Exhibit 10.4.1


 


EMPLOYMENT AGREEMENT


 


This Employment Agreement (the “Agreement”),
dated as of March 13, 2015, is made and entered into by and between Ruthigen, Inc. a Delaware corporation (“Ruthigen”)
and Pulmatrix, a Delaware corporation (“Pulmatrix”) (collectively “Employer”)
and Hojabr Alimi (“Employee” or “Alimi”).


 


WHEREAS, upon the Effective Time, Employee
is not a director or officer of Employer;


 


WHEREAS, Alimi and Ruthigen are parties
to an Amended and Restated Employment Agreement dated November 28, 2014 (the “Prior Employment Agreement”);


 


WHEREAS, pursuant to an Agreement and
Plan of Merger (the “Merger Agreement”), Ruthigen and Pulmatrix Inc. (including their affiliates and
subsidiaries) have agreed to consummate the merger of Ruthigen Merger Corp, a wholly-owned subsidiary of Ruthigen, with and into
Pulmatrix with Pulmatrix as the surviving corporation (the merger process herein referred to as the “Merger”);


 


WHEREAS, the Prior Employment Agreement
will be terminated as of the date the Merger becomes effective thereunder (the “Effective Time”); and


 


WHEREAS, Pulmatrix is a Delaware corporation
with its primary headquarters located in Massachusetts;


 


NOW, THEREFORE, for good and valuable
consideration, receipt of which is hereby acknowledged, Alimi and Employer agree as follows:


 


1.          Term
of Agreement. As of the Effective Time, this Agreement shall be binding upon and enforceable
against the parties and will remain in effect until the first yearly anniversary of the Effective Time (“Term
of Agreement”). This Agreement may only be terminated during the Term of Agreement
with advance Employee written consent or if Alimi: (i) is convicted of, or has pled guilty to, a felony (under the laws of the
United States or any state thereof); (ii) has engaged in acts of fraud, material dishonesty or other acts of willful misconduct
in the course of his duties hereunder, unless Alimi believes in good faith that such acts were in the interests of Employer; (iii)
has materially violated this Agreement and has not cured such violation within fourteen (14) days of written notice from Employer;
or (iv) willfully fails to comply with reasonable directives of Employer which are communicated to him in writing, and which Employee
fails to correct within seven (7) days of such communication from Employer.


 


2.          Duties
and Wages. Alimi agrees to perform such services as an employee as Employer may reasonably request relating to the transition
of business resulting from the Merger, including without limitation, general corporate matters, matters related to Ruthigen RUT58-60
drug asset, and assisting with the search for potential buyers or licensees of Employer’s core business – Ruthigen
hypochlorous acid based drug candidate (RUT58-60). Alimi shall make himself available to perform these services for up to twenty-four
(24) hours per calendar quarter, on days and at times mutually convenient to the parties, for Restricted Stock Units as described
further below and at a gross hourly rate of twenty-five US dollars ($25.00), less customary tax and other withholdings (the “Wages”).
Employee shall submit accurate records of time worked in accordance with Employer’s policies and procedures and shall be
paid in accordance with Employer’s standard payroll schedule. The parties agree that Employee is not authorized to work more
than eight (8) hours per day or more than forty (40) hours per week, unless Employer expressly otherwise directs and Employee agrees.
Any further work requested by Employer and mutually agreed by Employee shall be subject to additional compensation, which must
be mutually agreed by both parties.


 


Employee is authorized to incur reasonable expenses
in carrying out Employee’s duties for Employer under this Agreement and entitled to reimbursement for all such expenses.
Any expense above one-hundred US dollars ($100) shall require pre-approval by Employer.


 


Employee shall report directly to Robert Clarke
(CEO), and provide monthly reports for completed projects.


 




    	 



    	 



    

  


Employer agrees that no relocation is required
for the Employee to conduct and perform his duties under this Agreement. Furthermore, Employer agrees this Agreement is non-exclusive
and Employee may work or consult for other businesses in accordance with Section 4 of this Agreement.


