Exhibit
10.1

    

     

    CONTINUOUS
OFFERING PROGRAM AGREEMENT

     

     

    September
3, 2010

    


    Rodman
& Renshaw, LLC

    1251
Avenue of the Americas, 20th
Floor

    New York,
NY 10020

    


    
      Ladies
and Gentlemen:

    

           

    Oculus
Innovative Sciences, Inc., a corporation organized under the laws of Delaware
(the “Company”), confirms
its agreement (this “Agreement”) with
Rodman & Renshaw, LLC (the “Manager”) as
follows:

    


    1.     Description of
Shares. The Company has issued and proposes to sell through or to the
Manager, as sales agent and/or principal, up to 2,000,000 shares (the “Shares”) of the
Company’s common stock, $0.0001 par value (“Common Stock”) from
time to time during the term of this Agreement and on the terms set forth in
Section 3 of this Agreement.  For purposes of selling the Shares
through the Manager, the Company hereby appoints the Manager as exclusive agent
of the Company for the purpose of soliciting purchases of the Shares from the
Company pursuant to this Agreement and the Manager agrees to use its reasonable
efforts to solicit purchases of the Shares on the terms and subject to the
conditions stated herein. The Company agrees that whenever it determines to sell
the Shares directly to the Manager as principal, it will enter into a separate
agreement (each, a “Terms Agreement”) in
substantially the form of Annex I hereto,
relating to such sale in accordance with Section 3 of this Agreement.
Certain terms used herein are defined in Section 18 hereof.

    


    2.     Representations and
Warranties.  The Company represents and warrants to, and agrees
with, the Manager at the Execution Time and on each such time the following
representations and warranties are repeated or deemed to be made pursuant to
this Agreement, as set forth below.

    


    (a) The
Company meets the requirements for use of Form S-3 under the Act and has
prepared and filed with the Commission a shelf registration statement (File
Number 333-149223) on Form S-3, including a related base prospectus
(the “Base
Prospectus”), for registration under the Act of the offering and sale of
the Shares.  As filed, the Prospectus contains all information
required by the Act and the rules thereunder, and, except to the extent the
Manager shall agree in writing to a modification, shall be in all substantive
respects in the form furnished to the Manager prior to the Execution Time or
prior to any such time this representation is repeated or deemed to be made. The
Registration Statement, at the Execution Time, each such time this
representation is repeated or deemed to be made, and at all times during which a
prospectus is required by the Act to be delivered (whether physically or through
compliance with Rule 172, 173 or any similar rule) in connection with any
offer or sale of Shares, meets the requirements set forth in
Rule 415(a)(1)(x). The Effective Date of the Registration Statement was not
earlier than the date three years before the Execution Time. Any reference
herein to the Registration Statement, the Base Prospectus, any Interim
Prospectus Supplement or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Exchange Act on or before the Effective
Date of the Registration Statement or the issue date of the Base Prospectus, any
Interim Prospectus Supplement or the Prospectus, as the case may be; and any
reference herein to the terms “amend,” “amendment” or “supplement” with respect
to the Registration Statement, the Base Prospectus, any Interim Prospectus
Supplement or the Prospectus shall be deemed to refer to and include the filing
of any document under the Exchange Act after the Effective Date of the
Registration Statement or the issue date of the Base Prospectus, any Interim
Prospectus Supplement or the Prospectus, as the case may be, deemed to be
incorporated therein by reference.

    


    
      
        
        

      

      
        
          Rodman
& Renshaw, LLC o 1251 Avenue of the
Americas, 20th Floor,
New York, NY 10020

          Tel:
212 356 0500 o Fax:
212 581 5690 o
www.rodm.com o Member: FINRA,
SIPC

        

        
          

        

      

      
        
        

      

    

    (b) On the
Effective Date, at the Execution Time, at each Applicable Time, at each
Settlement Date and at all times during which a prospectus is required by the
Act to be delivered (whether physically or through compliance with
Rule 172, 173 or any similar rule) in connection with any offer or sale of
Shares, the Registration Statement complied and will comply in all material
respects with the applicable requirements of the Act and the Exchange Act and
the respective rules thereunder and did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and on the date of any filing pursuant to Rule 424(b), at the
Execution Time, at each Applicable Time, on each Settlement Date and at all
times during which a prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172, 173 or any similar rule) in
connection with any offer or sale of Shares, the Prospectus (together with any
supplement thereto) complied and will comply in all material respects with the
applicable requirements of the Act and the Exchange Act and the respective rules
thereunder and did not and will not include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the
Company makes no representations or warranties as to the information contained
in or omitted from the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by the Manager specifically for inclusion in
the Registration Statement or the Prospectus (or any supplement
thereto).

    


    (c) At the
Execution Time, at each Applicable Time and at each Settlement Date, the
Disclosure Package does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The preceding sentence does not apply to statements in or omissions
from the Disclosure Package based upon and in conformity with written
information furnished to the Company by the Manager specifically for use
therein.

    


    
      
        
        

      

      
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    (d) (i) At
the earliest time after the filing of the Registration Statement that the
Company or another offering participant made a bona fide offer (within the
meaning of Rule 164(h)(2)) of the Shares and (ii) as of the Execution
Time and on each such time this representation is repeated or deemed to be made
(with such date being used as the determination date for purposes of this
clause (ii)), the Company was not and is not an Ineligible Issuer (as
defined in Rule 405), without taking account of any determination by the
Commission pursuant to Rule 405 that it is not necessary that the Company
be considered an Ineligible Issuer.

    


    (e) No Issuer
Free Writing Prospectus includes any information the substance of which
conflicts with the information contained in the Registration Statement,
including any document incorporated therein by reference and any prospectus
supplement deemed to be a part thereof that has not been superseded or modified;
and no Issuer Free Writing Prospectus contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The foregoing sentence does not apply to statements in or
omissions from any Issuer Free Writing Prospectus based upon and in conformity
with written information furnished to the Company by the Manager specifically
for use therein.

    


    (f) The
Registration Statement is not the subject of a pending proceeding or examination
under Section 8(d) or 8(e) of the Act, and the Company is not the subject
of a pending proceeding under Section 8A of the Act in connection with the
offering of the Shares.

    


    (g) The
Company has not entered into any other sales agency agreements or other similar
arrangements with any agent or any other representative in respect of at the
market offerings of the Shares in accordance with Rule 415(a)(4) of the
Act.

    


    (h) The
Company has not taken and will not take, directly or indirectly, any action
designed to or that might be reasonably expected to cause or result in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.

    


    (i) There is
no broker, finder or other party that is entitled to receive from the Company
any brokerage or finder’s fee or other fee or commission as a result of any
transactions contemplated by this Agreement other than the Manager.

    


    
      
        
        

      

      
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    (j) The
consolidated financial statements incorporated by reference in the Disclosure
Package and the Prospectus and any amendments thereof or supplements thereto
present fairly in all material respects the consolidated financial position of
the Company and its subsidiaries as of the dates indicated and the consolidated
results of their operations and cash flows for the periods specified and have
been prepared in conformity with generally accepted accounting principles
(“GAAP”)
applied on a consistent basis during the periods involved, except as indicated
therein, and the supporting schedules incorporated by reference in the
Disclosure Package and the Prospectus present fairly the information required to
be stated therein.

    


    (k) The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware, with power and authority
(corporate and other) to own its properties and conduct its business as it is
now being conducted except where the failure to have such power or authority
would not individually or in the aggregate have a material adverse effect on the
condition (financial or otherwise), earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business (a “Material Adverse
Effect”).

    


    (l) The
execution and delivery by the Company of this Agreement, the consummation by the
Company of the transactions herein contemplated and the compliance by the
Company with the terms hereof do not and will not conflict with, or result in a
breach or violation of, any of the terms or provisions of, or constitute a
default under, the Certificate of Incorporation or Bylaws, as amended and/or
restated, of the Company or any of its subsidiaries or any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or by which any of the property or assets of the
Company or any of its subsidiaries is subject (except for such conflicts,
breaches, violations and defaults as would not have a Material Adverse Effect
and would not materially adversely affect the consummation by the Company of the
transactions herein contemplated and the compliance by the Company with the
terms hereof), nor will such action result in any violation of the provisions of
the Certificate of Incorporation or Bylaws of the Company, or any statute or any
order, rule or regulation of any court or governmental agency or body, having
jurisdiction over the Company or any of its subsidiaries or any of their
respective properties; and except as disclosed in the Disclosure Package and the
Prospectus, no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the performance by the Company of this Agreement or the
consummation by the Company of the transactions contemplated by this Agreement,
except such as are required under the Blue Sky or securities laws of the various
states.

