.2 or 3.3, as the case may be, the Employer shall not pay any OLT Member a percentage of his or her severance entitlement (without regard to applicable deductions and withholdings) that exceeds the percentage that (i) the Salary Continuance Amount plus the aggregate amount paid to the Employee pursuant to Sections 3.2 and 3.3, together with the aggregate amount of deductions and withholdings withheld by the Employer, represents of (ii) the amount of the Employee’s Severance.

3.5           For greater certainty, all amounts due and payable by the Employer to the Employee pursuant to this Article 3 shall be paid, net of applicable deductions and withholdings.

4. TRANSITION MATTERS AND E-MAIL ACCOUNT

4.1           The Employee hereby agrees to make herself available to the Employer during the Salary Continuance Period, whenever reasonably requested by the Employer, in order to assist the Employer with respect to transition matters falling within the scope of the Employee’s duties and responsibilities prior to the Termination Date.

4.2           The Employee shall be entitled to continued access to her Occulogix.com e-mail account during the Salary Continuance Period.  However, such access may be denied by the Employer at any time for reason of Just Cause or if the Employer determines, in good faith and acting reasonably, that such access could give rise to or result in, or lead to, any harm or legal liability to or for the Employer.

5. STOCK OPTIONS

5.1           Notwithstanding the termination hereunder of the Employee’s employment with the Employer but subject to the Employer obtaining the requisite approval of its stockholders therefor in accordance with the provisions of the Stock Option Plan and all applicable laws, regulations and rules (including, without limitation, the rules of the Toronto Stock Exchange) (the “Requisite Stockholder Approval”), the term of the Stock Options shall be extended to, and the Stock Options shall remain exercisable until, the tenth anniversaries of their respective dates of grant, being (i) February 10, 2016 for 80,000 of the Stock Options and (ii) July 3, 2017 for 30,000 of the Stock Options.  Such term extension shall become effective on the date on which the Requisite Stockholder Approval is obtained, if ever, and all of the agreements pursuant to which the Stock Options were granted shall be deemed to be amended accordingly on the date on which the Requisite Stockholder Approval is obtained, if ever.

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5.2           The Employer shall use commercially reasonable efforts to obtain the Requisite Stockholder Approval, which covenant shall terminate and become null and void, and be of no more force or effect, upon the earlier to occur of (i) the date on which a meeting of the Employer’s stockholders may be convened to obtain the Requisite Stockholder Approval and (ii) June 30, 2008.

6. RELEASE AND TERMINATION

6.1           The Employee hereby agrees, on behalf of herself and her administrators, heirs, assigns and anyone claiming through her, to release completely and forever discharge the Employer and its affiliates and subsidiaries, and their respective officers, directors, shareholders, agents, servants, representatives, underwriters, successors, heirs and assigns, from any and all claims, demands, obligations and causes of action, of any nature whatsoever, whether known or unknown, which the Employee ever had, now has or might have in the future as a result of the Employee’s employment with the Employer or the termination thereof hereunder, including, without limitation, any claim relating to the Employment Agreement or the termination thereof hereunder or any claim relating to any violation of any Canadian federal or provincial statute or regulation, any claim for wrongful discharge or breach of contract or any claim relating to Canadian federal or provincial laws (including, without limitation, the Employment Standards Act (Ontario) and the Ontario Human Rights Code), provided, however, that such release and discharge shall be effective only upon the payment in full by the Employer of the Severance Balance pursuant to Article 3.  For greater certainty, the release and discharge by the Employee pursuant to this Section 6.1 shall have no force or effect whatsoever until such time, if ever, that the Severance Balance is paid in full by the Employer to the Employee.  Notwithstanding the foregoing, nothing herein shall be construed as depriving the Employee of any indemnification rights to which she is entitled under the Amended and Restated By-laws of the Employer on or prior to the Termination Date or of any protection to which she may be entitled, on, prior to or after the Termination Date, under the Employer’s directors’ and officers’ liability insurance policy from time to time.

6.2           Section 12 of the Employment Agreement (Non-Competition) is hereby amended by replacing, in the first paragraph thereof, the words “which involves the development, manufacturing, sales and/or distribution of products, equipment, services and/or technology relating to the apheresis treatment of ophthalmic diseases or which is otherwise the same as, or substantially similar to, or which competes with or would compete with, the business carried on by the Corporation or any of its Subsidiaries during the Employment Period or at the end thereof.” with the words “(i) the Corporation’s RHEO business and/or (ii) the business of OcuSense, Inc., as each of them was carried on during the Employment Period.”.

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6.3           The Employment Agreement is hereby terminated and rendered null and void, save and except for those provisions thereof that are expressly stated to survive the termination thereof, including, without limitation, Section 12 (Non-Competition), as amended by Section 6.2 of this Agreement, and Sections 13 (No Solicitation of Customers or Patients), 14 (No Solicitation of Employees) 15 (Confidentiality) and 16 (Remedies).  The Employee hereby agrees to abide by such provisions, including, for greater certainty, Section 12 of the Employment Agreement (Non-Competition), as amended by Section 6.2 of this Agreement.

7. FUTURE EMPLOYMENT

7.1           The mitigation by the Employee of any damages or losses arising from the termination hereunder of her employment with the Employer and the termination of the Employment Agreement hereunder (including, without limitation, by obtaining other employment) shall not, in any way, derogate from, or otherwise affect, the Employee’s rights or the Employer’s obligations under this Agreement.  For greater certainty, and without derogating from the generality of the foregoing statement, no amount to be paid by the Employer under this Agreement shall be reduced by any compensation earned by the Employee as a result of employment by another employer or otherwise after the Termination Date.

8. THIRD PARTY COMMUNICATIONS

8.1           In consideration of the mutual promises and covenants contained herein, each of the parties hereto hereby agrees that she and it will not make any statements to, or initiate or participate in any discussions with, any other person, including, without limitation, the Employer’s customers, which are derogatory, disparaging or injurious to the reputation of the Employee or the Employer.  This Section 8.1, in no way, shall be construed as prohibiting either party hereto from responding truthfully to any question or interrogatory to which such party is requested to respond.

9. ACKNOWLEDGEMENT

9.1 The Employee hereby acknowledges that:

(a) She has had sufficient time to review and consider this Agreement thoroughly;

(b) She has read and understands the terms of this Agreement and her obligations hereunder;

(c) She has been given an opportunity to obtain independent legal advice, or such other advice as she may desire, concerning the interpretation and effect of this Agreement; and

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(d) She is entering this Agreement voluntarily and without any pressure from the Employer.

10. MISCELLANEOUS

10.1         The headings in this Agreement are included solely for convenience of reference and shall not affect the construction or interpretation hereof.

10.2         The parties hereto expressly agree that nothing in this Agreement shall be construed as an admission of liability.

10.3         This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, trustees, administrators, successors and assigns.

10.4         This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter of the termination of the Employee’s employment with the Employer.  This Agreement supersedes and replaces all prior agreements, if any, written or oral, with respect to such subject matter and any rights which the Employee may have by reason of any such prior agreements or by reason of the Employee’s employment with the Corporation.  There are no representations, warranties or agreements between the parties hereto in connection with the subject matter of this Agreement, except as specifically set forth in this Agreement.  No reliance is placed on any representation, opinion, advice or assertion of fact made by the Employer or any of its officers, directors, agents or employees to the Employee, except to the extent that the same has been reduced to writing and included as a term of this Agreement.  Accordingly, there shall be no liability, either in tort or in contract, assessed in relation to any such representation, opinion, advice or assertion of fact, except to the extent aforesaid.

10.5         Each of the provisions contained in this Agreement is distinct and severable, and a declaration of invalidity or unenforceability of any provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.

10.6         This Agreement shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein.

10.7         This Agreement may be signed in counterparts and delivered by facsimile transmission or other electronic means, and each of such counterparts shall constitute an original document, and such counterparts, taken together, shall constitute one and the same instrument.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties have executed this Agreement.

OCCULOGIX, INC.
By:	“Suh Kim”
	Suh Kim
	General Counsel

	“Nozhat Choudry”
Signature of Witness	Nozhat Choudry
Name of Witness (please print)

8

EX-10.49

Exhibit 10.49

Execution Copy

TERMINATION AGREEMENT

THIS AGREEMENT is made as of the 31st day of January, 2008 by and between Stephen Kilmer (the “Employee”), a resident of the Province of Ontario, and OccuLogix, Inc. (the “Employer”), a corporation incorporated under the laws of the State of Delaware, and having its executive offices at 2600 Skymark Avenue, Building 9, Suite 201, Mississauga, Ontario, L4W 5B2.

WHEREAS, the Employer and the Employee entered into an employment agreement dated as of July 30, 2004 (the “Employment Agreement”) pursuant to which the Employee has been serving the Employer as its Vice President, Investor & Public Affairs;

AND WHEREAS, capitalized terms used in this Agreement, but not otherwise defined, shall have the respective meanings attributed to such terms in the Employment Agreement;

AND WHEREAS, the Employee and the Employer mutually have agreed that the services of the Employee no longer are required and, accordingly, have agreed to the termination of the Employee’s employment with the Employer pursuant to Section 8.1.2 of the Employment Agreement;

AND WHEREAS, when the Employee’s employment under the Employment Agreement has been terminated by the Employer for any reason other than Just Cause pursuant to Section 8.1.2 of the Employment Agreement, the Employee is entitled to receive from the Employer, in addition to accrued but unpaid Salary, if any, a lump sum payment equal to 12 months’ of his Basic Salary and 2.5% of his Basic Salary in respect of his entitlement to Benefits (the “Employee’s Severance”), less any amounts payable to the Employee in lieu of notice where a Stop Work Notice has been given pursuant to Section 8 of the Employment Agreement and any amounts owing by the Employee to the Employer for any reason;

AND WHEREAS, the Employee has not been given a Stop Work Notice pursuant to Section 8 of the Employment Agreement;

AND WHEREAS, each of the Employee and the Employer agrees that it would not be in the bests interests of either of them to obligate the Employer to pay all of the Employee’s Severance upon the termination of the Employee’s employment with the Employer pursuant to Section 8.1.2 of the Employment Agreement;

AND WHEREAS, the Employment Agreement is further amended by this Agreement;

AND WHEREAS, the Employee has been granted an aggregate of 110,000 time-based stock options (the “Stock Options”) pursuant to the Employer’s 2002 Stock Option Plan, as amended (the “Stock Option Plan”);

AND WHEREAS, notwithstanding the proposed termination of the Employee’s employment with the Employer and subject to the Employer obtaining the requisite approval of its stockholders therefor, the Compensation Committee of the Employer’s board of directors and the Employer’s board of directors have approved the extension of the term of the Stock Options to the tenth anniversaries of their respective dates of grant;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement (the receipt and sufficiency of which are hereby acknowledged by the parties hereto), the parties hereto agree as follows:

1. TERMINATION

1.1           The Employee and the Employer hereby agree that the Employee’s employment with the Employer is terminated pursuant to Section 8.1.2 of the Employment Agreement, effective at the close of business on the date hereof (the “Termination Date”).  For greater certainty, the Employee hereby waives the requirement, under Section 8.1.2 of the Employment Agreement, to provide 12 months’ prior written notice to the Employee of the Employer’s intention to terminate his employment with the Employer.

2. RETURN OF PROPERTY

2.1           The Employee hereby certifies that he has returned to the Employer all property of the Employer in the Employee’s possession, including, without limitation, all keys, business cards, computer hardware, including, without limitation, Blackberry units, printers, mice and other hardware accessories, and computer software.

2.2           The Employee hereby further agrees that, by no later than the end of the Salary Continuance Period (defined below), he will certify, in writing, that he has returned to the Employer or destroyed, and he will have returned to the Employer or destroyed, all tangible material embodying Confidential Information in any form whatsoever, including, without limitation, all paper copy copies, summaries and excerpts of Confidential Information and all electronic media or records containing or derived from Confidential Information.

3. SEVERANCE

3.1           The Employee and the Employer hereby agree that, notwithstanding Section 9 of the Employment Agreement, the Employee’s Severance shall not be paid to him in a lump sum on the Termination Date.  In lieu thereof, during the period from the Termination Date to March 31, 2008 inclusive (the “Salary Continuance Period”), the Employer shall pay the Employee, on a semi-monthly basis according to the Employer’s regular payroll practices, amounts equal to the basic wages that the Employee was earning from the Employer immediately prior to the Termination Date (less applicable deductions and withholdings).  The aggregate net amount paid by the Employer to the Employee during the Salary Continuance Period, together with the aggregate amount of deductions and withholdings withheld by the Employer, in accordance with its regular payroll practices and pursuant to this Section 3.1, are hereinafter referred to, collectively, as the “Salary Continuance Amount”.

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3.2           Subject to Section 3.3, on the earliest to occur of (i) June 30, 2008, (ii) the date on which the Employer closes a financing for total gross proceeds in an aggregate amount of at least U.S.$10,000,000, whether by way of debt, equity or otherwise, and whether such financing is effected in a single transaction or a series of related or unrelated transactions, and (iii) a Change of Control (defined below), the Employer shall pay the Employee, in a lump sum, an amount equal to (A) the Employee’s Severance minus (B) the Salary Continuance Amount, less applicable deductions and withholdings (the “Severance Balance”).  “Change of Control” shall be deemed to have occurred when:  (a) any Person, other than a Person or a combination of Persons presently owning, directly or indirectly, more than 20% of the issued and outstanding voting securities of the Employer, acquires or becomes the beneficial owner of, or a combination of Persons acting jointly and in concert acquires or becomes the beneficial owner of, directly or indirectly, more than 50% of the voting securities of the Employer, whether through the acquisition of previously issued and outstanding voting securities or of voting securities that have not been previously issued, or any combination thereof, or any other transaction having a similar effect; (b) the Employer merges with one or more corporations, including, without limitation, any Subsidiary or Affiliate of the Employer; (c) the Employer sells, leases or otherwise disposes of all or substantially all of its assets and undertaking, whether pursuant to one or more transactions; (d) any Person not part of existing management of the Employer or any Person not controlled by existing management of the Employer enters into any arrangement to provide management services to the Employer which results in either (Y) the termination by the Employer, for any reason other than Just Cause, of the employment of any two of the Chairman and Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer and General Counsel within three months of the date such arrangement is entered into or (Z) the termination by the Employer, for any reason other than Just Cause, of the employment of all such senior executive personnel within six months of the date that such arrangement is entered into; or (e) the Employer enters into any transaction or arrangement which would have the same, or similar, effect as the transactions referred to in (a), (b), (c) or (d) of this sentence.

3.3           If, prior to the end of the Salary Continuance Period, any petition should be filed by or against the Employer for liquidation or reorganization, or should the Employer become insolvent or make an assignment for the benefit of any creditor or creditors, or should a receiver or trustee be appointed for all or any significant part of the Employer’s assets, or should the Employer consent to the winding-up, liquidation or dissolution of itself or its affairs (each, a “Bankruptcy Event”), then an amount equal to (i) the Employee’s Severance minus (ii) the aggregate net amount paid by the Employer to the Employee to the date of the Bankruptcy Event, together with the aggregate amount of deductions and withholdings withheld by the Employer, pursuant to Section 3.1, shall become due and payable immediately to the Employee.  If a Bankruptcy Event occurs on or after March 31, 2008, then the Severance Balance shall become due and payable immediately to the Employee.

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3.4           The Employer hereby agrees that, in the event that any of Elias Vamvakas, Tom Reeves, Nozhat Choudry, John Cornish, Bill Dumencu, David Eldridge, Julie Fotheringham, Suh Kim, Stephen Parks or Stephen Westing (each, an “OLT Member”) should become entitled to receive severance pursuant to his or her executive employment agreement at any time before the Employer has paid, in full, the amount due and payable to him pursuant to Section 3.2 or 3.3, as the case may be, the Employer shall not pay any OLT Member a percentage of his or her severance entitlement (without regard to applicable deductions and withholdings) that exceeds the percentage that (i) the Salary Continuance Amount plus the aggregate amount paid to the Employee pursuant to Sections 3.2 and 3.3, together with the aggregate amount of deductions and withholdings withheld by the Employer, represents of (ii) the amount of the Employee’s Severance.

3.5           For greater certainty, all amounts due and payable by the Employer to the Employee pursuant to this Article 3 shall be paid, net of applicable deductions and withholdings.

4. STOCK OPTIONS

4.1           Notwithstanding the termination hereunder of the Employee’s employment with the Employer but subject to the Employer obtaining the requisite approval of its stockholders therefor in accordance with the provisions of the Stock Option Plan and all applicable laws, regulations and rules (including, without limitation, the rules of the Toronto Stock Exchange) (the “Requisite Stockholder Approval”), the term of the Stock Options shall be extended to, and the Stock Options shall remain exercisable until, the tenth anniversaries of their respective dates of grant, being (i) December 16, 2014 for 80,000 of the Stock Options and (ii) July 3, 2017 for 30,000 of the Stock Options.  Such term extension shall become effective on the date on which the Requisite Stockholder Approval is obtained, if ever, and all of the agreements pursuant to which the Stock Options were granted shall be deemed to be amended accordingly on the date on which the Requisite Stockholder Approval is obtained, if ever.

4.2           The Employer shall use commercially reasonable efforts to obtain the Requisite Stockholder Approval, which covenant shall terminate and become null and void, and be of no more force or effect, upon the earlier to occur of (i) the date on which a meeting of the Employer’s stockholders may be convened to obtain the Requisite Stockholder Approval and (ii) June 30, 2008.

5. RELEASE AND TERMINATION

5.1           The Employee hereby agrees, on behalf of himself and his administrators, heirs, assigns and anyone claiming through him, to release completely and forever discharge the Employer and its affiliates and subsidiaries, and their respective officers, directors, shareholders, agents, servants, representatives, underwriters, successors, heirs and assigns, from any and all claims, demands, obligations and causes of action, of any nature whatsoever, whether known or unknown, which the Employee ever had, now has or might have in the future as a result of the Employee’s employment with the Employer or the termination thereof hereunder, including, without limitation, any claim relating to the Employment Agreement or the termination thereof hereunder or any claim relating to any violation of any Canadian federal or provincial statute or regulation, any claim for wrongful discharge or breach of contract or any claim relating to Canadian federal or provincial laws (including, without limitation, the Employment Standards Act (Ontario) and the Ontario Human Rights Code), provided, however, that such release and discharge shall be effective only upon the payment in full by the Employer of the Severance Balance pursuant to Article 3.  For greater certainty, the release and discharge by the Employee pursuant to this Section 5.1 shall have no force or effect whatsoever until such time, if ever, that the Severance Balance is paid in full by the Employer to the Employee.  Notwithstanding the foregoing, nothing herein shall be construed as depriving the Employee of any indemnification rights to which he is entitled under the Amended and Restated By-laws of the Employer on or prior to the Termination Date or of any protection to which he may be entitled, on, prior to or after the Termination Date, under the Employer’s directors’ and officers’ liability insurance policy from time to time.

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5.2           Section 12 of the Employment Agreement (Non-Competition) is hereby amended by replacing, in the first paragraph thereof, the words “the business carried on during the Employment Period or at the end thereof, as the case may be, by the Corporation or any of its Subsidiaries.” with the words “(i) the Corporation’s RHEO business and/or (ii) the business of OcuSense, Inc., as each of them was carried on during the Employment Period.”.

5.3           The Employment Agreement is hereby terminated and rendered null and void, save and except for those provisions thereof that are expressly stated to survive the termination thereof, including, without limitation, Section 12 (Non-Competition), as amended by Section 5.2 of this Agreement, and Sections 13 (No Solicitation of Patients), 14 (No Solicitation of Employees) 15 (Confidentiality) and 16 (Remedies).  The Employee hereby agrees to abide by such provisions, including, for greater certainty, Section 12 of the Employment Agreement (Non-Competition), as amended by Section 5.2 of this Agreement.

6. FUTURE EMPLOYMENT

6.1           The mitigation by the Employee of any damages or losses arising from the termination hereunder of his employment with the Employer and the termination of the Employment Agreement hereunder (including, without limitation, by obtaining other employment) shall not, in any way, derogate from, or otherwise affect, the Employee’s rights or the Employer’s obligations under this Agreement.  For greater certainty, and without derogating from the generality of the foregoing statement, no amount to be paid by the Employer under this Agreement shall be reduced by any compensation earned by the Employee as a result of employment by another employer or otherwise after the Termination Date.

7. THIRD PARTY COMMUNICATIONS

7.1           In consideration of the mutual promises and covenants contained herein, each of the parties hereto hereby agrees that he and it will not make any statements to, or initiate or participate in any discussions with, any other person, including, without limitation, the Employer’s customers, which are derogatory, disparaging or injurious to the reputation of the Employee or the Employer.  This Section 7.1, in no way, shall be construed as prohibiting either party hereto from responding truthfully to any question or interrogatory to which such party is requested to respond.

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8. ACKNOWLEDGEMENT

8.1 The Employee hereby acknowledges that:

(a) He has had sufficient time to review and consider this Agreement thoroughly;

(b) He has read and understands the terms of this Agreement and his obligations hereunder;

(c) He has been given an opportunity to obtain independent legal advice, or such other advice as he may desire, concerning the interpretation and effect of this Agreement; and

(d) He is entering this Agreement voluntarily and without any pressure from the Employer.

9. MISCELLANEOUS

9.1           The headings in this Agreement are included solely for convenience of reference and shall not affect the construction or interpretation hereof.

9.2           The parties hereto expressly agree that nothing in this Agreement shall be construed as an admission of liability.

9.3           This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, trustees, administrators, successors and assigns.

9.4           This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter of the termination of the Employee’s employment with the Employer.  This Agreement supersedes and replaces all prior agreements, if any, written or oral, with respect to such subject matter and any rights which the Employee may have by reason of any such prior agreements or by reason of the Employee’s employment with the Corporation.  There are no representations, warranties or agreements between the parties hereto in connection with the subject matter of this Agreement, except as specifically set forth in this Agreement.  No reliance is placed on any representation, opinion, advice or assertion of fact made by the Employer or any of its officers, directors, agents or employees to the Employee, except to the extent that the same has been reduced to writing and included as a term of this Agreement.  Accordingly, there shall be no liability, either in tort or in contract, assessed in relation to any such representation, opinion, advice or assertion of fact, except to the extent aforesaid.

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9.5           Each of the provisions contained in this Agreement is distinct and severable, and a declaration of invalidity or unenforceability of any provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.

9.6           This Agreement shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein.

9.7           This Agreement may be signed in counterparts and delivered by facsimile transmission or other electronic means, and each of such counterparts shall constitute an original document, and such counterparts, taken together, shall constitute one and the same instrument.