 


3.          Outstanding
Stock-based Incentive Compensation. Upon the Effective Time, subject to Section 5.1, any and all unvested stock options
granted by Ruthigen to Alimi outstanding as of the Effective Time (the “Outstanding Options”) shall thereupon
be terminated and forfeited. Subject to Section 5.1 and Section 7, any and all unvested restricted stock units granted by Ruthigen
to Alimi outstanding prior to the Effective Time (the “Outstanding RSUs”) shall be terminated and forfeited.


 


4.          Noncompetition;
Nonsolicitation. Commencing on the Effective Time and ending on the date that is one calendar year immediately following the
Effective Time (“Term”), provided, however, that in the event that it is judicially determined that Alimi
has breached materially any provision of this Section 4, the Term applicable to each obligation that Alimi shall have been determined
to have breached shall be automatically extended by a number of days equal to the total number of days in the period from the date
on which such breach shall have first occurred through the date as of which such breach shall have been fully cured, Alimi shall
not anywhere throughout primarily Canada, Europe, Japan, and the United States where Employer will be conducting the Business (as
defined below) (the “Territory”), for himself/herself or through or on behalf of any other person, whether
as an officer, director, employee, equity holder, partner, consultant, advisor, creditor or otherwise:


 


(a)          (i)
engage in, participate in or acquire any financial or beneficial interest in (which for the avoidance of doubt will include employment
with or engagement as an independent contractor for), any business that is engaged in any hypochlorous acid based technology, or
HOCL, based therapies that are designed to prevent and/or treat infections in post-operative invasive surgery including but not
limited to Puricor and Novabay Pharmaceuticals (collectively the “Business”). Nothing in Section 1(a)(i)
shall prevent Alimi from (A) owning as a passive investment less than two percent of the outstanding shares of the capital stock
(or ownership interests) of a publicly held company, if Alimi is not otherwise associated directly or indirectly with such company
or any affiliate of such company or (B) with the consent of Employer (not to be unreasonably withheld), providing services on a
volunteer basis (including, but not limited to, service on boards of director), or (ii) take any action intended to, or that would
reasonably be expected to, negatively affect any commercial relationship of Employer, related to the Business with any other person;



 


(b)          encourage,
induce, attempt to induce, solicit or attempt to solicit any employee to leave his or her employment with Employer, (it being understood
that the placement of general advertisements that may be targeted to a particular geographic or technical area but which are not
targeted directly or indirectly towards an employee, shall not be deemed to be a breach of this Section 1(b)); or


 


(c)          encourage,
induce, attempt to induce, solicit or attempt to solicit any customer of Employer, to cease its customer relationship with Employer
with respect to the Business.


 


5.          Consideration:
In addition to the employment with Employer offered herein, the following additional consideration, which is separate and divisible
and on its own also sufficient to support the non-competition and non-solicitation provision set forth in Section 4:


 


5.1.          On
the Effective Time, Employer shall pay Alimi a lump-sum payment in the amount of $547,600, less taxes and other withholdings, as
payment in exchange for cancellation of Employee’s Outstanding Options and Outstanding RSUs and Employee shall execute a
Cancellation Agreement, in substantially the form attached hereto as Exhibit A. By that date, Employer also shall pay an
amount in lump-sum equivalent to one hundred percent of Alimi’s premiums under the Consolidated Omnibus Budget Reconciliation
Act for one year, in the same amounts for the same medical coverage as in effect as of the Effective Time.


 




    	 



    	 



    

  