    


    
      
        
        

      

      
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    (m) This
Agreement has been duly authorized by the Company. This Agreement has been duly
executed and delivered by the Company.

    


    (n) Marcum,
LLP, who reported on certain annual consolidated financial statements of the
Company incorporated by reference in the Disclosure Package and the Prospectus,
were, at the time such reports were prepared, independent accountants as
required by the Securities Act and the rules and regulations thereunder (the
“Securities Act
Regulations”).

    


    (o) Other
than as set forth in the Disclosure Package and the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of its
subsidiaries is the subject which, in the reasonable judgment of the Company,
individually or in the aggregate are likely to have a Material Adverse Effect;
and, to the best of the Company’s knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by
others.

    


    (p) The
Company has authorized capital stock as set forth in the Disclosure Package and
the Prospectus, and all of the issued shares of capital stock of the Company
have been (and upon issuance, the Shares will be) duly and validly authorized
and issued and are fully paid and non-assessable;  and all of the
issued shares of capital stock of each material subsidiary of the Company have
been fully and validly authorized and issued, are fully paid and non-assessable
and, except as disclosed in the Disclosure Package and the Prospectus, are owned
directly or indirectly by the Company.

    


    (q) The
Company is subject to Section 13 of the Exchange Act.

    


    (r) Except as
otherwise disclosed in the Disclosure Package and the Prospectus, no labor
problem or dispute with the employees of the Company or any of its subsidiaries
that could reasonably be expected to have a Material Adverse Effect exists or,
to the knowledge of the Company, is threatened.

    


    (s) Except as
described in the Disclosure Package and the Prospectus the Company and each
material subsidiary possess all licenses, certificates, authorizations and
permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, except to the
extent that the failure to possess such licenses, certificates, authorizations
or permits would not have a Material Adverse Effect; and to the Company’s
knowledge neither the Company nor any Significant Subsidiary (as defined in
Registration S-X under the Securities Act) has received any notice of
proceedings relating to the revocation or modification of any such certificate,
authorization or permit, with respect to which any unfavorable decision, ruling
or finding would singly or in the aggregate, result in a Material Adverse
Effect.

    


    
      
        
        

      

      
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    (t) Except as
otherwise disclosed in the Disclosure Package and the Prospectus, the Company
and its subsidiaries (i) are in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health (to the extent related to exposure to hazardous or
toxic substances or wastes, pollutants or contaminants), the environment or
hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”);
(ii) have received and are in compliance with all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses; and (iii) have not received notice of any
actual or potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes, pollutants or
contaminants, except where such non-compliance with Environmental Laws, failure
to receive required permits, licenses or other approvals, or liability would
not, individually or in the aggregate, result in a Material Adverse
Effect.

    


    (u) The
Company is not and, after giving effect to the offering and sale of the Shares
and the application of the proceeds thereof as described in the Disclosure
Package and the Prospectus, the Company will not be required to register as an
“investment company”, within the meaning of the Investment Company Act of 1940,
as amended (the “1940 Act”).

    


    (v) The
Company and each of its subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions
are executed in accordance with management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
Except as described in the Disclosure Package and the Prospectus, since the end
of the Company’s most recent audited fiscal year, there have been (1) no
material weakness identified by management or by the Company’s auditors and
communicated to Management in the Company’s internal control over financial
reporting (whether or not remediated) and (2) no change in the Company’s
internal control over financial reporting that have materially affected, or are
reasonably likely to materially affect, the Company’s internal control over
financial reporting.

    


    (w) Any
statistical and market-related data included in the Disclosure Package and the
Prospectus are based on or derived from sources that the Company believes to be
reliable and accurate, and where required, the Company has obtained the written
consent to the use of such data from such sources.

    


    
      
        
        

      

      
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    (x) Neither
the company nor any of its subsidiaries nor, to the knowledge of the Company,
any director, officer, agent, employee or affiliate of the Company or any of its
subsidiaries is aware of or has taken any action, directly or indirectly, that
would result in a violation by such persons of the Foreign Corrupt Practices Act
of 1977, as amended, and the rules and regulations thereunder (the “FCPA”), including,
without limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise to
pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign
political party or official thereof or any candidate for foreign political
office, in contravention of the FCPA; and the Company, its subsidiaries and, to
the knowledge of the Company, its affiliates have conducted their businesses in
compliance with the FCPA and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith.

    


    (y) The
operations of the Company and its subsidiaries are and have been conducted at
all times in compliance with applicable financial recordkeeping and reporting
requirements and the money laundering statutes and the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money Laundering
Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
or any of its subsidiaries with respect to the Money Laundering Laws is pending
or, to the best knowledge of the Company, threatened.

    


    (z) Neither
the Company nor any of its subsidiaries nor, to the knowledge of the Company,
any director, officer, agent, employee or affiliate of the Company or any of its
subsidiaries is currently subject to any sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the
Company will not directly or indirectly use the proceeds of the offering, or
lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions
administered by OFAC.

    


    (aa) No
holders of equity securities of the Company have rights to the registration of
such equity securities under the Registration Statement.

    


    (bb) There are
no transfer taxes or other similar fees or charges under Federal law or the laws
of any state, or any political subdivision thereof, required to be paid in
connection with the execution and delivery of this Agreement or the issuance by
the Company or sale by the Company of the Shares. Any certificate signed by an
executive officer authorized by the Company and delivered to the Manager or
counsel for the Manager in connection with this Agreement or any Terms Agreement
shall be deemed a representation and warranty by the Company, as to matters
covered thereby, to the Manager.

    


    
      
        
        

      

      
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    (cc) As to
each product subject to the jurisdiction of the U.S. Food and Drug
Administration (“FDA”) under the
Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder
(“FDCA”) that
is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed
by the Company or any of its subsidiaries (each such product, a “Pharmaceutical
Product”), such Pharmaceutical Product is being manufactured, packaged,
labeled, tested, distributed, sold and/or marketed by the Company in compliance
with all applicable requirements under FDCA and similar laws, rules and
regulations relating to registration, investigational use, premarket clearance,
licensure, or application approval, good manufacturing practices, good
laboratory practices, good clinical practices, product listing, quotas,
labeling, advertising, record keeping and filing of reports.  There is
no pending, completed or, to the Company's knowledge, threatened, action
(including any lawsuit, arbitration, or legal or administrative or regulatory
proceeding, charge, complaint, or investigation) against the Company or any of
its Subsidiaries, and neither the Company nor any of its subsidiaries have
received any notice, warning letter or other communication from the FDA or any
other governmental entity, which (i) contests the premarket clearance,
licensure, registration, or approval of, the uses of, the distribution of, the
manufacturing or packaging of, the testing of, the sale of, or the labeling and
promotion of any Pharmaceutical Product, (ii) withdraws its approval of,
requests the recall, suspension, or seizure of, or withdraws or orders the
withdrawal of advertising or sales promotional materials relating to, any
Pharmaceutical Product, (iii) imposes a clinical hold on any clinical
investigation by the Company or any of its Subsidiaries, (iv) enjoins production
at any facility of the Company or any of its Subsidiaries, (v) enters or
proposes to enter into a consent decree of permanent injunction with the Company
or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws,
rules or regulations by the Company or any of its Subsidiaries, and which,
either individually or in the aggregate, would have a Material Adverse
Effect.  The business and operations of the Company have been and are
being conducted in all material respects in accordance with all applicable laws,
rules and regulations of the FDA.  The Company has not been informed by the
FDA that the FDA will prohibit the marketing, sale, license or use in the United
States of any product proposed to be developed, produced or marketed by the
Company nor has the FDA expressed any concern as to approving or clearing for
marketing any product being developed or proposed to be developed by the
Company.

