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Exhibit 10.1
 
EXCHANGE AGREEMENT
 
THIS EXCHANGE AGREEMENT (this “Agreement”), dated as of February 10, 2010, is
entered into by and between Oxis International, Inc., a Delaware corporation
(“Oxis International”), and Theorem Group, LLC, a California limited liability
company (the “Stockholder”).
 
RECITALS
 
A.           The Stockholder, being the owner of all of the currently issued and
outstanding shares of Oxis International’s Series G Convertible Preferred Stock,
par value $.001 per share ("Series G Preferred"), currently owns 25,000 shares
of Series G Preferred;
 
B.           The documents issued by Oxis International evidencing the Series G
Preferred contain incorrect provisions, are ambiguous, and do not correctly
reflect the terms agreed to between Oxis International and the purchaser of the
Series G Preferred. In addition, a question has arisen as to the validity of the
initial issuance of the Series G Preferred, which shares were not created until
several months after the initial purchase and sale of the Series G Preferred.
 
C.           The reports filed by Oxis International with the Securities and
Exchange Commission (the “SEC”) to disclose the terms of the Series G Preferred
contain certain inaccuracies, which inaccuracies create further uncertainties
regarding the rights of the Series G Preferred.  For example, Oxis International
initially disclosed that the Series G Preferred was designated as “Series E
Convertible Preferred Stock,” that the holder thereof could not convert the
Series G Preferred into more than 4.9% of Oxis International’s issued and
outstanding common stock (the Certificate of Designation states that the
foregoing percentage is 9.9%), and that the Series G Preferred had voting rights
on an as converted basis multiplied by 10 (Oxis International subsequently
disclosed that the voting multiple was 100).  Although most of these
inaccuracies have been corrected, there remains uncertainty as to certain of the
rights of the Series G Preferred.
 
D.           Oxis International and the Stockholder desire to correct the
ambiguous and incorrect provisions in the Certificate of Designation of the
Series G Preferred, and desire to clarify such corrected terms in the public
reports filed by Oxis International in its SEC reports.
 
E.           Oxis International has filed a Certificate of Designations with the
Secretary of State of the State of Delaware authorizing the issuance of a new
series of Oxis International’s preferred stock designated as “Series H
Convertible Preferred Stock” (the “Series H Preferred”), which Certificate of
Designation corrects and clarifies the incorrect and ambiguous terms of the
Series G Preferred, but is otherwise substantially similar to the Certificate of
Designation of the Series G Preferred.
 
F.           In order to correct and clarify the terms of the Series G
Preferred, the Stockholder desires to exchange all of its shares of Series G
Preferred for an equal number of newly issued shares of Series H Preferred, and
Oxis International desires to exchange the Series G Preferred
 

 
 
 

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for an equal number of newly issued shares of Series G Preferred, all on the
terms and conditions set forth in this Agreement.
 
NOW, THEREFORE, in consideration of the mutual promises of the parties hereto,
and of good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
 
ARTICLE 1.
 

 
SHARE EXCHANGE
 
Subject to the terms and conditions of this Agreement, and in reliance upon the
representations, warranties, covenants and agreements contained herein, Oxis
International and the Stockholder hereby agree to correct the Series G Preferred
equity investment of the Stockholder in Oxis International as follows:
 
1.1.           Exchange and Cancellation of Series G Preferred.  Oxis
International and the Stockholder hereby agree to exchange all of the currently
issued and outstanding shares of Series G Preferred for new shares of Series H
Preferred.  In order to effect the exchange of shares of Series G Preferred for
Series H Preferred, concurrently with the execution of this Agreement, the
Stockholder is delivering to Oxis International the stock certificate evidencing
the 25,000 issued and outstanding shares of Series G Preferred owned by the
Stockholder.  The foregoing Series G Preferred stock certificate has been duly
endorsed by the Stockholder for transfer to, and cancellation by Oxis
International in a manner satisfactory to Oxis International.  Oxis
International hereby acknowledges receipt of such stock certificate and agrees
to cancel all of the shares of Series G Preferred represented by the stock
certificate.
 