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IN WITNESS WHEREOF, the parties have executed this Agreement.

OCCULOGIX, INC.
By:	“Suh Kim”
	Suh Kim
	General Counsel

	“Stephen Kilmer”
Signature of Witness	Stephen Kilmer
Name of Witness (please print)

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EX-10.50

Exhibit 10.50

Execution Copy

LOAN AGREEMENT

THIS LOAN AGREEMENT (this “Agreement”), dated as of February 19, 2008, is made by and among OccuLogix, Inc. (the “Company”), a Delaware corporation with executive offices located at 2600 Skymark Avenue, Building 9, Suite 201, Mississauga, Ontario, L4W 5B2, Canada, the lenders listed on the Schedule of Lenders attached hereto as Exhibit A (individually, a “Lender” and, collectively, the “Lenders”) and Marchant Securities Inc. (the “Collateral Agent”), an Ontario corporation with offices located at 100 York Boulevard, Suite 404, Richmond Hill, Ontario, L4B 1J8, Canada.

BACKGROUND

A.           The Lenders have agreed to make available to the Company a loan in an aggregate principal amount of U.S.$3,000,000 (the “Loan”) on the terms and conditions of this Agreement.  Each of the Lenders has agreed to advance the amount set forth opposite his, her or its name on Exhibit A, representing his, her or its portion of the Loan (the “Individual Lender’s Advance”).

B.           The Company is attempting to raise additional capital by way of a private placement of shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”).

C.           The Company’s obligations under this Agreement will be secured by a pledge of 1,754,589 shares of the Series A Preferred Stock of OcuSense, Inc. (“OcuSense”), representing 50.1% of the issued and outstanding shares of the capital stock of OcuSense, of which the Company is the legal and beneficial owner.

D.           The proceeds of the Loan will be used (i) to fulfill the Company’s obligation, when such obligation becomes due and owing, to pay the last U.S.$2,000,000 installment of the purchase price payable to OcuSense pursuant to the Series A Preferred Stock Purchase Agreement, dated as of November 30, 2006, by and among OcuSense and the Company, as amended on October 29, 2007, and (ii) for general corporate purposes.

E.           Each of the Lenders is an “accredited investor” pursuant to Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”) and an “accredited investor” pursuant to National Instrument 45-106—Prospectus and Registration Exemptions (“NI 45-106”).

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Lenders hereby agree as follows:

ARTICLE I

LOAN

1.1           Advance.  Concurrently with his, her or its execution and delivery of this Agreement, and subject to the satisfaction or waiver of the closing conditions set forth in Article V in favor of the Lenders, each Lender shall advance to the Company his, her or its Individual Lender’s Advance by wire transfer in accordance with the Company’s instructions or by personal check.

1.2           Maturity Date.  The maturity date of the Loan (the “Maturity Date”) shall be the 180th day following the date hereof, if the Company’s management proxy statement prepared and filed in connection with the Private Placement (defined below) does not become subject to “review” by the U.S. Securities and Exchange Commission or any Canadian securities regulatory authority having jurisdiction (either, a “Securities Regulator”).  If such management proxy statement becomes subject to “review” by a Securities Regulator, then the Maturity Date shall be the 270th day following the date hereof.  The Company shall notify the Lenders as promptly as reasonably possible of whether or not such management proxy statement has become subject to “review” by a Securities Regulator.

1.3           Interest.  From the date hereof until maturity (whether by acceleration or otherwise and both before and after default), interest shall accrue on the unpaid principal amounts outstanding hereunder on a quarterly basis, without allowance or deduction, at a rate of 12% per annum, and shall be payable on the earliest to occur of (i) the Maturity Date, (ii) the Pre-payment Date (defined below) and (iii) an Event of Default (defined below).  For illustrative purposes, the Schedule of Interest attached hereto as Exhibit B sets forth the amount of interest that will be payable to each of the Lenders if the Loan remains outstanding until the Maturity Date.

1.4           Repayment.  In the absence of any pre-payment of the Loan pursuant to Section 1.5 or any Event of Default (defined below), on the Maturity Date, the Company shall pay the Lenders, in cash, the outstanding principal amount of the Loan plus accrued and unpaid interest thereon, calculated in accordance with Section 1.3.  For greater certainty, the cash paid by the Company pursuant to this Section 1.4 shall be allocated among the Lenders on a pro rata basis, in accordance with each Lender’s Individual Lender’s Advance.

1.5           Pre-payment.  At its option, and within its sole discretion, the Company may pre-pay the Loan in full at any time prior to the Maturity Date (the “Pre-Payment Date”) by:

(a)           (i) paying to the Lenders, in cash, the outstanding principal amount of the Loan plus accrued and unpaid interest thereon, calculated in accordance with Section 1.3, and (ii) issuing to the Lenders warrants (the “Warrants”), substantially in the form of the Warrant attached hereto as Exhibit C, exercisable into shares of the Common Stock, at an exercise price of U.S.$0.10 per share, and exercisable into shares of the Common Stock in an aggregate number equal to approximately 19.9% of the issued and outstanding shares of the Common Stock on the Pre-payment Date but which, in no event, shall exceed 20% of the issued and outstanding shares of the Common Stock on the Pre-payment Date (the “Warrant Shares”); or

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(b)           by no later than the tenth day following the date of closing of a private placement by the Company of shares of the Common Stock for aggregate gross proceeds of no less than U.S.$4,000,000 (the “Private Placement”), issuing to the Lenders shares of the Common Stock in an aggregate amount equal to the outstanding principal amount of the Loan plus accrued and unpaid interest thereon, calculated in accordance with Section 1.3, at a per share price that is 15% less than the per share price paid by the investors in the Private Placement but on other terms and conditions substantially similar to those accepted by the investors in the Private Placement, provided that the Company shall have obtained all of the corporate and regulatory approvals reasonably necessary for the issuance to the Lenders of shares of the Common Stock pursuant to this Section 1.5(b).

In the event of any pre-payment of the Loan pursuant to Section 1.5(a), the Warrants shall be allocated among the Lenders on a pro rata basis, in accordance with each Lender’s Individual Lender’s Advance.  Each of the Warrants shall be exercisable into a whole number of Warrant Shares, and, under no circumstance, shall the Company be obligated to issue a Warrant which, when exercised, will be exercisable into, or otherwise give rise to any obligation on the part of the Company to issue, a fractional Warrant Share.  For greater certainty, the cash portion of any pre-payment of the Loan pursuant to Section 1.5(a) shall be allocated among the Lenders on a pro rata basis, in accordance with each Lender’s Individual Lender’s Advance.

In the event of any pre-payment of the Loan pursuant to Section 1.5(b), the shares of the Common Stock to be issued to the Lenders shall be allocated among the Lenders on a pro rata basis, in accordance with each Lender’s Individual Lender’s Advance.  Under no circumstance, shall the Company be obligated to issue a fractional share of the Common Stock, and, if any fraction of a share of the Common Stock would be issuable to a Lender but for the application of this provision of this Section 1.5, then the number of shares of the Common Stock issuable to such Lender shall be rounded down to the nearest whole number.

The Warrants, the Warrant Shares and the shares of the Common Stock issued pursuant to Section 1.5(b) are referred to hereinafter, collectively, as the “Securities”.

1.6           Use of Proceeds.  The Lenders hereby acknowledge, and agree to, the use of proceeds of the Loan described in Recital D hereof.

ARTICLE II

REPRESENTATIONS AND WARRANTIES

2.1           Representations and Warranties of the Company.  The Company hereby represents and warrants to the Lenders as follows:

(a)           Organization and Qualification.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has the requisite legal authority to own and use its properties and assets and to carry on its business as currently conducted.  The Company is not in violation of any of the provisions of its certificate of incorporation, bylaws or other organizational or charter documents.  The Company is duly qualified to do business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by the Company makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not, individually or in the aggregate, have, or reasonably be expected to result in, a Material Adverse Effect (defined below).  For purposes of this Agreement, “Material Adverse Effect” means (i) a material adverse effect on the results of operations, assets, business or financial condition of the Company and its subsidiaries, taken as a whole on a consolidated basis, or (ii) material and adverse impairment of the Company’s ability to perform its obligations under this Agreement, provided that none of the following alone shall be deemed, in and of itself, to constitute a Material Adverse Effect:  (A) a change in the market price or trading volume of the Common Stock or (B) changes in general economic conditions or changes affecting the industry in which the Company operates generally (as opposed to Company-specific changes) so long as such changes do not have a disproportionate effect on the Company and its subsidiaries, taken as a whole.

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(b)           Authorization; Enforcement.  The Company has the requisite corporate authority to enter into this Agreement and to carry out its obligations hereunder.  The execution and delivery of this Agreement and the Share Pledge Agreement (defined below) have been duly authorized by all necessary corporate action on the part of the Company.  This Agreement has been duly executed and delivered by the Company and constitutes, and the Share Pledge Agreement (defined below), when executed and delivered in accordance with the terms hereof, will constitute, a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and (ii) the effect of rules of law governing the availability of specific performance and other equitable remedies.

(c)           No Conflicts.  The execution and delivery by the Company of this Agreement and the Share Pledge Agreement (defined below), and the performance by the Company of its obligations hereunder and thereunder, do not and will not (i) conflict with or violate any provision of the Company’s certificate of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default under (or an event that, with notice or lapse of time or both, would become a default under), or give to others any rights of termination, amendment, acceleration or cancellation under (with or without notice, lapse of time or both), any agreement, credit facility, debt or other instrument evidencing a debt of the Company or other understanding to which the Company is a party, or by which any of its properties or assets is bound, except to the extent that such conflict or default or termination, amendment, acceleration or cancellation right would not reasonably be expected to have a Material Adverse Effect, or (iii) result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject, or by which any of its properties or assets is bound, except to the extent that such violation would not reasonably be expected to have a Material Adverse Effect.

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(d)           The Securities.  On the Pre-payment Date, if any, the Securities to be issued pursuant to Section 1.5(a) or 1.5(b), as the case may be, will be duly authorized and, when issued and paid for in accordance with this Agreement, will be duly and validly issued and outstanding, fully paid and non-assessable, free and clear of all liens and will not be subject to pre-emptive or similar rights of stockholders of the Company (other than any that may be imposed by the Lenders).

(e)           Litigation.  There is no action, suit, claim or proceeding or, to the knowledge of the Company, inquiry or investigation, before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against or affecting the Company that would be reasonably expected, individually or in the aggregate, to have a Material Adverse Effect.

(f)           Share Pledge Agreement.  The Share Pledge Agreement (defined below) creates a valid first priority security interest in the Collateral (defined below).

2.2           Representations and Warranties of the Lenders.

(a)           Organization; Authority.  In the case of a Lender that is not a natural person, (i) such Lender is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has the requisite corporate, partnership or other power and authority to enter into this Agreement and to carry out its obligations hereunder, and (ii) the execution and delivery of this Agreement have been duly authorized by all necessary corporate, partnership or other action on the part of such Lender.  In the case of all Lenders, whether or not a natural person, this Agreement has been duly executed and delivered by such Lender and constitutes a valid and binding obligation of such Lender, enforceable against him, her or it in accordance with its terms, except as may be limited by (A) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors’ rights generally and (B) the effect of rules of law governing the availability of specific performance and other equitable remedies.

(b)           No Public Sale or Distribution.  On the Pre-payment Date, if any, such Lender will be acquiring the Warrants or shares of the Common Stock, as the case may be, and, if applicable, upon exercise of the Warrants, will be acquiring the Warrant Shares issuable upon the exercise thereof, in the ordinary course of business for his, her or its account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered under the Securities Act or under an exemption from such registration and in compliance with applicable U.S. federal and state securities laws, or except pursuant to a valid prospectus and registration under applicable Canadian provincial and territorial securities laws and regulations or under an exemption from the prospectus and registration requirements thereunder and in compliance with applicable Canadian provincial and territorial securities laws and regulations, and such Lender does not have a present arrangement to effect any distribution of the Securities to or through any person or entity.

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(c)           Investor Status.  On the date hereof and on the Pre-payment Date, if any, such Lender is and will be, respectively, (i) an “accredited investor” as defined in Rule 501(a) promulgated under Regulation D of the Securities Act, if he, she or it is a resident of the U.S., and (ii) an “accredited investor” as defined in NI 45-106, if he, she or it is a resident of Canada.

(d)           Experience of Lender.  Such Lender, either alone or together with his, her or its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of entering into this Agreement and making his, her or its Individual Lender’s Advance and the merits and risks of the prospective investment in the Securities, and such Lender has so evaluated such merits and risks.  Such Lender understands that he, she or it must bear the economic risk of an investment in the Securities, if any, indefinitely and is able to bear such risk and to afford a complete loss of such investment.

(e)           Access to Information.  Such Lender acknowledges that he, she or it has reviewed the SEC Reports (defined below) and has been afforded (i) the opportunity to ask such questions as he, she or it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of this Agreement and the merits and risks of the prospective investment in the Securities, (ii) access to information about the Company and its subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable him, her or it to evaluate the terms and conditions of this Agreement and the merits and risks of the prospective investment in the Securities and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed decision.  “SEC Reports” means the reports required to be filed by the Company under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including pursuant to Section 13(a) or 15(d) thereof, together with any materials filed or furnished by the Company under the Exchange Act, whether or not any such reports were required to be filed or furnished.

(f)             No Governmental Review.  Such Lender understands that no United States federal or state agency, Canadian provincial or territorial securities commission or any other government or governmental agency has passed on or made, or will pass on or make, any recommendation or endorsement of the Securities or the fairness or suitability of the prospective investment in the Securities.

(g)            Securities Transactions.  Such Lender has not engaged, directly or indirectly, and no person or entity acting on behalf of or pursuant to any understanding with such Lender has engaged, in any purchases or sales of any securities of the Company since the time such Lender was first contacted by the Company, or by any other person or entity, regarding an investment in the Company, including this Agreement and the transactions contemplated herein.

(h)             Restricted Securities.  Such Lender understands that the Securities will be characterized as “restricted securities” under U.S. federal securities laws inasmuch as, if issued, they will be acquired from the Company in a transaction not involving a public offering and that, under U.S. federal securities laws and applicable regulations, the Securities may be resold without registration under the Securities Act only in certain limited circumstances.  Such Lender acknowledges that all certificates representing any of the Securities will bear a restrictive legend to the foregoing effect and hereby consents to the transfer agent for the Common Stock making a notation on its records to implement the restrictions on transfer described herein.  Such Lender acknowledges that the Securities will not be qualified for distribution to the public in Canada and that such Lender will not, directly or indirectly, offer or re-sell the Securities in Canada or to any Canadian resident, or to any person or entity who is acting on behalf of a Canadian resident or to any person or entity whom he, she or it believes intends to re-offer, re-sell or deliver any of the Securities in Canada, unless permitted under applicable Canadian provincial and territorial securities laws and regulations.

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(i)           No Legal, Tax or Investment Advice.  Such Lender understands that nothing in this Agreement or any other materials presented by or on behalf of the Company to him, her or it in connection with this Agreement and the transactions contemplated herein, including the prospective investment in the Securities, constitutes legal, tax or investment advice.  Such Lender has consulted such legal, tax and investment advisors as he, she or it, in his, her or its sole discretion, has deemed necessary or appropriate in the circumstances.

ARTICLE III

SECURITY

3.1           Share Pledge Agreement.  As continuing collateral security for all indebtedness, obligations and liabilities, present or future, absolute or contingent, matured or not, at any time owing by the Company to any of the Lenders, or remaining unpaid to any of the Lenders, under or in connection with this Agreement (collectively, the “Secured Obligations”), the Company shall execute and deliver the share pledge agreement, in the form of the Share Pledge Agreement attached hereto as Exhibit D (the “Share Pledge Agreement”).  The Share Pledge Agreement shall be entered into in favor of the Collateral Agent for the rateable benefit of the Lenders.

3.2           Appointment of Collateral Agent.  Each of the Lenders hereby irrevocably designates and appoints the Collateral Agent as the collateral agent of such Lender under the Share Pledge Agreement, and each of the Lenders hereby irrevocably authorizes the Collateral Agent, in such capacity, to take such action on such Lender’s behalf under the Share Pledge Agreement, and to exercise such powers and perform such duties, as are expressly delegated to the Collateral Agent by the provisions of this Agreement and/or the Share Pledge Agreement, together with such other powers as are reasonably incidental thereto, including the power to execute documents on behalf of the Lenders.  The Collateral Agent hereby accepts such designation and appointment and agrees to perform its obligations as collateral agent in accordance with the provisions of this Agreement and the Share Pledge Agreement.  Notwithstanding any contrary provision in this Agreement or the Share Pledge Agreement, the Collateral Agent shall not have any duties or responsibilities, except those expressly set forth herein or therein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or the Share Pledge Agreement or otherwise shall exist against the Collateral Agent.  The Collateral Agent hereby declares that it shall hold the collateral charged by the Share Pledge Agreement (the “Collateral”) and the rights granted to it under this Agreement and the Share Pledge Agreement solely in its capacity as collateral agent for the rateable benefit of the Lenders.  Notwithstanding any other provision in this Agreement or the Share Pledge Agreement, the Collateral Agent may refrain from doing anything which would be, or might be in its reasonable opinion, contrary to any applicable law.

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3.3           Delegation of Duties.  The Collateral Agent may perform any of its duties under this Agreement and the Share Pledge Agreement by or through agents or attorneys-in-fact and shall be entitled to rely upon the advice of counsel concerning all matters pertaining to such duties.  The Collateral Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact, provided that they were selected by the Collateral Agent with reasonable care.

3.4           Exculpatory Provisions.  None of the Collateral Agent or any of its officers, directors, employees, agents or attorneys-in-fact shall be liable for any action lawfully taken or omitted to be taken by it or such person under, or in connection with, this Agreement or the Share Pledge Agreement (except for its or such person’s gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction).  The Collateral Agent shall have no obligation to any of the Lenders to ascertain, or to inquire as to, the observance or performance by the Company of any of its agreements or covenants contained herein or the Share Pledge Agreement or to inspect the properties, books or records of the Company.

3.5           Reliance by Collateral Agent.  The Collateral Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, fax, statement, e-mail message, order or other document or conversation believed by the Collateral Agent to be genuine and correct and to have been signed, sent or made by the proper person or persons and upon the advice of legal counsel, accountants or other experts.  The Collateral Agent shall be entitled to refuse to take, or continue to take, any action under this Agreement or the Share Pledge Agreement unless it first receives such advice or concurrence of Required Lenders (defined below) as the Collateral Agent deems appropriate or unless it shall be indemnified to its satisfaction by the Lenders against any and all liability that may be incurred by it by reason of taking, or continuing to take, such action.  For purposes of this Agreement, “Required Lenders” means Lenders whose Individual Lender’s Advances, in aggregate, total 50% or more of the principal amount of the Loan.  In all cases, the Collateral Agent shall be fully protected in acting, or in refraining from acting, under this Agreement or the Share Pledge Agreement in accordance with any written request of Required Lenders, and such request, together with any action or omission pursuant thereto, shall be binding upon all of the Lenders.

3.6           Indemnification.  Each of the Lenders hereby agrees to indemnify the Collateral Agent in its capacity as collateral agent, ratably in accordance with his, her or its Individual Lender’s Advance, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may be imposed on, incurred by or asserted against the Collateral Agent, at any time (including at any time following the payment in full of the Secured Obligations), in any way relating to, or arising from, this Agreement or the Share Pledge Agreement, or the transactions contemplated herein or therein, or any action or omission in connection with any of the foregoing (the “Collateral Agent’s Claims”), provided, however, that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the Collateral Agent’s gross negligence or willful misconduct as determined by a final judgment of a court of competent jurisdiction.  This Section 3.6 shall survive until the first anniversary of the date of payment in full of the Secured Obligations.

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3.7           Successor Collateral Agent.  The Collateral Agent may resign as collateral agent upon 20 days’ prior written notice to the Lenders and the Company.  If Required Lenders deem it advisable, they may terminate the Collateral Agent’s authority to act on behalf of the Lenders pursuant to this Article III upon 20 days’ prior written notice to the other Lenders and the Company.  If the Collateral Agent resigns, or if its authority to act on behalf of the Lenders is terminated, pursuant to this Section 3.7, then Required Lenders shall appoint, from among the Lenders, a successor collateral agent, which successor collateral agent shall be approved by the Company (which approval shall not be withheld unreasonably), whereupon such successor collateral agent shall succeed to the rights, powers and duties of the Collateral Agent, and the term “Collateral Agent” shall mean such successor collateral agent effective upon such appointment and approval, and whereupon the former Collateral Agent’s rights, powers and duties as collateral agent shall be terminated, without any other further act or deed on the part of any of the former Collateral Agent, the Lenders or the Company.  After its resignation or termination as collateral agent, the provisions of this Article III shall inure to the benefit of any former Collateral Agent with respect to any and all of its actions or omissions while it acted as collateral agent under this Agreement and the Share Pledge Agreement.

3.8           Enforcement of Security.  Upon an Event of Default (defined below), the security constituted by the Share Pledge Agreement (the “Security”) shall become enforceable, and Required Lenders thereafter may provide the Collateral Agent with a written request to enforce the Security.

3.9           Application of Proceeds of Realization.  Subject to the claims, if any, of the Company’s creditors whose claims rank in priority to the Security, all cash Proceeds of Realization (defined below) shall be applied and distributed as follows:

(a)           first, to the payment of all reasonable costs and expenses incurred by the Collateral Agent (including legal fees and disbursements) in the exercise of any or all of the powers granted to it under this Agreement and/or the Share Pledge Agreement and to the payment of the remuneration of any receiver appointed by the Collateral Agent or by a court at the instance of the Collateral Agent in respect of the Collateral or any part thereof (a “Receiver”) and all costs and expenses properly incurred by such Receiver (including legal fees and disbursements) in the exercise of any or all of the powers granted to it;

(b)           second, to the payment of all amounts of money borrowed or advanced, if any, by the Collateral Agent or a Receiver and any interest thereon;

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(c)           third, to the payment of the Secured Obligations to the Lenders, pro rata in accordance with their respective Individual Lender’s Advances; and

(d)           the balance, if any, in accordance with applicable law.

“Proceeds of Realization” means proceeds derived by, or on behalf of, the Collateral Agent from any sale, disposition or other realization of the Collateral.

3.10           Discharge of Security.  In the event of a permitted sale or other disposition of any of the Collateral, the Security therein shall terminate automatically and be deemed discharged and released.  Each of the Lenders hereby authorizes the Collateral Agent, at the expense of the Company, to execute and deliver such discharges and other instruments necessary or advisable for the purposes of releasing and discharging the Security therein, of recording the provision or effect thereof in any public office where the Security may be registered or recorded and of more fully and effectively carrying out the intent of this Section 3.10.