5.2.  On the Effective
Time, Alimi shall also receive a grant of such number of restricted stock units, pursuant to Employer’s 2013 Employee, Director
and Consultant Equity Incentive Plan, equal to the lesser of (i) 930,000 or (ii) the quotient of $3,125,000 divided by the fair
market value of Employer’s Common Stock on the Effective Time, based on PWC’s valuation on such date following consultation
with Alimi (the “New RSUs”). Such New RSUs shall be vested and delivered in accordance with Employer’s
equity plan and an applicable award agreement, which shall include the following schedule: (i) a number of New RSUs equal to the
lesser of (a) 930,000 or (b) such number of RSUs with an aggregate value equal to $1,400,000 shall be fully vested at the Effective
Time and the underlying shares shall be delivered to Employee on the first trading day following the first anniversary of the Effective
Time; (ii) 25% of the New RSUs that were not fully vested on the Effective Time shall vest on the first business day of the third
(3rd) month following the Effective Time and the underlying shares shall be delivered on the first trading day following
the fifteenth (15th) month anniversary of the Effective Time; (iii) an additional 25% of the New RSUs that were not
fully vested on the Effective Time shall vest on the first business day of the sixth (6th) month anniversary of the
Effective Time and the underlying shares shall be delivered on the first trading day following the eighteenth (18th)
month anniversary of the Effective Time; (iv) an additional 25% of the New RSUs that were not fully vested on the Effective Time
shall vest on the first business day of the ninth (9th) month anniversary of the Effective Time and the underlying shares
shall be delivered on the first trading day following the twenty-first (21st) month anniversary of the Effective Time
and (v) the remaining 25% of the New RSUs that were not fully vested on the Effective Time shall vest on the first business day
of the twelfth (12th) month following the Effective Time, and the underlying shares shall be delivered on the first
trading day following the twenty-fourth (24th) month anniversary of the Effective Time. In the event Employer sells,
terminates, or disposes of the hypochlorous acid asset, or HOCl based drug asset (RUT58-60), Employer will cause the buyer or benefactor
to assume the obligations under this Agreement, and all remaining unvested New RSUs will fully vest and the obligations under this
Agreement would transfer to the buyer or benefactor. In the event Employee terminates this Agreement, all remaining unvested New
RSUs will be forfeited. All shares of stock delivered pursuant to the New RSUs shall be subject to that certain lock-up agreement,
of even date herewith, attached hereto as Exhibit B (“Lock-Up Agreement”). The withholding required
by Section 7 below shall be delivered by Employee to Employer on the day Employee takes possession of the stock. Employer shall
register the New RSUs with the Securities and Exchange Commission under a Registration Statement on Form S-8 which Employer shall
cause to remain effective until the earlier of (i) the time that all of the shares underlying the New RSUs have been sold by Employee,
(ii) six (6) months following the termination of the Lock-Up Agreement or (iii) such time as Employer is not subject to the requirement
to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended.


 


6.          Separate
Non-compete.  Employee must execute an additional, separate non-compete agreement with Oculus Innovative Sciences, Inc.,
attached as Exhibit B, as a condition precedent to the closing of the Merger.


 


7.          Withholding
Tax. The delivery of any shares in connection with the New RSUs, is subject to and conditioned upon Alimi satisfying the income
and employment withholding obligations due with respect to any ordinary income recognized in connection with the delivery of such
shares. Alimi acknowledges and understands that if he fails to satisfy the withholding obligations with respect to the New RSUs,
Employer will have no obligation to deliver any shares of Common Stock to Employee with respect to the portion of the New RSUS
for which Employee fails to deliver the required withholding, as applicable, and he will forfeit his right to receive such New
RSUs, as applicable. Notwithstanding anything to the contrary herein, Employee’s failure to pay any withholding due with
respect to one tranche of New RSUs shall not impact his right to receive shares of Common Stock underlying any other tranches of
New RSUs.


 


8.          Prior
Employment Agreement. As of the Effective Time, the Prior Employment Agreement between the parties shall terminate, except
that Alimi acknowledges and agrees that Section 8 Confidentiality, Section 9 Inventions and Developments,
Section 12 Return of Property, and Section 14 Cooperation in Litigation of the Prior Employment Agreement,
and all provisions thereunder, shall remain in full force and effect in accordance with their terms and shall be incorporated into
this Agreement as if to apply in an equivalent manner to any further services Alimi provides hereunder; provided however that in
no event will these obligations, with the exception of those set forth in Section 14 Cooperation in Litigation, continue
past the end of the Term of Agreement as defined in Section 1 herein. The parties also agree that any obligations to indemnify
Alimi as set forth in the Prior Employment Agreement shall be incorporated herein and Employer’s obligations to indemnify
Alimi in Employer’s certificate of incorporation and bylaws shall remain in effect.


