Exhibit 10.4


 


EMPLOYMENT AGREEMENT


 


This EMPLOYMENT AGREEMENT
(this “Agreement”) is entered into by and between Jeffrey S. Day (the “Executive”), and Oculus
Innovative Sciences, Inc., a Delaware corporation (the “Corporation”), as of November 30, 2016 (the “Effective
Date”). This Agreement replaces that certain employment offer letter dated as of March 2, 2015, and entered into by and
between the Executive and the Corporation.


 


RECITALS


 


WHEREAS, prior
to the date hereof, the Executive has served as the Corporation’s President of IntraDermTM Pharmaceuticals division;


 


WHEREAS, the
Corporation desires that the Executive continue to be employed by the Corporation as its President of IntraDermTM Pharmaceuticals
division, and to carry out the duties and responsibilities described below, all on the terms and conditions set forth herein;


 


WHEREAS, the
Executive is willing to accept and continue such employment on such terms and conditions.


 


NOW, THEREFORE,
in consideration of the foregoing premises and the mutual covenants and promises of the parties herein, the receipt and sufficiency
of which are hereby acknowledged by each of the parties, the Corporation and the Executive hereto agree as follows:


 


1. Employment and Duties.


 


1.1 Position.
On the terms and subject to the conditions set forth herein, the Corporation agrees to continue to employ the Executive as its
President of IntraDermTM Pharmaceuticals division for the Term of Employment (as defined in Section 2). The Executive
does hereby accept and agree to such employment, on the terms and conditions expressly set forth in this Agreement. The Executive
shall, if requested, also serve as a member of the Board of Directors of the Corporation (the “Board”) or as
an officer or director of any affiliate of the Corporation for no additional compensation.


 


1.2 Duties.
During the Term of Employment (as defined in Section 2), the Executive shall serve the Corporation as its President of the
IntraDermTM Pharmaceuticals division. The Executive shall, without limitation and without limiting the Executive’s other
duties to the Corporation, and without limiting the authority of the Corporation’s Board of Directors, be responsible for
the general supervision, direction and control of the business and affairs of the IntraDermTM Pharmaceuticals division and
have such other duties and responsibilities as the Board shall designate that are consistent with the Executive’s position
as President of the IntraDermTM Pharmaceuticals division of the Corporation. The Executive shall perform all of such duties
and responsibilities in accordance with the legal directives of the Board and in accordance with the practices and policies of
the Corporation as in effect from time to time throughout the Term of Employment (as defined in Section 2) (including, without
limitation, the Corporation’s insider trading and ethics policies, as they may change from time to time). While employed
as President of the IntraDermTM Pharmaceuticals division of the Corporation, the Executive shall report to the Board, however,
day-to-day functions will be reviewed by the Chief Executive Officer. Throughout the Term of Employment (as defined in Section
2), the Executive shall not serve on the boards of directors or advisory boards of any other entity, except for any wholly
or majority owned subsidiaries of the Corporation, unless such service is expressly approved by the Board. As President of the
IntraDermTM Pharmaceuticals division of the Corporation, Mr. Day is responsible for sales, marketing, business development
and costs associated with growing the sales to dermatologists in the United States, which includes managing a growing direct sales
force, growing existing products and launching new products. He has full profit and loss responsibility for this division, which
is striving to grow revenue quickly and become breakeven.


 


1.3 No Other Employment;
Minimum Time Commitment. Throughout the Term of Employment, the Executive shall both (i) devote substantially all of the Executive’s
business time, energy and skill to the performance of the Executive’s duties for the Corporation, and (ii) hold no other
job. The Executive agrees that any investment or direct involvement in, or any appointment to or continuing service on the board
of directors or similar body of, any corporation or other entity, other than wholly or majority owned subsidiaries of the Corporation,
must be first approved in writing by the Corporation. The foregoing provisions of this Section 1.3 shall not prevent the
Executive from investing in non-competitive, publicly-traded securities to the extent permitted by Section 6(b).


 


 


 






    	 	1	 



     


    

 


1.4 No Breach of
Contract. The Executive hereby represents to the Corporation that: (i) the execution and delivery of this Agreement by the
Executive and the Corporation and the performance by the Executive of the Executive’s duties hereunder shall not constitute
a breach of, or otherwise contravene, the terms of any other agreement or policy to which the Executive is a party or otherwise
bound; (ii) the Executive has no information (including, without limitation, confidential information and trade secrets) of any
other person or entity which the Executive is not legally and contractually free to disclose to the Corporation; and (iii) the
Executive is not bound by any confidentiality, trade secret or similar agreement (other than this Agreement) with any other person
or entity.


 


1.5 Place of Performance.
The principal place of Executive’s employment shall be the Corporation’s offices, currently located in Philadelphia,
Pennsylvania, though such principal place of employment of the Executive may be moved from time to time upon mutual agreement by
the Executive and the Corporation. The Executive agrees that the Executive will be regularly present at the Corporation’s
principal executive offices, or such other location as the parties may designate, and that the Executive may be required to travel
from time to time in the course of performing the Executive’s duties for the Corporation.


 


1.6 Performance
Review. During the Term of Employment, the Compensation Committee of the Corporation, in its sole discretion, will review Executive’s
performance every six (6) months beginning on the Effective Date. The Compensation Committee will determine the performance goals
and factors after consultation with the Executive in its sole discretion and its decision shall be binding on all persons.


 


2. Term of Employment. The “Term
of Employment” shall commence on the Effective Date, and shall continue in full force and effect until the Termination
Date pursuant to Section 5.8. This Agreement shall govern the terms of Executive’s employment hereunder on and after
the Effective Date.


 


3. Compensation.


 


3.1 Base Salary.
As of the Effective Date and during the Term of Employment, the Corporation shall pay to the Executive a base salary at the rate
of $232,000 per year, subject to increase (but not decrease) by the Board (the “Base Salary”). The Executive’s
Base Salary shall be paid in accordance with the Corporation’s regular payroll practices in effect from time to time, but
no less frequently than monthly.


 


3.2 Annual Bonus.
For each fiscal year during the Term of Employment, Executive shall be eligible to receive an annual bonus (the “Annual
Bonus”). However, the decision to provide any Annual Bonus and the amount and terms of any Annual Bonus shall be in the
sole and absolute discretion of the Compensation Committee of the Board. If the Compensation Committee decides to award an Annual
Bonus to Executive, it will independently negotiate a supplement to this Agreement with Executive setting forth the terms and conditions
of the Annual Bonus. Executive must be employed by the Corporation on the day that any Annual Bonus is paid. However, the Board
of Directors or the Compensation Committee, as appropriate, may in its sole discretion agree to pay a pro rata or full Annual Bonus,
and if such Annual Bonus is granted, then determine the amount, form and payment schedule.


 


3.3 Equity Awards.
During the Term of Employment, Executive shall be eligible to participate in the Company’s 2006 Amended and Restated Equity
Incentive Plan and the 2011 Equity Incentive Plan or any successor plan, subject to the terms of such plans, as determined by the
Board or the Compensation Committee, in its discretion.


 


3.4. Indemnification.
(a) In the event that the Executive is made a party or threatened to be made a party to any action, suit, or proceeding, whether
civil, criminal, administrative or investigative (a “Proceeding”), other than any Proceeding initiated by the
Executive or the Corporation related to any contest or dispute between the Executive and the Corporation or any of its affiliates
with respect to this Agreement or the Executive’s employment hereunder, by reason of the fact that the Executive is or was
a director or officer of the Corporation, or any affiliate of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, member, employee or agent of another corporation or a partnership, joint venture, trust or other enterprise,
the Executive shall be indemnified and held harmless by the Corporation to the maximum extent permitted under applicable law and
the Corporation’s articles and bylaws, as may be amended from time to time, from and against any liabilities, costs, claims
and expenses, including all costs and expenses incurred in defense of any Proceeding (including attorneys’ fees).