3.11           Further Assurances.  From time to time, upon the reasonable request of the Collateral Agent, the Company shall make, do and execute and deliver, or cause to be made, done and executed and delivered, all such further acts, deeds, assurances, documents and things as may be necessary or advisable, in the reasonable opinion of the Collateral Agent, to perfect the Security or to carry out more fully and effectively the intent of this Agreement and the Share Pledge Agreement.

ARTICLE IV

COVENANTS

4.1           Covenants of the Company.  Until the Secured Obligations are paid in full, the Company hereby agrees:

(a)           to pay, whenever due, all principal, interest and other amounts outstanding under this Agreement;

(b)           to comply with all of its obligations under this Agreement and the Share Pledge Agreement;

(c)           to notify the Lenders and the Collateral Agent promptly of (i) any material breach by the Company of its representations and warranties or covenants herein or in the Share Pledge Agreement and (ii) any Event of Default (defined below);

(d)           not to create, assume or suffer to exist any lien upon the Collateral ranking ahead of, or in priority to, the Security;

(e)           not to sell, or otherwise dispose of, the Collateral unless the proceeds of such sale or disposition shall be sufficient to pay the Secured Obligations in full and shall be so used, provided that nothing in this Section 4.1(e) shall be read or construed as prohibiting the Company from selling, or otherwise disposing of, the Collateral if the proceeds of such sale or disposition shall be sufficient to pay the Secured Obligations in full and shall be so used; and

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(f)           to do, or cause to be done, all things necessary or desirable to maintain the Company’s existence and good standing under the laws of the State of Delaware and the Company’s legal authority to own and use its properties and assets and to carry on its business as currently conducted.

4.2           Covenants of the Lenders.  Each of the Lenders hereby, as to himself, herself or itself and for no other Lender, agrees:

(a)           to notify the Company promptly of any material breach by him, her or it of his, her or its representations and warranties or covenants herein;

(b)           at the Closing (defined below), to complete and execute and deliver the Accredited Investor Certificate attached hereto as Exhibit E, if such Lender is a resident of the U.S., and the Accredited Investor Certificate attached hereto as Exhibit F, if such Lender is a resident of Canada (either, the “Accredited Investor Certificate”);

(c)           at all times until the Maturity Date, to remain (i) an “accredited investor” as defined in Rule 501(a) promulgated under Regulation D of the Securities Act, if he, she or it is a resident of the U.S., and (ii) an “accredited investor” as defined in NI 45-106, if he, she or it is a resident of Canada; and

(d)           upon a breach of the covenant contained in Section 4.2(c), to assign his, her or its rights and obligations under, and his, her or its right, title and interest in and to, this Agreement and the Share Pledge Agreement, to a U.S. or Canadian resident third party approved by the Company in writing (which approval shall not be withheld unreasonably) that qualifies as an “accredited investor” as defined in Rule 501(a) promulgated under Regulation D of the Securities Act, if such third party is a resident of the U.S., and an “accredited investor” as defined in NI 45-106, if such third party is a resident of Canada, and that certifies in writing its “accredited investor” status and agrees, in writing, to assume such Lender’s obligations under this Agreement.

ARTICLE V

CONDITIONS

5.1           Closing Conditions in Favor of the Lenders.  The obligation of each of the Lenders to advance its Individual Lender’s Advance is subject to the satisfaction, or the waiver by such Lender, on or prior to such advance (the “Closing”), of each of the following conditions:

(a)           Representations and Warranties.  The representations and warranties of the Company contained herein shall be true and correct in all material respects as of the date hereof and as of the Closing as though made on and as of such date;

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(b)           Share Pledge Agreement.  The Company shall have executed and delivered the Share Pledge Agreement; and

(c)           Performance.  The Company shall have performed, satisfied and complied with, in all material respects, all covenants, agreements and conditions required by this Agreement or the Share Pledge Agreement to be performed, satisfied or complied with by it at or prior to the Closing.

5.2           Closing Conditions in Favor of the Company.  The entering into of this Agreement by the Company with each of the Lenders, and the acceptance by the Company of such Lender’s Individual Lender’s Advance, is subject to the satisfaction, or the waiver by the Company, at or prior to the Closing, of each of the following conditions:

(a)           Representations and Warranties.  The representations and warranties of such Lender contained herein shall be true and correct in all material respects as of the date hereof and as of the Closing as though made on and as of such date;

(b)           Accredited Investor Certificate.  Such Lender shall have completed and executed and delivered the Accredited Investor Certificate in accordance with Section 4.2(b); and

(c)           Performance.  Such Lender shall have performed, satisfied and complied with, in all material respects, all other covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by him, her or it at or prior to the Closing.

ARTICLE VI

EVENTS OF DEFAULT

6.1           Events of Default.  The occurrence of any of the following events shall constitute an “Event of Default”:

(a)           Failure to Pay.  The Company defaults in the payment, when due and payable, of the outstanding principal amount of the Loan plus accrued and unpaid interest thereon, calculated in accordance with Section 1.3, and such default continues for seven days or longer;

(b)           Breach of Representation and Warranty or Covenant.  Without duplication of Section 6.1(a), the Company breaches, in a material respect, any representation and warranty or covenant contained herein or in the Share Pledge Agreement and fails to remedy such material breach, to the satisfaction of Required Lenders, on or prior to the tenth day following the earlier to occur of (i) the date on which Required Lenders notify the Company, in writing, of such material breach and (ii) the date on which the Company becomes aware of such material breach; or

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(c)           Bankruptcy.  The Company (i) commences a voluntary case or proceeding, (ii) consents to the entry of an order for relief against it in an involuntary case or proceeding, (iii) consents to the appointment of a trustee, receiver, receiver and manager, liquidator, administrator or other similar official of it or for all or substantially all of its properties and assets, (iv) makes a general assignment for the benefit of its creditors, (v) consents to the filing of a petition in bankruptcy against it or (vi) takes any comparable action, under the Bankruptcy and Insolvency Act (Canada), the Companies Creditors Arrangement Act (Canada) or Title 11 of the United States Code, as such laws may be supplemented or amended from time to time, together with all rules, regulations and instruments made thereunder, or any other similar Canadian law, U.S. federal or state law or foreign law relating to bankruptcy, insolvency, winding up, administration, receivership or other similar matters.

Upon an Event of Default, Required Lenders may declare the outstanding principal amount of the Loan plus accrued and unpaid interest thereon, calculated in accordance with Section 1.3, to be due and payable immediately.   

ARTICLE VII

GENERAL

7.1           Amendments; Waivers.  No provision of this Agreement or the Share Pledge Agreement may be amended or waived except in a written instrument signed, (i) in the case of an amendment, by the Company, Required Lenders and the Collateral Agent or (ii) in the case of a waiver, by the party against whom enforcement of any such waiver is sought, provided that, in the case of waiver by or on behalf of all of the Lenders, such written instrument shall be signed by Required Lenders.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.  The Collateral Agent may enter into technical, minor or administrative amendments to the Share Pledge Agreement without the consent of the Lenders.

7.2           Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile or e-mail at the facsimile number or e-mail address referred to in this Section 7.2 prior to 6:30 p.m. (Eastern time) on a business day in the Province of Ontario (“Business Day”), (b) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile or e-mail at the facsimile number or e-mail address referred to in this Section 7.2 on a day that is not a Business Day or later than 6:30 p.m. (Eastern time) on any Business Day, (c) the Business Day following the date of deposit with a nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given.  The addresses, facsimile numbers and e-mail addresses for such notices and communications are those set forth on the signature pages hereof, or such other address, facsimile number or e-mail address as may be designated in writing hereafter, in the same manner, by the relevant party hereto.

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7.3           Survival.  All representations and warranties and covenants herein shall survive the execution and delivery of this Agreement and the advance by each of the Lenders of his, her or its Individual Lender’s Advance.

7.4           Headings.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

7.5           Meaning of “Including”.  The word “including”, whenever used in this Agreement, shall be deemed to be followed by the phrase “without limitation”.

7.6           Entire Agreement.  This Agreement, together with the Exhibits hereto, and the Share Pledge Agreement contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such agreements and exhibits.  At or after the Closing, and without further consideration, the parties hereto will make, do and execute and deliver, or cause to be made, done and executed and delivered, such further acts, deeds, assurances, documents and things as may be reasonably requested by any of the other parties hereto in order to give practical effect to the intention of the parties hereunder.

7.7           Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.  The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of Required Lenders.  Without derogating from the obligation contained in Section 4.2(d), each of the Lenders may assign its rights and obligations under, and his, her or its right, title and interest in and to, this Agreement to a U.S. or Canadian resident third party approved by the Company in writing (which approval shall not be withheld unreasonably) that qualifies as an “accredited investor” as defined in Rule 501(a) promulgated under Regulation D of the Securities Act, if such third party is a resident of the U.S., and an “accredited investor” as defined in NI 45-106, if such third party is a resident of Canada, and that certifies in writing its “accredited investor” status and agrees, in writing, to assume such Lender’s obligations under this Agreement.

7.8           No Third Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person or entity.

7.9           Governing Law; Venue.  ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.  THE PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE PROVINCE OF ONTARIO FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT BY ANY OF THE PARTIES HERETO, IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF THE SHARE PLEDGE AGREEMENT), AND HEREBY IRREVOCABLY WAIVE, AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY ANY OF THE OTHER PARTIES HERETO, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT OR THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER.

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7.10           Execution.  This Agreement may be executed by one or more of the parties hereto on any number of separate counterparts (including by facsimile or e-mail transmission), all of which when taken together shall be considered one and the same agreement.  In the event that any signature is delivered by facsimile transmission or e-mail attachment, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or e-mail-attached signature page were an original thereof.

7.11           Severability.  If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

[SIGNATURE PAGES TO FOLLOW]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

OCCULOGIX, INC.
By:	“William G. Dumencu”
	Name:	William G. Dumencu
	Title:	Chief Financial Officer and Treasurer
Address for Notices:
2600 Skymark Avenue
Building 9, Suite 201
Mississauga, Ontario
L4W 5B2
Fax No.:  905-602-7623
Telephone No.:  905-602-0887
E-mail:  elias.vamvakas@occulogix.com; or bill.dumencu@occulogix.com
Attention:  Elias Vamvakas and William G. Dumencu
MARCHANT SECURITIES INC., as the Collateral Agent
By:	“Gregory L. Marchant”
	Name:	Gregory L. Marchant
	Title:	President and CEO
Address for Notices:
100 York Boulevard, Suite 404
Richmond Hill, Ontario
L4B 1J8
Fax No.:  416-322-7527
Telephone No.:  416-322-9700, ext. 5000
E-mail:  gmarchant@marchantsecurities.com
Attention:  Gregory L. Marchant

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Lender Signature Page

By his, her or its execution and delivery of this signature page, the undersigned hereby joins in and agrees to be bound by the terms and conditions of the Loan Agreement, dated as of, 2008 (the “Loan Agreement”), by and among OccuLogix, Inc., the Lenders (as defined therein) and Marchant Securities Inc. and authorizes this signature page to be attached to the Loan Agreement or counterparts thereof.

Name of Lender:
By:
	Name:
	Title:

Address:

Telephone No.:

Facsimile No.:

E-mail Address:

Principal Amount: U.S.$

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Exhibit A

SCHEDULE OF LENDERS

Lender	Individual Lender’s Advance (U.S.$)
1243690 Ontario Inc.	$90,000
1317179 Ontario Inc.	$25,000
2144304 Ontario Inc.	$35,000
6319335 Canada Inc.	$30,000
Nikolai Antropov	$50,000
Simon Benstead	$150,000
Botch Inc.	$100,000
Jennifer Colton	$10,000
Michael Colton	$10,000
Prakesh Dhadphale	$25,000
Julia Della Maestra	$200,000
Discovery Place Child Care Centre Ltd.	$50,000
DME Holdings Inc.	$50,000
Excite Holdings Corporation	$25,000
Robert I. Gans, M.D., Trustee	$15,000
Stephanie Gowing	$75,000
Gail M. Horwitz	$15,000
JimJan Consultants Inc.	$150,000
Kaleo Financial Inc.	$75,000
Deborah A. Karp, as Trustee under the Deborah A. Karp Revocable Trust Agreement dated May 6, 2004	$20,000
Peter McCague	$25,000
MSW Investments Limited	$100,000
Chris Nianiaris	$125,000
Terry O’Neal	$50,000
Sharon Padzensky	$50,000
Mary Pejic	$65,000
Peoples International Co. Inc.	$50,000
Etienne Puckett and Tracy Puckett	$50,000
Carol Ann Rees	$75,000
Vladimir Riajskikh	$25,000
Daniel Veal and Elizabeth Veal	$75,000
Jimmy Veal and Linda Veal	$50,000
Zachry Veal and Leigh Veal	$75,000
Peter Volpe	$50,000
Glenn Warheit and Dayna Warheit, Joint Tenants	$10,000
Glenn Warheit, Trustee FBO Glenn A. Warheit Living Trust	$25,000
Lynne Warheit and Phil Warheit, Joint Tenants	$50,000
Dr. Brock Wright	$550,000
Dr. Brock Wright in trust	$100,000
Janet E. Wright	$200,000

Exhibit B

SCHEDULE OF INTEREST

 

Lender	Individual Lender’s Advance (U.S.$)	Interest earned for 180 days	Interest earned for 270 days
1243690 Ontario Inc.	$90,000	$      5,326.03	$      7,989.04
1317179 Ontario Inc.	$25,000	$      1,479.45	$      2,219.18
2144304 Ontario Inc.	$35,000	$      2,071.23	$      3,106.85
6319335 Canada Inc.	$30,000	$      1,775.34	$      2,663.01
Nikolai Antropov	$50,000	$      2,958.90	$      4,438.36
Simon Benstead	$150,000	$      8,876.71	$    13,315.07
Botch Inc.	$100,000	$      5,917.81	$      8,876.71
Jennifer Colton	$10,000	$         591.78	$         887.67
Michael Colton	$10,000	$         591.78	$         887.67
Prakesh Dhadphale	$25,000	$      1,479.45	$      2,219.18
Julia Della Maestra	$200,000	$    11,835.62	$    17,753.42
Discovery Place Child Care Centre Ltd.	$50,000	$      2,958.90	$      4,438.36
DME Holdings Inc.	$50,000	$      2,958.90	$      4,438.36
Excite Holdings Corporation	$25,000	$      1,479.45	$      2,219.18
Robert I. Gans, M.D., Trustee	$15,000	$         887.67	$      1,331.51
Stephanie Gowing	$75,000	$      4,438.36	$      6,657.53
Gail M. Horwitz	$15,000	$         887.67	$      1,331.51
JimJan Consultants Inc.	$150,000	$      8,876.71	$    13,315.07
Kaleo Financial Inc.	$75,000	$      4,438.36	$      6,657.53
Deborah A. Karp, as Trustee under the Deborah A. Karp Revocable Trust Agreement dated May 6, 2004	$20,000	$      1,183.56	$      1,775.34
Peter McCague	$25,000	$      1,479.45	$      2,219.18
MSW Investments Limited	$100,000	$      5,917.81	$      8,876.71
Chris Nianiaris	$125,000	$      7,397.26	$    11,095.89
Terry O’Neal	$50,000	$      2,958.90	$      4,438.36
Sharon Padzensky	$50,000	$      2,958.90	$      4,438.36
Mary Pejic	$65,000	$      3,846.58	$      5,769.86
Peoples International Co. Inc.	$50,000	$      2,958.90	$      4,438.36
Etienne Puckett and Tracy Puckett	$50,000	$      2,958.90	$      4,438.36
Carol Ann Rees	$75,000	$      4,438.36	$      6,657.53
Vladimir Riajskikh	$25,000	$      1,479.45	$      2,219.18
Daniel Veal and Elizabeth Veal	$75,000	$      4,438.36	$      6,657.53
Jimmy Veal and Linda Veal	$50,000	$      2,958.90	$      4,438.36
Zachry Veal and Leigh Veal	$75,000	$      4,438.36	$      6,657.53
Peter Volpe	$50,000	$      2,958.90	$      4,438.36
Glenn Warheit and Dayna Warheit, Joint Tenants	$10,000	$         591.78	$         887.67
Glenn Warheit, Trustee FBO Glenn A. Warheit Living Trust	$25,000	$      1,479.45	$      2,219.18
Lynne Warheit and Phil Warheit, Joint Tenants	$50,000	$      2,958.90	$      4,438.36
Dr. Brock Wright	$550,000	$    32,547.95	$    48,821.92
Dr. Brock Wright in trust	$100,000	$      5,917.81	$      8,876.71
Janet E. Wright	$200,000	$    11,835.62	$    17,753.42
Totals	$3,000,000	$  177,534.25	$  266,301.37

Exhibit C

WARRANT

NEITHER THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

NEITHER THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE ARE QUALIFIED FOR DISTRIBUTION IN ANY OF THE PROVINCES OR TERRITORIES OF CANADA AND MAY NOT BE OFFERED OR SOLD IN ANY PROVINCE OR TERRITORY OF CANADA EXCEPT PURSUANT TO A VALID PROSPECTUS AND REGISTRATION UNDER APPLICABLE CANADIAN PROVINCIAL AND TERRITORIAL SECURITIES LAWS AND REGULATIONS (COLLECTIVELY, “CANADIAN SECURITIES LAWS”) OR UNDER AN EXEMPTION FROM THE PROSPECTUS AND REGISTRATION REQUIREMENTS THEREUNDER AND IN ACCORDANCE WITH CANADIAN SECURITIES LAWS.

THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

OCCULOGIX, INC.

WARRANT

Warrant No.  _______ Dated:  ■, 2008

OCCULOGIX, INC., a Delaware corporation (the “Company”), hereby certifies that, for value received, or its registered assigns (the “Holder”) is entitled to purchase from the Company up to a total of  shares of common stock, $0.001 par value per share (the “Common Stock”), of the Company (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”) at an exercise price equal to U.S.$0.10 per share (as adjusted from time to time as provided in Section 9, the “Exercise Price”), at any time on or after the 180th day following the Pre-Payment Date (as defined in the Loan Agreement (defined below)) (the “Initial Exercise Date”) and through and including the date that is five years from the date of issuance hereof (the “Expiration Date”), and subject to the following terms and conditions.  This Warrant (this “Warrant”) is one of a series of similar warrants issued pursuant to Section 1.5(a) of that certain Loan Agreement, dated as of ■, 2008 by and among the Company, the Lenders identified therein and Marchant Securities Inc. (the “Loan Agreement”).  All such warrants are referred to herein, collectively, as the “Warrants.”

1.              Definitions.  In addition to the terms defined elsewhere in this Warrant, capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Loan Agreement.

2.              Registration of Warrant.  The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the Holder of record hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder and for all other purposes, absent actual notice to the contrary.

3.              Registration of Transfers.  The Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the transfer agent for the Common Stock (the “Transfer Agent”) or to the Company at its address specified herein.  Upon any such registration of transfer, a new warrant to purchase Common Stock, in substantially the form of this Warrant (any such new warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder.  The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant.

4.             Exercise and Duration of Warrants.

(a)           This Warrant shall be exercisable by the registered Holder at any time and from time to time on or after the Initial Exercise Date to and including the Expiration Date.  At 6:30 p.m. (Eastern time) on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value; provided that, if the average of the Closing Prices (defined below) for the five Trading Days (defined below) immediately prior to (but not including) the Expiration Date exceeds the Exercise Price on the Expiration Date, then this Warrant shall be deemed to have been exercised in full (to the extent not previously exercised) on a “cashless exercise” basis at 6:30 p.m. (Eastern time) on the Expiration Date.  For purposes of this Warrant, “Closing Price” means, for any date, the closing price per share of the Common Stock for such date (or the nearest preceding date) on the primary stock market or exchange or quotation system on which the Common Stock is then listed or quoted (the “Primary Trading Market”).  For purposes of this Warrant, “Trading Day” means (i) any day on which the Common Stock is listed or quoted and traded on the Primary Trading Market, or (ii) if trading ceases to occur on the Primary Trading Market, any business day in the State of New York.

(b)           A Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached hereto (the “Exercise Notice”), appropriately completed and duly signed, and (ii) payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised (which may take the form of a “cashless exercise” if so indicated in the Exercise Notice), and the date such items are delivered to the Company (as determined in accordance with the notices provision hereof) is an “Exercise Date”.  The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder.  Execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.

5.              Delivery of Warrant Shares.

(a)           Upon exercise of this Warrant, the Company shall promptly (but in no event later than five Trading Days after the Exercise Date) issue or cause to be issued and cause to be delivered to or upon the written order of the Holder, and in such name or names as the Holder may designate, a certificate for the Warrant Shares issuable upon such exercise, free of restrictive legends unless the Warrant Shares are not freely transferable without volume restrictions pursuant to Rule 144 under the Securities Act.  The Holder, or any person or entity so designated by the Holder to receive Warrant Shares, shall be deemed to have become the holder of record of such Warrant Shares as of the Exercise Date.  The Company shall, upon request of the Holder, use its best efforts to deliver Warrant Shares hereunder electronically through The Depository Trust Company or another established clearing corporation performing similar functions.

(b)           This Warrant is exercisable, either in its entirety or, from time to time, for a portion of the number of Warrant Shares.  Upon surrender of this Warrant following one or more partial exercises, the Company shall issue or cause to be issued, at its expense, a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.

(c)           In addition to any other rights available to a Holder, if the Company fails to deliver to the Holder a certificate representing Warrant Shares by the third Trading Day after the date on which delivery of such certificate is required by this Warrant, and if after such third Trading Day the Holder purchases (in an open market transaction or otherwise) shares of the Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares that the Holder anticipated receiving from the Company (a “Buy-In”), then the Company shall, within three Trading Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, if any) for the shares of the Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate (and to issue such shares of the Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder a certificate representing such shares of the Common Stock and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) the number of such shares of the Common Stock, times (B) the Closing Price on the date of the event giving rise to the Company’s obligation to deliver such certificate.

(d)           The Company’s obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any person or entity or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other person or entity of any obligation to the Company or any violation or alleged violation of law by the Holder or any other person or entity, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares.  Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of the Common Stock upon exercise of this Warrant as required pursuant to the terms hereof.

6.              Charges, Taxes and Expenses.  Issuance and delivery of certificates for shares of the Common Stock upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder.  The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

7.             Replacement of Warrant.  If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and a customary and reasonable bond or indemnity, if requested.  Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third party costs as the Company may prescribe.

8.             Reservation of Warrant Shares.  The Company covenants that it will, at all times, reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from pre-emptive rights or any other contingent purchase rights of persons other than the Holder (after giving effect to the adjustments and restrictions of Section 9, if any).  The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and non-assessable.  The Company will take all such action as may be necessary to assure that such shares of the Common Stock may be issued as provided herein without violation of any applicable law or regulation or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed.