 




    	 



    	 



    

  


9.          Governing
Law/Venue. The parties agree that this Agreement shall be governed by and construed exclusively under the laws of the Commonwealth
of Massachusetts. Venue of any litigation arising from this Agreement or any disputes relating to Alimi’s employment and
non-competition /-non-solicitation obligations set forth in Sections 4 and 5 herein shall exclusively be in the federal or state
district court of competent jurisdiction in the Commonwealth of Massachusetts. Alimi consents to personal jurisdiction of any such
court for any dispute relating to or arising out of this Agreement or Alimi’s employment, and Alimi agrees that Alimi shall
not challenge personal or subject matter jurisdiction in such courts. To the extent that any party hereto has claims that could
be brought in or adjudicated under the laws of any jurisdiction other than Massachusetts, the parties expressly hereby waive all
such rights.


 


10.         Voluntary.
This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the parties hereto. The
parties acknowledge that they have had ample opportunity to have this Agreement reviewed by the counsel of their choice.


 


11.         Sole
Agreement. Except as set forth herein, this Agreement is the sole, entire and complete agreement of the parties relating to
Alimi’s employment with Employer subsequent to the Effective Time, and it supersedes and fully replaces any prior agreements
(whether written or oral) covering the subject matter of this Agreement. No changes in or additions to this Agreement shall be
recognized, unless incorporated in this Agreement by written amendment signed by all parties hereto. No statements, promises or
representations have been made by any party to any other party, or relied upon, and no consideration has been offered, promised,
expected or held out other than as expressly set forth herein, provided only that the release of claims in any prior agreement
or release shall remain in full force and effect.


 


12.         No
Assignment. In entering into this Agreement, Employer is relying on the unique personal services of Alimi; services from another
person will not be an acceptable substitute. Except as provided in this Agreement, neither party may assign this Agreement or any
of the rights or obligations set forth in this Agreement without the explicit advance written consent of the other party. Any attempted
assignment in violation of this Section 12 shall be void. The provisions of this Agreement shall be binding upon and shall inure
to the benefit of Employer and its successors and assigns. Employer agrees that this Agreement shall survive any change with respect
to the ownership of the assets of Employer (e.g., sell, sub-license, termination, return of the assets to prior owners, etc.) or
any other business development deal.


 


13.         Severability.
The covenants contained in this Agreement are intended by the parties hereto as separate and divisible provisions, and in the event
that any or all of the covenants expressed herein shall be determined by a court of competent jurisdiction to be invalid or unenforceable,
the remaining parts, terms or provisions of this Agreement shall not be affected and such provisions shall remain in full force
and effect. The parties intend all provisions of this Agreement to be enforced to the fullest extent permitted by law. If, however,
any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future law, such provision shall
be fully severable, and this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision
were never a part hereof, and the remaining provisions shall remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance. In lieu of such illegal, invalid or unenforceable provision, there shall
be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible, and the parties hereby request the court to whom disputes relating to this
Agreement are submitted to reform the otherwise unenforceable covenant in accordance with this Section.


 


14.         Notices.
All notices, requests and other communications required or permitted under, or otherwise made in connection with, this Agreement,
shall be in writing and shall be deemed to have been duly given (a) when delivered in person, (b) upon confirmation of receipt
when transmitted by facsimile transmission, (c) upon receipt after dispatch by registered or certified mail, postage prepaid, or
(d) on the next business day if transmitted by national overnight courier (with confirmation of delivery), in each case, addressed
as follows:


 




    	 



    	 



    

  


if to Alimi,
to:


 


Hojabr Alimi


1356 Gordon Lane


Santa Rosa, CA 95404


Email: hojialimi@gmail.com


 


if to Employer, to:


 


Pulmatrix, Inc.


99 Hayden Avenue, Suite 390


Lexington, MA 02421


Facsimile No.: ______________


Email: ___________________


  


[Signature Page Follows]


 


IN WITNESS HEREOF, the parties have executed this Agreement as set
forth below.


 


	EMPLOYER	 	HOJABR ALIMI
	 	 	 
	By:	/s/ Hojabr Alimi	 	/s/ Hojabr Alimi
	 	 	 	 	 
	Title: 	CEO	 	Date: 	3/13/2015
	 	 	 	 	 
	Date: 	3/13/2015	 	 	 


 




    	 



    	 



    

 


	PULMATRIX INC.	 
	 	 	 