1.2.           Issuance of Series H Preferred.  Concurrently with the execution
of this Agreement, and in exchange for the shares of Series G Preferred
delivered by the Stockholder to Oxis International for cancellation, Oxis
International is delivering to the Stockholder a new stock certificate
representing 25,000 shares of its new Series H Preferred.  The new shares of
Series H Preferred have a $1.00 per share stated value, a per share conversion
price equal the lesser of (A) $0.01 and (B) 60% of the average of the 3 lowest
trading prices occurring at any time during the 20 trading days preceding
conversion, and the other rights, preferences and privileges contained in the
“Certificate of Designations--Series H Convertible Preferred Stock,” a certified
copy of which is attached hereto as Exhibit A.
 
1.3.           Oxis International Form 8-K.  Attached hereto as Exhibit B is the
form of a Current Report on Form 8-K that Oxis International hereby agrees to
file with the SEC no later than the fourth business day following the date of
execution of this Agreement and the exchange of securities being effected
concurrently with such execution.
 

 
 
 

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ARTICLE 2.
 
STOCKHOLDER RELEASE
 
In consideration of the issuance of the Series H Preferred and the other terms
and provisions of this Agreement, the Stockholder, on behalf of itself and on
behalf of its related entities (i.e., its shareholders, officers, directors,
administrators, principals, agents, attorneys, associates and other affiliates),
hereby, generally and unconditionally, releases, remises, acquits and forever
discharges Oxis International and its related entities (i.e., its officers,
directors, shareholders, principals, agents, attorneys, associates and other
affiliates), of and from any and all claims, demands, rights, actions, causes of
action, suits, contracts, debts, controversies, expenses, liabilities,
obligations, damages, losses, expenses (including, without limitation,
reasonable attorneys' fees), and allegations of any kind and character
whatsoever, whether legal, contractual, statutory, administrative or equitable
in nature or otherwise, direct or indirect, absolute, fixed or contingent, that
the Stockholder now owns, holds, has or claims to have, or owned at any time,
held, had or claimed to have had or may come to own, hold, have or claim to have
against Oxis International or its related entities arising out of or in
connection with the terms of the Series G Preferred and the Stockholder’s rights
thereunder.
 
ARTICLE 3.
 
 
REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER
 
To induce Oxis International to execute, deliver and perform this Agreement, the
Stockholder hereby represents and warrants to Oxis International as follows:
 
3.1.           Authority Relative to this Agreement.  This Agreement has been
duly authorized by all necessary action of the Stockholder and has been duly
executed and delivered by the Stockholder, and is a valid and binding agreement
of such Stockholder, enforceable in accordance with its terms, except as such
enforcement is subject to any applicable bankruptcy, insolvency, reorganization
or other laws relating to or affecting creditors' rights generally and general
principles of equity.  Neither the execution nor the delivery of this Agreement
nor the consummation of the transactions contemplated hereby will conflict with,
or result in a breach of the terms, conditions or provisions of, or constitute a
default under, or result in the imposition of any lien or encumbrance upon any
of the shares Series G Preferred that the Stockholder is hereby delivering to
Oxis International for cancellation.
 
3.2.           Title to the Shares of Series G Preferred.  The Stockholder owns,
of record and beneficially, all 25,000 shares of Series G Preferred, free and
clear of all pledges, security interests, liens, charges, encumbrances,
equities, claims and options of whatever nature.  No individual, corporation,
entity or person has any claim or interest in, to, or against any of the shares
of Series G Preferred owned by the Stockholder.
 
3.3.           Investment Intent.  The Stockholder is acquiring the shares of
Series H Preferred for investment for its own account, not as a nominee or
agent, and not with a view to, or for resale in connection with, any
distribution thereof.  The Stockholder understands that the
 

 
 
 

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issuance of the shares of Series H Preferred has not been, and will not be,
registered under the Securities Act by reason of a specific exemption from the
registration provisions of the Securities Act, the availability of which depends
upon, among other things, the bona fide nature of the Stockholder’s investment
intent and the accuracy of the Stockholder’s representations as expressed
herein.  The Stockholder is an “accredited investor” as that term is defined in
the rules and regulations promulgated under the Securities Act, and has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of the investment to be made in the shares of
Series H Preferred.
 