 


(b) During the Term
of Employment and for a period of six (6) years thereafter, the Corporation or any successor to the Corporation shall purchase
and maintain, at its own expense, directors’ and officers’ liability insurance providing coverage to the Executive
on terms that are no less favorable than the coverage provided to other directors and similarly situated executives of the Corporation.


 


 


 






    	 	2	 



     


    

 


3.5 Clawback Provisions.
Any incentive-based compensation, or any other compensation, paid to the Executive pursuant to this Agreement or any other agreement
or arrangement with the Corporation which is subject to recovery under any law, government regulation or stock exchange listing
requirement, will be subject to such deductions and clawback as may be required to be made pursuant to such law, government regulation
or stock exchange listing requirement (or any policy adopted by the Corporation pursuant to any such law, government regulation
or stock exchange listing requirement). The Corporation will make any determination for clawback or recovery in accordance with
any applicable law or regulation.


 


4. Benefits.


 


4.1 Health and Welfare.
During the Term of Employment, Executive shall be entitled to participate in all employee pension and welfare benefit plans and
programs made available by the Corporation to the Corporation’s senior-level employees generally, as such plans or programs
may be in effect from time to time.


 


4.2 Reimbursement
of Business Expenses. Executive is authorized to incur reasonable expenses in carrying out the Executive’s duties for
the Corporation under this Agreement and entitled to reimbursement for all such expenses the Executive incurs during the Term of
Employment in connection with carrying out the Executive’s duties for the Corporation, subject to the Corporation’s
reasonable expense reimbursement policies in effect from time to time. The Corporation shall reimburse the Executive to the extent
required by the preceding sentence.


 


4.3 Vacation and
Other Leave. During the Term of Employment, Executive shall accrue and be entitled to take paid vacation in accordance with
the Corporation’s standard vacation policies in effect from time to time, including the Corporation’s policies regarding
vacation accruals. The Executive shall also be entitled to all other holiday and leave pay generally available to all other employees
of the Corporation.


 


4.4. Car allowance.
During the Term of Employment, Executive will receive a car allowance in the amount of $750 per month, subject to the following
limitations. The Corporation reserves the right to review the amount of the car allowance annually and to determine whether to
continue paying such car allowance and in what amount. The Corporation may, in its sole discretion, increase, decrease or eliminate
the car allowance at any time. The car allowance is intended to be a fixed amount and any car expenses in excess of the monthly
payment shall be borne by the Executive.


 


5. Termination.


 


The Term of Employment
and the Executive’s employment hereunder may be terminated by either the Corporation or the Executive at any time and for
any reason; provided that, unless otherwise provided herein, either party shall be required to give the other party at least 30
calendar days advance written notice of any termination of the Executive’s employment in accordance with Sections 5.7
and 5.8. Upon termination of the Executive’s employment during the Term of Employment, the Executive shall be entitled
to the compensation and benefits described in this Section 5 and shall have no further rights to any compensation or any
other benefits from the Company or any of its affiliates.


 







5.1 Definitions.
For purposes of this Agreement:


 


(a) “Accrued Amounts”
shall mean:


 


(i)  any accrued but
unpaid Base Salary and accrued but unused vacation which shall be paid within one (1) week following the Termination Date (as defined
below);


 


(ii)  reimbursement
for unreimbursed business expenses properly incurred by the Executive, which shall be subject to and paid in accordance with the
Corporation’s expense reimbursement policy; and


 


(iii)  such employee
benefits (including equity compensation), if any, to which the Executive may be entitled under the Corporation’s employee
benefit plans as of the Termination Date; provided that, in no event shall the Executive be entitled to any payments in the nature
of severance or termination payments except as specifically provided herein.


 


 


 






    	 	3	 



     


    

 


(b) “Change in Control”
shall mean the occurrence of any of the following after the Effective Date:


 


(i)  one person (or
more than one person acting as a group) acquires ownership of stock of the Company that, together with the stock held by such person
or group, constitutes more than 50% of the total fair market value or total voting power of the stock of such corporation; provided
that, a Change in Control shall not occur if any person (or more than one person acting as a group) owns more than 50% of the total
fair market value or total voting power of the Company’s stock and acquires additional stock;


 


(ii)  a majority of
the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed
by a majority of the Board before the date of appointment or election; or


 


(iii)  the sale of all
or substantially all of the Company’s assets.


 


Notwithstanding the foregoing,
a Change in Control shall not occur unless such transaction constitutes a change in the ownership of the Company, a change in effective
control of the Company, or a change in the ownership of a substantial portion of the Company’s assets under Section 409A.


 


For purposes of the definition
of “Change of Control”, the following definitions shall be applicable:


 


(i) The term “person”
shall mean any individual, corporation or other entity and any group as such term is used in Section 13(d) (3) or 14(d) (2) of
the Exchange Act.


 


(ii)  Any person shall
be deemed to be the beneficial owner of any shares of capital stock of the Corporation:


 


a. which that person owns directly
whether or not of record, or


 


b. which that person has the
right to acquire pursuant to any agreement or understanding or upon exercise of conversion rights, warrants, or options, or otherwise,
or


 


c. which are beneficially owned,
directly or indirectly (including shares deemed owned through application of clause (b) above, by an “affiliate” or
“associate” (as defined in the rules of the Securities and Exchange Commission under the Securities Act of 1933, as
amended) of that person, or


 


d. which are beneficially owned,
directly or indirectly (including shares deemed owned through application of clause (b) above), by any other person with which
that person or his “affiliate” or “associate” (defined as aforesaid) has any agreement, arrangement, or
understanding for the purpose of acquiring, holding, voting or disposing of capital stock of the Corporation.


 







(iii)  The outstanding
shares of capital stock of the Corporation shall include shares deemed owned through application of clause (ii) (b), (c), and (d)
above, but shall not include any other shares which may be issuable pursuant to any agreement or upon exercise of conversion rights,
warrants or options, or otherwise, but which are not actually outstanding.


 


(c) “Cause”
shall mean:


 


(i)  the Executive’s
willful failure to perform his duties (other than any such failure resulting from incapacity due to physical or mental illness);


 


(ii)  the Executive’s
willful failure to comply with any valid and legal directive of the Board communicated to him in writing;


 


(iii)  the Executive’s
willful engagement in dishonesty, illegal conduct or gross misconduct, which is, in each case, materially injurious to the Company
or its affiliates;


 


(iv)  the Executive’s
embezzlement, misappropriation or fraud, whether or not related to the Executive’s employment with the Corporation;


 


 


 






    	 	4	 



     


    

 


(v)  the Executive’s
conviction of or plea of guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent) or a crime
that constitutes a misdemeanor involving moral turpitude;


 


(vi)  the Executive’s
violation of a material policy of the Corporation that has been provided to Executive (documents made public on the Company’s
website or through filings with the U.S. Securities and Exchange Commission are deemed provide to the Executive);


 


(vii)  the Executive’s
willful unauthorized disclosure of Confidential Information (as defined below);


 


(viii)  the Executive’s
material breach of any material obligation under this Agreement or any other written agreement between the Executive and the Corporation;
or


 


(ix)  any material failure
by the Executive to comply with the Corporation’s written policies or rules, as they may be in effect from time to time during
the Employment Term, if such failure causes material, reputational or financial harm to the Company.


 







For purposes of this
provision, no act or failure to act on the part of the Executive shall be considered “willful” unless it is done, or
omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s action or omission was
in the best interests of the Company. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted
by the Board or upon the advice of counsel for the Corporation shall be conclusively presumed to be done, or omitted to be done,
by the Executive in good faith and in the best interests of the Corporation. In all cases the Company shall notify the Executive
in writing of the basis for any for Cause termination by providing a detailed description of the alleged facts and circumstances
giving rise to Cause. In addition, with respect to clauses (i), (ii), (vi), (viii) and (ix) Executive shall be given a period of
at least 30 days to cure and only if Executive fails to cure within such time period will a termination be for Cause.