9.             Certain Adjustments.  The Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9.

(a)           Stock Dividends and Splits.  If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on the Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of the Common Stock, (ii) subdivides outstanding shares of the Common Stock into a larger number of shares or (iii) combines outstanding shares of the Common Stock into a smaller number of shares, then in each such case, the Exercise Price shall be multiplied by a fraction, of which the numerator shall be the number of shares of the Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of the Common Stock outstanding immediately after such event.  Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.

(b)           Pro Rata Distributions.  If the Company, at any time while this Warrant is outstanding, distributes to holders of the Common Stock (i) evidences of its indebtedness, (ii) any security (other than a distribution of the Common Stock covered by the preceding paragraph), (iii) rights or warrants to subscribe for or purchase any security or (iv) any other asset other than cash dividends out of earnings (in each case, “Distributed Property”), then in each such case, the Holder shall be entitled, upon exercise of this Warrant for the purchase of any or all of the Warrant Shares issuable upon the exercise of this Warrant, to receive the amount of Distributed Property which would have been payable to the Holder, had the Holder been the holder of such Warrant Shares on the record date for the determination of stockholders entitled to such Distributed Property.  The Company will, at all times, set aside in escrow and keep available for distribution to the Holder, upon exercise of this Warrant, a portion of the Distributed Property to satisfy the distribution to which the Holder is entitled pursuant to the preceding sentence.

(c)           Fundamental Transactions.  If any capital reorganization, reclassification of the capital stock of the Company, consolidation or merger of the Company with another corporation in which the Company is not the survivor, or sale, transfer or other disposition of all or substantially all of the Company’s assets to another corporation shall be effected (all such transactions being hereinafter referred to as a “Fundamental Transaction”), then the Company shall use its best efforts to ensure that lawful and adequate provision shall be made whereby the Holder shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions herein specified and in lieu of the Warrant Shares immediately theretofore issuable upon exercise of this Warrant, such shares of stock, securities or assets as would have been issuable or payable with respect to or in exchange for a number of Warrant Shares equal to the number of Warrant Shares immediately theretofore issuable upon exercise of this Warrant, had such reorganization, reclassification, consolidation, merger, sale, transfer or other disposition not taken place, and, in any such case, appropriate provision shall be made with respect to the rights and interests of the Holder to the end that the provisions hereof (including, without limitation, provision for adjustment of the Exercise Price) shall thereafter be applicable, as nearly equivalent as may be practicable in relation to any share of stock, securities or assets thereafter deliverable upon the exercise thereof.  The Company shall not effect any such consolidation, merger, sale, transfer or other disposition unless, prior to or simultaneously with the consummation thereof, the successor corporation (if other than the Company) resulting from such consolidation or merger, or the corporation purchasing or otherwise acquiring such assets or other appropriate corporation or entity shall assume the obligation to deliver to the Holder, at the last address of the Holder appearing on the books of the Company, such shares of stock, securities or assets as, in accordance with the foregoing provisions, the Holder may be entitled to purchase and the other obligations under this Warrant.  The provisions of this Section 9(c) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales, transfers or other dispositions, each of which transactions shall also constitute a Fundamental Transaction.

(d)           Number of Warrant Shares.  Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) of this Section 9, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased (as the case may be) proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the decreased or increased (as the case may be) number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.

(e)           Calculations.  All calculations under this Section 9 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable.  The number of shares of the Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of the Common Stock.

(f)           Notice of Adjustments.  Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based.  Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Transfer Agent.

(g)           Notice of Corporate Events.  If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of the Common Stock, including, without limitation, any granting of rights or warrants to subscribe for or purchase any capital stock of the Company, (ii) authorizes or approves, enters into any agreement contemplating, or solicits stockholder approval for, any Fundamental Transaction or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction, at least ten calendar days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to insure that the Holder is given the practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.

10.           Payment of Exercise Price.  The Holder shall pay the Exercise Price in immediately available funds; provided, however, that the Holder may satisfy its obligation to pay the Exercise Price through a “cashless exercise”, in which event the Company shall issue to the Holder the number of Warrant Shares determined as follows:

X = Y [(A-B)/A]

where:

X = the number of Warrant Shares to be issued to the Holder.

Y = the number of Warrant Shares with respect to which this Warrant is being exercised.

A = the average of the Closing Prices for the five Trading Days immediately prior to (but not including) the Exercise Date.

B = the Exercise Price.

For purposes of Rule 144 promulgated under the Securities Act, it is intended, understood and acknowledged that the Warrant Shares issued in a cashless exercise transaction shall be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was originally issued pursuant to the Loan Agreement.

11.           Fractional Shares.  The Company shall not be required to issue, or cause to be issued, fractional Warrant Shares on the exercise of this Warrant.  If any fraction of a Warrant Share would, except for the provisions of this Section 11, be issuable upon exercise of this Warrant, the number of Warrant Shares to be issued will be rounded down to the nearest whole share.

12.           Notices.  Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in the Loan Agreement prior to 6:30 p.m. (Eastern time) on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in the Loan Agreement on a day that is not a Trading Day or later than 6:30 p.m. (Eastern time) on any Trading Day, (iii) the Trading Day following the date of delivery to the courier service, if sent by a nationally recognized overnight courier service or (iv) upon actual receipt by the party to whom such notice is required to be given.  The address for such notices or communications shall be as set forth in the Loan Agreement.

13.           Warrant Agent.  The Company shall serve as warrant agent under this Warrant. Upon 30 days’ notice to the Holder, the Company may appoint a new warrant agent.  Any corporation into which the Company or any new warrant agent may be merged, or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party, or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or stockholder services business, shall be a successor warrant agent under this Warrant without any further act.  Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

14. Miscellaneous.

(a)           Subject to the restrictions on transfer set forth on the first page hereof, this Warrant may be assigned by the Holder.  This Warrant may not be assigned by the Company except to a successor in the event of a Fundamental Transaction.  This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any person or entity other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant.  This Warrant may be amended only in writing signed by the Company and the Holder and their successors and assigns.

(b)           The Company will not, by amendment of its governing documents or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will, at all times and in good faith, assist in the carrying out of all such terms and in the taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder against impairment.  Without limiting the generality of the foregoing, the Company (i) will not increase the par value of any Warrant Shares above the amount payable therefor on such exercise, (ii) will take all such action as may be reasonably necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable Warrant Shares on the exercise of this Warrant and (iii) will not close its stockholder books or records in any manner which interferes with the timely exercise of this Warrant.

(c)           GOVERNING LAW; VENUE; WAIVER OF JURY TRIAL.  ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT AND THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER.  EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THIS AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF.  NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. EACH OF THE COMPANY AND THE HOLDER HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.

(d)           The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.

(e)           In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not, in any way, be affected or impaired thereby, and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized officer as of the date first indicated above.

OCCULOGIX, INC.
By:
Name:	William G. Dumencu
Title:	Chief Financial Officer and Treasurer

FORM OF EXERCISE NOTICE

(To be executed by the Holder to exercise the right to purchase shares of the Common Stock under the foregoing Warrant)

To:  OCCULOGIX, INC.

The undersigned is the Holder of Warrant No. _______ (the “Warrant”) issued by OCCULOGIX, INC., a Delaware corporation (the “Company”).  Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the Warrant.

1. The Warrant is currently exercisable to purchase a total of ______________ Warrant Shares.

2. The undersigned Holder hereby exercises its right to purchase _________________ Warrant Shares pursuant to the Warrant.

3. The Holder intends that payment of the Exercise Price shall be made as (check one):

____ “Cash Exercise” under Section 10

____ “Cashless Exercise” under Section 10

4. If the Holder has elected a Cash Exercise, the Holder shall pay the sum of $____________ to the Company in accordance with the terms of the Warrant.

5. Pursuant to this exercise, the Company shall deliver to the Holder _______________ Warrant Shares in accordance with the terms of the Warrant.

6. Following this exercise, the Warrant shall be exercisable to purchase a total of ______________ Warrant Shares.

7. The Holder hereby represents and warrants to the Company that the Holder is (i) an “accredited investor” as defined in Rule 501(a) promulgated under Regulation D of the Securities Act of 1933, as amended, if the Holder is a resident of the U.S. and (ii) an “accredited investor” as defined in National Instrument 45-106—Prospectus and Registration Exemptions, if the Holder is a resident of Canada.

Dated:  ____________________, ______	Name of Holder:
	(Print)
	By:
	Name:
	Title:
		(Signature must conform in all respects to name of the Holder as specified on the face of the Warrant)

FORM OF ASSIGNMENT

[To be completed and signed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ________________________________ the right represented by the within Warrant to purchase ____________ shares of Common Stock of OCCULOGIX, INC. to which the within Warrant relates and appoints ________________ attorney to transfer said right on the books of OCCULOGIX, INC. with full power of substitution in the premises.

Dated:  ____________________, ______
	(Signature must conform in all respects to name of the Holder as specified on the face of the Warrant)
	Address of Transferee
In the presence of:

Exhibit D

SHARE PLEDGE AGREEMENT

THIS SHARE PLEDGE AGREEMENT (this “Share Pledge Agreement”), dated as of ■, 2008, is made by OccuLogix, Inc. (the “Pledgor”), a Delaware corporation with executive offices located at 2600 Skymark Avenue, Building 9, Suite 201, Mississauga, Ontario, L4W 5B2, Canada, in favor of Marchant Securities Inc. (the “Pledgee”), in its capacity as the Collateral Agent under that certain Loan Agreement, dated as of the date hereof, by and among the Pledgor, the Lenders identified therein and the Pledgee (the “Loan Agreement”), an Ontario corporation with offices located at 100 York Boulevard, Suite 404, Richmond Hill, Ontario, L4B 1J8, Canada.

BACKGROUND

A.           Pursuant to the Loan Agreement, the Lenders identified therein have agreed to make available to the Pledgor a loan in an aggregate principal amount of U.S.$3,000,000.

B.           The Pledgor agreed to secure its obligations under the Loan Agreement by a pledge of 1,754,589 shares of the Series A Preferred Stock of OcuSense, Inc. (the “Pledged Shares”), representing 50.1% of the issued and outstanding shares of the capital stock of OcuSense, Inc., of which the Pledgor is the legal and beneficial owner, pursuant to this Share Pledge Agreement.

C.           Pursuant to the Loan Agreement, each of the Lenders irrevocably designated and appointed the Pledgee as the collateral agent of such Lender under this Share Pledge Agreement, for the rateable benefit of the Lenders.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Share Pledge Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Pledgor and the Pledgee hereby agree as follows:

1.             Definitions.  In addition to the terms defined elsewhere in this Share Pledge Agreement, capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Loan Agreement.

2.             Collateral.  The Pledged Shares, together with all proceeds thereof, including any securities or monies received on account thereof and at the time held by the Pledgee hereunder, are referred to herein as the “Collateral”.

3.             Secured Obligations.  This Share Pledge Agreement is made by the Pledgor for the benefit of the Pledgee in order to secure all indebtedness, obligations and liabilities, present or future, absolute or contingent, matured or not, at any time owing by the Pledgor to any of the Lenders, or remaining unpaid to any of the Lenders, under or in connection with the Loan Agreement, including:

(a)           the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise, including upon the occurrence of an Event of Default) of all obligations and liabilities of the Pledgor, now existing or hereafter incurred under, or arising out of or in connection with, the Loan Agreement; and

(b)           in the event of any proceeding for the collection of the Secured Obligations (defined below) or the enforcement of this Share Pledge Agreement after the failure to repay the Loan in full when due (whether at the stated maturity, by acceleration or otherwise, including upon the occurrence of an Event of Default), the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Pledgee of its rights hereunder, together with reasonable legal fees and disbursements actually incurred;

all such indebtedness, obligations and liabilities being referred to herein as the “Secured Obligations”.

4.             Pledge.  In order to secure the full and prompt payment when due of the Secured Obligations and for the purposes set forth in Section 3, the Pledgor hereby:  (i) grants to the Pledgee a continuing first priority security interest in the Collateral; (ii) pledges the Pledged Shares to, and deposits them with, the Pledgee and agrees to deliver to the Pledgee all certificates representing the Pledged Shares, accompanied by undated stock transfer powers duly executed in blank on behalf of the Pledgor, or such other instruments of transfer as are reasonably acceptable to the Pledgee, which certificates, stock transfer powers and other instruments of transfer, if any, at the Pledgee’s option, may be registered in the name of the Pledgee or its nominee on and after the occurrence of an Event of Default that is continuing; and (iii) assigns, transfers, hypothecates, mortgages, charges and sets over to the Pledgee all of the Pledgor’s right, title and interest in and to the Pledged Shares; provided, however, that the Pledgor shall be permitted to sell, or otherwise dispose of, the Collateral if the proceeds of such sale or disposition shall be sufficient to pay the Secured Obligations in full and shall be so used.  The Pledgee hereby agrees, in connection with such sale or disposition, to make, do and execute and deliver, or cause to be made, done and executed and delivered, such further acts, deeds, assurances, documents and things as the Pledgor reasonably requests, including, without limitation, to return to the Pledgor the certificate representing the Pledged Shares.

5.             Attachment.  The Pledgor hereby acknowledges that the security interest hereby created attaches upon the execution of this Share Pledge Agreement (or, in the case of any after-acquired property, upon the date of acquisition by the Pledgor of any rights therein), that value has been given by the Pledgee and that the Pledgor has (or, in the case of any after-acquired property, will have) rights in the Collateral or the power to transfer rights in the Collateral to the Pledgee.

6.             Representations and Warranties.  The Pledgor hereby represents and warrants to the Pledgee as follows:

(a)           The Pledgor has the requisite corporate authority and the legal right to pledge the Pledged Shares pursuant to this Share Pledge Agreement.

(b)           The Pledgor is the legal and beneficial owner of, and has good and valid title to, the Pledged Shares, free from any liens, charges, security interests, encumbrances or any rights of others that rank prior to, or pari passu with, the security interested created hereby, other than such liens, charges, security interests, encumbrances or rights as may be permitted under the Loan Agreement.

(c)           The Pledged Shares have been duly and validly issued, are fully paid and non-assessable and are not subject to any liens or any pre-emptive or similar rights.

7.           Voting, etc. in Absence of Event of Default.  Unless and until an Event of Default shall have occurred and be continuing, the Pledgor shall be entitled to exercise any and all voting rights attaching to the Pledged Shares and to give consents, waivers and ratifications in respect thereof.  The Pledgor’s entitlement to exercise such voting rights and to give such consents, waivers and ratifications shall cease for so long as an Event of Default shall have occurred and be continuing, in which case Section 9 shall become applicable.

8.           Dividends and Other Distributions.  Until the Secured Obligations are paid in full, all non-cash dividends and other non-cash amounts paid or payable in respect of the Pledged Shares (including, without limitation, the below-listed items) shall form part of the Collateral and shall be held by the Pledgee as part of the Collateral:

(a)           all other or additional stock, or other securities or property (other than cash), paid or distributed by way of dividend or otherwise in respect of the Pledged Shares;

(b)           all other or additional stock, or other securities or property (other than cash), paid or distributed in respect of the Pledged Shares by reason of a stock split, spin-off, split-up, reclassification, combination of shares or other similar transaction; and

(c)           all other or additional stock, or other securities or property (other than cash), paid or distributed in respect of the Pledged Shares by reason of a consolidation, merger, exchange of stock, conveyance of assets, liquidation or other similar transaction.

Unless and until an Event of Default shall have occurred and be continuing, all cash dividends and other cash amounts paid or payable in respect of the Pledged Shares shall not form part of the Collateral and shall not be held by the Pledgee as part of the Collateral but, rather, shall be paid directly to the Pledgor.

9.           Remedies.   Upon the occurrence of an Event of Default that is continuing, the Pledgee shall be entitled to exercise all of its rights, powers and remedies (whether vested in the Pledgee by this Share Pledge Agreement or the Loan Agreement or by law) for the protection and enforcement of its rights with respect to the Collateral, and, without derogating from the generality of the foregoing, the Pledgee shall be entitled to take any or all of the following actions, all of which the Pledgor hereby agrees to be commercially reasonable:

(a)           to receive all amounts payable in respect of the Collateral;

(b)           to transfer all or any part of the Collateral into the Pledgee’s name or the name or names of its nominee or nominees;

(c)           to vote all or any part of the Collateral and to give consents, waivers or ratifications in respect thereof, and otherwise to act as though it were the outright owner thereof, with the Pledgor hereby irrevocably constituting and appointing the Pledgee the proxy and attorney-in-fact of the Pledgor, with full power of substitution to do so; and

(d)           to sell, assign and deliver, or grant options to purchase, all or any part of the Collateral, or any interest therein, at any public or private sale, without demand of performance, for cash, on credit or for other property, for immediate or future delivery without any assumption of credit risk, and for such price and on such other terms as the Pledgee may determine in its reasonable discretion, provided that at least ten days’ prior written notice of such sale shall be given to the Pledgor, with each purchaser at any such sale holding the Collateral so sold absolutely free from any claim or right on the part of the Pledgor, and the Pledgor hereby waiving and releasing, to the fullest extent permitted by law, any right or equity of redemption with respect to the Collateral, whether before or after sale hereunder, and any right of marshalling the Collateral and any other security for the Secured Obligations or otherwise.

10.           Remedies Cumulative.  Each right, power and remedy of the Pledgee provided for in this Share Pledge Agreement or the Loan Agreement or now or hereafter existing at law or in equity shall be cumulative and concurrent and shall be in addition to, and not in lieu of, every other such right, power or remedy.  The exercise, or the commencement of the exercise, by the Pledgee of any right, power or remedy provided for in this Share Pledge Agreement or the Loan Agreement or now or hereafter existing at law or in equity shall not preclude the simultaneous or subsequent exercise by the Pledgee of any or all such other rights, powers and remedies, and no failure or delay on the part of the Pledgee to exercise any such right, power or remedy shall operate as a waiver thereof.  Unless otherwise required by this Share Pledge Agreement or the Loan Agreement, no notice to, or demand on, the Pledgor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or shall constitute a waiver of any right of the Pledgee to take any other or further action in any circumstances without notice or demand.

11.           Further Assurances.  The Pledgor hereby agrees that it will join with the Pledgee in executing and, at the Pledgor’s expense, filing and re-filing under the Uniform Commercial Code and similar legislation in Canada such financing statements, continuation statements and other documents and in such public offices as the Pledgee, acting reasonably, may deem necessary or advisable to perfect and preserve the Pledgee’s security interest in the Collateral, and the Pledgor hereby authorizes the Pledgee to file financing statements and amendments thereto relating to any or all of the Collateral without the Pledgor’s signature, where permitted by law, and agrees to make, do and execute and deliver, or cause to be made, done and executed and delivered, such further acts, deeds, assurances, documents and things as the Pledgee, acting reasonably, may require or deem advisable to carry out the purposes and intent of this Share Pledge Agreement and the Loan Agreement.

12.           Rights and Duties of the Pledgee.

(a)           The Pledgee may perform any of its duties under this Share Pledge Agreement by or through agents or attorneys-in-fact and shall be entitled to rely upon the advice of counsel concerning all matters pertaining to such duties.  The Pledgee shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact, provided that they were selected by the Pledgee with reasonable care.

(b)           In holding the Collateral, the Pledgee and any nominee on its behalf shall be bound to exercise only the same degree of care as it would exercise with respect to similar property of its own, of similar value held in the same place.  The Pledgee and any nominee on its behalf will be deemed to have exercised reasonable care with respect to the custody and preservation of the Collateral if it takes such action for that purpose as the Pledgor reasonably requests in writing.  However, failure of the Pledgee or its nominee to comply with any such request will not, in and of itself, be deemed a failure to exercise reasonable care.

13.           Discharge of Security.  In the event of a permitted sale or other disposition by the Pledgor of any of the Collateral, the security interest therein shall terminate automatically and be deemed discharged and released.  The Pledgee, at the Pledgor’s expense, shall execute and deliver such discharges and other instruments necessary or advisable for the purposes of releasing and discharging such security interest, of recording the provision or effect thereof in any public office where it may be registered or recorded and of more fully and effectively carrying out the intent of this Section 13.

14.           Termination and Release.  Upon the payment in full of the Secured Obligations, this Share Pledge Agreement shall terminate and, other than as explicitly provided herein, be of no further force or effect and the security interest in the Collateral shall be deemed discharged and released.  The Pledgee, at the Pledgor’s expense, shall execute and deliver such discharges and other instruments necessary or advisable for the purposes of releasing and discharging such security interest, of recording the provision or effect thereof in any public office where it may be registered or recorded and of more fully and effectively carrying out the intent of this Section 14.  The obligations under this Section 14 shall survive the termination of this Share Pledge Agreement.

15.           Amendments; Waivers.  No provision of this Share Pledge Agreement may be amended or waived except in a written instrument signed, (i) in the case of an amendment, by the Pledgor, Required Lenders and the Pledgee or (ii) in the case of a waiver, by the party against whom enforcement of any such waiver is sought, provided that, in the case of waiver by the Pledgee, on behalf of all of the Lenders, such written instrument shall be signed by Required Lenders.  No waiver of any default with respect to any provision, condition or requirement of this Share Pledge Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.  The Pledgee may enter into technical, minor or administrative amendments to this Share Pledge Agreement without the consent of the Lenders.

16.           Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective in accordance with the notices provision of the Loan Agreement.

17.           Conflict.  To the extent of any conflict or inconsistency between the provisions of the Loan Agreement, on the one hand, and the provisions of this Share Pledge Agreement, on the other hand, the former shall prevail.

18.           Headings.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

19.           Successors and Assigns.  This Share Pledge Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.

20.           Governing Law; Venue.  ALL QUESTIONS CONCERING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS SHARE PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.  THE PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE PROVINCE OF ONTARIO FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT BY ANY OF THE PARTIES HERETO, IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN, AND HEREBY IRREVOCABLY WAIVE, AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY ANY OF THE OTHER PARTIES HERETO, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT OR THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER.

21.           Execution.  This Share Pledge Agreement may be executed and delivered in one or more counterparts (including by facsimile or e-mail transmission), all of which when taken together shall be considered one and the same agreement.  In the event that any signature is delivered by facsimile transmission or e-mail attachment, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or e-mail-attached signature page were an original thereof.

22.           Severability.  If any provision of this Share Pledge Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Share Pledge Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Share Pledge Agreement.

23.           Executed Copy.  The Pledgor acknowledges receipt of a fully executed copy of this Share Pledge Agreement.

IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this Share Pledge Agreement to be executed and delivered by their duly authorized officers as of the date first above written.