    


    3.     Sale and Delivery of
Shares.

    


    (a) Subject
to the terms and conditions and in reliance upon the representations and
warranties herein set forth, the Company will issue and agrees to sell Shares
from time to time through the Manager, acting as sales agent, and the Manager
agrees to use its reasonable efforts to sell, as sales agent for the Company,
the Shares on the following terms:

    


    
      
        
        

      

      
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    (i) The
Shares are to be sold on a daily basis or otherwise as shall be agreed to by the
Company and the Manager on any day that (A) is a trading day for The NASDAQ
Capital Market (“Trading Market”),
(B) the Company has instructed the Manager by telephone (confirmed promptly
by electronic mail) to make such sales and (C) the Company has satisfied
its obligations under Section 6 of this Agreement. The Company will
designate the maximum amount of the Shares to be sold by the Manager daily (in
any event not in excess of the amount available for issuance under the
Prospectus and the currently effective Registration Statement) and the minimum
price per Share at which such Shares may be sold. Subject to the terms and
conditions hereof, the Manager shall use its reasonable efforts to sell on a
particular day all of the Shares designated for the sale by the Company on such
day. The gross sales price of the Shares sold under this Section 3(a) shall
be the market price for shares of the Company’s Common Stock sold by the Manager
under this Section 3(a) on the Trading Market at the time of sale of such
Shares.

    


    (ii) The
Company acknowledges and agrees that (A) there can be no assurance that the
Manager will be successful in selling the Shares, (B) the Manager will
incur no liability or obligation to the Company or any other person or entity if
it does not sell Shares for any reason other than a failure by the Manager to
use its reasonable efforts consistent with its normal trading and sales
practices and applicable law and regulations to sell such Shares as required
under this Agreement, and (C) the Manager shall be under no obligation to
purchase Shares on a principal basis pursuant to this Agreement, except as
otherwise specifically agreed by the Manager and the Company pursuant to a Terms
Agreement.

    


    (iii) The
Company shall not authorize the issuance and sale of, and the Manager shall not
be obligated to use its reasonable efforts to sell, any Share at a price lower
than the minimum price therefor designated from time to time by the Company’s
Board of Directors (the “Board”), or a duly
authorized committee thereof, and notified to the Manager in writing. The
Company or the Manager may, upon notice to the other party hereto by telephone
(confirmed promptly by electronic mail), suspend the offering of the Shares for
any reason and at any time; provided, however, that such
suspension or termination shall not affect or impair the parties’ respective
obligations with respect to the Shares sold hereunder prior to the giving of
such notice.

    


    (iv) The
Manager may sell Shares by any method permitted by law deemed to be an “at the
market” offering as defined in Rule 415 of the Securities Act, including
without limitation sales made directly on the Trading Market on any other
existing trading market for the Common Stock or to or through a market maker.
The Manager may also sell Shares in privately negotiated
transactions.

    


    
      
        
        

      

      
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    (v) The
compensation to the Manager for sales of the Shares with respect to which the
Manager acts as sales agent under this Agreement shall be 2.0% of the gross
sales price per Share sold pursuant to this Section 3(a). The foregoing
rate of compensation shall not apply when the Manager acts as principal, in
which case the Company may sell Shares to the Manager as principal at a price
agreed upon at the relevant Applicable Time pursuant to a Terms Agreement. The
remaining proceeds, after further deduction for any transaction fees imposed by
any governmental or self-regulatory organization in respect of such sales, shall
constitute the net proceeds to the Company for such Shares (the “Net
Proceeds”).

    


    (vi) The
Manager shall provide written confirmation (which may be by facsimile or
electronic mail) to the Company following the close of trading on the Trading
Market each day in which the Shares are sold under this Section 3(a)
setting forth the number of the Shares sold on such day, the aggregate gross
sales proceeds and the Net Proceeds to the Company, and the compensation payable
by the Company to the Manager with respect to such sales.

    


    (vii) Settlement
for sales of the Shares pursuant to this Section 3(a) will occur at
10:00 a.m. (Eastern Time), or at such time as the Company and the Manager
may mutually agree, on the third business day following the date on which such
sales are made (each such day, a “Settlement Date”). On
each Settlement Date, the Shares sold through the Manager for settlement on such
date shall be issued and delivered by the Company to the Manager against payment
of the Net Proceeds for the sale of such Shares. Settlement for all such Shares
shall be effected by free delivery of the Shares to the Manager’s account at The
Depository Trust Company (“DTC”) via the DWAC
system, in return for payments in same day funds delivered to the account
designated by the Company. If the Company or its transfer agent (if applicable)
shall default on its obligation to deliver the Shares on any Settlement Date,
the Company shall (A) indemnify and hold the Manager harmless against any
loss, claim or damage arising from or as a result of such default by the Company
and (B) pay the Manager any commission to which it would otherwise be
entitled absent such default.  If the Manager breaches this Agreement
by failing to deliver the Net Proceeds on any Settlement Date for the Shares
delivered by the Company, the Manager will pay the Company interest based on the
effective overnight federal funds rate.

    


    (viii) At each
Applicable Time, Settlement Date, Representation Date (as defined in
Section 4(k)) and Filing Date (as defined below in Section 4(w), the
Company shall be deemed to have affirmed each representation and warranty
contained in this Agreement as if such representation and warranty were made as
of such date, modified as necessary to relate to the Registration Statement and
the Prospectus as amended as of such date. Any obligation of the Manager to use
its reasonable efforts to sell the Shares on behalf of the Company shall be
subject to the continuing accuracy of the representations and warranties of the
Company herein, to the performance by the Company of its obligations hereunder
and to the continuing satisfaction of the additional conditions specified in
Section 6 of this Agreement.

    


    
      
        
        

      

      
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    (b) If the
Company wishes to sell the Shares pursuant to this Agreement but other than as
set forth in Section 3(a) of this Agreement (each, a “Placement”), it will
notify the Manager of the proposed terms of such Placement. If the Manager,
acting as principal, wishes to accept such proposed terms (which it may decline
to do for any reason in its sole discretion) or, following discussions with the
Company wishes to accept amended terms, the Manager and the Company will enter
into a Terms Agreement setting forth the terms of such Placement. The terms set
forth in a Terms Agreement will not be binding on the Company or the Manager
unless and until the Company and the Manager have each executed such Terms
Agreement accepting all of the terms of such Terms Agreement. In the event of a
conflict between the terms of this Agreement and the terms of a Terms Agreement,
the terms of such Terms Agreement will control.

    


    (c) Each sale
of the Shares to the Manager shall be made in accordance with the terms of this
Agreement and, if applicable, a Terms Agreement, which will provide for the sale
of such Shares to, and the purchase thereof by, the Manager. A Terms Agreement
may also specify certain provisions relating to the reoffering of such Shares by
the Manager. The commitment of the Manager to purchase the Shares pursuant to
any Terms Agreement shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement shall
specify the number of the Shares to be purchased by the Manager pursuant
thereto, the price to be paid to the Company for such Shares, any provisions
relating to rights of, and default by, underwriters acting together with the
Manager in the reoffering of the Shares, and the time and date (each such time
and date being referred to herein as a “Time of Delivery”)
and place of delivery of and payment for such Shares. Such Terms Agreement shall
also specify any requirements for opinions of counsel, accountants’ letters and
officers’ certificates pursuant to Section 6 of this Agreement and any
other information or documents required by the Manager.

    


    (d) Under no
circumstances shall the number and aggregate amount of the Shares sold pursuant
to this Agreement and any Terms Agreement exceed (i) the aggregate amount set
forth in Section 1, (ii) the number of shares of the Common Stock available for
issuance under the currently effective Registration Statement or (iii) the
number and aggregate amount of Shares authorized from time to time to be issued
and sold under this Agreement by the Board, or a duly authorized
committee  thereof, and notified to the Manager in
writing.

    


    
      
        
        

      

      
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    (e) If either
party has reason to believe that the exemptive provisions set forth in
Rule 101(c)(1) of Regulation M under the Exchange Act are not
satisfied with respect to the Shares, it shall promptly notify the other party
and sales of the Shares under this Agreement and any Terms Agreement shall be
suspended until that or other exemptive provisions have been satisfied in the
judgment of each party.