 


(d) “Disability”
shall mean the Executive’s inability, due to physical or mental incapacity, to substantially perform his duties and responsibilities
under this Agreement, with or without reasonable accommodation, for 90 calendar days out of any three hundred sixty-five (365)
calendar day period, but only if the Executive is considered disabled within the meaning of Treasury Regulation section 1.409A-3(i)(4).
Without limiting the circumstances in which the Executive may be determined to be disabled as defined in Treasury Regulation section
1.409A-3(i)(4), the Executive will be presumed to be disabled if determined to be totally disabled by the Social Security Administration
or if determined to be disabled in accordance with a disability insurance program, provided the definition of disability applied
under such disability insurance program complies with the requirements of Treasury Regulation section 1.409A-3(i)(4). Any question
as to the existence of the Executive’s Disability as to which the Executive and the Corporation cannot agree shall be determined
in writing by a qualified independent physician mutually acceptable to the Executive and the Corporation. If the Executive and
the Corporation cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians
shall select a third who shall make such determination in writing. The determination of Disability made in writing to the Corporation
and the Executive shall be final and conclusive for all purposes of this Agreement.


 







(e) “Good
Reason” shall mean the occurrence of any of the following, in each case during the Employment Term without the Executive’s
written consent:


 


(i)  a reduction in
the Executive’s then current Base Salary;


 


(ii)  only after a sale
of the Corporation, a relocation of the Executive’s principal place of employment by more than 50 miles, unless the new principal
place of employment is closer to Executive’s principal residence;


 


(iii)  the Corporation’s
failure to obtain an agreement from any successor to the Corporation to assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be required to perform if no succession had taken place, except where
such assumption occurs by operation of law; or


 


(iv)  a material, adverse
change in the Executive’s title, authority, duties or responsibilities (other than temporarily while the Executive is physically
or mentally incapacitated or as required by applicable law).


  


The Executive cannot
terminate his employment for Good Reason unless he has provided written notice to the Corporation of the existence of the circumstances
providing grounds for termination for Good Reason within 30 business days of the initial existence of such grounds and the Corporation
has had at least 30 business days from the date on which such notice is provided to cure such circumstances. If the Executive does
not terminate his employment for Good Reason within 30 calendar days after the expiration of the cure period, then the Executive
will be deemed to have waived his right to terminate for Good Reason with respect to such grounds.


 


 


 






    	 	5	 



     


    

 


5.2  Termination
for Cause or Without Good Reason.


 


The Executive’s
employment hereunder may be terminated by the Corporation for Cause or by the Executive without Good Reason. If the Executive’s
employment is terminated, by the Corporation for Cause or by the Executive without Good Reason, the Executive shall be entitled
to receive the Accrued Amounts.


 


5.3 Termination Without Cause
or for Good Reason.


 


The Term of Employment
and the Executive’s employment hereunder may be terminated by the Executive for Good Reason or by the Corporation without
Cause. In the event of such termination, the Executive shall be entitled to receive the Accrued Amounts and subject to the Executive’s
compliance with Section 6, Section 7, Section 8, Section 9, and Section 10 of this Agreement
and his execution of a release of claims in favor of the Company, its affiliates and their respective officers and directors in
a form attached hereto (the “Release”) and such Release becoming effective within the applicable time period
set forth in the Release, (the “Release Execution Period”), the Executive shall be entitled to receive the following:


 


 (a) a lump sum payment equal to one time the Executive’s Base Salary, which shall be paid in six equal monthly installments following the Termination Date; and


 




 (b) upon determination by the Corporation’s Board of Directors or Compensation Committee, as appropriate, to be made in its sole discretion as to whether to grant a bonus, and if such bonus is granted, the amount, form and payment schedule. For the avoidance of doubt, Executive shall not be entitled to any bonus solely for reason of termination, unless the Board of Directors or the Compensation Committee, as appropriate, in its sole discretion awards a bonus to Executive.




 


If Executive violates
Section 6, Section 7, Section 8, Section 9, and Section 10 of this Agreement, the Corporation
shall be entitled to repayment of any severance benefits.


 







(c)   If the
Executive timely and properly elects health continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”), the Company shall reimburse the Executive for the monthly COBRA premium paid by the Executive for
himself and his dependents. Such reimbursement shall be paid to the Executive on the 10th day of the month immediately
following the month in which the Executive timely remits the premium payment (“COBRA Premium Reimbursements”).
The Executive shall be eligible to receive such COBRA Premium Reimbursement until the earliest of: (i) the twelve-month anniversary
of the Termination Date; (ii) the date the Executive is no longer eligible to receive COBRA continuation coverage; and (iii) the
date on which the Executive becomes eligible to receive substantially similar coverage from another employer or other source. Notwithstanding
the foregoing, if the Company’s making payments under this Section 5.3(b) would violate the nondiscrimination rules
applicable to non-grandfathered plans under the Affordable Care Act (the “ACA”), or result in the imposition
of penalties under the ACA and the related regulations and guidance promulgated thereunder), the parties agree to reform this Section
5.3(b) in a manner as is necessary to comply with the ACA.


 


(d)   Consistent
with the terms of any equity incentive plan of the Company, as approved by the stockholders, as applicable:


 


(i)   all outstanding
time-based equity-based compensation awards granted to the Executive during the Term of Employment shall become fully vested and
exercisable for the remainder of their full term; and


 


(ii)   all outstanding
performance-based equity compensation awards granted to the Executive during the Term of Employment shall remain outstanding and
shall vest or be forfeited in accordance with the terms of the applicable award agreements, if the applicable performance goals
are satisfied. The determination whether such performance goals are satisfied shall be in the sole discretion of the Compensation
Committee or the Board, as the case may be.


 


5.4   Death
or Disability.


 


(a)   The
Executive’s employment hereunder shall terminate automatically upon the Executive’s death during the Term of Employment,
and the Corporation may terminate the Executive’s employment on account of the Executive’s Disability.


 


(b)   If the
Executive’s employment is terminated during the Term of Employment on account of the Executive’s death or Disability,
the Executive (or the Executive’s estate and/or beneficiaries, as the case may be) shall be entitled to receive the Accrued
Amounts. In addition, Executive’s spouse and other dependents shall be entitled to 12-months of COBRA Premium Reimbursements
upon timely request to the Corporation for such benefits. Notwithstanding any other provision contained herein, all payments made
in connection with the Executive’s Disability shall be provided in a manner which is consistent with federal and state law.
The Corporation may deduct, from all payments made hereunder, all applicable taxes and other appropriate deductions.


 


 


 






    	 	6	 



     


    

 


5.5   Change in Control
Termination.


 


(a)   Notwithstanding
any other provision contained herein, if the Executive’s employment hereunder is terminated by the Executive for Good Reason
or without Cause (other than on account of the Executive’s death or Disability), in each case within three (3) months prior
to or twelve (12) months following a Change in Control, the Executive shall be entitled to receive the Accrued Amounts and subject
to the Executive’s compliance with Section 6, Section 7, Section 8, Section 9 and Section
10 of this Agreement and his execution of a Release which becomes effective by the end of the Release Execution Period, the
Executive shall be entitled to receive a lump sum payment equal to one time the sum of the Executive’s Base Salary, which
shall be paid in six equal monthly installments following the Termination Date. If Executive violates Section 6, Section
7, Section 8, Section 9, and Section 10 of this Agreement, the Corporation shall be entitled to
repayment of any severance benefits.