OCCULOGIX, INC.
By:
	Name:
	Title:
MARCHANT SECURITIES INC., as the Collateral Agent
By:
	Name:
	Title:

Exhibit E

U.S. ACCREDITED INVESTOR CERTIFICATE

TO:	OccuLogix, Inc. (the “Company”)
RE:	Loan Agreement, dated as of  __________________________ , 2008, by and among the Company, the Lenders identified therein and Marchant Securities Inc. (the “Loan Agreement”)

This Accredited Investor Certificate is being delivered to the Company pursuant to Section 4.2(b) of the Loan Agreement.  Capitalized terms used in this Accredited Investor Certificate, but not defined herein, have the respective meanings attributed to such terms in the Loan Agreement.

(A)                          The undersigned hereby certifies that, as of the Closing, the undersigned:

1.             is experienced in evaluating and investing in securities;

2.             is able to fend for the undersigned;

3.             can bear the economic risk of the undersigned’s investment in the Loan and investment, if any, in the Securities pursuant to the Loan Agreement (collectively, the “Investment”);

4.             has such knowledge and experience in financial or business matters that the undersigned is capable of evaluating the merits and risks of the Investment;

5.             understands and acknowledges that the opportunity for the Investment is available only to “accredited investors” (“Accredited Investors”) who satisfy one or more of the criteria set forth in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”);

6.             understands and acknowledges that the Securities may not be registered under the Securities Act or the securities laws of any state of the United States and may not be offered or sold within the United States, constitute “restricted securities” (as defined in Rule 144 promulgated under the Securities Act) and may not be resold unless they are registered under the Securities Act or an applicable exemption from such registration requirement is available;

7.             is an Accredited Investor and falls within one or more of the categories set forth below, as indicated by an “X” or “ü” mark placed in the space(s) designated therefor:

{MARK ONE OR MORE OF THE FOLLOWING CATEGORIES, AS APPLICABLE}

□ a bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act, whether acting in an individual or fiduciary capacity; a broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended; an insurance company as defined in Section 2(a)(13) of the Securities Act; an investment company registered under the Investment Company Act of 1940 (the “Investment Company Act”) or a business development company as defined in Section 2(a)(48) of the Investment Company Act; a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; a plan established and maintained by a state, its political subdivisions or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of U.S.$5,000,000; an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 (“ERISA”) if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of ERISA, which is either a bank, savings and loan association, insurance company or registered investment adviser, or if the employee benefit plan has total assets in excess of U.S.$5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are Accredited Investors

□ a private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940

□ an organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Shares, with total assets in excess of U.S.$5,000,000

□ a director or an executive officer of the Company

□ a natural person whose individual net worth, or joint net worth with that person’s spouse, at the Closing, exceeds U.S.$1,000,000

□ a natural person who had an individual income in excess of U.S.$200,000 in each of the two most recent years or joint income with that person’s spouse in excess of U.S.$300,000 in each of those years and who has a reasonable expectation of reaching the same income level in the current year

□ a trust, with total assets in excess of U.S.$5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) promulgated under the Securities Act

□ an entity in which all of the equity owners are Accredited Investors;

8.                  understands and acknowledges that the Securities will not be qualified by prospectus for distribution in any of the provinces or territories of Canada.

(B)                      The undersigned hereby agrees to re-certify, in writing, the undersigned’s status as an Accredited Investor on the Pre-payment Date, if any, and that such re-certification shall be a condition to any issuance to the undersigned of any of the Securities.

IN WITNESS WHEREOF, the undersigned has duly executed this Accredited Investor Certificate as of the Closing.

Name of Lender

(please print)

Signature

Name of Person Signing

(and indicate capacity of person signing if signing as custodian, trustee or on behalf of an entity)

Exhibit F

CANADIAN ACCREDITED INVESTOR CERTIFICATE

TO:	OccuLogix, Inc. (the “Company”)
RE:	Loan Agreement, dated as of ____________________, 2008, by and among the Company, the Lenders identified therein and Marchant Securities Inc. (the “Loan Agreement”)

This Accredited Investor Certificate is being delivered to the Company pursuant to Section 4.2(b) of the Loan Agreement.  Capitalized terms used in this Accredited Investor Certificate, but not defined herein, have the respective meanings attributed to such terms in the Loan Agreement.

(A)                          The undersigned hereby acknowledges that the Company is relying on this Accredited Investor Certificate to determine the undersigned’s suitability for investment in the Loan and investment, if any, in the Securities pursuant to the Loan Agreement (collectively, the “Investment”) and hereby represents and warrants and certifies that, as of the Closing, the undersigned:

1.             is acting as principal and not as agent in connection with the Investment and, if acquiring the Securities, would be doing so for investment only and not with a view to resale or distribution;

2.             is a resident of the Province of  ___________________________________________ and is an “accredited investor” as defined in NI 45-106 by virtue of being one of the following, as indicated by an “X” or “ü” mark placed in the space designated therefor:

{MARK ONE OF THE FOLLOWING CATEGORIES}

□ (a)     a Canadian financial institution, or a Schedule III bank

□ (b)     the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada)

□ (c)     a subsidiary of any person referred to in paragraphs (a) or (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary

□ (d)     a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer, other than a person registered solely as a limited market dealer registered under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador)

□ (e)     an individual registered or formerly registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (d)

□ (f)     the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction of Canada

□ (g)     a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l’île de Montréal or an intermunicipal management board in Québec

□ (h)     any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government

□ (i)     a pension fund that is regulated by either the Office of the Superintendent of Financial Institutions (Canada) or a pension commission or similar regulatory authority of a jurisdiction of Canada

□ (j)      an individual who, either alone or with a spouse, beneficially owns, directly or indirectly, financial assets1 having an aggregate realizable value that before taxes, but net of any related liabilities2, exceeds $1,000,000

□ (k)     an individual whose net income before taxes exceeded $200,000 in each of the two most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the two most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year

□ (l)      an individual who, either alone or with a spouse, has net assets of at least $5,000,000

□ (m)     a person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements

□ (n)     an investment fund that distributes or has distributed its securities only to (i) a person that is or was an accredited investor at the time of the distribution, (ii) a person that acquires or acquired securities in the circumstances referred to in sections 2.10 [Minimum investment amount] and 2.19 [Additional investment in investment funds] of NI 45-106, or (iii) a person described in paragraph (i) or (ii) that acquires or acquired securities under section 2.18 [Investment fund reinvestment] of NI 45-106

___________________________ 

1 Financial assets means (a) cash, (b) securities, and (c) a contract of insurance, a deposit or an evidence of a deposit that is not a security for securities laws purposes.

 

2 Related liabilities means (a) liabilities incurred or assumed for the purposes of financing the acquisition or ownership of financial assets, and (b) liabilities that are secured by financial assets.

□ (o)     an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the securities regulator has issued a receipt

□ (p)      a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be

□ (q)     a person acting on behalf of a fully managed account managed by that person, if that person is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction

□ (r)      a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded

□ (s)     an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) through (d) or paragraph (i) in form and function

□ (t)      a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors

□ (u)     an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser

□ (v)     a person that is recognized or designated by the securities regulator as (i) an accredited investor or (ii) an exempt purchaser in Alberta or British Columbia  {IF MARKING THIS CATEGORY, PLEASE ATTACH A COPY OF SUCH ORDER}; and

3.                has received and reviewed a copy of the revised PowerPoint presentation of the Company dated January 29, 2008.

(B)                      The undersigned hereby agrees to represent and warrant and certify again, in writing, the undersigned’s status as an Accredited Investor on the Pre-payment Date, if any, and that such representation and warranty and certification on the Pre-payment Date, if any, shall be a condition to any issuance to the undersigned of any of the Securities.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the undersigned has duly executed this Accredited Investor Certificate as of the Closing.

Name of Lender

(please print)

Signature

Name of Person Signing

(and indicate capacity of person signing if signing as custodian, trustee or on behalf of an entity)

EX-10.51

Exhibit 10.51

Execution Copy

SHARE PLEDGE AGREEMENT

THIS SHARE PLEDGE AGREEMENT (this “Share Pledge Agreement”), dated as of _______________, 2008, is made by OccuLogix, Inc. (the “Pledgor”), a Delaware corporation with executive offices located at 2600 Skymark Avenue, Building 9, Suite 201, Mississauga, Ontario, L4W 5B2, Canada, in favor of Marchant Securities Inc. (the “Pledgee”), in its capacity as the Collateral Agent under that certain Loan Agreement, dated as of the date hereof, by and among the Pledgor, the Lenders identified therein and the Pledgee (the “Loan Agreement”), an Ontario corporation with offices located at 100 York Boulevard, Suite 404, Richmond Hill, Ontario, L4B 1J8, Canada. 

BACKGROUND

A.            Pursuant to the Loan Agreement, the Lenders identified therein have agreed to make available to the Pledgor a loan in an aggregate principal amount of U.S.$3,000,000.

B.             The Pledgor agreed to secure its obligations under the Loan Agreement by a pledge of 1,754,589 shares of the Series A Preferred Stock of OcuSense, Inc. (the “Pledged Shares”), representing 50.1% of the issued and outstanding shares of the capital stock of OcuSense, Inc., of which the Pledgor is the legal and beneficial owner, pursuant to this Share Pledge Agreement.

C.             Pursuant to the Loan Agreement, each of the Lenders irrevocably designated and appointed the Pledgee as the collateral agent of such Lender under this Share Pledge Agreement, for the rateable benefit of the Lenders.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Share Pledge Agreement and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Pledgor and the Pledgee hereby agree as follows:

1.             Definitions.  In addition to the terms defined elsewhere in this Share Pledge Agreement, capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Loan Agreement.

2.             Collateral.  The Pledged Shares, together with all proceeds thereof, including any securities or monies received on account thereof and at the time held by the Pledgee hereunder, are referred to herein as the “Collateral”.

3.             Secured Obligations.  This Share Pledge Agreement is made by the Pledgor for the benefit of the Pledgee in order to secure all indebtedness, obligations and liabilities, present or future, absolute or contingent, matured or not, at any time owing by the Pledgor to any of the Lenders, or remaining unpaid to any of the Lenders, under or in connection with the Loan Agreement, including:

(a)           the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise, including upon the occurrence of an Event of Default) of all obligations and liabilities of the Pledgor, now existing or hereafter incurred under, or arising out of or in connection with, the Loan Agreement; and

(b)           in the event of any proceeding for the collection of the Secured Obligations (defined below) or the enforcement of this Share Pledge Agreement after the failure to repay the Loan in full when due (whether at the stated maturity, by acceleration or otherwise, including upon the occurrence of an Event of Default), the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Pledgee of its rights hereunder, together with reasonable legal fees and disbursements actually incurred;

all such indebtedness, obligations and liabilities being referred to herein as the “Secured Obligations”.

4.            Pledge.  In order to secure the full and prompt payment when due of the Secured Obligations and for the purposes set forth in Section 3, the Pledgor hereby:  (i) grants to the Pledgee a continuing first priority security interest in the Collateral; (ii) pledges the Pledged Shares to, and deposits them with, the Pledgee and agrees to deliver to the Pledgee all certificates representing the Pledged Shares, accompanied by undated stock transfer powers duly executed in blank on behalf of the Pledgor, or such other instruments of transfer as are reasonably acceptable to the Pledgee, which certificates, stock transfer powers and other instruments of transfer, if any, at the Pledgee’s option, may be registered in the name of the Pledgee or its nominee on and after the occurrence of an Event of Default that is continuing; and (iii) assigns, transfers, hypothecates, mortgages, charges and sets over to the Pledgee all of the Pledgor’s right, title and interest in and to the Pledged Shares; provided, however, that the Pledgor shall be permitted to sell, or otherwise dispose of, the Collateral if the proceeds of such sale or disposition shall be sufficient to pay the Secured Obligations in full and shall be so used.  The Pledgee hereby agrees, in connection with such sale or disposition, to make, do and execute and deliver, or cause to be made, done and executed and delivered, such further acts, deeds, assurances, documents and things as the Pledgor reasonably requests, including, without limitation, to return to the Pledgor the certificate representing the Pledged Shares.

5.             Attachment.  The Pledgor hereby acknowledges that the security interest hereby created attaches upon the execution of this Share Pledge Agreement (or, in the case of any after-acquired property, upon the date of acquisition by the Pledgor of any rights therein), that value has been given by the Pledgee and that the Pledgor has (or, in the case of any after-acquired property, will have) rights in the Collateral or the power to transfer rights in the Collateral to the Pledgee.

6.             Representations and Warranties.  The Pledgor hereby represents and warrants to the Pledgee as follows:

(a)           The Pledgor has the requisite corporate authority and the legal right to pledge the Pledged Shares pursuant to this Share Pledge Agreement.

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(b)           The Pledgor is the legal and beneficial owner of, and has good and valid title to, the Pledged Shares, free from any liens, charges, security interests, encumbrances or any rights of others that rank prior to, or pari passu with, the security interested created hereby, other than such liens, charges, security interests, encumbrances or rights as may be permitted under the Loan Agreement.

(c)           The Pledged Shares have been duly and validly issued, are fully paid and non-assessable and are not subject to any liens or any pre-emptive or similar rights.

7.             Voting, etc. in Absence of Event of Default.  Unless and until an Event of Default shall have occurred and be continuing, the Pledgor shall be entitled to exercise any and all voting rights attaching to the Pledged Shares and to give consents, waivers and ratifications in respect thereof.  The Pledgor’s entitlement to exercise such voting rights and to give such consents, waivers and ratifications shall cease for so long as an Event of Default shall have occurred and be continuing, in which case Section 9 shall become applicable.

8.             Dividends and Other Distributions.  Until the Secured Obligations are paid in full, all non-cash dividends and other non-cash amounts paid or payable in respect of the Pledged Shares (including, without limitation, the below-listed items) shall form part of the Collateral and shall be held by the Pledgee as part of the Collateral:

(a)           all other or additional stock, or other securities or property (other than cash), paid or distributed by way of dividend or otherwise in respect of the Pledged Shares;

(b)           all other or additional stock, or other securities or property (other than cash), paid or distributed in respect of the Pledged Shares by reason of a stock split, spin-off, split-up, reclassification, combination of shares or other similar transaction; and

(c)           all other or additional stock, or other securities or property (other than cash), paid or distributed in respect of the Pledged Shares by reason of a consolidation, merger, exchange of stock, conveyance of assets, liquidation or other similar transaction.

Unless and until an Event of Default shall have occurred and be continuing, all cash dividends and other cash amounts paid or payable in respect of the Pledged Shares shall not form part of the Collateral and shall not be held by the Pledgee as part of the Collateral but, rather, shall be paid directly to the Pledgor.

9.             Remedies.   Upon the occurrence of an Event of Default that is continuing, the Pledgee shall be entitled to exercise all of its rights, powers and remedies (whether vested in the Pledgee by this Share Pledge Agreement or the Loan Agreement or by law) for the protection and enforcement of its rights with respect to the Collateral, and, without derogating from the generality of the foregoing, the Pledgee shall be entitled to take any or all of the following actions, all of which the Pledgor hereby agrees to be commercially reasonable:

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(a)           to receive all amounts payable in respect of the Collateral;

(b)           to transfer all or any part of the Collateral into the Pledgee’s name or the name or names of its nominee or nominees;

(c)           to vote all or any part of the Collateral and to give consents, waivers or ratifications in respect thereof, and otherwise to act as though it were the outright owner thereof, with the Pledgor hereby irrevocably constituting and appointing the Pledgee the proxy and attorney-in-fact of the Pledgor, with full power of substitution to do so; and

(d)           to sell, assign and deliver, or grant options to purchase, all or any part of the Collateral, or any interest therein, at any public or private sale, without demand of performance, for cash, on credit or for other property, for immediate or future delivery without any assumption of credit risk, and for such price and on such other terms as the Pledgee may determine in its reasonable discretion, provided that at least ten days’ prior written notice of such sale shall be given to the Pledgor, with each purchaser at any such sale holding the Collateral so sold absolutely free from any claim or right on the part of the Pledgor, and the Pledgor hereby waiving and releasing, to the fullest extent permitted by law, any right or equity of redemption with respect to the Collateral, whether before or after sale hereunder, and any right of marshalling the Collateral and any other security for the Secured Obligations or otherwise.

10.           Remedies Cumulative.  Each right, power and remedy of the Pledgee provided for in this Share Pledge Agreement or the Loan Agreement or now or hereafter existing at law or in equity shall be cumulative and concurrent and shall be in addition to, and not in lieu of, every other such right, power or remedy.  The exercise, or the commencement of the exercise, by the Pledgee of any right, power or remedy provided for in this Share Pledge Agreement or the Loan Agreement or now or hereafter existing at law or in equity shall not preclude the simultaneous or subsequent exercise by the Pledgee of any or all such other rights, powers and remedies, and no failure or delay on the part of the Pledgee to exercise any such right, power or remedy shall operate as a waiver thereof.  Unless otherwise required by this Share Pledge Agreement or the Loan Agreement, no notice to, or demand on, the Pledgor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or shall constitute a waiver of any right of the Pledgee to take any other or further action in any circumstances without notice or demand.

11.           Further Assurances.  The Pledgor hereby agrees that it will join with the Pledgee in executing and, at the Pledgor’s expense, filing and re-filing under the Uniform Commercial Code and similar legislation in Canada such financing statements, continuation statements and other documents and in such public offices as the Pledgee, acting reasonably, may deem necessary or advisable to perfect and preserve the Pledgee’s security interest in the Collateral, and the Pledgor hereby authorizes the Pledgee to file financing statements and amendments thereto relating to any or all of the Collateral without the Pledgor’s signature, where permitted by law, and agrees to make, do and execute and deliver, or cause to be made, done and executed and delivered, such further acts, deeds, assurances, documents and things as the Pledgee, acting reasonably, may require or deem advisable to carry out the purposes and intent of this Share Pledge Agreement and the Loan Agreement.

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12.           Rights and Duties of the Pledgee.

(a)           The Pledgee may perform any of its duties under this Share Pledge Agreement by or through agents or attorneys-in-fact and shall be entitled to rely upon the advice of counsel concerning all matters pertaining to such duties.  The Pledgee shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact, provided that they were selected by the Pledgee with reasonable care.

(b)           In holding the Collateral, the Pledgee and any nominee on its behalf shall be bound to exercise only the same degree of care as it would exercise with respect to similar property of its own, of similar value held in the same place.  The Pledgee and any nominee on its behalf will be deemed to have exercised reasonable care with respect to the custody and preservation of the Collateral if it takes such action for that purpose as the Pledgor reasonably requests in writing.  However, failure of the Pledgee or its nominee to comply with any such request will not, in and of itself, be deemed a failure to exercise reasonable care.

13.           Discharge of Security.  In the event of a permitted sale or other disposition by the Pledgor of any of the Collateral, the security interest therein shall terminate automatically and be deemed discharged and released.  The Pledgee, at the Pledgor’s expense, shall execute and deliver such discharges and other instruments necessary or advisable for the purposes of releasing and discharging such security interest, of recording the provision or effect thereof in any public office where it may be registered or recorded and of more fully and effectively carrying out the intent of this Section 13.

14.           Termination and Release.  Upon the payment in full of the Secured Obligations, this Share Pledge Agreement shall terminate and, other than as explicitly provided herein, be of no further force or effect and the security interest in the Collateral shall be deemed discharged and released.  The Pledgee, at the Pledgor’s expense, shall execute and deliver such discharges and other instruments necessary or advisable for the purposes of releasing and discharging such security interest, of recording the provision or effect thereof in any public office where it may be registered or recorded and of more fully and effectively carrying out the intent of this Section 14.  The obligations under this Section 14 shall survive the termination of this Share Pledge Agreement.

15.           Amendments; Waivers.  No provision of this Share Pledge Agreement may be amended or waived except in a written instrument signed, (i) in the case of an amendment, by the Pledgor, Required Lenders and the Pledgee or (ii) in the case of a waiver, by the party against whom enforcement of any such waiver is sought, provided that, in the case of waiver by the Pledgee, on behalf of all of the Lenders, such written instrument shall be signed by Required Lenders.  No waiver of any default with respect to any provision, condition or requirement of this Share Pledge Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.  The Pledgee may enter into technical, minor or administrative amendments to this Share Pledge Agreement without the consent of the Lenders.

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16.           Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective in accordance with the notices provision of the Loan Agreement.

17.           Conflict.  To the extent of any conflict or inconsistency between the provisions of the Loan Agreement, on the one hand, and the provisions of this Share Pledge Agreement, on the other hand, the former shall prevail.

18.           Headings.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

19.           Successors and Assigns.  This Share Pledge Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.

20.           Governing Law; Venue.  ALL QUESTIONS CONCERING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS SHARE PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN.  THE PARTIES HERETO HEREBY IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE PROVINCE OF ONTARIO FOR THE ADJUDICATION OF ANY DISPUTE BROUGHT BY ANY OF THE PARTIES HERETO, IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN, AND HEREBY IRREVOCABLY WAIVE, AND AGREE NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING BROUGHT BY ANY OF THE OTHER PARTIES HERETO, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT OR THAT SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER.

21.           Execution.  This Share Pledge Agreement may be executed and delivered in one or more counterparts (including by facsimile or e-mail transmission), all of which when taken together shall be considered one and the same agreement.  In the event that any signature is delivered by facsimile transmission or e-mail attachment, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or e-mail-attached signature page were an original thereof.

22.           Severability.  If any provision of this Share Pledge Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Share Pledge Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Share Pledge Agreement.

23.           Executed Copy.  The Pledgor acknowledges receipt of a fully executed copy of this Share Pledge Agreement.

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IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this Share Pledge Agreement to be executed and delivered by their duly authorized officers as of the date first above written.