    


    4.     Agreements. The
Company agrees with the Manager that:

    


    (a) During
any period when the delivery of a prospectus relating to the Shares is required
(including in circumstances where such requirement may be satisfied pursuant to
Rule 172, 173 or any similar rule) to be delivered under the Act, the
Company will not file any amendment of the Registration Statement or supplement
(including any Interim Prospectus Supplement) to the Base Prospectus unless the
Company has furnished to the Manager a copy for its review prior to filing and
will not file any such proposed amendment or supplement to which the Manager
reasonably objects. The Company will properly complete the Prospectus, in a form
approved by the Manager, and file such Prospectus, as amended at the Execution
Time, with the Commission pursuant to the applicable paragraph of
Rule 424(b) by the Execution Time and will cause any supplement to the
Prospectus to be properly completed, in a form approved by the Manager, and will
file such supplement with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed thereby and will provide
evidence reasonably satisfactory to the Manager of such timely filing. The
Company will promptly advise the Manager (a filing with the SEC will be
sufficient for notice to the Manager) (i) when the Prospectus, and any
supplement thereto, shall have been filed (if required) with the Commission
pursuant to Rule 424(b), (ii) when, during any period when the
delivery of a prospectus (whether physically or through compliance with
Rule 172, 173 or any similar rule) is required under the Act in connection
with the offering or sale of the Shares, any amendment to the Registration
Statement shall have been filed or become effective, (iii) of any request
by the Commission or its staff for any amendment of the Registration Statement,
or any Rule 462(b) Registration Statement, or for any supplement to the
Prospectus or for any additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any notice objecting to its use or the institution or
threatening of any proceeding for that purpose and (v) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the institution or
threatening of any proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order or the occurrence of any
such suspension or objection to the use of the Registration Statement and, upon
such issuance, occurrence or notice of objection, to obtain as soon as possible
the withdrawal of such stop order or relief from such occurrence or objection,
including, if necessary, by filing an amendment to the Registration Statement or
a new registration statement and using its best efforts to have such amendment
or new registration statement declared effective as soon as
practicable.

    


    
      
        
        

      

      
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    (b) If, at
any time on or after an Applicable Time but prior to the related Settlement
Date, any event occurs as a result of which the Disclosure Package would include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances under
which they were made or the circumstances then prevailing not misleading, the
Company will (i) notify promptly the Manager so that any use of the
Disclosure Package may cease until it is amended or supplemented;
(ii) amend or supplement the Disclosure Package to correct such statement
or omission; and (iii) supply any amendment or supplement to the Manager in
such quantities as the Manager may reasonably request.

    


    (c) During
any period when the delivery of a prospectus relating to the Shares is required
(including in circumstances where such requirement may be satisfied pursuant to
Rule 172, 173 or any similar rule) to be delivered under the Act, any event
occurs as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances under
which they were made at such time not misleading, or if it shall be necessary to
amend the Registration Statement, file a new registration statement or
supplement the Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, including in connection with use or delivery of the
Prospectus, the Company promptly will (i) notify the Manager of any such
event, (ii) prepare and file with the Commission, subject to the second
sentence of paragraph (a) of this Section 4, an amendment or
supplement or new registration statement which will correct such statement or
omission or effect such compliance, (iii) use its best efforts to have any
amendment to the Registration Statement or new registration statement declared
effective as soon as practicable in order to avoid any disruption in use of the
Prospectus and (iv) supply any supplemented Prospectus to the Manager in
such quantities as the Manager may reasonably request.

    


    (d) As soon
as practicable, the Company will make generally available to its security
holders and to the Manager an earnings statement or statements of the Company
and its subsidiaries which will satisfy the provisions of Section 11(a) of
the Act and Rule 158.

    


    (e) The
Company will furnish to the Manager and counsel for the Manager, without charge,
signed copies of the Registration Statement (including exhibits thereto) and, so
long as delivery of a prospectus by the Manager or dealer may be required by the
Act (including in circumstances where such requirement may be satisfied pursuant
to Rule 172, 173 or any similar rule), as many copies of the Prospectus and
each Issuer Free Writing Prospectus and any supplement thereto as the Manager
may reasonably request. The Company will pay the expenses of printing or other
production of all documents relating to the offering.

    


    
      
        
        

      

      
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    (f) The
Company will arrange, if necessary, for the qualification of the Shares for sale
under the laws of such jurisdictions as the Manager may designate and will
maintain such qualifications in effect so long as required for the distribution
of the Shares; provided that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action that would subject it to service of process in suits, other
than those arising out of the offering or sale of the Shares, in any
jurisdiction where it is not now so subject.

    


    (g) The
Company agrees that, unless it has or shall have obtained the prior written
consent of the Manager, and the Manager agrees with the Company that, unless it
has or shall have obtained, as the case may be, the prior written consent of the
Company, it has not made and will not make any offer relating to the Shares that
would constitute an Issuer Free Writing Prospectus or that would otherwise
constitute a “free writing prospectus” (as defined in Rule 405) required to
be filed by the Company with the Commission or retained by the Company under
Rule 433, provided that the prior written consent of the parties hereto
shall be deemed to have been given in respect of the Free Writing Prospectuses
included in Schedule I
hereto, if any. Any such free writing prospectus consented to by the Manager or
the Company is hereinafter referred to as a “Permitted Free Writing Prospectus.”
The Company agrees that (i) it has treated and will treat, as the case may
be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus
and (ii) it has complied and will comply, as the case may be, with the
requirements of Rules 164 and 433 applicable to any Permitted Free Writing
Prospectus, including in respect of timely filing with the Commission, legending
and record keeping.

    


    (h) The
Company will not offer, sell, contract to sell, pledge, or otherwise dispose of,
(or enter into any transaction which is designed to, or might reasonably be
expected to, result in the disposition of (whether by actual disposition or
effective economic disposition due to cash settlement or otherwise) by the
Company or any affiliate of the Company or any person in privity with the
Company or any affiliate of the Company) directly or indirectly, including the
filing (or participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent position or
liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Exchange Act, any other shares of Common Stock or any
securities convertible into, or exercisable, or exchangeable for, shares of
Common Stock; or publicly announce an intention to effect any such transaction
(“Subsequent
Financing”) (i) without giving the Manager at least three Business
Days’ prior written notice specifying the nature of the proposed transaction and
the date of such proposed transaction and (ii) unless the Manager suspends
acting under this Agreement for such period of time requested by the Company or
as deemed appropriate by the Manager in light of the proposed transaction; provided, however, that the
Company may issue and sell Common Stock pursuant to any employee stock option
plan, stock ownership plan or dividend reinvestment plan of the Company and,
with as much notice as reasonably practicable, the Company may issue Common
Stock issuable upon the conversion of securities or the exercise of warrants
outstanding at the Execution Time.  Notwithstanding anything herein to
the contrary, the Manager shall have the right to act as co-manager of any
public offering of securities or co-placement agent of any private placement of
equity or equity-linked securities (excluding warrants issued in conjunction
with any non-convertible debt, equity compensation to officers, directors or
consultants, shares issued upon exercise of warrants or options, shares issued
for trade payable or services, or any transaction with gross proceeds less than
$250,000),  until July 31, 2011.

    


    
      
        
        

      

      
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    (i) Until the
termination of this Agreement, the Company will not take, directly or
indirectly, any action designed to or that would constitute or that might
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation in violation of the Act, Exchange Act
or the rules and regulations thereunder of the price of any security of the
Company to facilitate the sale or resale of the Shares.

    


    (j) The
Company will, at any time during the term of this Agreement, as supplemented
from time to time, advise the Manager immediately after it shall have received
notice or obtained knowledge thereof, of any material information or fact that
would alter or affect any opinion, certificate, letter and other document
provided to the Manager pursuant to Section 6 herein.

