Employment Agreement between OXIS International, Inc. and Marvin S. Hausman,
      M.D. dated November 6, 2006


    Exhibit
      10.1

    
 

    EMPLOYMENT
      AGREEMENT

    


    Employment
      Agreement dated as of November
      6, 2006, between OXIS INTERNATIONAL INC., a Delaware corporation (with its
      successors and assigns, referred to as the “Corporation”) and MARVIN S. HAUSMAN,
      M.D. (hereinafter referred to as “HAUSMAN”).

     

    PRELIMINARY
      STATEMENT

    


    The
      Corporation desires to employ HAUSMAN as President and Chief Executive Officer
      of the Corporation, and HAUSMAN wishes to be employed by the Corporation, upon
      the terms and subject to the conditions set forth in this Agreement. The
      Corporation and HAUSMAN also wish to enter into the other agreements set forth
      in this Agreement, all of which are related to HAUSMAN’s employment under this
      Agreement.

     

    AGREEMENT

    


    HAUSMAN
      and the Corporation therefore agree as follows:

    


    1.
       Term
      of Employment.
      The
      Corporation hereby employs HAUSMAN and HAUSMAN hereby accepts employment with
      the Corporation for the period (the “Initial Term”) commencing as of October 15,
      2006 (the “Commencement Date”), and ending on the third anniversary of the
      Commencement Date hereof or
      upon
      the earlier termination of the Initial Term pursuant to Section 6. The Initial
      Term will be extended automatically for additional one-year periods (each,
      an
“Additional Term,” together with the Initial Term, the “Term”), subject to the
      rights of the parties generally to terminate this Agreement in accordance with
      the provisions of Section 6(a). The termination of the Term for any reason
      shall
      end HAUSMAN’s employment under this Agreement, but, except as otherwise set
      forth herein, shall not terminate HAUSMAN’s or the Corporation’s other
      agreements in this Agreement.

    


    2.
       Position
      and Duties.
      Upon the
      commencement of the Initial Term, HAUSMAN shall serve as President and Chief
      Executive Officer of the Corporation. HAUSMAN shall also serve as the Chairman
      of the Board of Directors and shall also hold such additional positions and
      titles as the Board of Directors (“Board”) may determine from time to time.
      HAUSMAN shall report to the Board. During the Term, HAUSMAN shall devote
      substantial time and attention to performing his duties as an employee of the
      Corporation. The Corporation acknowledges that the foregoing sentence shall
      not
      restrict HAUSMAN from devoting time and attention to other business ventures,
      including without limitation those activities identified on Schedule A annexed
      hereto, which the Corporation acknowledges are not business opportunities of
      the
      Corporation. Additionally, HAUSMAN may continue serving on the Board of
      Directors of TorreyPines Therapeutics, Inc. and as a member of its Board
      committees and may serve in similar capacities with other companies or
      organizations subject to his obtaining prior approval from Board. 

    



    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    3.
       Compensation.

    