OCCULOGIX, INC.
By:	“William G. Dumencu”
	Name:	William G. Dumencu
	Title:	Chief Financial Officer and Treasurer
MARCHANT SECURITIES INC., as the Collateral Agent
By:	“Gregory L. Marchant”
	Name:	Gregory L. Marchant
	Title:	President and CEO

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EX-10.52

Exhibit 10.52

EMPLOYMENT AGREEMENT

THIS AGREEMENT is made as of the 25th day of February, 2008,

B E T W E E N:

OccuLogix, Inc., a corporation incorporated under the laws of the State of Delaware

(the “Corporation”)

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William G. Dumencu, of the Town of Milton, in the Province of Ontario

(the “Employee”)

RECITALS:

WHEREAS, the Employee has been employed by the Corporation since August 1, 2003 pursuant to the Employment Agreement, dated as of August 1, 2003, between Vascular Sciences Corporation (now the Corporation) and the Employee, as amended by the Amending Agreement, dated as of April 14, 2006, between the Corporation and the Employee (as amended, the “Old Employment Agreement”);

AND WHEREAS, the other members of the Corporation’s executive management team are parties to employment agreements that differ in form from the Old Employment Agreement;

AND WHEREAS, the Employee has requested that his employment agreement resemble more closely the employment agreements of the other members of the Corporation’s executive management team;

AND WHEREAS, the Employee has requested that the Old Employment Agreement be terminated and superseded and replaced by this Agreement;

AND WHEREAS, the Corporation wishes to retain the Employee;

AND WHEREAS, the Corporation and the Employee wish to enter into this Agreement to set forth the rights and obligations of each of them, from and following the date hereof, as regards the Employee’s employment with the Corporation;

NOW THEREFORE in consideration of the mutual covenants and agreements contained in this Agreement and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the Corporation and the Employee agree as follows:

1. Definitions

1.1.               In this Agreement,

1.1.1.                      “Affiliate” has the meaning attributed to such term in the Business Corporations Act (Ontario), as the same may be amended from time to time, and any successor legislation thereto;

1.1.2.                      “Agreement” means this agreement and all schedules attached to this agreement, in each case, as they may be amended or supplemented from time to time, and the expressions “hereof”, “herein”, “hereto”, “hereunder”, “hereby” and similar expressions refer to this Agreement and unless otherwise indicated, references to sections are to sections in this Agreement;

1.1.3.                      “Basic Salary” has the meaning attributed to such term in section 5.1;

1.1.4.                      “Benefits” has the meaning attributed to such term in section 5.4;

1.1.5.                      “Board” means the board of directors of the Corporation;

1.1.6.                      “Business Day” means any day, other than Saturday, Sunday or any statutory holiday in the Province of Ontario;

1.1.7.                      “Change of Control” for the purposes of this Agreement, shall be deemed to have occurred when:

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1.1.7.1.                      any Person, other than a Person or a combination of Persons presently owning, directly or indirectly, more than 20% of existing voting securities of the Corporation, acquires or becomes the beneficial owner of, or a combination of Persons acting jointly and in concert, acquires or becomes the beneficial owner of, directly or indirectly, more than 50% of the voting securities of the Corporation, whether through the acquisition of previously issued and outstanding voting securities or of voting securities that have not been previously issued, or any combination thereof, or any other transaction having a similar effect;

1.1.7.2.                      the Corporation merges or amalgamates with one or more corporations other than a Subsidiary of the Corporation;

1.1.7.3.                      the Corporation sells, leases or otherwise disposes of all or substantially all of its assets and undertaking, whether pursuant to one or more transactions;

1.1.7.4.                      any Person not part of existing management of the Corporation or any Person not controlled by the Corporation or by any Affiliate of the Corporation enters into any arrangement to provide management services to the Corporation which results in either: (i) the termination by the Corporation of the employment of any two of the Chairman and Chief Executive Officer, the President and Chief Operating Officer, the Chief Financial Officer and the General Counsel within three months of the date such arrangement is entered into for any reason other than Just Cause; or (ii) the termination by the Corporation for any reason other than Just Cause of the employment of all such senior executive personnel within six months of the date that such arrangement is entered into; or

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1.1.7.5.                      the Corporation enters into any transaction or arrangement which would have the same or similar effect as the transactions referred to in sections 1.1.7.1, 1.1.7.2, 1.1.7.3or 1.1.7.4above.

1.1.8.                      “Confidential Information” means all confidential or proprietary information, intellectual property (including trade secrets) and confidential facts relating to the business or affairs of the Corporation or any of its Subsidiaries which the Corporation treats as confidential or proprietary;

1.1.9.                      “Disability” means the mental or physical state of the Employee such that the Employee has been unable, as a result of illness, disease, mental or physical disability or similar cause, to fulfill his obligations under this Agreement either for any consecutive six-month period or for any period of 12 months (whether or not consecutive) in any consecutive 24-month period;

1.1.10.                    “Employment Period” has the meaning attributed to such term in section 4;

1.1.11.                    “ESA” means the Employment Standards Act, 2000 (Ontario), as the same may be amended from time to time, and any successor legislation thereto;

1.1.12.                    “Good Reason” means:

1.1.12.1.                      without the consent of the Employee, any material change or series of material changes in the responsibilities or status of the Employee with the Corporation, such that, immediately after such change or series of changes, the responsibilities and status of the Employee are materially diminished in comparison to his responsibilities and status immediately prior to such change or series of changes, except in connection with the termination of the Employee’s employment by the Corporation for Just Cause or in connection with the Employee’s death, Disability or Retirement or a voluntary resignation by the Employee other than a resignation for Good Reason;

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1.1.12.2.                      a reduction by the Corporation of more than 10% in the Employee’s Basic Salary as in effect on the date hereof or as the same may be increased from time to time;

1.1.12.3.                      the taking of any action by the Corporation which would materially adversely affect the Employee’s participation in the Corporation’s employee benefits plans, or otherwise materially reduce the Employee’s Benefits, and other similar plans in which the Employee is participating at the date hereof (or such other plans as may be implemented after the date hereof that provide the Employee with substantially similar benefits), or the taking of any action by the Corporation which would deprive the Employee of any material fringe benefit enjoyed by him at the date hereof;

1.1.12.4.                      without the Employee’s consent, the requirement that the Employee be based anywhere other than the Corporation’s principal executive offices except for required travel on the Corporation’s business; or

1.1.12.5.                      any reason which would be considered to amount to constructive dismissal by a court of competent jurisdiction.

1.1.13. “Just Cause” means:

1.1.13.1.                      the failure of the Employee to properly carry out his duties after notice by the Corporation of the failure to do so and an opportunity for the Employee to correct the same within a reasonable time from the date of receipt of such notice; or

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1.1.13.2.                      theft, fraud, dishonesty or misconduct by the Employee involving the property, business or affairs of the Corporation or its Subsidiaries or involving the carrying out of the Employee’s duties;

1.1.14.                    “Person” means any individual, partnership, limited partnership, joint venture, syndicate, sole proprietorship, company or corporation with or without share capital, unincorporated association, trust, trustee, executor, administrator or other legal personal representative, regulatory body or agency, government or governmental agency, authority or entity, however designated or constituted;

1.1.15.                    “Restricted Period” means the one-year period immediately following the cessation of the Employee’s employment;

1.1.16.                    “Retirement” means retirement in accordance with the Corporation’s retirement policy from time to time;

1.1.17.                    “Subsidiaries” has the meaning attributed to such term in the Business Corporations Act (Ontario), as the same may be amended from time to time, and any successor legislation thereto;

1.1.18.                    “Stop Work Notice” has the meaning attributed to such term in section 8.2;

1.1.19.                    “Year of Employment” means any 12-month period commencing on January 1.

2. Employment of the Employee

The Corporation shall continue to employ the Employee, and the Employee shall continue to serve the Corporation, in the position of Chief Financial Officer and Treasurer on the conditions and for the remuneration hereinafter set out.  In such position, the Employee shall perform and fulfill such duties and responsibilities as the Corporation may designate from time to time.  The Employee shall report to the Chairman and Chief Executive Officer of the Corporation.

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3. Performance of Duties

During the Employment Period, the Employee shall faithfully, honestly and diligently serve the Corporation and its Subsidiaries as contemplated above.  The Employee shall (except in the case of illness or accident) devote all of his working time and attention to his employment hereunder, except where expressly agreed by the Chairman and Chief Executive Officer, and shall use his best efforts to promote the interests of the Corporation.

4. Employment Period

The Employee’s employment under this Agreement shall, subject to section 8 and section 10, be for an indefinite term.  Accordingly, the Corporation shall continue to employ the Employee, and the Employee shall continue to serve the Corporation, as an employee in accordance with this Agreement for the period ending on the effective date the employment of the Employee under this Agreement is terminated in accordance with section 8.2 or section 10 (the “Employment Period”).

5. Remuneration

5.1.              Basic Remuneration.  The Corporation shall pay the Employee a gross salary, minus applicable deductions and withholdings, in respect of each Year of Employment in the Employment Period, of $184,271.04 (the “Basic Salary”), payable in equal installments according to the Corporation’s regular payroll practices.  The Basic Salary shall, in the sole and absolute discretion of the Board, be subject to an increase on the basis of an annual review.

5.2.              Bonus Remuneration.  The Employee shall, in respect of each Year of Employment during the Employment Period, receive bonus remuneration in accordance with the terms and conditions outlined in Schedule 5.2.

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5.3.               Stock Options.  The Employee shall, during the Employment Period, receive such stock options, if any, as the board of directors of the Corporation, in its sole discretion may, pursuant to the terms of the Corporation’s stock option plan, authorize.

5.4.               Benefits.  The Corporation shall provide to the Employee, in addition to the Basic Salary, the benefits (the “Benefits”) described in the Corporation’s employee benefit booklet from time to time, and such Benefits will be provided in accordance with, and subject to, the terms and conditions of the applicable plan relating thereto in effect from time to time and subject to change at any time in the sole discretion of the Corporation.

5.5.               Prorata Entitlement in the Event of Termination.  If the Employee’s employment is terminated pursuant to section 8 or section 10 or if the Employee dies during the Employment Period, the Employee shall be entitled to receive in respect of his entitlement to Basic Salary, and the Corporation shall be required to pay in respect thereof, only that proportion of the Basic Salary, in respect of the Year of Employment in which the effective date of the termination of employment or the date of death occurs, that (i) the number of days elapsed from the commencement of such Year of Employment to the effective date of termination or the date of death is to (ii) 365.

6. Expenses

Subject to the terms of the Corporation’s expense policy, the Corporation shall pay, or reimburse the Employee for, all travel and out-of-pocket expenses reasonably incurred or paid by the Employee in the performance of his duties and responsibilities, upon presentation by the Employee of expense statements or receipts or such other supporting documentation as the Corporation may reasonably require.

7. Vacation

The Employee shall be entitled, during each full Year of Employment during the Employment Period, to vacation with pay of four weeks.  Vacation shall be taken by the Employee at such time as may be acceptable to the Corporation having regard to its operations.  Except with the prior written consent of the Chairman and Chief Executive Officer, (i) no more than two weeks of vacation shall be taken consecutively and (ii) the vacation entitlement earned in a Year of Employment is subject to any carryover provisions as stated in the Company’s vacation policy.  Notwithstanding the foregoing, in the event that the Employee’s employment is terminated pursuant to section 8 or section 10, the Employee shall not be entitled to receive any payment in lieu of any vacation to which he was entitled and which had not already been taken by him except to the extent, if any, of the payments in respect of vacation pay required by the ESA.

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8. Termination

8.1.               Notice.  The Employee’s employment may, subject to section 10, be terminated at any time:

8.1.1.                      by the Corporation without prior notice and without further obligations to the Employee for reasons of Just Cause;

8.1.2.                      by the Corporation for any reason other than Just Cause, on twelve months’ prior written notice to the Employee, provided that if the Employee is entitled under the ESA to a longer period of notice than that prescribed above, the notice to be given by the Corporation under this section 8.1.2 shall be that minimum period of notice which is required under the ESA and no more; or

8.1.3.                      by the Employee on one month’s prior written notice to the Corporation.

The Employee’s employment shall be automatically terminated, without further obligation to the Employee, in the event of his death.

8.2.               Effective Date.  The effective date on which the Employee’s employment shall be terminated shall be:

8.2.1.                      in the case of termination under section 8.1.1, the day the Employee is deemed, under section 17, to have received notice from the Corporation of such termination;

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8.2.2.                      in the case of termination under section 8.1.2 or section 8.1.3, the last day of the minimum period referred to therein; and

8.2.3.                      in the event of the death of the Employee, on the date of his death.

Notwithstanding the foregoing, where the Corporation is giving or has given notice pursuant to section 8.1.2above, the Corporation shall have the right, at any time prior to the end of the Employment Period and by giving notice to the Employee to that effect (a “Stop Work Notice”), to require that the Employee cease to perform his duties and responsibilities and cease attending the Corporation’s premises immediately upon the giving of the Stop Work Notice.  If a Stop Work Notice is given, the Corporation shall continue to pay the Employee to the end of the Employment Period.  For that purpose, in calculating the Employee’s entitlement to Basic Salary, the Employee shall be considered to have been actively employed by the Corporation to the end of the Employment Period.  For the purpose of the Employee’s entitlement to Benefits, the Employee shall receive an amount equal to 2.5% of his Basic Salary for the purpose of obtaining equivalent coverage during the notice period.

9. Rights of Employee on Termination and Lump Sum Payment

Where the Employee’s employment under this Agreement has been terminated by the Corporation under section 8.1.2, the Employee shall be entitled, upon providing to the Corporation appropriate releases, resignations and other similar documentation, to receive from the Corporation, in addition to accrued but unpaid Basic Salary, if any, and any entitlement in respect of vacation as contemplated by section 7, a lump sum payment equal to 12 months of his Basic Salary and 2.5% of his Basic Salary in respect of his entitlement to Benefits, less any amounts payable to the Employee in lieu of notice where a Stop Work Notice has been given pursuant to section 8and less any amounts owing by the Employee to the Corporation for any reason.

Except as provided above in this section 9 and subject to sections 10 and 11, where the Employee’s employment has been terminated by the Employee or by the Corporation for any reason, the Employee shall not be entitled, except to the extent required under any mandatory employment standard under the ESA, to receive any payment as severance pay, in lieu of notice, or as damages.  Except as to any entitlement as provided above and subject to section 10, the Employee hereby waives any claims that the Employee may have against the Corporation for or in respect of severance pay, or on account of loss of office or employment or notice in lieu thereof or damages in lieu thereof (other than rights to accrued but unpaid Basic Salary and vacation pay and to reimbursement for expenses pursuant to section 6).  The payments to the Employee where the Corporation has given notice pursuant to section 8.1.2above, whether or not a Stop Work Notice is given, shall be deemed to include, and to satisfy entitlement to, severance pay pursuant to the ESA to the extent of such payments.

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10. Change of Control

10.1.               Termination of Employment by the Corporation for Just Cause.  Following a Change of Control, the Corporation may terminate the Employee’s employment at any time without notice or further obligations to the Employee under this Agreement for reasons of Just Cause.  Following a Change of Control, the Employee shall not be deemed to have been terminated for Just Cause unless and until there has been delivered to the Employee a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board (excluding the Employee if the Employee is, at the relevant time, a director of the Corporation) at a meeting of the Board called and held for the purpose (after reasonable notice to the Employee), finding that, in the good faith opinion of the Board, the Employee’s conduct constituted Just Cause and specifying the particulars thereof.  The date on which the copy of such resolution is given to the Employee shall be the effective date of any termination pursuant to this section 10.1.

10.2.               Termination of Employment Without Just Cause or for Good Reason. If at any time within 24 months following a Change of Control, the Employee’s employment is terminated (i) by the Corporation other than for Just Cause or (ii) by the Employee for Good Reason, the following provisions shall apply and the provisions of section 8 and section 9 shall not apply:

10.2.1.                      the Employee shall be entitled to receive, and the Corporation shall pay to the Employee immediately following termination, a cash amount equal to 12 months of the Basic Salary, less any required statutory deductions and withholdings;

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10.2.2.                      the Employee shall be entitled to receive, and the Corporation shall pay to the Employee, immediately following termination, a cash amount equal to 2.5% of his annual Basic Salary in lieu of continued benefit coverage; and

10.2.3.                      if at the date of termination of the Employee’s employment, the Employee holds options for the purchase of shares under a share option plan or otherwise, all options so held shall, notwithstanding the terms of the Corporation’s share option plan or of the agreement governing the Employee’s options, (i) immediately vest to the extent they have not already vested at such date; and (ii) (A) for a period of two years following the Employee’s date of termination continue to be held on the same terms and conditions as if the Employee continued to be employed by the Corporation or (B) if the Employee so elects in writing within 90 days after the date of termination, be purchased by the Corporation at a cash purchase price equal to the amount by which the aggregate “fair market value” of the shares subject to such options exceeds the aggregate option price for such shares, provided that for this purpose, “fair market value” means the higher of (i) the weighted average of the closing prices for the shares of the same class of the Corporation on the principal securities exchange (in terms of volume of trading) on which such shares are listed at the time of termination for each of the last ten days prior to such time on which such shares traded on such securities exchange and (ii) if the Change of Control involved the purchase and sale of such shares, the average value of the cash consideration paid to the shareholders of the Corporation in connection with the transactions resulting in the Change of Control.

For purposes of this Agreement, the Employee’s employment shall be deemed to have been terminated following a Change of Control by the Corporation without Just Cause or by the Employee with Good Reason, if: (i) the Employee’s employment is terminated by the Corporation without Just Cause prior to a Change of Control and such termination was at the request or direction of a Person who has entered into an agreement with the Corporation or any shareholder of the Corporation, the consummation of which would constitute a Change of Control; (ii) the Employee terminates his employment with Good Reason prior to a Change of Control and the circumstance or event which constitutes Good Reason occurs at the request or direction of a Person who has entered into an agreement with the Corporation or any shareholder of the Corporation, the consummation of which would constitute a Change of Control; or (iii) the Employee’s employment is terminated by the Corporation without Just Cause prior to a Change of Control and the Employee reasonably demonstrates that such termination is otherwise in connection with, or in anticipation of, a Change of Control which actually occurs.

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For greater certainty, this section 10.2does not apply in the event of the termination of the employment of the Employee: (i) as a result of death, Disability or Retirement of the Employee, (ii) by the Corporation for Just Cause or (iii) by the Employee without Good Reason.  If the Employee or the Corporation intends to terminate the Employee’s employment as contemplated in this section 10, the party having such intention shall, in accordance with the provisions of section 17 hereof, give the other notice thereof.

11. No Obligation to Mitigate

The Employee shall not be required to mitigate any damages or losses arising from any termination of this Agreement by seeking other employment or otherwise, nor (except as specifically provided herein) shall the amount of any payment provided for in this Agreement be reduced by any compensation earned by the Employee as a result of employment by another employer after termination or otherwise.

12. Non-Competition

The Employee shall not, either during the Employment Period or the Restricted Period, within Canada or the United States of America, directly or indirectly, in any manner whatsoever, including, without limitation, individually, or in partnership, jointly or in conjunction with any other Person, or as an employee, principal, agent, director or shareholder:

(i) be engaged in any undertaking;

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(ii) have any financial or other interest (including an interest by way of royalty or other compensation arrangements) in, or in respect of, the business of any Person which carries on a business; or

(iii) advise, lend money to or guarantee the debts or obligations of, or permit the use of the Employee’s name or any parts thereof, by any Person which carries on a business;

which is the same as, or substantially similar to, or which competes with or would compete with, the business carried on by the Corporation or any of its Subsidiaries during the Employment Period or at the end thereof.

Notwithstanding the foregoing, nothing herein shall prevent the Employee from owning not more than 5% of the issued and outstanding shares of a corporation, the shares of which are listed on a recognized stock exchange or traded in the over-the-counter market in Canada or the United States, which carries on a business which is the same as, or substantially similar to, or which competes with or would compete with, the business of the Corporation or any of its Subsidiaries.

13. No Solicitation of Customers or Patients

The Employee shall not, either during the Employment Period or the Restricted Period, directly or indirectly, solicit or attempt to solicit any patients or customers of the Corporation or any of its Subsidiaries for the purpose of selling to any patients or customers of the Corporation any products or services which are the same as or substantially similar to, or in any way competitive with, the products or services sold by the Corporation or any of its Subsidiaries during the Employment Period or at the end thereof, as the case may be.

14. No Solicitation of Employees

The Employee shall not, either during the Employment Period or the Restricted Period, directly or indirectly, employ or retain as an independent contractor any employee of the Corporation or any of its Subsidiaries or induce or solicit, or attempt to induce or solicit, any such person to leave his/her employment.

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15. Confidentiality

The Employee shall not, either during the Employment Period or at any time thereafter, directly or indirectly, use or disclose to any Person any Confidential Information, provided, however, that nothing in this section 15 shall preclude the Employee from disclosing or using Confidential Information if:

15.1.             the Confidential Information is available to the public or in the public domain at the time of such disclosure or use, without breach of this Agreement; or

15.2.             disclosure of the Confidential Information is required to be made by any law, regulation or governmental body or authority or by court order.

The Employee acknowledges and agrees that the obligations under this section 15 are to remain in effect in perpetuity and shall exist and continue in full force and effect, notwithstanding any breach or repudiation, or alleged breach or repudiation, by the Corporation of this Agreement.

16. Remedies

The Employee acknowledges that a breach or threatened breach by the Employee of the provisions of any of sections 12 to 15 inclusive will result in the Corporation and its shareholders suffering irreparable harm which is not capable of being calculated and which cannot be fully or adequately compensated by the recovery of damages alone.  Accordingly, the Employee agrees that the Corporation shall be entitled to interim and permanent injunctive relief, specific performance and other equitable remedies, in addition to any other relief to which the Corporation may become entitled.

17. Notices

Any notice or other communication required or permitted to be given hereunder shall be in writing and shall be given by prepaid first-class mail, by facsimile or other means of electronic communication or by hand delivery as hereinafter provided, except that any notice of termination by the Corporation under section 8 or section 10 shall be hand delivered or given by registered mail.  Any such notice or other communication, if mailed by prepaid first-class mail at any time, other than during a general discontinuance of postal service due to strike, lockout or other reason, shall be deemed to have been received on the fourth Business Day after the post-marked date thereof or, if mailed by registered mail, shall be deemed to have been received on the day such mail is delivered by the post office or, if sent by facsimile or other means of electronic communication, shall be deemed to have been received on the Business Day following the sending or, if delivered by hand shall be deemed to have been received at the time it is delivered to the applicable address noted below, either to the individual designated below or to an individual at such address having apparent authority to accept deliveries on behalf of the addressee.  Notice of change of address shall also be governed by this section 17.  In the event of a general discontinuance of postal service due to strike, lock-out or other reason, notices or other communications shall be delivered by hand or sent by facsimile or other means of electronic communication and shall be deemed to have been received in accordance with this section 17.   Notices and other communications shall be addressed as follows:

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a) if to the Employee:

William G. Dumencu

283 Coxe Blvd.

Milton, Ontario

L9T 4L4

b) if to the Corporation:

OccuLogix, Inc.

2600 Skymark Avenue, Bldg. 9, Suite 201

Mississauga, Ontario

L4W 5B2

Attention: Chairman and Chief Executive Officer

Telecopier number: (905) 602-7623

18. Headings

The inclusion of headings in this Agreement is for convenience of reference only and shall not affect the construction or interpretation hereof.

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19. Invalidity of Provisions

Each of the provisions contained in this Agreement is distinct and severable, and a declaration of invalidity or unenforceability of any such provision by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.