    


    (k) Upon
commencement of the offering of the Shares under this Agreement (and upon the
recommencement of the offering of the Shares under this Agreement following the
termination of a suspension of sales hereunder lasting more than 30 trading
days), and each time that (i) the Registration Statement or the Prospectus
shall be amended or supplemented, (ii) there is filed with the Commission
any document incorporated by reference into the Prospectus (other than a Current
Report on Form 8-K, unless the Manager shall otherwise reasonably request),
or (iii) otherwise as the Manager may reasonably request after consultation
with its counsel, (such commencement or recommencement date and each such date
referred to in (i), (ii) and (iii) above, a “Representation
Date”), the Company shall furnish or cause to be furnished to the Manager
forthwith a certificate dated and delivered the date of such commencement or
recommencement, the date of effectiveness of such amendment, the date of filing
with the Commission of such supplement or other document, the Time of Delivery,
or promptly upon request, as the case may be, in form reasonably satisfactory to
the Manager to the effect that the statements contained in the certificate
referred to in Section 6 of this Agreement which were last furnished to the
Manager are true and correct at the time of such commencement or recommencement
amendment, supplement, filing, or delivery, as the case may be, as though made
at and as of such time (except that such statements shall be deemed to relate to
the Registration Statement and the Prospectus as amended and supplemented to
such time) or, in lieu of such certificate, a certificate of the same tenor as
the certificate referred to in said Section 6, modified as necessary to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such certificate.

    


    
      
        
        

      

      
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    (l) At each
Representation Date, the Company shall furnish or cause to be furnished
forthwith to the Manager and to counsel to the Manager a written opinion of
Trombly Business Law, PC, counsel to the Company (“Company Counsel”), or
other counsel reasonably satisfactory to the Manager, dated and delivered the
date of commencement or recommencement, the date of effectiveness of such
amendment, the date of filing with the Commission of such supplement or other
document, the Time of Delivery, or promptly upon such request, as the case may
be, in form and substance reasonably satisfactory to the Manager, of the same
tenor as the opinions referred to in Section 6(b) of this Agreement, but
modified as necessary to relate to the Registration Statement and the Prospectus
as amended and supplemented to the time of delivery of such
opinion.

    


    (m) Upon
commencement of the offering of the Shares under this Agreement (and upon the
recommencement of the offering of the Shares under this Agreement following the
termination of a suspension of sales hereunder lasting more than 30 trading
days), and each time that (i) the Registration Statement or the Prospectus
shall be amended or supplemented to include additional amended financial
information, (ii) the Shares are delivered to the Manager as principal at a
Time of Delivery pursuant to a Terms Agreement at the Manager’s request and upon
reasonable advance notice, (iii) the Company files a Quarterly Report on
Form 10-Q or an Annual Report on Form 10-K, or (iv) at the Manager’s
request and upon reasonable advance notice to the Company, there is filed with
the Commission any document which contains financial information (other than an
Annual Report on Form 10-K) incorporated by reference into the Prospectus,
the Company shall cause (1) Marcum LLP(the “Accountants”), or
other independent accountants satisfactory to the Manager forthwith to furnish
the Manager a letter, and (2) the Chief Financial Officer of the Company
forthwith to furnish the Manager a certificate, in each case dated the date of
commencement or recommencement, the date of effectiveness of such amendment, the
date of filing of such supplement or other document with the Commission, or the
Time of Delivery, as the case may be, in form satisfactory to the Manager, of
the same tenor as the letters and certificate referred to in Section 6 of
this Agreement but modified to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the date of such letters and
certificate; provided, however, that the
Company will not be required to cause the Accountants to furnish such letters to
the Manager in connection with the filing of a Current Report on Form 8-K other
than an 8-K reporting a material change to the business of the Company such as
merger or a material acquisition or disposition of assets.

    


    
      
        
        

      

      
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    (n) Upon
commencement of the offering of the Shares under this Agreement (and upon the
recommencement of the offering of the Shares under this Agreement following the
termination of a suspension of sales hereunder lasting more than 30 trading
days), and at each Representation Date, the Company will conduct a due diligence
session, in form and substance, reasonably satisfactory to the Manager, which
shall include representatives of the management and the independent accountants
of the Company. The Company shall cooperate timely with any reasonable due
diligence request from or review conducted by the Manager or its agents from
time to time in connection with the transactions contemplated by this Agreement,
including, without limitation, providing information and available documents and
access to appropriate corporate officers and the Company’s agents during regular
business hours and at the Company’s principal offices, and timely furnishing or
causing to be furnished such certificates, letters and opinions from the
Company, its officers and its agents, as the Manager may reasonably
request.

    


    (o) The
Company consents to the Manager trading in the Common Stock for the Manager’s
own account and for the account of its clients at the same time as sales of the
Shares occur pursuant to this Agreement or pursuant to a Terms
Agreement.

    


    (p) The
Company will disclose in its Annual Reports on Form 10-K and Quarterly
Reports on Form 10-Q, as applicable, the number of Shares sold through the
Manager under this Agreement, the Net Proceeds to the Company and the
compensation paid by the Company with respect to sales of Shares pursuant to
this Agreement during the relevant quarter.

    


    (q) If to the
knowledge of the Company, the conditions set forth in Section 6(a) shall
not have been satisfied as of the applicable Settlement Date, the Company will
offer to any person who has agreed to purchase Shares from the Company as the
result of an offer to purchase solicited by the Manager the right to refuse to
purchase and pay for such Shares.

    


    (r) Each
acceptance by the Company of an offer to purchase the Shares hereunder, and each
execution and delivery by the Company of a Terms Agreement, shall be deemed to
be an affirmation to the Manager that the representations and warranties of the
Company contained in or made pursuant to this Agreement are true and correct as
of the date of such acceptance or of such Terms Agreement as though made at and
as of such date, and an undertaking that such representations and warranties
will be true and correct as of the Settlement Date for the Shares relating to
such acceptance or as of the Time of Delivery relating to such sale, as the case
may be, as though made at and as of such date (except that such representations
and warranties shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented relating to such Shares).

    


    
      
        
        

      

      
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    (s) The
Company shall ensure that there are at all times sufficient shares of Common
Stock to provide for the issuance, free of any preemptive rights, out of its
authorized but unissued shares of Common Stock or shares of Common Stock held in
treasury, of the maximum aggregate number of Shares authorized for issuance by
the Board pursuant to the terms of this Agreement. The Company will use its
commercially reasonable efforts to cause the Shares to be listed for trading on
the Trading Market and to maintain such listing.

    


    (t) During
any period when the delivery of a prospectus relating to the Shares is required
to be delivered under the Act (including in circumstances where such requirement
may be satisfied pursuant to Rule 172, 173 or any similar rule), the
Company will file all documents required to be filed with the Commission
pursuant to the Exchange Act within the time periods required by the Exchange
Act and the regulations thereunder.

    


    (u) The
Company shall cooperate with the Manager and use its reasonable efforts to
permit the Shares to be eligible for clearance and settlement through the
facilities of DTC.

    


    (v) The
Company will apply the Net Proceeds from the sale of the Shares in the manner
set forth in the Prospectus.

    


    (w) On or
prior to the earlier of (i) the date on which the Company shall file a
Quarterly Report on Form 10-Q or an Annual Report on Form 10-K in respect of any
fiscal quarter in which sales of Shares were made by the Manager pursuant to
Section 3(a) of this Agreement and (ii) the date on which the Company shall
be obligated to file such document referred to in clause (i) in respect of
such quarter (each such date, and any date on which an amendment to any such
document is filed, a “Filing Date”), the
Company will file a prospectus supplement with the Commission under the
applicable paragraph of Rule 424(b), which prospectus supplement will set
forth, with regard to such quarter, the number of the Shares sold through the
Manager as agent pursuant to Section 3(a) of this Agreement, the Net Proceeds to
the Company and the compensation paid by the Company with respect to such sales
of the Shares pursuant to Section 3(a) of this Agreement and deliver such number
of copies of each such prospectus supplement to the Trading Market as are
required by such exchange.