3.4.           Restrictions on Transfer; Restrictive Legends.  The Stockholder
understands that the transfer of the Series H Preferred, as well as the shares
of common stock issuable upon the conversion of the Series H Preferred, is
restricted by applicable state and U.S. federal securities laws, and that the
certificates evidencing the shares of Series H Preferred have been imprinted,
and the shares of the underlying common stock will be imprinted, with the
following (or substantially equivalent) legend restricting transfer except in
compliance therewith:
 
THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND MAY NOT BE
TRANSFERRED UNLESS (i) A REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), SHALL HAVE BECOME EFFECTIVE WITH
RESPECT THERETO, OR (ii) IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO OXIS INTERNATIONAL, INC., AN EXEMPTION UNDER THE SECURITIES ACT
AND FROM ANY APPLICABLE STATE SECURITIES LAWS IS AVAILABLE.
 
The legend set forth above shall be removed by Oxis International from the
aforementioned securities upon delivery to Oxis International of an opinion by
counsel, reasonably satisfactory to Oxis International, that a registration
statement under the Securities Act is at that time in effect with respect to the
legended security or that such security can be freely transferred in a public
sale without such a registration statement being in effect and that such
transfer will not jeopardize the exemption or exemptions from registration
pursuant to which Oxis International issued the shares of Series G Preferred and
Series H Preferred.
 
3.5.           Information.  The Stockholder has been furnished with all
materials that it has requested relating to the business, finances and
operations of Oxis International and materials relating to the Series G
Preferred, and has been afforded the opportunity to ask questions of the
principals of Oxis International.  The Stockholder understands that an
investment in the Series G Preferred involves a high degree of risk and that it
has received such accounting, legal and tax advice as it deems necessary to make
an informed investment decision with respect to its cancellation of the Series G
Preferred and its acquisition of the Series G Preferred.
 

 
 
 

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ARTICLE 4.
 
 
REPRESENTATIONS AND WARRANTIES OF OXIS INTERNATIONAL
 
To induce the Stockholder to execute, deliver and perform this Agreement, Oxis
International hereby represents and warrants to each the Stockholder as follows:
 
4.1.           Organization.  Oxis International is a corporation duly formed,
validly existing and in good standing under the laws of the State of Delaware
with the power and authority to conduct its business as it is now being
conducted and to own and lease its properties and assets.
 
4.2.           Authorization; Enforcement; Compliance with Other Laws.  Oxis
International has the requisite corporate power and authority to enter into and
perform this Agreement and to issue the shares of Series H Preferred in
accordance with the terms of this Agreement.  The execution and delivery of this
Agreement by Oxis International and the consummation by it of the transactions
contemplated hereby, including without limitation the issuance of the shares of
Series H Preferred, has been duly authorized by Oxis International's Board of
Directors and no further consent or authorization is required by Oxis
International, its Board of Directors or its stockholders.  Neither the
execution nor the delivery of this Agreement nor the consummation of the
transactions contemplated hereby will conflict with, or result in a breach of
the terms, conditions or provisions of or constitute a default under any
material agreement to which Oxis International is a party.  This Agreement has
been duly executed and delivered by Oxis International and constitutes the valid
and binding obligation of Oxis International, enforceable against Oxis
International in accordance with its terms, except as such enforcement is
subject to any applicable bankruptcy, insolvency, reorganization or other law
relating to or affecting creditors' rights generally and general principles of
equity.
 
4.3.           Validity of Issuance.  Upon the issuance of the shares of Series
H Preferred in accordance with the terms of this Agreement, the shares of Series
H Preferred shall be (i) validly issued, fully paid and non-assessable; (ii)
free from all taxes or liens; and (iii) the Stockholder will be entitled to all
rights accorded to a holder of such shares of Series H Preferred in the
Certificate of Designation of the Series H Preferred.
 