    (a)
       Base
      Salary.
      The
      Corporation shall pay HAUSMAN a base salary, beginning on the first day of
      the
      Initial Term and ending on the last day of the Initial Term, of $250,000 per
      annum. The base salary initially will be payable quarterly in advance in the
      form of the Corporation’s common stock (“Common Stock”), at a price equal to 85%
      of the “Market Price” for the Corporation’s common stock, which shall equal the
      average of the closing price for the five trading days prior to the date that
      the issuance is authorized by the Board of Directors. In lieu of receiving
      Common Stock for such payments, HAUSMAN may elect to receive that number of
      ten
      year Warrants (with cashless exercise provisions) equal to 1.5 times the number
      of shares of Common Stock that would otherwise be received, at an exercise
      price
      equal to the Market Price. The first installment, representing $67,500 of
      HAUSMAN’s base salary, and payable at HAUSMAN’s election either in the shares of
      Common Stock or form of warrants described in the foregoing sentence, will
      be
      paid promptly after the initial determination of the Market Price, and
      thereafter, will be paid on the dates that are three months, six months and
      nine
      months from the date hereof, and quarterly thereafter for the duration of the
      Term. Notwithstanding the foregoing, once the Corporation has raised at least
      $2.5 million in one or more financings (equity, debt or convertible debt, in
      addition to the financing closed on October 27, 2006) or in a strategic
      transaction (a “Qualifying Financing”), HAUSMAN may elect, at any time, in lieu
      of receiving a quarterly issuance of stock (or warrants in lieu thereof), to
      receive his base salary in cash, payable monthly on the Corporation’s regular
      pay cycle for professional employees. All shares of Common Stock issuable to
      HAUSMAN under Sections 3 and 4 hereof (if not otherwise registered pursuant
      to
      an existing stock option plan covered by a registration statement on Form S-8),
      or upon the exercise of the warrants to be issued in lieu thereof ,shall have
      the benefit of piggyback registration rights, pursuant to a Registration Rights
      Agreement to be executed by the Corporation and HAUSMAN (the “Registration
      Rights Agreement”); provided, however, that the failure to execute such a
      Registration Rights Agreement shall not limit HAUSMAN’s piggyback registration
      rights hereunder. Furthermore, the Corporation will obtain advice of counsel
      that the issuance of shares of Common Stock by the Corporation to HAUSMAN under
      Sections 3 and 4 hereof do not violate the provisions of Section 203 of the
      Delaware General Corporation Law. Following the Initial Term, the Board shall,
      in accordance with its customary review of executive management compensation,
      review HAUSMAN’s base salary and make adjustments the Board (or its Compensation
      Committee) feels are appropriate, but in any event HAUSMAN’s base salary shall
      not be lower than $250,000.

     

    (b) Other
      and Additional Compensation.     

      

    (i) Annual
      Bonus.
      During
      the Term, HAUSMAN shall receive an annual bonus based upon the attainment of
      agreed upon goals and milestones as determined by the Board and its Compensation
      Committee. During the remainder of calendar year 2006, HAUSMAN’s bonus shall be
      pro rated on an annual bonus rate in the range of 25% to 50% of his base salary,
      and his bonus for subsequent years of the Term shall be in a similar target
      range. Additional bonus calculations and payments determined by the Board and
      the Compensation Committee shall be made based upon (i) each $1 million in
      combined annual sales of the Corporation and its subsidiary BioCheck exceeding
      $6,500,000, (ii) successful financings an/or strategic transactions completed,
      taking into account the aggregate amount of funds raised for the Corporation
      and
      (iii) performance of the trading price of the Common Stock.
      The
      bonuses payable hereunder shall be paid in cash, although at HAUSMAN’s sole
      option, they may be paid in stock (or in the form of ten year warrants with
      cashless exercise provisions, with 1.5 times the number of warrants to be issued
      in lieu of the number of shares of Common Stock), based upon the average of
      the
      closing bid and asked prices for the 5 trading days immediately prior to the
      awarding to HAUSMAN of the bonus for a particular year (which shall also be
      the
      exercise price of the warrants, if the Advisor elects to receive warrants).
      HAUSMAN shall make his election no more than ten (10) days following
      notification by the Corporation of his bonus award, and the failure to make
      timely election shall mean that HAUSMAN shall receive the bonus in the form
      of
      cash.  


    
      
        
        

      

      
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    (ii) Stock
      Options.
      As soon
      as practicable following execution of this Agreement, HAUSMAN shall be granted
      options for the purchase of up to 495,000 shares (the “Initial Option Grant”) of
      Common Stock under the Corporation’s existing stock option plan (the “Plan”).
      The terms of the grant, including the vesting schedule and exercise price of
      the
      Initial Option Grant, shall be as set forth in a separate option agreement
      executed by and between the parties and will provide, among other things, (i)
      for cashless exercise provisions and (ii) for the vesting of 247,500 options
      in
      four equal quarterly installments commencing on the date that is three months
      from the Commencement Date and every three months thereafter, (iii) for the
      vesting of the remaining 247,500 options in eight quarterly installments over
      the subsequent two years and (iv) for an exercise price equal to the average
      of
      the closing bid and asked prices for the Common Stock on the trading day
      immediately prior to the date hereof. Subsequent stock option grants, including
      an annual grant in 2007, will be determined annually by the Board and the
      Compensation Committee, taking into account the previous year’s performance of
      the Corporation’s Common Stock, sales, revenue and income performance, as well
      as the frequency and success of financings and/or strategic transactions.