	By:	/s/ Robert Clarke	 
	 	 	 
	Title: 	CEO	 
	 	 	 
	Date:	3/13/2015	 


 


[PULMATRIX SIGNATURE TO ALIMI EMPLOYEMNT AGREMENT]


 




    	 



    	 



    

 


EXHIBIT A


 


Cancellation Agreement


 


This CANCELLATION AGREEMENT
(this “Agreement”) is dated as of March 13, 2015 and is entered into by Ruthigen, Inc., a Delaware
corporation (the “Company”), and Hojabr Alimi (the “Participant”). Terms used
in this Agreement with initial capital letters that are not otherwise defined herein shall have the meanings ascribed to such
terms in the Ruthigen, Inc. 2013 Employee, Director, and Consultant Equity Incentive Plan (the “Plan”).


 


WHEREAS, the Company
previously granted the Participant the number of restricted stock units (“RSUs”) set forth on Exhibit
A hereto (collectively, the “Outstanding RSUs”), subject to the terms and conditions of the Plan and
of the applicable Restricted Stock Unit Award Grant Notice for Employees, Directors, and Consultants (each, a “RSU
Grant Notice”) and the Restricted Stock Unit Agreement – Incorporated Terms and Conditions (each, an “RSU
Agreement,” together with each RSU Grant Notice referred to herein as, the “RSU Award Agreements”);


 


WHEREAS, the Company
previously granted the Participant the number of stock options (“Options”) set forth on Exhibit A hereto
(collectively, the “Outstanding Options,” together with the Outstanding RSUs referred to herein as, the
“Outstanding Awards”), subject to the terms and conditions of the Plan and of the applicable Stock Option
Grant Notice (each, an “Option Grant Notice”) and the Stock Option Agreement – Incorporated Terms
and Conditions (each, an “Option Agreement,” together with each Option Grant Notice referred to herein
as, the “Option Award Agreements,” and the Option Award Agreements together with the RSU Award Agreements
referred to herein as, the “Award Agreements”);


 


WHEREAS, pursuant
to an Agreement and Plan of Merger between the Company and Pulmatrix Inc. (“Pulmatrix), Ruthigen Merger Corp,
a wholly-owned subsidiary of the Company, will merge with and into Pulmatrix, with Pulmatrix as the surviving corporation (the
“Merger”); and


 


WHEREAS, in connection
with the Merger, the Company and the Participant desire to cancel all of the Participant’s Outstanding Awards, effective
as of the date the Merger becomes effective (the “Effective Time”), so that on and after the Effective
Time, the Outstanding Awards and the Award Agreements shall be cancelled and of no further effect.


 


NOW, THEREFORE,
in consideration of the mutual covenants contained herein and other good and valuable consideration, the sufficiency of which are
hereby acknowledged, the parties to this Agreement agree as follows:


 


CANCELLATION OF AWARDS


 


1.1           Cancellation
of Awards. In exchange for the consideration described in Section 1.2 below, the Participant hereby agrees that the
Award Agreements and the Outstanding Awards granted thereunder shall be cancelled, terminated, and of no further force or effect,
effective as of the Effective Time, and that neither the Company nor the Participant shall have any further rights or obligations
with respect to the Outstanding Awards, the Award Agreements, or with respect to any Common Stock of the Company that could have
been received upon settlement of the Outstanding Awards under the Award Agreements.


 




    	 



    	 



    

 


1.2        Payment.
In exchange for the Participant’s agreement to cancel the Outstanding Awards, the Award Agreements, and any other rights,
obligations, and liabilities of the Company granting the Participant the right to acquire Common Stock of the Company and the release
of claims set forth in Section 1.3, the Company hereby agrees to pay the Participant, on the Effective Time, a lump-sum
cash payment equal to five hundred forty-seven thousand six hundred dollars ($547,600), less any applicable local, state, or federal
income or employment taxes, or other required withholdings.


