Exhibit 10.3

 
PRODUCT OPTION AGREEMENT

 
This PRODUCT OPTION AGREEMENT (“Agreement”) is made and entered into as of the
latest date set forth on the signature lines below (the “Effective Date”), by
and between Oculus Innovative Sciences, Inc., a Delaware corporation having a
place of business at 1129 North McDowell Boulevard, Petaluma, California 94954
(“OCULUS”); and AmDerma Pharmaceuticals, LLC, a Delaware limited liability
company having a place of business at 440 US Highway 22 East, Suite 104,
Bridgewater, New Jersey 08807 (“AmDerma”).
 
WHEREAS, Oculus has developed proprietary technology and know-how (“Oculus
Technology”); and

WHEREAS, Oculus desires to use the Oculus Technology to develop a prescription
pharmaceutical product for the treatment of acne (the “Future Acne Product”);
and

WHEREAS, AmDerma desires to obtain the option to exclusively sell and distribute
the Future Acne Product, utilizing the Oculus Technology.

NOW, THEREFORE, in consideration of the mutual promises and undertakings of the
parties hereto, AmDerma and Oculus agree as follows:

1.           Option

1.1.  Within four (4) business days following the execution of this Agreement,
AmDerma will pay a one-time non-refundable payment of Five Hundred Thousand
($500,000) Dollars to Oculus in consideration for an option on the Future Acne
Product (“Option Payment”).  On behalf of itself and its officers, directors,
employees, agents, representatives, affiliates, and stockholders, agree that
until 5:00 PM Pacific Time on June 30, 2011, Oculus will not directly or
indirectly initiate, solicit, encourage, discuss, negotiate, or accept any
offers or proposals regarding the licensing, sale, transfer, co-promotion,
co-marketing, or similar transaction for Future Acne Product in the United
States and its possessions and territories without the prior written consent
of  AmDerma.  The intent of this option period is to create a period of
exclusivity for AmDerma to conduct diligence and negotiate a separate license
and supply agreement with Oculus for the Future Acne Product.  Upon execution of
that separate license and supply agreement for that Future Acne Product, the
Option Payment will be credited against the upfront payment expected in the
transaction.  For the avoidance of doubt, if the parties are unable to execute
that separate license and supply agreement for that Future Acne Product on or
before June 30, 2011, Oculus shall have no liability to repay the one-time
non-refundable payment of Five Hundred Thousand ($500,000) Dollars.

2.            Miscellaneous

2.1           Notices.  All notices shall be deemed given by fax, and addressed
as set forth at the signature line below or to such other address as the party
to receive the notice or request so designates by written notice to the other.

 
 

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2.2           Waiver.  No term or condition of this Agreement shall be deemed
waived unless such waiver is in a writing executed by the party against whom the
waiver is sought to be enforced.  Failure or delay in the exercise of any right,
power or privilege hereunder shall not operate as a waiver thereof or of any
subsequent failure or delay.

2.3           Governing Law, Jurisdiction, Venue.  The Agreement will be
governed by and construed under the laws of the State of New York without regard
to conflicts of laws principles.

2.4           Severability.  If any of the provisions of this Agreement in any
way violate or contravene any laws applicable to this Agreement, such provision
shall be deemed not to be a part of this Agreement and the remainder of this
Agreement shall remain in full force and effect.  In such event, the parties
agree to negotiate in good faith to substitute legal and enforceable provisions
that most nearly effect the original intent of the severed provision.

2.5           Subject Headings.  The captions and headings used herein are
intended for convenience only, and shall not affect the construction or
interpretation of any section or provision of this Agreement.

2.6          Entire Agreement; Amendments.  This Agreement constitutes the
entire understanding and agreement of the parties related to the subject matter
hereof, and supersedes any and all prior or contemporaneous offers,
negotiations, agreements and/or understandings, written or oral, as to such
subject matter.  Except as provided herein, no amendment, revision or
modification of this Agreement shall be effective or binding unless made in
writing and signed by the party against whom enforcement is sought.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
and delivered as of the date transcribed below.

OCULUS INNOVATIVE SCIENCES, INC.
 
AMDERMA PHARMACEUTICALS, LLC
         
By:
/s/ Hojabr Alimi  
By:
/s/ Chirag Patel          
Title:
President, CEO  
Title:
President          
Date:
February 14, 2011  
Date:
February 14, 2011          
1129 North McDowell Boulevard
 
440 US Highway 22 East, Suite 104
 
Petaluma, California 94954
 
Bridgewater, New Jersey 08807
 

 
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