 


(b)   If the
Executive timely and properly elects health continuation coverage under COBRA, the Corporation shall reimburse the Executive for
the monthly COBRA premium paid by the Executive for himself and his dependents. Such reimbursement shall be paid to the Executive
on the 10th day of the month immediately following the month in which the Executive timely remits the premium payment.
The Executive shall be eligible to receive such reimbursement until the earliest of: (i) the twelve-month anniversary of the Termination
Date; (ii) the date the Executive is no longer eligible to receive COBRA continuation coverage; and (iii) the date on which the
Executive becomes eligible to receive substantially similar coverage from another employer or other source. Notwithstanding the
foregoing, if the Corporation’s making payments under this Section 5.5(b) would violate the nondiscrimination rules
applicable to non-grandfathered plans under the ACA, or result in the imposition of penalties under the ACA, the parties agree
to reform this Section 5.5(b) in a manner as is necessary to comply with the ACA.


 







(c)   Consistent
with the terms of any equity incentive plan of the Company, as approved by the stockholders, as applicable:


 


(i)   all outstanding
time-based equity-based compensation awards granted to the Executive during the Term of Employment shall become fully vested and
exercisable for the remainder of their full term; and


 


(ii)   all outstanding
performance-based equity compensation awards granted to the Executive during the Term of Employment shall remain outstanding and
shall vest or be forfeited in accordance with the terms of the applicable award agreements, if the applicable performance goals
are satisfied. The determination whether such performance goals are satisfied shall be in the sole discretion of the Compensation
Committee or the Board, as the case may be.


  


5.6 Release; Exclusive
Remedy.


 


(a) The Executive agrees
that the payments contemplated by Section 5 shall constitute the exclusive and sole remedy for any termination of his employment
and the Executive covenants not to assert or to pursue any other remedies, at law or in equity, with respect to any termination
of employment. The Corporation and Executive acknowledge and agree that there is no duty of the Executive to mitigate damages under
this Agreement. All amounts paid to the Executive pursuant to Section 5 shall be paid without regard to whether the Executive
has taken or takes actions to mitigate damages.


 


(b) As used herein,
“Release” shall mean a written release, discharge and covenant not to sue entered into by the Executive in favor
of the Corporation in the form as in Exhibit A hereto.


 


5.7 Notice of Termination.
Any termination of the Executive’s employment hereunder by the Company or by the Executive during the Term of Employment
(other than termination pursuant to Section 5.4 on account of the Executive’s death) shall be communicated by written
notice of termination (the “Notice of Termination”) to the other party hereto in accordance with Section
14(j). The Notice of Termination shall specify:


 


		(a)	The termination provision of this Agreement relied upon;



		(b)	To the extent applicable, the facts and circumstances claimed to provide a basis for termination
of the Executive’s employment under the provisions so indicated; and



		(c)	The applicable Termination Date.



 


 


 






    	 	7	 



     


    

 


5.8 Termination
Date. The Executive’s Termination Date shall be:


 


		(a)	If the Executive’s employment hereunder terminates on account of the Executive’s death,
the date of the Executive’s death;



		(b)	If the Executive’s employment hereunder is terminated on account of the Executive’s
Disability, the date that it is determined that the Executive has a Disability;



		(c)	If the Corporation terminates the Executive’s employment hereunder for Cause, the date the
Notice of Termination is delivered to the Executive;



		(d)	If the Corporation terminates the Executive’s employment hereunder without Cause, the date
specified in the Notice of Termination, which shall be no less than 30 calendar days following the date on which the Notice of
Termination is delivered; provided that, the Corporation shall have the option to provide the Executive with a lump sum payment
equal to 30 calendar days’ Base Salary in lieu of such notice, which shall be paid in a lump sum on the Executive’s
Termination Date and for all purposes of this Agreement, the Executive’s Termination Date shall be the date on which such
Notice of Termination is delivered; and



		(e)	If the Executive terminates his employment hereunder with or without Good Reason, the date specified
in the Executive’s Notice of Termination, which shall be no less than 30 calendar days following the date on which the Notice
of Termination is delivered.



 







Notwithstanding anything contained herein,
the Termination Date shall not occur until the date on which the Executive incurs a Separation from Service within the meaning
of Section 409A.


 


5.9 Resignation
From Boards and Committees. Upon or promptly following any termination of Executive’s employment with the Corporation,
the Executive agrees to resign, as of the date of such termination, from (i) each and every board of directors (or similar body,
as the case may be) of the Corporation and each of its affiliates on which the Executive may then serve, including, but not limited
to, the Board (and any committees thereof), and (ii) each and every office of the Corporation and each of its affiliates that the
Executive may then hold, and all positions that he may have previously held with the Corporation and any of its affiliates.


 


5.10 Section 409A
of the Internal Revenue Code.


 


(a) This Agreement
is intended to comply with Section 409A of the Internal Revenue Code of 1986 (“Section 409A”) and shall be construed
and interpreted consistent with that intent. In the event that any payment or benefit payable under Section 5 of this Agreement
is not compliant with Section 409A and any taxes, penalties or interest are imposed on the Executive under Section 409A as a result
of such noncompliance (the “Section 409A Penalties”), the Corporation shall put the Executive in an after tax
economic position equivalent to the position the Executive would have been in without the imposition of such Section 409A Penalties.
The Executive shall notify the Corporation in writing of any claim by the Internal Revenue Service or state tax authorities that,
if successful, would require the payment of any such Section 409A Penalties or related state tax statutes. The Executive’s
right to be put in an equivalent after tax economic position is subject to the Executive providing such notification no later than
ten (10) business days after Executive is informed in writing of such claim. If the Corporation desires to contest such claim,
Executive shall (i) cooperate with the Corporation in good faith in order to effectively contest such claim and (ii) permit the
Corporation to participate in any proceedings relating to such claim. The Corporation shall control all proceedings taken in connection
with such contest; provided, however, that the Corporation shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest. This section shall also apply to any taxes, penalties, or interest
imposed by any state that are calculated in a manner similar to taxes, penalties, or interest imposed by Section 409A(a)(1)(B),
including those amounts imposed by the California Revenue and Taxation Code (R&TC) Sections 17501 and 24601.


 


(b) If and to the extent
that any payment or benefit under this Agreement, or any plan or arrangement of the Corporation, is determined by the Corporation
to constitute “non-qualified deferred compensation” subject to Section 409A and is payable to the Executive by reason
of the Executive’s termination of employment, then (a) such payment or benefit shall be made or provided to the Executive
only upon a “separation from service” as defined for purposes of Section 409A under applicable regulations (a “Separation
from Service”) and (b) if the Executive is a “specified employee” (within the meaning of Section 409A and
as determined by the Corporation), such payment or benefit shall not be made or provided before the date that is six (6) months
after the date of the Executive’s Separation from Service (or the Executive’s earlier death). For the purposes of clarity,
the first payment thereof will include a catch-up payment covering the amount that would have otherwise been paid to the Executive
during the period between the termination of Executive’s employment and the first payment date but for the application of
this provision, and the balance of the installments (if any) will be payable in accordance with their original schedule.


 


 


 






    	 	8	 



     


    

 





(c) To the extent any
expense reimbursement or in-kind benefit is determined to be subject to Section 409A, the amount of any such expenses eligible
for reimbursement or in-kind benefits provided in one taxable year shall not affect the expenses eligible for reimbursement or
in-kind benefits provided in any other taxable year (except under any lifetime limit applicable to expenses for medical care),
in no event shall any expenses be reimbursed after the last day of the calendar year following the calendar year in which the Executive
incurred such expenses, and in no event shall any right to reimbursement or in-kind benefits be subject to liquidation or exchange
for another benefit.