    


    5.     Payment of
Expenses.

     

    (a) The
Company agrees to pay the costs and expenses incident to the performance of its
obligations under this Agreement, whether or not the transactions contemplated
hereby are consummated, including without limitation: (i) the preparation,
printing or reproduction and filing with the Commission of the Registration
Statement (including financial statements and exhibits thereto), the Prospectus
and each Issuer Free Writing Prospectus, and each amendment or supplement to any
of them; (ii) the printing (or reproduction) and delivery (including
postage, air freight charges and charges for counting and packaging) of such
copies of the Registration Statement, the Prospectus, and each Issuer Free
Writing Prospectus, and all amendments or supplements to any of them, as may, in
each case, be reasonably requested for use in connection with the offering and
sale of the Shares; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Shares, including any stamp or
transfer taxes in connection with the original issuance and sale of the Shares;
(iv) the printing (or reproduction) and delivery of this Agreement, any
blue sky memorandum and all other agreements or documents printed (or
reproduced) and delivered in connection with the offering of the Shares;
(v) the registration of the Shares under the Exchange Act and the listing
of the Shares on the Trading Market; (vi) any registration or qualification
of the Shares for offer and sale under the securities or blue sky laws of the
several states (including filing fees and the reasonable fees and expenses of
counsel for the Manager relating to such registration and qualification) subject
to the cap below; (vii) actual and reasonable transportation and other
expenses incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Shares subject to the cap below;
(viii) the fees and expenses of the Company’s accountants and the fees and
expenses of counsel (including local and special counsel) for the Company; and
(ix) all other costs and expenses incident to the performance by the Company of
its obligations hereunder.

     

    
      
        
        

      

      
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    (b) Upon
closing of the first takedown, the Company shall pay to the Manager $50,000 for
its legal fees and expenses.

     

    


    


    6.     Conditions to the
Obligations of the Manager. The obligations of the Manager under this
Agreement and any Terms Agreement shall be subject to (i) the accuracy of
the representations and warranties on the part of the Company contained herein
as of the Execution Time, each Representation Date, and as of each Applicable
Time, Settlement Date and Time of Delivery, (ii) the performance by the
Company of its obligations hereunder and (iii) the following additional
conditions:

    


    (a) The
Prospectus, and any supplement thereto, required by Rule 424 to be filed
with the Commission have been filed in the manner and within the time period
required by Rule 424(b) with respect to any sale of Shares; each Interim
Prospectus Supplement shall have been filed in the manner required by
Rule 424(b) within the time period required by Section 3(a) of this
Agreement; any other material required to be filed by the Company pursuant to
Rule 433(d) under the Act, shall have been filed with the Commission within
the applicable time periods prescribed for such filings by Rule 433; and no
stop order suspending the effectiveness of the Registration Statement or any
notice objecting to its use shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.

    


    
      
        
        

      

      
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    (b) The
Company shall have requested and caused the Company Counsel to furnish to the
Manager, on every date specified in Section 4 of this Agreement, its
opinion and negative assurance statement, dated as of such date and addressed to
the Manager in substantially the form attached hereto as Exhibit A.

    


    (c) In
rendering such opinions, such counsel may rely (A) as to matters involving
the application of laws of any jurisdiction other than the State of Delaware or
the Federal laws of the United States, to the extent they deem proper and
specified in such opinion, upon the opinion of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel for the
Manager and (B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public officials.
References to the Prospectus in this paragraph (c) shall also include any
supplements thereto at the Settlement Date.

    


    (d) The
Company shall have furnished or caused to be furnished to the Manager, on every
date specified in Section 4 of this Agreement, a certificate of the
Company, signed by the Chief Executive Officer or the President and the
principal financial or accounting officer of the Company, dated as of such date,
to the effect that the signers of such certificate have carefully examined the
Registration Statement, the Disclosure Package and the Prospectus and any
supplements or amendments thereto and this Agreement and that:

    


    (i) the
representations and warranties of the Company in this Agreement are true and
correct on and as of such date with the same effect as if made on such date and
the Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to such
date;

    


    (ii) to his
knowledge, no stop order suspending the effectiveness of the Registration
Statement or any notice objecting to its use has been issued and no proceedings
for that purpose have been instituted or, to the Company’s knowledge,
threatened; and

    


    (iii) since the
date of the most recent financial statements included in the Disclosure Package,
there has been no Material Adverse Effect on the condition (financial or
otherwise), earnings, business or properties of the Company and its
subsidiaries, taken as a whole, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in the
Disclosure Package and the Prospectus.

    


    
      
        
        

      

      
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    (e) The
Company shall have requested and caused the Accountants to have furnished to the
Manager, on every date specified in Section 4 hereof and to the extent
requested by the Manager and upon reasonable advance notice in connection with
any offering of the Shares, letters (which may refer to letters previously
delivered to the Manager), dated as of such date, in form and substance
satisfactory to the Manager, confirming that they are independent accountants
within the meaning of the Act and the Exchange Act and the respective applicable
rules and regulations adopted by the Commission thereunder and that they have
performed a review of any unaudited interim financial information of the Company
and included or incorporated by reference in the Registration Statement and the
Prospectus in accordance with Statement on Auditing Standards No. 100, and
stating in effect that:

    


    (i) in their
opinion the audited financial statements and financial statement schedules and
pro forma financial statements included or incorporated by reference in the
Registration Statement and the Prospectus and reported on by them comply as to
form with the applicable accounting requirements of the Act and the Exchange Act
and the related rules and regulations adopted by the Commission;

    


    (ii) on the
basis of a reading of the latest unaudited financial statements made available
by the Company and their respective subsidiaries, their limited review, in
accordance with standards established under Statement on Auditing Standards
No. 100, of the unaudited interim financial information for the most
recently reported quarter, carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of the meetings of
the stockholders, directors and committees of the Company and their respective
subsidiaries, and inquiries of certain officials of the Company who have
responsibility for financial and accounting matters of the Company and their
respective subsidiaries as to transactions and events subsequent to the end of
such quarter, nothing came to their attention which caused them to believe
that:

    


    1. any
unaudited financial statements included or incorporated by reference in the
Registration Statement and the Prospectus do not comply as to form with
applicable accounting requirements of the Act and with the related rules and
regulations adopted by the Commission with respect to financial statements
included or incorporated by reference in Quarterly Reports on Form 10-Q
under the Exchange Act; and said unaudited financial statements are not in
conformity with generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements included
or incorporated by reference in the Registration Statement and the
Prospectus;

    


    
      
        
        

      

      
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    2. with
respect to the period subsequent to the most recently reported quarter, there
were any changes, at a specified date not more than five days prior to the date
of the letter, in the long-term debt of the Company and their respective
subsidiaries or capital stock of the Company or decreases in the stockholders’
equity of the Company as compared with the amounts shown on such consolidated
balance sheets included or incorporated by reference in the Registration
Statement and the Prospectus, or for the period from the end of such period to
such specified date there were any decreases, as compared with the corresponding
period in the preceding year, in net revenues or income before income taxes or
in total or per share amounts of net income of the Company and their respective
subsidiaries, except in all instances for changes or decreases set forth in such
letter, in which case the letter shall be accompanied by an explanation by the
Company as to the significance thereof unless said explanation is not deemed
necessary by the Manager; or

    


    3. the
information included or incorporated by reference in the Registration Statement
and the Prospectus in response to Regulation S-K, Item 301 (Selected
Financial Data), Item 302 (Supplementary Financial Information),
Item 402 (Executive Compensation) and Item 503(d) (Ratio of Earnings
to Fixed Charges) is not in conformity with the applicable disclosure
requirements of Regulation S-K; and

    


    (iii) they have
performed certain other specified procedures as a result of which they
determined that certain information of an accounting, financial or statistical
nature (which is limited to accounting, financial or statistical information
derived from the general accounting records of the Company and its subsidiaries)
set forth or incorporated by reference in the Registration Statement and the
Prospectus and in Exhibit 12 to the Registration Statement, agrees with the
accounting records of the Company and its subsidiaries, excluding any questions
of legal interpretation.

    


    (f) The
Company shall have requested and caused its Chief Financial Officer to have
furnished to the Manager, on every date specified in Section 4 hereof and
to the extent requested by the Manager in connection with any offering of the
Shares, a certificate as to certain financial information included in the
Disclosure Package and the Prospectus, in form and substance reasonably
satisfactory to the Manager.

    


    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    (g) Since the
respective dates as of which information is disclosed in the Registration
Statement, the Disclosure Package and the Prospectus, except as otherwise stated
therein, there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraph (d) of this Section 6
or (ii) any change, or any development involving a prospective change, in
or affecting the condition (financial or otherwise), earnings, business or
properties of the Company and its subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as set
forth in or contemplated in the Disclosure Package (exclusive of any amendment
or supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the Manager, so
material and adverse as to make it impractical or inadvisable to proceed with
the offering or delivery of the Shares as contemplated by the Registration
Statement (exclusive of any amendment thereof), the Disclosure Package and the
Prospectus (exclusive of any amendment or supplement thereto).