4.4.           Exempt Transaction.  The issuance of the shares of Series H
Preferred hereunder shall constitute a transaction exempt from the registration
requirements of Section 5 of the Securities Act and the qualification or
registration requirements of any applicable state securities laws.
 
ARTICLE 5.

 
MISCELLANEOUS
 
5.1.           Survival of Representations, Warranties.  Each of the
representations, warranties, agreements, covenants and obligations herein is
material and shall be deemed to have been relied
 

 
 
 

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upon by the other party or parties and shall survive after the date hereof and
shall not merge in the performance of any obligation by any party hereto.
 
5.2.           Entire Agreement.  This Agreement, and the other certificates,
agreements, and other instruments to be executed and delivered by the parties in
connection with the transactions contemplated hereby, constitute the sole
understanding of the parties with respect to the subject matter hereof and
supersede all prior oral or written agreements with respect to the subject
matter hereof.
 
5.3.           Parties Bound by Agreement; Successors and Assigns.  The terms,
conditions, and obligations of this Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns.
 
5.4.           Amendments and Waivers.  Any provision of this Agreement may be
amended or the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of Oxis International and the Stockholder.
 
5.5.           Attorney’s Fees.  Should any party hereto retain counsel for the
purpose of enforcing, or preventing the breach of, any provision hereof
including the institution of any action or proceeding, whether by arbitration,
judicial or quasi-judicial action or otherwise, to enforce any provision hereof
or for damages for any alleged breach of any provision hereof, or for a
declaration of such party’s rights or obligations hereunder, then, whether such
matter is settled by negotiation, or by arbitration or judicial determination,
the prevailing party shall be entitled to be reimbursed by the losing party for
all costs and expenses incurred thereby, including reasonable attorneys’ fees
for the services rendered to such prevailing party.
 
5.6.           Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
and all of which shall constitute the same instrument.
 
5.7.           Headings.  The headings of the Sections and paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.
 
5.8.           Notices.  All notices, requests, demands, claims, and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given: when received, if
personally delivered; when transmitted, if transmitted by telecopy, electronic
or digital transmission method; three business days after such notice, request,
demand claim or other communication is sent, if sent by registered or certified
mail, return receipt requested, postage prepaid, and addressed to (i) Oxis
International at its corporate headquarters, or (ii) the Stockholder at 2049
Century Park East, Suite 3630, Los Angeles, California 90067.  Any party may
send any notice, request, demand, claim, or other communication hereunder to the
intended recipient at the address set forth above using any other means, but no
such notice, request, demand, claim, or other communication shall be deemed to
have been duly given unless and until it actually is received by the intended
recipient.  Any party
 

 
 
 

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may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other parties notice
in the manner herein set forth.
 
5.9.           Governing Law.  This Agreement shall be construed in accordance
with and governed by the laws of the State of California without giving effect
to the principles of choice of law thereof.
 
5.10.           Arbitration.  Any dispute arising under or in connection with
any matter related to this Agreement or any related agreement shall be resolved
exclusively by arbitration.  The arbitration shall be in conformity with and
subject to the then-applicable rules and procedures of the American Arbitration
Association or, at the election of the demanding party, any other form of
“alternative dispute resolution” procedure generally recognized in the State of
California; e.g., a reference pursuant to California Code of Civil Procedure
(“Code”) Section 638 or reliance upon Section 1280 et. seq. of the Code.  All
parties agree to be (1) subject to the jurisdiction and venue of the arbitration
in the County of Los Angeles, State of California, (2) bound by the decision of
the arbitrator as the final decision with respect to the dispute and (3) subject
to the jurisdiction of the Superior Court of the State of California for the
purpose of confirmation and enforcement of any award.
 
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of
the date first indicated above.
 

 
OXIS INTERNATIONAL, INC.,
a Delaware corporation
 
 
 
By: /s/ Anthony
Calaldo                                                                
Name: Anthony Cataldo
Title: Chief Executive Officer
 
 
THEOREM GROUP, LLC,
a California limited liability company
 
 
By: /s/ Anshuman Dube      
     Its:  Anshuman Dube, Managing Member