 


1.3           Release.


 


(a)          Effective
as of the Effective Time, the Participant, for the Participant and the Participant’s successors and assigns forever, does
hereby unconditionally and irrevocably compromise, settle, remise, acquit, and fully and forever release and discharge the Company
and its respective successors, assigns, parents, divisions, subsidiaries, and affiliates, and its present and former officers,
directors, employees, and agents (collectively, the “Released Parties”) from any and all claims, counterclaims,
set-offs, debts, demands, choses in action, obligations, remedies, suits, damages, and liabilities in connection with any rights
to acquire securities of the Company pursuant to the Outstanding Awards and the Award Agreements, and the Common Stock of the Company
issuable thereunder (collectively, the “Releaser’s Claims”), whether now known or unknown or suspected
or claimed, whether arising under common law, in equity, or under statute, which the Participant or the Participant’s successors
or assigns ever had, now have, or in the future may claim to have against the Released Parties and which may have arisen at any
time on or prior to the date hereof; provided, however, that this Section 1.3(a) shall not apply to any of the obligations
or liabilities of the Released Parties arising under or in connection with this Agreement.


 


(b)          The
Participant covenants and agrees never to commence, voluntarily aid in any way, prosecute, or cause to be commenced or prosecuted
against the Released Parties any action or other proceeding based on any of the released Releaser’s Claims which may have
arisen at any time on or prior to the date hereof.


 


1.4           Further
Assurances. Each party to this Agreement agrees that it will perform all such further acts and execute and deliver all such
further documents as may be reasonably required in connection with the consummation of the transactions contemplated hereby in
accordance with the terms of this Agreement.


 


1.5           Representations
and Warranties. The Participant hereby represents and warrants to the Company that the Participant has full power and
authority to enter into and perform this Agreement and to carry out the transactions contemplated hereby. This Agreement constitutes
the legal, valid, and binding obligation of the Participant, enforceable against the Participant in accordance with its terms.
The Participant has read and understood this Agreement and is entering into this Agreement voluntarily. The Participant
agrees that this Agreement provides good and valuable consideration for the Participant’s agreements herein.


 


MISCELLANEOUS


 


2.1           Parties
Bound. The terms, provisions, representations, warranties, covenants, and agreements that are contained in this Agreement shall
apply to, be binding upon, and inure to the benefit of the parties to this Agreement and their respective heirs, executors, administrators,
legal representatives, and permitted successors and assigns.


 


2.2           Entire
Agreement. This Agreement contains the entire understanding of the parties to this Agreement with respect to the subject matter
contained in this Agreement and supersedes all prior agreements and understandings among the parties with respect to such subject
matter, including, without limitation, the Award Agreements.


 


2.3           Law
Governing. This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Delaware,
without regard to its principles of conflict of laws.


 


2.4           Effectiveness.
If the Merger is not consummated, this Agreement shall be void and cease to be of further force or effect, with no liability on
the part of any party to the other party hereto, and the agreements and obligations of the parties contained in the Award Agreements
shall continue to apply in accordance with the applicable Award Agreement’s terms, without giving effect to the terms of
this Agreement.


  






    	 



    	 



    




 


[Signature Page to Follow]


 




    	 



    	 



    

 


 


IN WITNESS WHEREOF,
the Company has caused this Agreement to be executed by its duly authorized officer, and the Participant, to evidence his consent
and approval of all the terms hereof, has duly executed this Agreement as of the date first written above.


 


	 	RUTHIGEN, INC.
	 	 	 
	 	By:	/s/ Hojabr Alimi
	 	Name:	Hojabr Alimi
	 	Title:	CEO


  


	 	PARTICIPANT
	 	 
	 	/s/ Hojabr Alimi
	 	Hojabr Alimi
	 	 	 
	 	Address:	1356 Gordon Lane
	 	 	Santa Rosa, CA 95404
	 	 	 


 




    	 



    	 



    

 


EXHIBIT A


 


Outstanding RSUs


 


	Restricted Stock Unit No.	 	Date of Grant	 	Number of Shares

underlying the RSUs	 	Type of Vesting
	00009	 	May 11, 2014	 	125,000	 	Time-based vesting
	00014	 	May 11, 2014	 	24,055	 	Performance-based vesting