    


    (h) The
Company shall have paid the required Commission filing fees relating to the
Shares within the time period required by Rule 456(b)(1)(i) of the Act
without regard to the proviso therein and otherwise in accordance with
Rules 456(b) and 457(r) of the Act and, if applicable, shall have updated
the “Calculation of Registration Fee” table in accordance with
Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration
Statement or on the cover page of a prospectus filed pursuant to
Rule 424(b).

    


    (i) The
Financial Industry Regulatory Authority shall not have raised any objection with
respect to the fairness and reasonableness of the terms and arrangements under
this Agreement.

    


    (j) The
Shares shall have been listed and admitted and authorized for trading on the
Trading Market, and satisfactory evidence of such actions shall have been
provided to the Manager.

    


    (k) Prior to
each Settlement Date and Time of Delivery, as applicable, the Company shall have
furnished to the Manager such further information, certificates and documents as
the Manager may reasonably request.

    


    If any of
the conditions specified in this Section 6 shall not have been fulfilled
when and as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Manager and counsel for the
Manager, this Agreement and all obligations of the Manager hereunder may be
canceled at, or at any time prior to, any Settlement Date or Time of Delivery,
as applicable, by the Manager. Notice of such cancellation shall be given to the
Company in writing or by telephone or facsimile confirmed in
writing.

    


    The
documents required to be delivered by this Section 6 shall be delivered at
the office of Weinstein Smith LLP, counsel for the Manager, at 420 Lexington
Ave., Suite 2620, New York, NY 10170, on each such date as provided in this
Agreement.

    


    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

    7.     Indemnification and
Contribution.

    


    (a) The
Company agrees to indemnify and hold harmless the Manager, the directors,
officers, employees and agents of the Manager and each person who controls the
Manager within the meaning of either the Act or the Exchange Act against any and
all losses, claims, damages or liabilities, joint or several, to which they or
any of them may become subject under the Act, the Exchange Act or other Federal
or state statutory law or regulation, at common law or otherwise, as incurred,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for the
registration of the Shares as originally filed or in any amendment thereof, or
in the Base Prospectus, any Interim Prospectus Supplement, the Prospectus, any
Issuer Free Writing Prospectus, or in any amendment thereof or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and agrees to reimburse each such
indemnified party for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action, as incurred; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by the Manager specifically for inclusion therein. This indemnity
agreement will be in addition to any liability that the Company may otherwise
have.

    


    (b) The
Manager agrees to indemnify and hold harmless the Company, each of its
directors, each of its officers who signs the Registration Statement, and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
the Manager, but only with reference to written information relating to the
Manager furnished to the Company by the Manager specifically for inclusion in
the documents referred to in the foregoing indemnity; provided, however, that in no
case shall the Manager be responsible for any amount in excess of the
underwriting discount or commission, as the case may be, applicable to the
Shares purchased and sold by the Manager hereunder. This indemnity agreement
will be in addition to any liability which the Manager may otherwise
have.

    


    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

    (c) Promptly
after receipt by an indemnified party under this Section 7 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 7,
notify the indemnifying party in writing of the commencement thereof; but the
failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it
did not otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses and
(ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall
be entitled to appoint counsel of the indemnifying party’s choice at the
indemnifying party’s expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below); provided, however, that such
counsel shall be reasonably satisfactory to the indemnified party.
Notwithstanding the indemnifying party’s election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any
such action include both the indemnified party and the indemnifying party and
the indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.

    


    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

    (d) In the
event that the indemnity provided in paragraph (a), (b) or (c) of
this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Manager agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending the same) (collectively “Losses”) to which the
Company and the Manager may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and by the
Manager on the other from the offering of the Shares; provided, however, that in no
case shall the Manager be responsible for any amount in excess of the
underwriting discount or commission, as the case may be, applicable to the
Shares purchased and sold by the Manager hereunder. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the Company
and the Manager severally shall contribute in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of the
Company on the one hand and of the Manager on the other in connection with the
statements or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Company shall be
deemed to be equal to the total net proceeds from the offering (before deducting
expenses) received by it, and benefits received by the Manager shall be deemed
to be equal to the total underwriting discounts and commissions, in each case as
determined by this Agreement or any applicable Terms Agreement. Relative fault
shall be determined by reference to, among other things, whether any untrue or
any alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information provided by the Company
on the one hand or the Manager on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The Company and the Manager agree that it
would not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions of
this paragraph (d), no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 7, each person who controls
the Manager within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of the Manager shall have the same rights
to contribution as the Manager, and each person who controls the Company within
the meaning of either the Act or the Exchange Act, each officer of the Company
who shall have signed the Registration Statement and each director of the
Company shall have the same rights to contribution as the Company, subject in
each case to the applicable terms and conditions of this
paragraph (d).

    


    8.     Termination.

    


    (a) The
Company shall have the right, by giving written notice as hereinafter specified,
to terminate the provisions of this Agreement relating to the solicitation of
offers to purchase the Shares in its sole discretion at any time. Any such
termination shall be without liability of any party to any other party except
that (i) with respect to any pending sale, through the Manager for the
Company, the obligations of the Company, including in respect of compensation of
the Manager, shall remain in full force and effect notwithstanding the
termination and (ii) the provisions of Sections 5, 7, 9, 10, 12, 14
and 15 of this Agreement shall remain in full force and effect notwithstanding
such termination.

    


    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    (b) The
Manager shall have the right, by giving written notice as hereinafter specified,
to terminate the provisions of this Agreement relating to the solicitation of
offers to purchase the Shares in its sole discretion at any time. Any such
termination shall be without liability of any party to any other party except
that the provisions of Sections 5, 7, 9, 10, 12, 14 and 15 of this
Agreement shall remain in full force and effect notwithstanding such
termination.

    


    (c) This
Agreement shall remain in full force and effect unless terminated pursuant to
Sections 8(a) or (b) above or otherwise by mutual agreement of the
parties; provided that any
such termination by mutual agreement shall in all cases be deemed to provide
that Sections 5, 7, 9, 10, 12, 14 and 15 shall remain in full force and
effect.

    


    (d) Any
termination of this Agreement shall be effective on the date specified in such
notice of termination; provided that such
termination shall not be effective until the close of business on the date of
receipt of such notice by the Manager or the Company, as the case may be. If
such termination shall occur prior to the Settlement Date or Time of Delivery
for any sale of the Shares, such sale shall settle in accordance with the
provisions of Section 3(a)(vii) of this Agreement.

    


    (e) In the
case of any purchase of Shares by the Manager pursuant to a Terms Agreement, the
obligations of the Manager pursuant to such Terms Agreement shall be subject to
termination, in the absolute discretion of the Manager, by prompt oral notice
given to the Company prior to the Time of Delivery relating to such Shares, if
any, and confirmed promptly by facsimile or electronic mail, if, since the time
of execution of the Terms Agreement and prior to such delivery and payment,
(i) trading in the Company’s Common Stock shall have been suspended by the
Commission or the Trading Market or trading in securities generally on the
Trading Market shall have been suspended or limited or minimum prices shall have
been established on such exchange, (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war, or other
calamity or crisis the effect of which on financial markets is such as to make
it, in the sole judgment of the Manager, impractical or inadvisable to proceed
with the offering or delivery of the Shares as contemplated by the Prospectus
(exclusive of any amendment or supplement thereto).

    


    9.     Representations and
Indemnities to Survive. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers and
of the Manager set forth in or made pursuant to this Agreement will remain in
full force and effect, regardless of any investigation made by the Manager or
the Company or any of the officers, directors, employees, agents or controlling
persons referred to in Section 7 hereof, and will survive delivery of and
payment for the Shares. The provisions of Sections 5 and 7 hereof shall
survive the termination or cancellation of this Agreement.