    


    (iii) Additional
      Compensation.
      The
      foregoing establishes the minimum compensation during the Term and shall not
      preclude the Board from awarding HAUSMAN a higher salary or any additional
      bonuses or stock options in the event of a successful financing or strategic
      transaction or otherwise, and in any event, in the discretion of the
      Board.

    


    (iv) Sign-on
      Bonus.
      As a
      sign-on bonus and as soon as practicable following execution of this Agreement,
      , the Corporation shall issue to HAUSMAN 500,000 shares of Common Stock and
      ten
      year warrants (the “Warrants”) to purchase 1,505,000 shares of Common Stock, at
      an exercise price equal to the Market Price. The Warrants shall have a cashless
      exercise provision and otherwise shall be in form mutually satisfactory to
      the
      parties. All of the shares of Common Stock issued under this Section 3(b)(iv)
      will be subject to repurchase by the Corporation at a price of par value per
      share, and the amount of shares subject to repurchase will be reduced in six
      equal monthly increments commencing on the 30 days after the Commencement Date
      and every 30th
      day
      thereafter until 180 days after the Commencement Date, when none of such shares
      shall be subject to repurchase. The Warrants issued under this Section 3(b)(iv)
      will vest monthly in six equal installments, commencing on the date that is
      30
      days after the Commencement Date, through the 180th
      day
      after the Commencement Date. 

    


    4.
       Employee
      Benefits. 

    


    (a) General.
      During
      the Term, HAUSMAN shall be entitled to the employee benefits generally made
      available to the Corporation’s executive officers, including four-weeks paid
      vacation (no more than 2 weeks per month) and all U.S. national holidays,
      participation in the Corporation’s 401(k) plan or other plans that may be made
      available from time to time to the Corporation’s executive officers.
      Additionally, HAUSMAN shall receive family health and dental insurance benefits.
      As soon as reasonably practicable following the date hereof, the Corporation
      shall arrange for and maintain short-term and long-term disability policies
      for
      benefit of HAUSMAN in such amounts generally customary for similarly situated
      executive employees in the industry. 

    


    (b) Other
      Benefits. During
      the Term, the Corporation shall provide HAUSMAN with an annual office expense
      allowance of $50,000, for the costs of maintaining an office in the Stevenson,
      Washington area. The office expense allowance shall be payable quarterly in
      advance in the form of Common Stock, at a price equal to 85% of the Market
      Price. The first installment, representing $12,500 of the office expense
      allowance, will be paid promptly after the determination of the Market Price,
      and thereafter, will be paid on the dates that are three months, six months
      and
      nine months from the date hereof, and quarterly thereafter for the duration
      of
      the Term. Notwithstanding the foregoing, once the Corporation has completed
      a
      Qualifying Financing, the office expense allowance will be paid in cash in
      advance, commencing for the quarter next following the quarter in which the
      Qualifying Financing occurred.


    
      
        
        

      

      
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    (c) Indemnification.
      The
      Corporation will indemnify HAUSMAN for his actions in the capacity as an officer
      and director of the Corporation and any of its subsidiaries to the full extent
      permitted by law and as provided in the Corporation’s Certificate of
      Incorporation and by-laws. 

     

    5.
       Expenses.
      During
      the Term, the Corporation shall reimburse HAUSMAN in cash for actual
      out-of-pocket travel, entertainment and other business expenses incurred by
      him
      in the performance of his services for the Corporation upon the receipt of
      appropriate documentation of such expenses.