20. Entire Agreement

This Agreement constitutes the entire agreement between the parties pertaining to the subject matter of this Agreement.  This Agreement supersedes and replaces all prior agreements, written or oral, with respect to the Employee’s employment by the Corporation (including, without limitation, the Old Employment Agreement) and any rights which the Employee may have by reason of any such prior agreement or by reason of the Employee’s prior employment, if any, by the Corporation.  There are no warranties, representations or agreements between the parties in connection with the subject matter of this Agreement except as specifically set forth or referred to in this Agreement.  No reliance is placed on any representation, opinion, advice or assertion of fact made by the Corporation or its directors, officers and agents to the Employee, except to the extent that the same has been reduced to writing and included as a term of this Agreement.  Accordingly, there shall be no liability, either in tort or in contract, assessed in relation to any such representation, opinion, advice or assertion of fact, except to the extent aforesaid.

21. Waiver, Amendment

Except as expressly provided in this Agreement, no amendment or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby.  No waiver of any provision of this Agreement shall constitute a waiver of any other provision, nor shall any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided.

22. Currency

All amounts in this Agreement are stated and shall be paid in Canadian currency.

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23. Employers and Employees Act Not to Apply

The Corporation and the Employee agree that section 2 of the Employers and Employees Act (Ontario) shall not apply to, or in respect of, this Agreement or the employment of the Employee hereunder.

24. Governing Law

This Agreement shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the laws of Canada applicable therein.

25. Counterparts

This Agreement may be signed in counterparts and each of such counterparts shall constitute an original document, and such counterparts, taken together, shall constitute one and the same instrument.

26. Acknowledgment

The Employee acknowledges that:

26.1.             the Employee has had sufficient time to review and consider this Agreement thoroughly;

26.2.             the Employee has read and understands the terms of this Agreement and the Employee’s obligations hereunder;

26.3.             the Employee has been given an opportunity to obtain independent legal advice, or such other advice as the Employee may desire, concerning the interpretation and effect of this Agreement; and

26.4.             this Agreement is entered into voluntarily and without any pressure, and the Employee’s continued employment has not been made conditional upon execution of this Agreement by the Employee.

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IN WITNESS WHEREOF the parties have executed this Agreement as of the date first written above.

OCCULOGIX, INC.
By:	“Elias Vamvakas”
	Elias Vamvakas
	Chairman and Chief Executive Officer

Witness
	)
	)
	)
	)
	)
	)
	)
	)	“William G. Dumencu”
	)	William G. Dumencu

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SCHEDULE 5.2

Bonus Remuneration

In respect of each Year of Employment during the Employment Period, the Employee shall be entitled to receive a maximum of 25% of his Basic Salary as bonus remuneration based upon performance criteria agreed upon by the Chairman and Chief Executive Officer and approved by the Compensation Committee of the Board.

EX-10.53

Exhibit 10.53
  

Execution Copy 

TERMINATION AGREEMENT

THIS TERMINATION AGREEMENT is made as of February 25, 2008 (the “Termination Effective Date”)

B E T W E E N:
	ASAHI KASEI KURARAY MEDICAL CO., LTD., a corporation organized and existing under the laws of Japan
	(“Asahi”)
	- and -
	OCCULOGIX, INC., a corporation incorporated under the laws of the State of Delaware
	(“OccuLogix”)

WHEREAS, on October 20, 2006, Asahi Kasei Medical Co., Ltd. (now Asahi) and OccuLogix entered into the 2006 Distributorship Agreement pursuant to which OccuLogix was, upon certain conditions, appointed Asahi’s exclusive distributor in certain jurisdictions, and Asahi’s non-exclusive distributor in Italy, of the Rheofilter filter and the Plasmoflo filter and pursuant to which OccuLogix had certain minimum purchase and other obligations (the “2006 Distribution Agreement”);

AND WHEREAS, on November 1, 2007, OccuLogix announced an indefinite suspension of its RHEO System clinical development program due to OccuLogix’s difficult financial position, thus making it difficult for OccuLogix to fulfill its obligations under the 2006 Distribution Agreement;

AND WHEREAS, a lifting of such suspension will not be feasible in the near term for reason of OccuLogix’s continuing difficult financial position;

AND WHEREAS, following good faith discussions between the parties hereto, they mutually agree that it would be in their respective best interests to terminate the 2006 Distribution Agreement;

NOW THEREFORE in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Asahi and OccuLogix hereby agree as follows:

1. On and as of the Termination Effective Date, the 2006 Distribution Agreement hereby shall be terminated and rendered null and void notwithstanding Article 18.2 thereof, save and except for Articles 7.8, 15, 20, 21, 22, 23 and 24 thereof (the “Surviving Provisions”), all of which shall survive the termination of the 2006 Distribution Agreement.

2.  Each of the parties hereto hereby acknowledges and agrees that the other party hereto owes it no further obligations, liabilities or duties whatsoever pursuant to, arising from or in connection with, or otherwise relating to, the 2006 Distribution Agreement, whether of a financial nature or otherwise, save and except for any obligations, liabilities or duties pursuant to, arising from or in connection with, or otherwise relating to, any of the Surviving Provisions.

3.  Each of the parties hereto, on behalf of itself, its successors and assigns and any party claiming through it, hereby releases completely and forever discharges the other party hereto and its affiliates and subsidiaries, and their respective officers, directors, shareholders, agents, employees, servants, representatives, successors and assigns, from any and all claims, demands, obligations and causes of action, of any nature whatsoever, arising under any jurisdiction’s laws, whether known or unknown, which the releasing party ever had, now has or might have in the future as a result of, pursuant to, arising from or in connection with, or otherwise relating to, the 2006 Distribution Agreement or any of the transactions and dealings engaged in or consummated thereunder or pursuant thereto, or otherwise relating thereto, save and except for such claims, demands, obligations and causes of action relating to any of the Surviving Provisions.

4. Each of the parties hereto hereby represents and warrants to the other party that:

(a)  it has the corporate power and capacity to enter into, and perform its obligations under, this Termination Agreement; and

(b) it has taken all necessary action on its part to authorize the execution and delivery by it of this Termination Agreement and the performance of its obligations hereunder.

5. Each of the parties hereto hereby agrees to do, execute, acknowledge and deliver, or to cause to be done, executed, acknowledged and delivered, all such further acts, documents and instruments as may be reasonably necessary to accomplish the intent of this Termination Agreement.

6. This Termination Agreement may be signed in separate counterparts (and communicated by facsimile or e-mail transmission), and each such counterpart will constitute an original document, and such counterparts, taken together, will constitute one and the same instrument.

7.  This Termination Agreement shall be governed by the substantive and procedural laws of Japan.  All disputes, controversies or differences which may arise between the parties, out of or in relation to or in connection with this Termination Agreement, or for the breach hereof, shall be settled by mutual consultation between the parties hereto in good faith as promptly as possible but, failing an amicable settlement, shall be finally settled by arbitration to be held in Tokyo, Japan under the Rules of Conciliation and Arbitration of the International Chamber of Commerce, by which each party hereto agrees to be bound.

-2-

IN WITNESS WHEREOF, the parties hereto have executed this Termination Agreement as of the date first written above.

ASAHI KASEI KURARAY MEDICAL CO., LTD.
By:	/s/ Yasuyuki Yoshida
	Name:	Yasuyuki Yoshida
	Title:	President
OCCULOGIX, INC.
By:	/s/ Thomas P. Reeves
	Name:	Thomas P. Reeves
	Title:	President and Chief Operating Officer

-3-

EX-10.54

Exhibit 10.54
  

Execution Copy

AMENDING AGREEMENT

THIS AMENDING AGREEMENT is made as of the 3rd day of March, 2008 by and between Nozhat Choudry (the “Employee”), a resident of the Province of Ontario, and OccuLogix, Inc. (the “Employer”), a corporation incorporated under the laws of the State of Delaware, and having its executive offices at 2600 Skymark Avenue, Building 9, Suite 201, Mississauga, Ontario, L4W 5B2.

WHEREAS, the Employer and the Employee entered into a termination agreement dated as of January 31, 2008 (the “Termination Agreement”) pursuant to which the Employee’s employment with the Employer, as its Vice President, Clinical Research, was terminated;

AND WHEREAS, capitalized terms used in this Amending Agreement, but not otherwise defined, shall have the respective meanings attributed to such terms in the Termination Agreement;

AND WHEREAS, the Employer and the Employee mutually have agreed that it would be in the best interests of each of them to permit the Employer to pay up to 50% of the Severance Balance in a non-cash form of consideration;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Amending Agreement and the Termination Agreement (the receipt and sufficiency of which are hereby acknowledged by the parties hereto), the parties hereto agree as follows:

1. AMENDMENT

1.1           Sections 3.3, 3.4 and 3.5 of the Termination Agreement are hereby deleted in their entirety and replaced with the following Sections 3.3, 3.4, 3.5 and 3.6:

3.3 At the sole discretion of the Employer, and subject to the provisions of this Section 3.3 and Section 3.4, and subject further to the Employer obtaining all requisite corporate approval therefor (including, without limitation, the approval of the Employer’s stockholders, if required), the Employer may satisfy and discharge in full its obligation under Section 3.2 to pay the Severance Balance by:  (i) issuing to the Employee stock options under the Stock Option Plan in a number equal to the quotient of (a) some percentage of the Severance Balance, which shall not exceed 50%, divided by (b) the per stock option value of such stock options, which shall be determined by the Employer using the Black-Scholes valuation method (collectively, the “Severance Stock Options”); and (ii) paying the balance of the Severance Balance to the Employee in cash.  The Severance Stock Options shall have a term of ten years commencing on the date of their grant and, other than as may be agreed to by the Employer within its sole discretion, will not become exercisable prior to the 180th day following the date of their grant.  The exercise price of the Severance Stock Options shall be determined by the Employer’s board of directors in accordance with the provisions of the Stock Option Plan and all applicable laws, regulations and rules (including, without limitation, the rules of the Toronto Stock Exchange).

3.4 If,  prior to the end of the Salary Continuance Period, any petition should be filed by or against the Employer for liquidation or reorganization, or should the Employer become insolvent or make an assignment for the benefit of any creditor or creditors, or should a receiver or trustee be appointed for all or any significant part of the Employer’s assets, or should the Employer consent to the winding-up, liquidation or dissolution of itself or its affairs (each, a “Bankruptcy Event”), then an amount equal to (i) the Employee’s Severance minus (ii) the aggregate net amount paid by the Employer to the Employee to the date of the Bankruptcy Event, together with the aggregate amount of deductions and withholdings withheld by the Employer, pursuant to Section 3.1, shall become due and payable, in cash, immediately to the Employee.  If a Bankruptcy Event occurs on or after March 31, 2008, then the Severance Balance shall become due and payable, in cash, immediately to the Employee.

3.5 The Employer hereby agrees that, in the event that any of Elias Vamvakas, Tom Reeves, John Cornish, Bill Dumencu, David Eldridge, Julie Fotheringham, Stephen Kilmer, Suh Kim, Stephen Parks or Stephen Westing (each, an “OLT Member”) should become entitled to receive severance pursuant to his or her executive employment agreement at any time before the Employer has paid, in full, the amount due and payable to her pursuant to Section 3.2 or 3.4, as the case may be, the Employer shall not pay any OLT Member a percentage of his or her severance entitlement (without regard to applicable deductions and withholdings) that exceeds the percentage that (i) the Salary Continuance Amount plus the aggregate amount paid to the Employee pursuant to Sections 3.2 and 3.4, together with the aggregate amount of deductions and withholdings withheld by the Employer, represents of (ii) the amount of the Employee’s Severance.  For greater certainty, for purposes of calculating such percentage in a circumstance in which the Employer has exercised its discretion pursuant to Section 3.3 and has issued Severance Stock Options, then the aggregate amount paid to the Employee pursuant to Section 3.2 shall be the sum of (i) the value of such Severance Stock Options, as determined by the Employer using the Black-Scholes valuation method, and (ii) the amount of the Severance Balance paid in cash.

3.6 For greater certainty, all cash amounts due and payable by the Employer to the Employee pursuant to this Article 3 shall be paid, net of applicable deductions and withholdings.

1.2           The Termination Agreement remains in full force and effect, unamended, other than as specifically amended by this Amending Agreement.

2

2. ACKNOWLEDGEMENT

2.1 The Employee hereby acknowledges that:

(a) She has had sufficient time to review and consider this Amending Agreement thoroughly;

(b) She has read and understands the terms of this Amending Agreement and her obligations hereunder;

(c) She has been given an opportunity to obtain independent legal advice, or such other advice as she may desire, concerning the interpretation and effect of this Amending Agreement; and

(d) She is entering this Amending Agreement voluntarily and without any pressure from the Employer.

3. MISCELLANEOUS

3.1           The headings in this Amending Agreement are included solely for convenience of reference and shall not affect the construction or interpretation hereof.

3.2           The parties hereto expressly agree that nothing in this Amending Agreement shall be construed as an admission of liability.

3.3           This Amending Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, trustees, administrators, successors and assigns.

3.4           This Amending Agreement and the Termination Agreement constitute the entire agreement between the parties hereto pertaining to the subject matter of the termination of the Employee’s employment with the Employer.  This Amending Agreement, together with the Termination Agreement, supersede and replace all prior agreements, if any, written or oral, with respect to such subject matter and any rights which the Employee may have by reason of any such prior agreements or by reason of the Employee’s employment with the Corporation.  There are no representations, warranties or agreements between the parties hereto in connection with the subject matter of this Amending Agreement, except as specifically set forth herein.  No reliance is placed on any representation, opinion, advice or assertion of fact made by the Employer or any of its officers, directors, agents or employees to the Employee, except to the extent that the same has been reduced to writing and included as a term of this Amending Agreement or the Termination Agreement.  Accordingly, there shall be no liability, either in tort or in contract, assessed in relation to any such representation, opinion, advice or assertion of fact, except to the extent aforesaid.

3.5           Each of the provisions contained in this Amending Agreement is distinct and severable, and a declaration of invalidity or unenforceability of any provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.

3

3.6           This Amending Agreement shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein.

3.7           This Amending Agreement may be signed in counterparts and delivered by facsimile transmission or other electronic means, and each of such counterparts shall constitute an original document, and such counterparts, taken together, shall constitute one and the same instrument.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

4

IN WITNESS WHEREOF, the parties have executed this Amending Agreement as of the date set forth above.

OCCULOGIX, INC.
By:	“Suh Kim”
	Suh Kim
	General Counsel

	“Nozhat Choudry”
Signature of Witness	Nozhat Choudry
Name of Witness (please print)

5

EX-10.55

Exhibit 10.55

Execution Copy

AMENDING AGREEMENT

THIS AMENDING AGREEMENT is made as of the 3rd day of March, 2008 by and between John Cornish (the “Employee”), a resident of the State of Florida, and OccuLogix, Inc. (the “Employer”), a corporation incorporated under the laws of the State of Delaware, and having its executive offices at 2600 Skymark Avenue, Building 9, Suite 201, Mississauga, Ontario, L4W 5B2.

WHEREAS, the Employer and the Employee entered into a termination agreement dated as of January 4, 2008 (the “Termination Agreement”) pursuant to which the Employee’s employment with the Employer, as its Vice President, Operations, was terminated;

AND WHEREAS, capitalized terms used in this Amending Agreement, but not otherwise defined, shall have the respective meanings attributed to such terms in the Termination Agreement;

AND WHEREAS, the Employer and the Employee mutually have agreed that it would be in the best interests of each of them to permit the Employer to pay up to 100% of the Severance Balance in a non-cash form of consideration;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Amending Agreement and the Termination Agreement (the receipt and sufficiency of which are hereby acknowledged by the parties hereto), the parties hereto agree as follows:

1. AMENDMENT

1.1           Sections 3.3, 3.4 and 3.5 of the Termination Agreement are hereby deleted in their entirety and replaced with the following Sections 3.3, 3.4, 3.5 and 3.6:

3.3 At the sole discretion of the Employer, and subject to the provisions of this Section 3.3 and Section 3.4, and subject further to the Employer obtaining all requisite corporate approval therefor (including, without limitation, the approval of the Employer’s stockholders, if required), the Employer may satisfy and discharge in full its obligation under Section 3.2 to pay the Severance Balance by:  (i) issuing to the Employee stock options under the Stock Option Plan in a number equal to the quotient of (a) some percentage of the Severance Balance, up to 100%, divided by (b) the per stock option value of such stock options, which shall be determined by the Employer using the Black-Scholes valuation method (collectively, the “Severance Stock Options”); and (ii) paying the balance of the Severance Balance to the Employee in cash.  The Severance Stock Options shall have a term of ten years commencing on the date of their grant and, other than as may be agreed to by the Employer within its sole discretion, will not become exercisable prior to the 180th day following the date of their grant.  The exercise price of the Severance Stock Options shall be determined by the Employer’s board of directors in accordance with the provisions of the Stock Option Plan and all applicable laws, regulations and rules (including, without limitation, the rules of the Toronto Stock Exchange).

3.4 If,  prior to the end of the Salary Continuance Period, any petition should be filed by or against the Employer for liquidation or reorganization, or should the Employer become insolvent or make an assignment for the benefit of any creditor or creditors, or should a receiver or trustee be appointed for all or any significant part of the Employer’s assets, or should the Employer consent to the winding-up, liquidation or dissolution of itself or its affairs (each, a “Bankruptcy Event”), then an amount equal to (i) the Employee’s Severance minus (ii) the aggregate net amount paid by the Employer to the Employee to the date of the Bankruptcy Event, together with the aggregate amount of deductions and withholdings withheld by the Employer, pursuant to Section 3.1, shall become due and payable, in cash, immediately to the Employee.  If a Bankruptcy Event occurs on or after March 31, 2008, then the Severance Balance shall become due and payable, in cash, immediately to the Employee.

3.5 The Employer hereby agrees that, in the event that any of Elias Vamvakas, Tom Reeves, Nozhat Choudry, Bill Dumencu, David Eldridge, Julie Fotheringham, Stephen Kilmer, Suh Kim, Stephen Parks or Stephen Westing (each, an “OLT Member”) should become entitled to receive severance pursuant to his or her executive employment agreement at any time before the Employer has paid, in full, the amount due and payable to him pursuant to Section 3.2 or 3.4, as the case may be, the Employer shall not pay any OLT Member a percentage of his or her severance entitlement (without regard to applicable deductions and withholdings) that exceeds the percentage that (i) the Salary Continuance Amount plus the aggregate amount paid to the Employee pursuant to Sections 3.2 and 3.4, together with the aggregate amount of deductions and withholdings withheld by the Employer, represents of (ii) the amount of the Employee’s Severance.  For greater certainty, for purposes of calculating such percentage in a circumstance in which the Employer has exercised its discretion pursuant to Section 3.3 and has issued Severance Stock Options, then the aggregate amount paid to the Employee pursuant to Section 3.2 shall be the sum of (i) the value of such Severance Stock Options, as determined by the Employer using the Black-Scholes valuation method, and (ii) the amount of the Severance Balance paid in cash.

3.6 For greater certainty, all cash amounts due and payable by the Employer to the Employee pursuant to this Article 3 shall be paid, net of applicable deductions and withholdings.

1.2           The Termination Agreement remains in full force and effect, unamended, other than as specifically amended by this Amending Agreement.

1

2. ACKNOWLEDGEMENT

2.1 The Employee hereby acknowledges that:

(a) He has had sufficient time to review and consider this Amending Agreement thoroughly;

(b) He has read and understands the terms of this Amending Agreement and his obligations hereunder;

(c) He has been given an opportunity to obtain independent legal advice, or such other advice as he may desire, concerning the interpretation and effect of this Amending Agreement; and

(d) He is entering this Amending Agreement voluntarily and without any pressure from the Employer.

3. MISCELLANEOUS

3.1           The headings in this Amending Agreement are included solely for convenience of reference and shall not affect the construction or interpretation hereof.

3.2           The parties hereto expressly agree that nothing in this Amending Agreement shall be construed as an admission of liability.

3.3           This Amending Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, trustees, administrators, successors and assigns.

3.4           This Amending Agreement and the Termination Agreement constitute the entire agreement between the parties hereto pertaining to the subject matter of the termination of the Employee’s employment with the Employer.  This Amending Agreement, together with the Termination Agreement, supersede and replace all prior agreements, if any, written or oral, with respect to such subject matter and any rights which the Employee may have by reason of any such prior agreements or by reason of the Employee’s employment with the Corporation.  There are no representations, warranties or agreements between the parties hereto in connection with the subject matter of this Amending Agreement, except as specifically set forth herein.  No reliance is placed on any representation, opinion, advice or assertion of fact made by the Employer or any of its officers, directors, agents or employees to the Employee, except to the extent that the same has been reduced to writing and included as a term of this Amending Agreement or the Termination Agreement.  Accordingly, there shall be no liability, either in tort or in contract, assessed in relation to any such representation, opinion, advice or assertion of fact, except to the extent aforesaid.

3.5           Each of the provisions contained in this Amending Agreement is distinct and severable, and a declaration of invalidity or unenforceability of any provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.

2

3.6           This Amending Agreement shall be governed by, and construed in accordance with, the laws of the State of Florida, without regard to its conflicts of laws rules which shall be deemed inapplicable to this Amending Agreement.

3.7           This Amending Agreement may be signed in counterparts and delivered by facsimile transmission or other electronic means, and each of such counterparts shall constitute an original document, and such counterparts, taken together, shall constitute one and the same instrument.

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3

IN WITNESS WHEREOF, the parties have executed this Amending Agreement as of the date set forth above.

OCCULOGIX, INC.
By:	“Suh Kim”
	Suh Kim
	General Counsel

	“John Cornish”
Signature of Witness	John Cornish
Name of Witness (please print)

5

EX-10.56

Exhibit 10.56

Execution Copy

AMENDING AGREEMENT

THIS AMENDING AGREEMENT is made as of the 3rd day of March, 2008 by and between David C. Eldridge (the “Employee”), a resident of the State of Oklahoma, and OccuLogix, Inc. (the “Employer”), a corporation incorporated under the laws of the State of Delaware, and having its executive offices at 2600 Skymark Avenue, Building 9, Suite 201, Mississauga, Ontario, L4W 5B2.