 







(d) To the extent that
any provision of this Agreement is ambiguous as to its compliance with Section 409A, the provision will be read in such a manner
so that all payments hereunder comply with Section 409A. To the extent any payment under this Agreement may be classified as a
“short-term deferral” within the meaning of Section 409A, such payment shall be deemed a short-term deferral, even
if it may also qualify for an exemption from Section 409A under another provision of Section 409A. Payments pursuant to this section
are intended to constitute separate payments for purposes of Section 1.409A-2(b)(2) of the Treasury Regulations.


 



6. Non-Competition.


 


The Executive acknowledges
and recognizes the highly competitive nature of the businesses of the Corporation, the amount of sensitive and confidential information
involved in the discharge of the Executive’s position with the Corporation, and the harm to the Corporation that would result
if such knowledge or expertise was disclosed or made available to a competitor. The Executive further understands and acknowledges
that the Company Group’s (the Corporation and its affiliates are referred to, collectively, as the “Company Group”)
ability to reserve these for the exclusive knowledge and use of the Company Group is of great competitive importance and commercial
value to the Company Group, and that improper use or disclosure by the Executive is likely to result in unfair or unlawful competitive
activity. Based on that understanding, the Executive hereby expressly agrees as follows:


 


(a) Because of Company
Group’s legitimate business interest as described herein and the good and valuable consideration offered to the Executive,
during the term of Executive’s employment and for the term of one year, to run consecutively, beginning on the last day of
the Executive’s employment with the Corporation, for any reason or no reason and whether employment is terminated at the
option of the Executive or the Corporation, the Executive agrees and covenants not to engage in Prohibited Activity.


 


For purposes of this
non-compete clause, “Prohibited Activity” is activity in which the Executive contributes his knowledge, directly
or indirectly, in whole or in part, as an employee, employer, owner, operator, manager, advisor, consultant, agent, partner, director,
stockholder, officer, volunteer, intern or any other similar capacity to an entity engaged in the same or similar business as the
Company Group, including those engaged in the business of selling dermatological products within the United States similar to the
Company Group or an U.S. entity selling dermatological products similar to the Company Group. Prohibited Activity also includes
activity that may require or inevitably require disclosure of trade secrets, proprietary information or confidential information.


 


(b) Notwithstanding
anything to the contrary in this Agreement, the Executive may, directly or indirectly, own, solely as an investment, securities
of any Person, other than a business that competes with the business of the Company Group, which are publicly traded on a national
or regional stock exchange or on the over-the-counter market if the Executive (i) is not a controlling Person of, or a member of
a group that controls, such Person, and (ii) does not, directly or indirectly, beneficially own one percent (1%) or more of any
class of securities of such Person. Executive may indirectly, through a mutual or exchange traded fund, own, solely as an investment,
securities of a business that competes with the business of the Company Group, which are publicly traded on a national or regional
stock exchange or on the over-the-counter market if the Executive (i) is not a controlling Person of, or a member of a group that
controls, such Person, and (ii) does not, directly or indirectly, beneficially own one percent (1%) or more of any class of securities
of such business. For purposes of this Section 6(b), “Person” shall have the meaning ascribed to such
terms in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as described
in Section 13(d) thereof.


 


(c) This Section does
not, in any way, restrict or impede the Executive from exercising protected rights to the extent that such rights cannot be waived
by agreement or from complying with any applicable law or regulation or a valid order of a court of competent jurisdiction or an
authorized government agency, provided that such compliance does not exceed that required by the law, regulation or order. The
Executive shall promptly provide written notice of any such order to the Board of Directors.


 


 


 






    	 	9	 



     


    

 





7. Confidential Information.


 


As a material part
of the consideration for the Corporation’s commitment to the terms of this Agreement, the Executive hereby agrees that the
Executive will not at any time (whether during or after the Executive’s employment with the Corporation), other than in the
course of the Executive’s duties hereunder, or unless compelled by lawful process after written notice to the Corporation
of such notice along with sufficient time for the Corporation to try and overturn such lawful process, disclose or use for the
Executive’s own benefit or purposes or the benefit or purposes of any other person, firm, partnership, joint venture, association,
corporation or other business organization, entity or enterprise, any trade secrets, or other confidential data or information
relating to customers, development programs, costs, marketing, trading, investment, sales activities, promotion, credit and financial
data, financing methods, or plans of any entity within the Company Group; provided, however, that the foregoing shall
not apply to information which is generally known to the industry or the public, other than as a result of the Executive’s
breach of this covenant. The Executive further agrees that the Executive will not retain or use for his own account, at any time,
any trade names, trademark or other proprietary business designation used or owned in connection with the business of any entity
within the Company Group.


 



8. Proprietary Rights.


 


(a) Inventions.
All inventions, policies, systems, developments or improvements conceived, designed, implemented and/or made by the Executive,
either alone or in conjunction with others, at any time or at any place during the Term of Employment, whether or not reduced to
writing or practice during such Term of Employment, which directly or indirectly relate to the business of any entity within the
Company Group, or which were developed or made in whole or in part using the facilities and/or capital of any entity within the
Company Group, shall be the sole and exclusive property of the Company Group. The Executive shall promptly give notice to the Corporation
of any such invention, development, patent or improvement, and shall at the same time, without the need for any request by any
person or entity within the Company Group, assign all of the Executive’s rights to such invention, development, patent and/or
improvement to the Company Group. The Executive shall sign all instruments necessary for the filing and prosecution of any applications
for, or extensions or renewals of, letters patent of the United States or any foreign country that any entity in the Company Group
desires to file.


 


(b) Work Product.
The Executive acknowledges and agrees that all writings, works of authorship, technology, inventions, discoveries, ideas and other
work product of any nature whatsoever, that are created, prepared, produced, authored, edited, amended, conceived or reduced to
practice by the Executive individually or jointly with others during the Term of the Executive’s employment by the Corporation
and relating in any way to the business or contemplated business, research or development of the Corporation (regardless of when
or where the Work Product is prepared or whose equipment or other resources is used in preparing the same) and all printed, physical
and electronic copies, all improvements, rights and claims related to the foregoing, and other tangible embodiments thereof (collectively,
“Work Product”), as well as any and all rights in and to copyrights, trade secrets, trademarks (and related
goodwill), patents and other intellectual property rights therein arising in any jurisdiction throughout the world and all related
rights of priority under international conventions with respect thereto, including all pending and future applications and registrations
therefor, and continuations, divisions, continuations-in-part, reissues, extensions and renewals thereof (collectively, “Intellectual
Property Rights”), shall be the sole and exclusive property of the Corporation.


 


For purposes of this
Agreement, Work Product includes, but is not limited to, Company Group information, including plans, publications, research, strategies,
techniques, agreements, documents, contracts, terms of agreements, negotiations, know-how, computer programs, computer applications,
software design, web design, work in process, databases, manuals, results, developments, reports, graphics, drawings, sketches,
market studies, formulae, notes, communications, algorithms, product plans, product designs, styles, models, audiovisual programs,
inventions, unpublished patent applications, original works of authorship, discoveries, experimental processes, experimental results,
specifications, customer information, client information, customer lists, client lists, manufacturing information, marketing information,
advertising information, and sales information.


 


(c) Work Made for
Hire; Assignment. All copyrightable work by the Executive during the Term of Employment that relates to the business of any
entity in the Company Group is intended to be “work made for hire” as defined in Section 101 of the Copyright Act of
1976, and shall be the property of the Company Group. If the copyright to any such copyrightable work is not the property of the
Company Group by operation of the law, the Executive will, without further consideration, assign to the Company Group all right,
title and interest in such copyrightable work and will assist the entities in the Company Group and their nominees in every way,
at the Company Group’s expense, to secure, maintain and defend for the Company Group’s benefit, copyrights and any
extensions and renewals thereof on any and all such work including translations thereof in any and all countries, such work to
be and to remain the property of the Company Group whether copyrighted or not.