 


Outstanding Options


 


	Option No.	 	Date of Grant	 	Number of Options

Granted	 	Description
	00003	 	May 12, 2014	 	47,094	 	ISO
	00004	 	May 12, 2014	 	112,406	 	NQSO


 




    	 



    	 



    

 





EXHIBIT B


 


Lock-Up Agreement


 


Reference
is hereby made to that certain Employment Agreement (the “Employment Agreement”), of even date herewith,
between Hojabr Alimi (“Alimi”) and Ruthigen, Inc., a Delaware corporation (the “Company”),
and its affiliates, pursuant to which, among other things, the Company shall grant to Alimi at the Effective Time (as defined
in the Employment Agreement) up to 930,000 restricted stock units (the “Shares”) pursuant to Ruthigen’s
2013 Employee, Director and Consultant Equity Incentive Plan (the “Plan”) and Restricted Stock Unit Award
Grant Notice (the “Grant Notice”). Such Shares shall vest in accordance with the vesting schedule set
forth in the Grant Notice and otherwise in accordance with the Plan and the Employment Agreement. Each date that a portion of the
Shares vests is referred to herein as a “Vesting Date.” As used herein, “Vested Shares”
refers to any Shares that have vested in accordance with the vesting schedule set forth above and in the Grant Notice and “Unvested
Shares” refers to any Shares that are not Vested Shares. Capitalized terms used herein and not otherwise defined
shall have the meanings set forth in the Employment Agreement.


 


As a condition to and in
consideration of the grant of the Shares, Alimi hereby agrees as follows:


 


		1.	Without limiting the terms of the Plan or the Grant Notice, Alimi hereby covenants and agrees that,
except as provided herein, he shall not, without the prior written consent of the Company (i) offer, sell, offer to sell, contract
to sell, hedge, pledge, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or sell (or announce any offer, sale, offer of sale, contract of sale, hedge, pledge, sale of any option
or contract to purchase, purchase of any option or contract of sale, grant of any option, right or warrant to purchase or other
sale or disposition), or otherwise transfer or dispose of (or enter into any transaction or device that is designed to, or could
be expected to, result in the disposition by any person at any time in the future), any of the Unvested Shares, or any securities
into or for which any of the Unvested Shares may be converted, exercised or exchanged, whether by operation of law or otherwise;
or (ii) enter into any swap or other agreement or any transaction that transfers, in whole or in part, directly or indirectly,
the economic consequence of ownership of any of the Unvested Shares (whether any such swap or other transaction described in clause
(i) or (ii) above is to be settled by delivery of any of the Unvested Shares).



 


		2.	Alimi hereby covenants and agrees that, except as provided herein, he
shall not, without the prior written consent of the Company (i) offer, sell, offer to sell, contract to sell, hedge, pledge, sell
any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or
sell (or announce any offer, sale, offer of sale, contract of sale, hedge, pledge, sale of any option or contract to purchase,
purchase of any option or contract of sale, grant of any option, right or warrant to purchase or other sale or disposition), or
otherwise transfer or dispose of (or enter into any transaction or device that is designed to, or could be expected to, result
in the disposition by any person at any time in the future), any of the Vested Shares, or any securities into or for which any
of the Vested Shares may be converted, exercised or exchanged, whether by operation of law or otherwise; or (ii) enter into any
swap or other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of any of the Vested Shares (whether any such swap or other transaction described in clause (i) or (ii) above is to
be settled by delivery of any of the Shares), until the date that is six months after such Vested Shares have been delivered pursuant
to the Employment Agreement. 



 


The parties further acknowledge
and agree that the foregoing restriction shall preclude Alimi from engaging in any hedging or other transaction which is designed
to, or which reasonably could be expected to or result in a sale or disposition of the Shares, even if such Shares would be disposed
of by any party other than Alimi.  Such prohibited hedging or other transactions would include, without limitation, any short
sale or any purchase, sale or grant of any right (including, without limitation, any put or call option) with respect to any of
the Shares, or with respect to any security that includes, relates to or derives any significant part of its value from such Shares.