    


    6.
       Termination;
      Non-Renewal.

    


    (a)
       General.
      The Term
      shall end immediately upon HAUSMAN’s death, or upon termination for Cause,
      Disability or Good Reason, each as defined in Section 7. Upon termination of
      the
      Term due to HAUSMAN’s death, all compensation due HAUSMAN under this Agreement
      will cease. In all other cases, (i) the Corporation may terminate this Agreement
      either upon sixty (60) days prior written notice, if such termination shall
      be
      effective in the calendar year 2006, or otherwise upon ninety (90) days written
      notice and (ii) HAUSMAN may terminate this Agreement upon sixty (60) days
      written notice. The parties agree that the mere act to providing notice to
      the
      other party of termination shall not in any event be deemed to provide such
      other party the right to immediately terminate this Agreement.

    


    The
      Corporation may elect not to renew this Agreement by giving no less than 90
      days
      written notice prior to the expiration of any Term. HAUSMAN may elect not to
      renew this Agreement by giving not less than 60 days written notice prior to
      the
      expiration of any Term. Upon the receipt of any notice of non-renewal as
      provided in this Section 6(a), HAUSMAN shall continue to be compensated in
      the
      manner set forth in this Agreement until the expiration of the applicable Term.
      

    


    (b)
       Notice
      of Termination - Generally.
      Any
      termination by the Corporation of HAUSMAN’s employment hereunder shall be in
      writing and delivered to HAUSMAN at the address set forth herein or at such
      address kept in the records of the Corporation and shall specify the reasons
      for
      such termination. 

    


    (c)   Termination
      by the Corporation for Cause. Any
      written notice of termination by the Corporation of HAUSMAN for Cause shall,
      to
      the extent determined by the Board that the Cause is curable, allow HAUSMAN
      the
      opportunity to cure, but in any event no more than ten (10) days (except in
      the
      event of a termination pursuant to Section 7(a)(vi), in which case the cure
      period shall be 30 days). Such notice of termination shall also state in
      reasonable detail the Board’s understanding of the facts leading to the
      determination of Cause. Upon the Corporation’s final termination of the Term for
      Cause, all compensation due to HAUSMAN under this Agreement will cease, other
      than that described in Section 9 below. Moreover, any unexercised portions
      of
      the Initial Option Grant or other stock option grants to HAUSMAN by the
      Corporation shall expire upon such termination.

    


    (d)  Termination
      by the Corporation upon a Change of Control. In
      the
      event that the Corporation terminates its relationship with HAUSMAN within
      one
      (1) year of a “Change of Control”, as defined in Section 7(c), other than for
      Cause, HAUSMAN shall receive the following:

     

    (i) an
      amount
      equal to twelve (12) months of base salary for the then current Term (which
      is
      in addition to the base salary paid to HAUSMAN after the Corporation’s delivery
      of notice of termination pursuant to Section 6 and the actual date of
      termination) plus an amount equal to the prior year’s bonus (and if occurring
      before the bonus for 2007 has been determined, an amount equal to 50% of the
      then current base salary); and


    
      
        
        

      

      
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    (ii) the
      full
      vesting of the Initial Option Grant and any other stock option grants to HAUSMAN
      by the Corporation, and extended exercisability thereof until their respective
      expiration dates; and 

    


    (iii) Other
      Compensation (as defined in Section 9); and

    


    (iv) If
      the
      foregoing payments and benefits provided to HAUSMAN in Sections 6(d)(i) through
      (iii) above (the “Change of Control Payments”) are or become subject to the tax
      (“Excise Tax”) imposed by Section 4999 of the Internal Revenue Code of 1986, as
      amended, the Corporation shall pay to HAUSMAN such amount (the “Gross-up
      Payment”) as may be necessary to place HAUSMAN in the same after-tax position as
      if no portion of the Change of Control Payments and any amounts paid to him
      pursuant to this paragraph 6(d) had been subject to the Excise Tax.