 


 


 






    	 	10	 



     


    

 





(d) Further Assurances;
Power of Attorney. During and after the Executive’s employment, the Executive agrees to reasonably cooperate with the
Corporation to (i) apply for, obtain, perfect and transfer to the Company Group the Work Product as well as an Intellectual Property
Right in the Work Product in any jurisdiction in the world; and (ii) maintain, protect and enforce the same, including, without
limitation, executing and delivering to the Corporation any and all applications, oaths, declarations, affidavits, waivers, assignments
and other documents and instruments as shall be requested by the Corporation. The Executive hereby irrevocably grants the Corporation
power of attorney to execute and deliver any such documents on the Executive’s behalf in the Executive’s name and to
do all other lawfully permitted acts to transfer the Work Product to the Corporation and further the transfer, issuance, prosecution
and maintenance of all Intellectual Property Rights therein, to the full extent permitted by law, if the Executive does not promptly
cooperate with the Corporation’s request (without limiting the rights the Corporation shall have in such circumstances by
operation of law). The power of attorney is coupled with an interest and shall not be effected by the Executive’s subsequent
incapacity.


 


(e) No License.
The Executive understands that this Agreement does not, and shall not be construed to, grant the Executive any license or right
of any nature with respect to any Work Product or Intellectual Property Rights or any Confidential Information, materials, software
or other tools made available to the Executive by the Corporation.


 



9. Anti-Solicitation.


 


In light of the amount
of sensitive and confidential information involved in the discharge of the Executive’s duties, and the harm to the Corporation
that would result if such knowledge or expertise were disclosed or made available to a competitor, and as a reasonable step to
help protect the confidentiality of such information, the Executive promises and agrees that during the Term of Employment and
for a period of two (2) years thereafter, the Executive will not use the Company’s confidential information to, directly
or indirectly, individually or as a consultant to, or as an employee, officer, shareholder, director or other owner or participant
in any business, influence or attempt to influence the customers, vendors, suppliers, joint venturers, associates, consultants,
agents, or partners of any entity within the Company Group, either directly or indirectly, to divert their business away from the
Company Group, to any individual, partnership, firm, corporation or other entity then in competition with the business of any entity
within the Company Group, and he will not otherwise materially interfere with any business relationship of any entity within the
Company Group.


 


10. Non-Solicitation of Employees.


 


In light of the amount
of sensitive and confidential information involved in the discharge of the Executive’s duties, and the harm to the Corporation
that would result if such knowledge or expertise were disclosed or made available to a competitor, and as a reasonable step to
help protect the confidentiality of such information, the Executive promises and agrees that during the Term of Employment and
for a period of one (1) year thereafter, the Executive will not, directly or indirectly, individually or as a consultant to, or
as an employee, officer, shareholder, director, or other owner of or participant in any business, solicit (or assist in soliciting)
any person who is then, or at any time within six (6) months prior thereto was, an employee of an entity within the Company Group,
who earned annually $25,000 or more as an employee of such entity during the last six (6) months of his or her own employment to
work for (as an employee, consultant or otherwise) any business, individual, partnership, firm, corporation, or other entity whether
or not engaged in competitive business with any entity in the Company Group.


 


11. Return of Property.


 


The Executive agrees
to truthfully and faithfully account for and deliver to the Corporation all property belonging to the Corporation, any other entity
in the Company Group, or any of their respective affiliates, which the Executive may receive from or on account of the Corporation,
any other entity in the Company Group, or any of their respective affiliates, and upon the termination of the Term of Employment,
or the Corporation’s demand, the Executive shall immediately deliver to the Corporation all such property belonging to the
Corporation, any other entity in the Company Group, or any of their respective affiliates.


 


12. Withholding Taxes.


 


Notwithstanding anything
else herein to the contrary, the Corporation may withhold (or cause there to be withheld, as the case may be) from any amounts
otherwise due or payable under or pursuant to this Agreement such federal, state and local income, employment, or other taxes as
may be required to be withheld pursuant to any applicable law or regulation.


 


 


 






    	 	11	 



     


    

 





13. Cooperation in Litigation.


 


The Executive agrees
that, during the Term of Employment or after the termination of the Executive’s employment, he will reasonably cooperate
with the Corporation, subject to his reasonable personal and business schedules, in any litigation which arises out of events occurring
prior to the termination of his employment, including but not limited to, serving as a witness or consultant and producing documents
and information relevant to the case or helpful to the Corporation. The Corporation agrees to reimburse the Executive for all reasonable
costs and expenses he incurs in connection with his obligations under this Section 13 and, in addition, to reasonably compensate
the Executive for time actually spent in connection therewith following the termination of his employment with the Corporation.


 



14. Miscellaneous.


 


(a) Assignment. This Agreement is
personal in its nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement
or any rights or obligations hereunder; provided, however, that in the event of a merger, consolidation, or transfer
or sale of all or substantially all of the assets of the Corporation with or to any other individual(s) or entity, this Agreement
shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor shall discharge
and perform all the promises, covenants, duties, and obligations of the Corporation hereunder.


 


(b) Number and Gender. Where the
context requires, the singular shall include the plural, the plural shall include the singular, and any gender shall include all
other genders.


 


(c) Section Headings. The section
headings of, and titles of paragraphs and subparagraphs contained in, this Agreement are for the purposes of convenience only,
and they neither form a part of this Agreement nor are they to be used in the construction or interpretation thereof.


 


(d) Governing Law. This Agreement,
and all questions relating to its validity, interpretation, performance and enforcement, as well as the legal relations hereby
created between the parties hereto, shall be governed by and construed under, and interpreted and enforced in accordance with,
the laws of the State of California, notwithstanding any California or other conflict of law provision to the contrary. This Agreement
is intended to comply with Section 409A of the Internal Revenue Code of 1986 and the regulations promulgated thereunder. Any action
or proceeding by either of the parties to enforce this Agreement shall be brought only in a state or federal court located in the
State of California, Sonoma county. The parties hereby irrevocably submit to the exclusive jurisdiction of such courts and waive
the defense of inconvenient forum to the maintenance of any such action or proceeding in such venue.


 


(e) Severability. If any provision
of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications
of this Agreement which can be given effect without the invalid provisions or applications and to this end the provisions of this
Agreement are declared to be severable.


 


(f) Entire Agreement. This Agreement
replaces and supersedes prior employment agreements, including the employment agreement executed by and between the Executive and
the Corporation dated January 1, 2004 and June 20, 2013. This Agreement embodies the entire agreement of the parties hereto respecting
the matters within its scope. Any prior negotiations, correspondence, agreements, proposals or understandings relating to the subject
matter hereof shall be deemed to have been merged into this Agreement, and to the extent inconsistent herewith, such negotiations,
correspondence, agreements, proposals, or understandings shall be deemed to be of no force or effect. There are no representations,
warranties, or agreements, whether express or implied, or oral or written, with respect to the subject matter hereof, except as
expressly set forth herein.


 


(g) Modifications. This Agreement
may not be amended, modified or changed (in whole or in part), except by a formal definitive written agreement expressly referring
to this Agreement, which agreement is executed by both of the parties hereto.


 


(h) Waiver. Neither the failure
nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege
with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence.
No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.


 


 


 






    	 	12	 



     


    

 


(i) Resolution of Disputes.