 




    	 



    	 



    

 


 


3.           Notwithstanding
the foregoing, Alimi may: (A) transfer any of the Vested Shares (after such shares have been delivered pursuant to the Employment
Agreement) (i) as a bona fide gift, provided that, prior to such transfer, the donee thereof agrees in writing to be bound
by the restrictions set forth in this agreement; (ii) to any trust, partnership, corporation or other entity formed for the direct
or indirect benefit of Alimi or Alimi’s immediate family (as defined below), provided that, prior to such transfer,
a duly authorized officer, representative or trustee of such transferee agrees in writing to be bound by the restrictions set forth
in this agreement, and provided further that any such transfer shall not involve a disposition for value; or (iii) if such transfer
occurs by operation of law, such as rules of descent and distribution, statutes governing the effects of a merger or a qualified
domestic order; and (B) at any time, sell a number of Vested Shares (after such shares have been delivered pursuant to the Employment
Agreement) (i) with an aggregate fair market value (determined based on the sale price Alimi receives from a third party for such
Vested Shares) equal to the income and employment tax withholding due with respect to any Vested Shares; or (ii) in a privately
negotiated transactions; provided that, in any case other than in connection with clause (B)(i), prior to such transfer,
the transferee agrees in writing that such transferee is receiving and holding any of the Shares subject to the provisions of this
agreement. For purposes hereof, “immediate family” shall mean any relationship by blood, marriage or adoption, not
more remote than first cousin.


 


In order to enable the
aforesaid covenants to be enforced, Alimi hereby consents to the placing of legends and/or entry of stop transfer instructions
or orders with the Company’s transfer agent in respect of any Shares.


 


4.          All
notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and,
unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine,
at the address or number designated below (if delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service,
fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be:


 


To the Company:


Ruthigen,
Inc.


2455
Bennett Valley Rd.; #C116


Santa
Rosa, CA 95404


Fax: (707) 676-1686


 


To Alimi:


Hojabr
Alimi


1356
Gordon Lane


Santa
Rosa, CA 95404


Email:
hojialimi@gmail.com


 


It is understood that either
party may change the address to which notices for it shall be addressed by providing notice of such change to the other party in
the manner set forth in this paragraph.


 


5.          This
agreement shall in all respects be governed by, and construed in accordance with, the applicable laws of the State of Delaware
without giving effect to principles of conflicts of law. Each party hereto irrevocably and unconditionally consents to submit the
exclusive jurisdiction of the United States District Court for the District of Delaware, or if jurisdiction in such court is lacking,
any court of the State of Delaware of competent jurisdiction sitting in New Castle County, Delaware, in connection with any action,
suit or proceeding arising out of or relating to this agreement and the transactions contemplated hereby, and agrees
that service of process may be made in any manner acceptable for use in such Delaware courts.  Each party hereby
irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this
agreement and/or the transactions contemplated hereby, in the above Delaware courts, and hereby further irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has
been brought in an inconvenient forum. The parties hereby expressly waive the right to any jury trial in any action or proceeding
involving this agreement.


 




    	 



    	 



    

  


6.          The
parties hereby acknowledge and agree that this agreement is irrevocable and shall be binding upon Alimi and Alimi’s heirs,
legal representatives, successors and permitted assigns. This agreement and/or any right, title or interest hereunder shall not
be assigned by Alimi without the prior written consent of the Company.


 


7.          This
agreement may be amended or modified only by a written agreement executed by all of the parties hereto; provided, however, the
Company may waive any term of this agreement without the consent of any person.


 


8.          This
agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The facsimile signature of any party to this agreement shall have the same effect as a manual signature.


 


9.          This
agreement will become a binding agreement among the parties as of the date hereof and will terminate on the date that is six months
after the last Vested Shares have been delivered.


 


[signature page follows]


 


	RUTHIGEN, INC.	 	Hojabr Alimi
	 	 	 	 	 
	By:	/s/ Hojabr Alimi	 	/s/ Hojabr Alimi
	 	 	 	 	 
	Title: 	CEO	 	Date:	3/13/2015
	 	 	 	 	 
	Date: 	3/13/2015