WHEREAS, the Employer and the Employee entered into a termination agreement dated as of January 4, 2008 (the “Termination Agreement”) pursuant to which the Employee’s employment with the Employer, as its Vice President, Science and Technology, was terminated;

AND WHEREAS, capitalized terms used in this Amending Agreement, but not otherwise defined, shall have the respective meanings attributed to such terms in the Termination Agreement;

AND WHEREAS, the Employer and the Employee mutually have agreed that it would be in the best interests of each of them to permit the Employer to pay up to 50% of the Severance Balance in a non-cash form of consideration;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Amending Agreement and the Termination Agreement (the receipt and sufficiency of which are hereby acknowledged by the parties hereto), the parties hereto agree as follows:

1. AMENDMENT

1.1           Sections 3.3, 3.4 and 3.5 of the Termination Agreement are hereby deleted in their entirety and replaced with the following Sections 3.3, 3.4, 3.5 and 3.6:

3.3 At the sole discretion of the Employer, and subject to the provisions of this Section 3.3 and Section 3.4, and subject further to the Employer obtaining all requisite corporate approval therefor (including, without limitation, the approval of the Employer’s stockholders, if required), the Employer may satisfy and discharge in full its obligation under Section 3.2 to pay the Severance Balance by:  (i) issuing to the Employee stock options under the Stock Option Plan in a number equal to the quotient of (a) some percentage of the Severance Balance, which shall not exceed 50%, divided by (b) the per stock option value of such stock options, which shall be determined by the Employer using the Black-Scholes valuation method (collectively, the “Severance Stock Options”); and (ii) paying the balance of the Severance Balance to the Employee in cash.  The Severance Stock Options shall have a term of ten years commencing on the date of their grant and, other than as may be agreed to by the Employer within its sole discretion, will not become exercisable prior to the 180th day following the date of their grant.  The exercise price of the Severance Stock Options shall be determined by the Employer’s board of directors in accordance with the provisions of the Stock Option Plan and all applicable laws, regulations and rules (including, without limitation, the rules of the Toronto Stock Exchange).

3.4 If,  prior to the end of the Salary Continuance Period, any petition should be filed by or against the Employer for liquidation or reorganization, or should the Employer become insolvent or make an assignment for the benefit of any creditor or creditors, or should a receiver or trustee be appointed for all or any significant part of the Employer’s assets, or should the Employer consent to the winding-up, liquidation or dissolution of itself or its affairs (each, a “Bankruptcy Event”), then an amount equal to (i) the Employee’s Severance minus (ii) the aggregate net amount paid by the Employer to the Employee to the date of the Bankruptcy Event, together with the aggregate amount of deductions and withholdings withheld by the Employer, pursuant to Section 3.1, shall become due and payable, in cash, immediately to the Employee.  If a Bankruptcy Event occurs on or after March 31, 2008, then the Severance Balance shall become due and payable, in cash, immediately to the Employee.

3.5 The Employer hereby agrees that, in the event that any of Elias Vamvakas, Tom Reeves, Nozhat Choudry, John Cornish, Bill Dumencu, Julie Fotheringham, Stephen Kilmer, Suh Kim, Stephen Parks or Stephen Westing (each, an “OLT Member”) should become entitled to receive severance pursuant to his or her executive employment agreement at any time before the Employer has paid, in full, the amount due and payable to him pursuant to Section 3.2 or 3.4, as the case may be, the Employer shall not pay any OLT Member a percentage of his or her severance entitlement (without regard to applicable deductions and withholdings) that exceeds the percentage that (i) the Salary Continuance Amount plus the aggregate amount paid to the Employee pursuant to Sections 3.2 and 3.4, together with the aggregate amount of deductions and withholdings withheld by the Employer, represents of (ii) the amount of the Employee’s Severance.  For greater certainty, for purposes of calculating such percentage in a circumstance in which the Employer has exercised its discretion pursuant to Section 3.3 and has issued Severance Stock Options, then the aggregate amount paid to the Employee pursuant to Section 3.2 shall be the sum of (i) the value of such Severance Stock Options, as determined by the Employer using the Black-Scholes valuation method, and (ii) the amount of the Severance Balance paid in cash.

1.2           Section 4.2 of the Termination Agreement is hereby deleted in its entirety and replaced with the following Section 4.2:

4.2 For greater certainty, all cash amounts due and payable by the Employer to the Employee pursuant to Article 3 and this Article 4 shall be paid, net of applicable deductions and withholdings.

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1.3           The Termination Agreement remains in full force and effect, unamended, other than as specifically amended by this Amending Agreement.

2. ACKNOWLEDGEMENT

2.1           The Employee hereby acknowledges that:

(a) He has had sufficient time to review and consider this Amending Agreement thoroughly;

(b) He has read and understands the terms of this Amending Agreement and his obligations hereunder;

(c) He has been given an opportunity to obtain independent legal advice, or such other advice as he may desire, concerning the interpretation and effect of this Amending Agreement; and

(d) He is entering this Amending Agreement voluntarily and without any pressure from the Employer.

3. MISCELLANEOUS

3.1           The headings in this Amending Agreement are included solely for convenience of reference and shall not affect the construction or interpretation hereof.

3.2           The parties hereto expressly agree that nothing in this Amending Agreement shall be construed as an admission of liability.

3.3           This Amending Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, trustees, administrators, successors and assigns.

3.4           This Amending Agreement and the Termination Agreement constitute the entire agreement between the parties hereto pertaining to the subject matter of the termination of the Employee’s employment with the Employer.  This Amending Agreement, together with the Termination Agreement, supersede and replace all prior agreements, if any, written or oral, with respect to such subject matter and any rights which the Employee may have by reason of any such prior agreements or by reason of the Employee’s employment with the Corporation.  There are no representations, warranties or agreements between the parties hereto in connection with the subject matter of this Amending Agreement, except as specifically set forth herein.  No reliance is placed on any representation, opinion, advice or assertion of fact made by the Employer or any of its officers, directors, agents or employees to the Employee, except to the extent that the same has been reduced to writing and included as a term of this Amending Agreement or the Termination Agreement.  Accordingly, there shall be no liability, either in tort or in contract, assessed in relation to any such representation, opinion, advice or assertion of fact, except to the extent aforesaid.

3.5           Each of the provisions contained in this Amending Agreement is distinct and severable, and a declaration of invalidity or unenforceability of any provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.

3

3.6           This Amending Agreement shall be governed by, and construed in accordance with, the laws of the State of Oklahoma, without regard to its conflicts of laws rules which shall be deemed inapplicable to this Amending Agreement.

3.7           This Amending Agreement may be signed in counterparts and delivered by facsimile transmission or other electronic means, and each of such counterparts shall constitute an original document, and such counterparts, taken together, shall constitute one and the same instrument.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

4

IN WITNESS WHEREOF, the parties have executed this Amending Agreement as of the date set forth above.

OCCULOGIX, INC.
By:	“Suh Kim”
	Suh Kim
	General Counsel

	“David C. Eldridge”
Signature of Witness	David C. Eldridge
Name of Witness (please print)

5

EX-10.57

Exhibit 10.57

Execution Copy

AMENDING AGREEMENT

THIS AMENDING AGREEMENT is made as of the 3rd day of March, 2008 by and between Julie A. Fotheringham (the “Employee”), a resident of the Province of Ontario, and OccuLogix, Inc. (the “Employer”), a corporation incorporated under the laws of the State of Delaware, and having its executive offices at 2600 Skymark Avenue, Building 9, Suite 201, Mississauga, Ontario, L4W 5B2.

WHEREAS, the Employer and the Employee entered into a termination agreement dated as of January 4, 2008 (the “Termination Agreement”) pursuant to which the Employee’s employment with the Employer, as its Vice President, Marketing, was terminated;

AND WHEREAS, capitalized terms used in this Amending Agreement, but not otherwise defined, shall have the respective meanings attributed to such terms in the Termination Agreement;

AND WHEREAS, the Employer and the Employee mutually have agreed that it would be in the best interests of each of them to permit the Employer to pay up to 50% of the Severance Balance in a non-cash form of consideration;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Amending Agreement and the Termination Agreement (the receipt and sufficiency of which are hereby acknowledged by the parties hereto), the parties hereto agree as follows:

1. AMENDMENT

1.1           Sections 3.3, 3.4 and 3.5 of the Termination Agreement are hereby deleted in their entirety and replaced with the following Sections 3.3, 3.4, 3.5 and 3.6:

3.3 At the sole discretion of the Employer, and subject to the provisions of this Section 3.3 and Section 3.4, and subject further to the Employer obtaining all requisite corporate approval therefor (including, without limitation, the approval of the Employer’s stockholders, if required), the Employer may satisfy and discharge in full its obligation under Section 3.2 to pay the Severance Balance by:  (i) issuing to the Employee stock options under the Stock Option Plan in a number equal to the quotient of (a) some percentage of the Severance Balance, which shall not exceed 50%, divided by (b) the per stock option value of such stock options, which shall be determined by the Employer using the Black-Scholes valuation method (collectively, the “Severance Stock Options”); and (ii) paying the balance of the Severance Balance to the Employee in cash.  The Severance Stock Options shall have a term of ten years commencing on the date of their grant and, other than as may be agreed to by the Employer within its sole discretion, will not become exercisable prior to the 180th day following the date of their grant.  The exercise price of the Severance Stock Options shall be determined by the Employer’s board of directors in accordance with the provisions of the Stock Option Plan and all applicable laws, regulations and rules (including, without limitation, the rules of the Toronto Stock Exchange).

3.4 If,  prior to the end of the Salary Continuance Period, any petition should be filed by or against the Employer for liquidation or reorganization, or should the Employer become insolvent or make an assignment for the benefit of any creditor or creditors, or should a receiver or trustee be appointed for all or any significant part of the Employer’s assets, or should the Employer consent to the winding-up, liquidation or dissolution of itself or its affairs (each, a “Bankruptcy Event”), then an amount equal to (i) the Employee’s Severance minus (ii) the aggregate net amount paid by the Employer to the Employee to the date of the Bankruptcy Event, together with the aggregate amount of deductions and withholdings withheld by the Employer, pursuant to Section 3.1, shall become due and payable, in cash, immediately to the Employee.  If a Bankruptcy Event occurs on or after March 31, 2008, then the Severance Balance shall become due and payable, in cash, immediately to the Employee.

3.5 The Employer hereby agrees that, in the event that any of Elias Vamvakas, Tom Reeves, Nozhat Choudry, John Cornish, Bill Dumencu, David Eldridge, Stephen Kilmer, Suh Kim, Stephen Parks or Stephen Westing (each, an “OLT Member”) should become entitled to receive severance pursuant to his or her executive employment agreement at any time before the Employer has paid, in full, the amount due and payable to her pursuant to Section 3.2 or 3.4, as the case may be, the Employer shall not pay any OLT Member a percentage of his or her severance entitlement (without regard to applicable deductions and withholdings) that exceeds the percentage that (i) the Salary Continuance Amount plus the aggregate amount paid to the Employee pursuant to Sections 3.2 and 3.4, together with the aggregate amount of deductions and withholdings withheld by the Employer, represents of (ii) the amount of the Employee’s Severance.  For greater certainty, for purposes of calculating such percentage in a circumstance in which the Employer has exercised its discretion pursuant to Section 3.3 and has issued Severance Stock Options, then the aggregate amount paid to the Employee pursuant to Section 3.2 shall be the sum of (i) the value of such Severance Stock Options, as determined by the Employer using the Black-Scholes valuation method, and (ii) the amount of the Severance Balance paid in cash.

3.6 For greater certainty, all cash amounts due and payable by the Employer to the Employee pursuant to this Article 3 shall be paid, net of applicable deductions and withholdings.

1.2           The Termination Agreement remains in full force and effect, unamended, other than as specifically amended by this Amending Agreement.

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2. ACKNOWLEDGEMENT

2.1 The Employee hereby acknowledges that:

(a) She has had sufficient time to review and consider this Amending Agreement thoroughly;

(b) She has read and understands the terms of this Amending Agreement and her obligations hereunder;

(c) She has been given an opportunity to obtain independent legal advice, or such other advice as she may desire, concerning the interpretation and effect of this Amending Agreement; and

(d) She is entering this Amending Agreement voluntarily and without any pressure from the Employer.

3. MISCELLANEOUS

3.1           The headings in this Amending Agreement are included solely for convenience of reference and shall not affect the construction or interpretation hereof.

3.2           The parties hereto expressly agree that nothing in this Amending Agreement shall be construed as an admission of liability.

3.3           This Amending Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, trustees, administrators, successors and assigns.

3.4           This Amending Agreement and the Termination Agreement constitute the entire agreement between the parties hereto pertaining to the subject matter of the termination of the Employee’s employment with the Employer.  This Amending Agreement, together with the Termination Agreement, supersede and replace all prior agreements, if any, written or oral, with respect to such subject matter and any rights which the Employee may have by reason of any such prior agreements or by reason of the Employee’s employment with the Corporation.  There are no representations, warranties or agreements between the parties hereto in connection with the subject matter of this Amending Agreement, except as specifically set forth herein.  No reliance is placed on any representation, opinion, advice or assertion of fact made by the Employer or any of its officers, directors, agents or employees to the Employee, except to the extent that the same has been reduced to writing and included as a term of this Amending Agreement or the Termination Agreement.  Accordingly, there shall be no liability, either in tort or in contract, assessed in relation to any such representation, opinion, advice or assertion of fact, except to the extent aforesaid.

3.5           Each of the provisions contained in this Amending Agreement is distinct and severable, and a declaration of invalidity or unenforceability of any provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.

3

3.6           This Amending Agreement shall be governed by, and construed in accordance with, the laws of the Province of Ontario and the federal laws of Canada applicable therein.

3.7           This Amending Agreement may be signed in counterparts and delivered by facsimile transmission or other electronic means, and each of such counterparts shall constitute an original document, and such counterparts, taken together, shall constitute one and the same instrument.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

4

IN WITNESS WHEREOF, the parties have executed this Amending Agreement as of the date set forth above.

OCCULOGIX, INC.
By:	“Suh Kim”
	Suh Kim
	General Counsel

	“Julie A. Fotheringham”
Signature of Witness	Julie A. Fotheringham
Name of Witness (please print)

5

EX-10.58

Exhibit 10.58

Execution Copy

AMENDING AGREEMENT

THIS AMENDING AGREEMENT is made as of the 3rd day of March, 2008 by and between Stephen Parks (the “Employee”), a resident of the State of Mississippi, and OccuLogix, Inc. (the “Employer”), a corporation incorporated under the laws of the State of Delaware, and having its executive offices at 2600 Skymark Avenue, Building 9, Suite 201, Mississauga, Ontario, L4W 5B2.

WHEREAS, the Employer and the Employee entered into a termination agreement dated as of January 4, 2008 (the “Termination Agreement”) pursuant to which the Employee’s employment with the Employer, as its Vice President, Sales, was terminated;

AND WHEREAS, capitalized terms used in this Amending Agreement, but not otherwise defined, shall have the respective meanings attributed to such terms in the Termination Agreement;

AND WHEREAS, the Employer and the Employee mutually have agreed that it would be in the best interests of each of them to permit the Employer to pay up to 50% of the Severance Balance in a non-cash form of consideration;

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Amending Agreement and the Termination Agreement (the receipt and sufficiency of which are hereby acknowledged by the parties hereto), the parties hereto agree as follows:

1. AMENDMENT

1.1           Sections 3.3, 3.4 and 3.5 of the Termination Agreement are hereby deleted in their entirety and replaced with the following Sections 3.3, 3.4, 3.5 and 3.6:

3.3 At the sole discretion of the Employer, and subject to the provisions of this Section 3.3 and Section 3.4, and subject further to the Employer obtaining all requisite corporate approval therefor (including, without limitation, the approval of the Employer’s stockholders, if required), the Employer may satisfy and discharge in full its obligation under Section 3.2 to pay the Severance Balance by:  (i) issuing to the Employee stock options under the Stock Option Plan in a number equal to the quotient of (a) some percentage of the Severance Balance, which shall not exceed 50%, divided by (b) the per stock option value of such stock options, which shall be determined by the Employer using the Black-Scholes valuation method (collectively, the “Severance Stock Options”); and (ii) paying the balance of the Severance Balance to the Employee in cash.  The Severance Stock Options shall have a term of ten years commencing on the date of their grant and, other than as may be agreed to by the Employer within its sole discretion, will not become exercisable prior to the 180th day following the date of their grant.  The exercise price of the Severance Stock Options shall be determined by the Employer’s board of directors in accordance with the provisions of the Stock Option Plan and all applicable laws, regulations and rules (including, without limitation, the rules of the Toronto Stock Exchange).

3.4 If,  prior to the end of the Salary Continuance Period, any petition should be filed by or against the Employer for liquidation or reorganization, or should the Employer become insolvent or make an assignment for the benefit of any creditor or creditors, or should a receiver or trustee be appointed for all or any significant part of the Employer’s assets, or should the Employer consent to the winding-up, liquidation or dissolution of itself or its affairs (each, a “Bankruptcy Event”), then an amount equal to (i) the Employee’s Severance minus (ii) the aggregate net amount paid by the Employer to the Employee to the date of the Bankruptcy Event, together with the aggregate amount of deductions and withholdings withheld by the Employer, pursuant to Section 3.1, shall become due and payable, in cash, immediately to the Employee.  If a Bankruptcy Event occurs on or after March 31, 2008, then the Severance Balance shall become due and payable, in cash, immediately to the Employee.

3.5 The Employer hereby agrees that, in the event that any of Elias Vamvakas, Tom Reeves, Nozhat Choudry, John Cornish, Bill Dumencu, Julie Fotheringham, David Eldridge, Stephen Kilmer, Suh Kim or Stephen Westing (each, an “OLT Member”) should become entitled to receive severance pursuant to his or her executive employment agreement at any time before the Employer has paid, in full, the amount due and payable to him pursuant to Section 3.2 or 3.4, as the case may be, the Employer shall not pay any OLT Member a percentage of his or her severance entitlement (without regard to applicable deductions and withholdings) that exceeds the percentage that (i) the Salary Continuance Amount plus the aggregate amount paid to the Employee pursuant to Sections 3.2 and 3.4, together with the aggregate amount of deductions and withholdings withheld by the Employer, represents of (ii) the amount of the Employee’s Severance.  For greater certainty, for purposes of calculating such percentage in a circumstance in which the Employer has exercised its discretion pursuant to Section 3.3 and has issued Severance Stock Options, then the aggregate amount paid to the Employee pursuant to Section 3.2 shall be the sum of (i) the value of such Severance Stock Options, as determined by the Employer using the Black-Scholes valuation method, and (ii) the amount of the Severance Balance paid in cash.

1.2           Section 4.2 of the Termination Agreement is hereby deleted in its entirety and replaced with the following Section 4.2:

4.2 For greater certainty, all cash amounts due and payable by the Employer to the Employee pursuant to Article 3 and this Article 4 shall be paid, net of applicable deductions and withholdings.

2

1.3           The Termination Agreement remains in full force and effect, unamended, other than as specifically amended by this Amending Agreement.

2. ACKNOWLEDGEMENT

2.1 The Employee hereby acknowledges that:

(a) He has had sufficient time to review and consider this Amending Agreement thoroughly;

(b) He has read and understands the terms of this Amending Agreement and his obligations hereunder;

(c) He has been given an opportunity to obtain independent legal advice, or such other advice as he may desire, concerning the interpretation and effect of this Amending Agreement; and

(d) He is entering this Amending Agreement voluntarily and without any pressure from the Employer.

3. MISCELLANEOUS

3.1           The headings in this Amending Agreement are included solely for convenience of reference and shall not affect the construction or interpretation hereof.

3.2           The parties hereto expressly agree that nothing in this Amending Agreement shall be construed as an admission of liability.

3.3           This Amending Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective heirs, trustees, administrators, successors and assigns.

3.4           This Amending Agreement and the Termination Agreement constitute the entire agreement between the parties hereto pertaining to the subject matter of the termination of the Employee’s employment with the Employer.  This Amending Agreement, together with the Termination Agreement, supersede and replace all prior agreements, if any, written or oral, with respect to such subject matter and any rights which the Employee may have by reason of any such prior agreements or by reason of the Employee’s employment with the Corporation.  There are no representations, warranties or agreements between the parties hereto in connection with the subject matter of this Amending Agreement, except as specifically set forth herein.  No reliance is placed on any representation, opinion, advice or assertion of fact made by the Employer or any of its officers, directors, agents or employees to the Employee, except to the extent that the same has been reduced to writing and included as a term of this Amending Agreement or the Termination Agreement.  Accordingly, there shall be no liability, either in tort or in contract, assessed in relation to any such representation, opinion, advice or assertion of fact, except to the extent aforesaid.

3.5           Each of the provisions contained in this Amending Agreement is distinct and severable, and a declaration of invalidity or unenforceability of any provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof.

3

3.6           This Amending Agreement shall be governed by, and construed in accordance with, the laws of the State of Mississippi, without regard to its conflicts of laws rules which shall be deemed inapplicable to this Amending Agreement.

3.7           This Amending Agreement may be signed in counterparts and delivered by facsimile transmission or other electronic means, and each of such counterparts shall constitute an original document, and such counterparts, taken together, shall constitute one and the same instrument.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

4

IN WITNESS WHEREOF, the parties have executed this Amending Agreement as of the date set forth above.

OCCULOGIX, INC.
By:	“Suh Kim”
	Suh Kim
	General Counsel

	“Stephen Parks”
Signature of Witness	Stephen Parks
Name of Witness (please print)

5

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

(a) the Registration Statement (Form S-3/A Amendment No. 3 No. 333-141098) and related prospectus of OccuLogix, Inc. for the registration of 9,441,749 shares of common stock; and

(b) the Registration Statement (Form S-8 No. 333-124505) pertaining to the Employees’ Stock Option Plan of OccuLogix, Inc.

Of our reports dated March 14, 2008, with respect to the consolidated financial statements and financial statement schedule of OccuLogix, Inc., and the effectiveness of internal control over financial reporting of OccuLogix, Inc., included in this Annual Report (Form 10-K) for the year ended December 31, 2007.

March 14, 2008	/s/ Ernst & Young LLP
Toronto, Canada	Chartered Accountants
	Licensed Public Accountants

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Elias Vamvakas, certify that:

1. I have reviewed this Annual Report on Form 10-K of OccuLogix, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:   March 17, 2008

/s/ Elias Vamvakas

Elias Vamvakas

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13A-14 OR 15D-14 OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, William G. Dumencu, certify that:

1. I have reviewed this Annual Report on Form 10-K of OccuLogix, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:   March 17, 2008

/s/ William G. Dumencu

William G. Dumencu

Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of OccuLogix, Inc. (the “Company”) for the year ended December 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Elias Vamvakas, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	By:	/s/ Elias Vamvakas
		Elias Vamvakas
		Chief Executive Officer
Dated March 17, 2008:

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of OccuLogix, Inc. (the “Company”) for the year ended December 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, William G. Dumencu, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	By:	/s/ William G. Dumencu
		William G. Dumencu
		Chief Financial Officer and
		Treasurer
Dated: March 17, 2008