 


(i) Any controversy
arising out of or relating to the Executive’s employment (whether or not before or after the expiration of the Term of Employment),
any termination of the Executive’s employment, this Agreement or the enforcement or interpretation of this Agreement, or
because of an alleged breach, default, or misrepresentation in connection with any of the provisions of this Agreement, including
(without limitation) any state or federal statutory claims, shall be submitted to arbitration in Santa Rosa, California, before
a sole arbitrator (the “Arbitrator”) selected from the American Arbitration Association (“AAA”),
and shall be conducted in accordance with the provisions of California Code of Civil Procedure §§ 1280 et seq.
as the exclusive remedy of such dispute; provided, however, that provisional injunctive relief may, but need not,
be sought in a court of law while arbitration proceedings are pending, and any provisional injunctive relief granted by such court
shall remain effective until the matter is finally determined by the Arbitrator. Final resolution of any dispute through arbitration
may include any remedy or relief that the Arbitrator deems just and equitable, including any and all remedies provided by applicable
state or federal statutes. At the conclusion of the arbitration, the Arbitrator shall issue a written decision that sets forth
the essential findings and conclusions upon which the Arbitrator’s award or decision is based. Any award or relief granted
by the Arbitrator hereunder shall be final and binding on the parties hereto and may be enforced by any court of competent jurisdiction.


 


(ii) The parties acknowledge
and agree that they are hereby waiving any rights to trial by jury in any action, proceeding or counterclaim brought by either
of the parties against the other in connection with any matter whatsoever arising out of or in any way connected with any of the
matters referenced in the first sentence of Section 14(i)(i).


 


(iii) The parties agree
that the Corporation shall be responsible for payment of the forum costs of any arbitration hereunder, including the Arbitrator’s
fee. The parties further agree that in any proceeding with respect to such matters, the prevailing party will be entitled to recover
its reasonable attorney’s fees and costs from the non-prevailing party (other than forum costs associated with the arbitration
which in any event shall be paid by the Corporation).


 


(iv) Without limiting
the remedies available to the parties and notwithstanding the foregoing provisions of this Section 14, the Executive and
the Corporation acknowledge that any breach of any of the covenants or provisions contained in Sections 5.9, and Sections
6 through 11 could result in irreparable injury to either of the parties hereto for which there might be no adequate
remedy at law, and that, in the event of such a breach or threat thereof, the non-breaching party shall be entitled to obtain a
temporary restraining order and/or a preliminary injunction and a permanent injunction restraining the other party hereto from
engaging in any activities prohibited by any covenant or provision in Sections 5.9, and Sections 6 through 11
or such other equitable relief as may be required to enforce specifically any of the covenants or provisions of Sections 5.9,
and Sections 6 through 11.


 


(j) Publicity.


 


The Executive hereby
irrevocably consents during the term of this Agreement to any and all uses and displays, by the Company Group and its agents, representatives
and licensees, of the Executive’s name, voice, likeness, image, appearance and biographical information in, on or in connection
with any pictures, photographs, audio and video recordings, digital images, websites, television programs and advertising, other
advertising and publicity, sales and marketing brochures, books, magazines, other publications, CDs, DVDs, tapes and all other
printed and electronic forms and media throughout the world, at any time during or after the period of his employment by the Company,
for all legitimate commercial and business purposes of the Company Group (“Permitted Uses”) without further
consent from or royalty, payment or other compensation to the Executive. The Executive hereby forever waives and releases the Company
Group and its directors, officers, employees and agents from any and all claims, actions, damages, losses, costs, expenses and
liability of any kind, arising under any legal or equitable theory whatsoever at any time during or after the period of his employment
by the Company, arising directly or indirectly from the Company Group’s and its agents’, representatives’ and
licensees’ exercise of their rights in connection with any Permitted Uses. At the end of the term of this Agreement, the
Company shall have no obligation to remove any previously-published displays described in this paragraph.


 


 


 






    	 	13	 



     


    

 


(k) Notices.


 


(i) All notices, requests,
demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been
duly received if (i) delivered by hand or by courier, effective upon delivery, (ii) given by facsimile or electronic version, when
transmitted if transmitted on a business day and during normal business hours of the recipient, and otherwise delivered on the
next business day following transmission, or (iii) sent by registered or certified mail, postage prepaid, return receipt requested,
5 business days after being deposited in the U.S. postal mail. Any notice shall be duly addressed to the parties as follows:


 


(i) If to the Corporation:


 


Oculus Innovative Sciences, Inc.


Chairman of the Board or any Independent Director

1129 North McDowell Boulevard

Petaluma, California 94954

Fax: +1 (707) 283-0551


 


(ii) If to the Executive:


 


Jeffrey Day

At the address on file with the Corporation


 


(ii) Any party may
alter the address to which communications or copies are to be sent by giving notice of such change of address in conformity with
the provisions of this Section 24 for the giving of notice.


 


(l) Legal Counsel; Mutual Drafting.
Each party recognizes that this is a legally binding contract and acknowledges and agrees that they have had the opportunity to
consult with legal counsel of their choice. Each party has cooperated in the drafting, negotiation and preparation of this Agreement.
Hence, in any construction to be made of this Agreement, the same shall not be construed against either party on the basis of that
party being the drafter of such language.


 


(m) Provisions that Survive Termination.
The provisions of Sections 3.4, 3.5, 5 through 13, and this Section 14 shall survive any termination
of the Term of Employment.


 


(n) Counterparts. This Agreement
may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears
thereon, and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or
more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the
signatories. Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.


 


(o) Tolling. Should the Executive
violate any of the terms of the restrictive covenant obligations articulated herein, the obligation at issue will run from the
first date on which the Executive ceases to be in violation of such obligation.


 


[Signature Page Follows]


 


 


 






    	 	14	 



     


    

 




IN WITNESS WHEREOF, the Corporation
and the Executive have executed this Employment Agreement as of the Effective Date.


  


	 	CORPORATION
	 	 
	 	Oculus Innovative Sciences, Inc.,
	 	a Delaware corporation
	 	 
	 	 
	 	By:	/s/ Jerry McLaughlin
	 	
        Name:

        Title:
	Jerry McLaughlin

Chairman of the Compensation Committee of
	 	 	Oculus Innovative Sciences, Inc.
	 	 	 
	 	EXECUTIVE
	 	 	 
	 	 	 
	 	By:	/s/ Jeffrey Day
	 	Name:	Jeffrey Day


 


 


 


 


 


 


 


 


 


 






    	 	15	 



     


    

 


EXHIBIT A — RELEASE


 


1. Definitions.
I intend all words used in this Release to have their plain meanings in ordinary English. Technical legal words are not needed
to describe what I mean. Specific terms I use in this Release have the following meanings:


 


A. “I,”
“me,” and “my” include me, Jeffrey Day, and anyone who has or obtains any legal rights or claims through
me, including my heirs and estate, and each of my descendants, dependents, executors, administrators, assigns and successors.


 


B. “Employer,”
as used in this Release, shall at all times mean Oculus Innovative Sciences, Inc. and “Released Party” or “Released
Parties”, individual and collectively, means the Employer and the Employer’s parent, past or present subsidiaries,
affiliates, each of any present or former officers, directors, shareholders, employees, agents or attorneys, trustees, insurers,
successors, predecessors, assigns, or personal representatives.


 


C. “My Claims”
mean actions or causes of action, suits, claims, charges, complaints, contracts (whether oral or written, express or implied from
any source), and promises, whatsoever, in law or equity, that I ever had, may now have or hereafter can, shall or may have against
the Employer or other Released Party as of the date of the execution of this Release, including all unknown, undisclosed and unanticipated
losses, wrongs, injuries, debts, claims or damages to me for, upon, or by reason of any matter, cause or thing whatsoever, that
are in any way related to my employment with or separation (termination of employment) from the Employer.