    


    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    Notices. All
communications hereunder will be in writing and effective only on receipt, and,
if sent to the Manager, will be mailed, delivered or facsimiled to Rodman &
Renshaw, LLC, 1251 Avenue of the Americas, New York, NY, 10020, Attention:
General Counsel, (fax 646-841-1640); or, if sent to the Company, will be mailed,
delivered or facsimiled to Oculus Innovative Sciences, Inc., 1129 N. McDowell
Blvd. Petaluma, CA 94954, Attention: Robert Miller, facsimile (707)
283-0551.

    


    10.     Successors. This
Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors and the officers, directors, employees, agents
and controlling persons referred to in Section 7 hereof, and no other
person will have any right or obligation hereunder.

    


    11.     No Fiduciary Duty.
The Company hereby acknowledges that (a) the purchase and sale of the
Shares pursuant to this Agreement is an arm’s-length commercial transaction
between the Company, on the one hand, and the Manager and any affiliate through
which it may be acting, on the other, (b) the Manager is acting solely as
sales agent and/or principal in connection with the purchase and sale of the
Company’s securities and not as a fiduciary of the Company and (c) the
Company’s engagement of the Manager in connection with the offering and the
process leading up to the offering is as independent contractors and not in any
other capacity. Furthermore, the Company agrees that it is solely responsible
for making its own judgments in connection with the offering (irrespective of
whether the Manager has advised or is currently advising the Company on related
or other matters). The Company agrees that it will not claim that the Manager
has rendered advisory services of any nature or respect, or owe an agency,
fiduciary or similar duty to the Company, in connection with such transaction or
the process leading thereto.

    


    12.     Integration. This
Agreement and any Terms Agreement supersede all prior agreements and
understandings (whether written or oral) between the Company and the Manager
with respect to the subject matter hereof.

    


    13.     Applicable Law. This
Agreement and any Terms Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.

    


    14.     Waiver of Jury Trial.
The Company hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Agreement, any Terms Agreement or the
transactions contemplated hereby or thereby.

    


    15.     Counterparts. This
Agreement and any Terms Agreement may be signed in one or more counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same agreement.

    


    
      
        
        

      

      
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    16.     Headings. The section
headings used in this Agreement and any Terms Agreement are for convenience only
and shall not affect the construction hereof.

    


    17.     Definitions. The
terms that follow, when used in this Agreement and any Terms Agreement, shall
have the meanings indicated.

    


      “Act” shall mean the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder.

    


     “Applicable Time”
shall mean, with respect to any Shares, the time of sale of such Shares pursuant
to this Agreement or any relevant Terms Agreement.

     

    “Base Prospectus”
shall mean the base prospectus referred to in Section 2(a) above contained
in the Registration Statement at the Execution Time.

    


     “Business Day” shall
mean any day other than a Saturday, a Sunday or a legal holiday or a day on
which banking institutions or trust companies are authorized or obligated by law
to close in New York City.

    


    “Commission” shall
mean the Securities and Exchange Commission.

    


    “Disclosure Package”
shall mean (i) the Base Prospectus, (ii) the most recently filed
Interim Prospectus Supplement, (iii) the Issuer Free Writing Prospectuses,
if any, identified in Schedule I
hereto and (iv) any other Free Writing Prospectus that the parties hereto shall
hereafter expressly agree in writing to treat as part of the Disclosure
Package.

    


    “Effective Date” shall
mean each date and time that the Registration Statement and any post-effective
amendment or amendments thereto became or becomes effective.

    


    “Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the Commission promulgated thereunder.

    


    “Execution Time” shall
mean the date and time that this Agreement is executed and delivered by the
parties hereto.

    


    “Free Writing
Prospectus” shall mean a free writing prospectus, as defined in
Rule 405.

    


    “Interim Prospectus
Supplement” shall mean the prospectus supplement relating to the Shares
prepared and filed pursuant to Rule 424(b) from time to time as provided by
Section 4 of this Agreement.

    


    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

    “Issuer Free Writing
Prospectus” shall mean an issuer free writing prospectus, as defined in
Rule 433.

    


    “Prospectus” shall
mean the Base Prospectus, as supplemented by the most recently filed Interim
Prospectus Supplement (if any).

    


    “Registration
Statement” shall mean the registration statement referred to in
Section 2(a) above, including exhibits and financial statements and any
prospectus supplement relating to the Shares that is filed with the Commission
pursuant to Rule 424(b) and deemed part of such registration statement
pursuant to Rule 430B, as amended on each Effective Date and, in the event
any post-effective amendment thereto becomes effective, shall also mean such
registration statement as so amended.

    


    “Rule 158”,
“Rule 164”,
“Rule 172”,
“Rule 173”,
“Rule 405”,
“Rule 415”,
“Rule 424”,
“Rule 430B” and
“Rule 433”
refer to such rules under the Act.

           

    If the
foregoing is in accordance with your understanding of our agreement, please sign
and return to us the enclosed duplicate hereof, whereupon this letter and your
acceptance shall represent a binding agreement among the Company and the
Manager.

    


    


    Very
truly yours,

    


    OCULUS
INNOVATIVE SCIENCES, INC.

    


    By:      
/s/ Robert E.
Miller              


    Name: 
Robert E. Miller

    Title:   
Chief Financial Officer

    


    The
foregoing Agreement is hereby confirmed and accepted as of the date first
written above.

    


    RODMAN
& RENSHAW, LLC

    
      	
               

              By:        
      /s/ John
      Borer                    
      

              Name:   
      John Borer

              Title:     
      Sr. Managing Director

               

            


    

     

     

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

    

     

    [Form
of Terms Agreement]

     

     

    ANNEX
I

     

     

    __________[Insert
Company name]

     

     

    COMMON
STOCK TERMS AGREEMENT

     

    


    Ladies
and Gentleman:

    


                    Oculus
Innovative Sciences, Inc. (the “Company”) proposes,
subject to the terms and conditions stated herein and in the Continuous Offering
Program Agreement, dated August __, 2010 (the “Equity Distribution
Agreement”), between the Company and Rodman & Renshaw, LLC, to issue
and sell to Rodman the securities specified in the Schedule I
hereto (the “Purchased
Shares”).

    


                    Each
of the provisions of the Equity Distribution Agreement not specifically related
to the solicitation by Rodman & Renshaw, LLC, as agent of the Company, of
offers to purchase securities is incorporated herein by reference in its
entirety, and shall be deemed to be part of this Terms Agreement to the same
extent as if such provisions had been set forth in full herein. Each of the
representations and warranties set forth therein shall be deemed to have been
made at and as of the date of this Terms Agreement and the Time of Delivery,
except that each representation and warranty in Section 2 of the Equity
Distribution Agreement which makes reference to the Prospectus (as therein
defined) shall be deemed to be a representation and warranty as of the date of
the Equity Distribution Agreement in relation to the Prospectus, and also a
representation and warranty as of the date of this Terms Agreement and the Time
of Delivery in relation to the Prospectus as amended and supplemented to relate
to the Purchased Shares.

    


                    An
amendment to the Registration Statement (as defined in the Equity Distribution
Agreement), or a supplement to the Prospectus, as the case may be, relating to
the Purchased Shares, in the form heretofore delivered to the Manager is now
proposed to be filed with the Securities and Exchange Commission.

    


                    Subject
to the terms and conditions set forth herein and in the Equity Distribution
Agreement which are incorporated herein by reference, the Company agrees to
issue and sell to Rodman and the latter agrees to purchase from the Company the
number of shares of the Purchased Shares at the time and place and at the
purchase price set forth in the Schedule I
hereto.

     

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

      
        If the foregoing is in
accordance with your understanding, please sign and return to us a counterpart
hereof, whereupon this Terms Agreement, including those provisions of the Equity
Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between the Manager and the Company.

     

    
      	 
      	 
      	 
      	 
      	 
      
	
              OCULUS
      INNOVATIVE SCIENCES, INC.

               

            	 
      	 
      
	
              By:__________________________________________

                   Name:

                   Title:

               

            


    

    ACCEPTED
as of the date

    first
written above.

    
      	 
      	 
      	 
      	 
      	 
      
	
              Rodman
      & Renshaw, LLC

               

            	 
      	 
      


    

    By:__________________________________________

         Name:

         Title:

     

    


     

    
      
        
        

      

      
        32