 


By signing this Release,
I am agreeing to release any actual and potential claim, known or unknown, I have or may potentially have, in law or in equity,
either as an individual or standing in the shoes of the government, under any federal, state or local law, administrative regulation
or legal principle (except as provided in Paragraph 4 of this Release). The following listing of laws and types of claims is not
meant to, and shall not be interpreted to, exclude any particular law or type of claim, law, regulation or legal principle not
listed. I understand I am releasing all my Claims, including, but not limited to, claims for invasion of privacy; breach of written
or oral, express or implied, contract; fraud or misrepresentation; and any claim under Section 1981 of the Civil Rights Act of
1866, Title VII of the Civil Rights Act of 1964, Age Discrimination in Employment Act of 1967 (“ADEA”), 29 U.S.C. §
626, as amended, the Older Workers Benefit Protection Act of 1990 (“OWBPA”), 29 U.S.C. 626(f), Title VII of the Civil
Rights Act of 1964 (“Title VII”), 42 U.S.C. § 2000e, et seq., the Americans with Disabilities Act Amendments Act
(“ADAAA”), 29 U.S.C. § 2101, et seq., the Family and Medical Leave Act (“FMLA”), 29 U.S.C. §
2601 et seq., the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, 29 U.S.C. §§ 1001,
et seq., Equal Pay Act (“EPA”), 29 U.S.C. § 206(d), the Worker Adjustment and Retraining Notification Act (“WARN”),
29 U.S.C. § 2101 et seq., the False Claims Act, 31 U.S.C. § 3729 et seq., the California Fair Employment and Housing
Act, the California Family Rights Act, any other state human rights or fair employment practices act, and any other federal, state,
or local statute, law, rule, regulation, ordinance or order. This includes, but is not limited to, claims for violation of any
civil rights laws based on protected class status; claims for assault, battery, defamation, intentional or negligent infliction
of emotional distress, breach of the covenant of good faith and fair dealing, promissory estoppel, negligence, negligent hiring,
retention or supervision, retaliation, constructive discharge, violation of whistleblower protection laws, unjust enrichment, payment
of any kind, including any other claim for severance pay, bonus or incentive pay, sick leave, holiday pay, vacation pay, life insurance,
health or medical insurance or any other fringe benefit, medical expenses, or disability, violation of public policy, and all other
claims for unlawful employment practices, and all other common law or statutory claims. To the maximum extent permitted by law,
I agree that I will not seek and waive any right to accept any relief or award from any charge or action against the Employer before
any federal, state, or local administrative agency or federal state or local court whether filed by me or on my behalf with respect
to any claim or right covered by this Release.


 


2. Agreement to
Release My Claims. Except as stated in Paragraph 4, I agree to give up all My Claims, waive any rights thereunder, and forever
discharge the Employer and all Released Parties of and from any and all liability to me for actions or causes of action, suits,
or Claims. To the maximum extent permitted by law, I agree that I will not seek and I waive any right to accept any relief or award
from any charge or action against the Employer or other Released Party before any federal, state, or local administrative agency
or federal state or local court whether filed by me or on my behalf with respect to any claim or right covered by this Release.
I also agree to withdraw any and all of my charges and lawsuits against Employer or other Released Party, except that I may, but
am not required to, withdraw or dismiss, or attempt to withdraw or dismiss, any charges that I may have pending against the Employer
or other Released Party with the EEOC or other civil rights enforcement agency.


 


 


 






    	 	16	 



     


    

 


I represent and warrant
that I have not transferred or otherwise assigned my Claims, or parts thereof, to any person or entity, other than the Employer.
I will defend, indemnify and hold harmless the Employer from and against any claim (including the payment of attorneys’ fees
and costs actually incurred whether or not litigation is commenced) that is directly or indirectly based on or in connection with
or arising out of any such assignment or transfer made, purported or claimed.


 


In exchange for my
agreement to release my Claims, I am receiving satisfactory Consideration (compensation) from the Employer to which I am not otherwise
entitled by law, contract, or under any Employer policy. The consideration I am receiving is a full and fair payment for the release
of all my Claims. The Employer and the Released Parties do not owe me anything in addition to what I will be receiving.


 


3. Older Workers
Benefit Protection Act. [This section may be revised if Executive terminates employment as part of a “group” termination.]
The Older Workers Benefit Protection Act (“OWBPA”) applies to individuals age 40 and older and sets forth certain criteria
for such individuals to waive their rights under the Age Discrimination in Employment Act (“ADEA”) in connection with
an exit incentive program or other employment termination program. I understand and have been advised that this Release of My Claims
is subject to the terms of the OWBPA. The OWBPA provides that an individual cannot waive a right or claim under the ADEA unless
the waiver is knowing and voluntary. I have been advised of this law, and I agree that I am signing this Release voluntarily, and
with full knowledge of its consequences. I understand that the Employer is giving me at least twenty-one (21) calendar days from
the date I received a copy of this Release to decide whether I want to sign it. I acknowledge that I have been advised to use this
time to consult with an attorney about the effect of this Release. If I sign this Release before the end of the twenty-one (21)
day period it will be my personal, voluntary decision to do so, and will be done with full knowledge of my legal rights. I agree
that material and/or immaterial changes to the Separation Agreement or this Release will not restart the running of this consideration
period.


 


4. Exclusions from
Release. My Claims do not include my rights, if any, to claim the following: unemployment insurance or workers compensation
benefits; claims for my vested post-termination benefits under any 401(k) or similar tax-qualified retirement benefit plan; my
COBRA rights; and my rights to enforce the terms of this Release.


 


A. Nothing in this
Release interferes with my right to file a charge with the Equal Employment Opportunity Commission (“EEOC”) or other
local civil rights enforcement agency, or participate in any manner in an EEOC investigation or proceeding under Title VII, the
ADA, the ADEA, or the EPA. I, however, understand that I am waiving my right to recover individual relief including, but not limited
to, back pay, front pay, reinstatement, attorneys’ fees, and/or punitive damages, in any administrative or legal action whether
brought by the EEOC or other civil rights enforcement agency, me or any other party.


 


B. Nothing in this
Release interferes with my right to challenge the knowing and voluntary nature of this Release under the ADEA and/or OWBPA, if
I have rights under such laws.


 


C. I agree that the
Employer and the Released Parties reserve any and all defenses, which any of them has or might have against any claims brought
by me. This includes, but is not limited to, the Employer’s or other Released Party’s right to seek available costs
and attorneys’ fees, and to have any monetary award granted to me, if any, reduced by the amount of money that I received
in consideration for this Release.


 


D. Nothing in this
Release releases any claims for indemnification by Executive pursuant to any indemnification agreement, statute or otherwise or
claims for coverage under any D&O or other similar insurance policy.


 


 


 






    	 	17	 



     


    

 


5. Effective Date;
Right to Rescind or Revoke. I understand that insofar as this Release relates to my rights under the Age Discrimination in
Employment Act (“ADEA”), it shall not become effective or enforceable until seven (7) calendar days after I sign it.
I also have the right to rescind (or revoke) this Release insofar as it extends to potential claims under the ADEA by written notice
to Employer within seven (7) calendar days following my signing this Release (the “Rescission Period”). Any such rescission
(or revocation) must be in writing and hand-delivered to Employer or, if sent by mail, postmarked within the applicable time period,
sent by certified mail, return receipt requested, and addressed as follows:


 


A. post-marked within
the seven (7) calendar day Rescission Period;


 


B. properly addressed
to


 


[INSERT NAME AND ADDRESS];
and


 


C. sent by certified
mail, return receipt requested.


 


6. I Understand
the Terms of this Release. I have had the opportunity to read this Release carefully and understand all its terms. I have had
the opportunity to review this Release with my own attorney. In agreeing to sign this Release, I have not relied on any statements
or explanations made by the Employer or its attorneys. I understand and agree that this Release and the attached Agreement contain
all the agreements between the Employer (and any other Released Party) and me. We have no other written or oral agreements. I understand
this Release is a very important legal document and I agree to be bound by the terms of this Release.


 


 


 


	 	 	 
	 	Dated: ____________, 20__	_______________________________
	 	 	Jeffrey Day
	 	 	 



 


 


 


 


 


 


 


 


 






    	 	18