    


    For
      the
      avoidance of doubt, HAUSMAN shall be entitled to the foregoing benefits once
      notice of termination is given by the Corporation pursuant to this Section
      6(d),
      regardless of his subsequent Death or Disability.

    


    (e)
       Termination
      by the Corporation other than upon Change of Control, Death, Disability or
      Cause. In
      the
      event that the Corporation terminates its relationship with HAUSMAN, including
      a
      non-renewal of this Agreement by the Corporation but other than upon a Change
      of
      Control, Death, Disability or Cause, HAUSMAN shall receive the
      following:

    


    (i) if
      employment was terminated during the calendar year 2006, an amount equal to
      six
      (6) months of the then current base salary; if employment was terminated
      commencing in the calendar year 2007 or if the Corporation elects not to renew
      this Agreement following the Initial Term or any Additional Term, an amount
      equal to twelve (12) months of base salary for the then current Term plus an
      amount equal to the prior year’s bonus (and if occurring before the bonus for
      2007 has been determined, an amount equal to 50% of the then current base
      salary) ; 

    


    (ii) if
      employment was terminated during the calendar year 2006, 50% of the previously
      unvested portion of the Initial Option Grant shall vest and such vested options
      shall be exercisable until their respective expiration dates; if employment
      was
      terminated commencing in the calendar year 2007 and thereafter or if the
      Corporation elects not to renew this Agreement following the Initial Term or
      any
      Additional Term, all stock options granted to HAUSMAN (including without
      limitation the Initial Option Grant) shall immediately vest and shall remain
      exercisable until their respective expiration dates; and

    


    (iii) Other
      Compensation.

    


    (f)
       Termination
      by HAUSMAN upon Good Reason; Other Terminations. In
      the
      event HAUSMAN terminates his relationship with the Corporation for “Good Reason”
as defined in Section 7, within one (1) year of the occurrence of the event
      which established the “Good Reason,” or for “Good Reason” within one (1) year of
      a Change of Control, HAUSMAN shall receive the following:

    


    (i) if
      the
      termination occurred during the calendar year 2006 for Good Reason, an amount
      equal to six (6) months of base salary; if the termination occurred during
      the
      calendar year 2006 due to a Change of Control, an amount equal to twelve (12)
      months of base salary; if termination for Good Reason occurred during the
      calendar year 2007 or thereafter, an amount equal to twelve (12) months of
      the
      then current base salary plus an amount equal to the prior year’s bonus (and if
      occurring before the bonus for 2007 has been determined, an amount equal to
      50%
      of the then current base salary); 


    
      
        
        

      

      
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    (ii) if
      termination occurred during the calendar year 2006, 50% of the previously
      unvested portion of the Initial Option Grant shall vest and such vested options
      shall be exercisable until their respective expiration dates, except that if
      termination is by HAUSMAN for Good Reason subsequent to a Change of Control,
      then 100% of any option grants to HAUSMAN (including, without limitation, the
      Initial Option Grant) shall vest and shall remain exercisable until its
      respective expiration dates; if employment was terminated commencing in the
      calendar year 2007 and thereafter, all stock options granted to HAUSMAN
      (including, without limitation, the Initial Option Grant) shall immediately
      vest
      and shall remain exercisable until their respective expiration dates; and


    


    (iii) Other
      Compensation. 

    


    HAUSMAN
      shall provide prior written notice to the Corporation of his termination
      pursuant to this Section 6(f), and such notice shall describe the particular
      “Good Reason(s)” at issue.

    


    If
      HAUSMAN otherwise terminates his employment without Good Reason, all options
      vested at the time of such termination shall expire on their respective
      expiration dates.

     

    7.
       Definitions.

    


    (a)
       "Cause"
      Defined.“Cause”
      means (i)
      willful
      malfeasance or willful misconduct by HAUSMAN in connection with his employment;
      (ii)
      HAUSMAN’s gross negligence in performing any of his duties under this Agreement;
      (iii)
      HAUSMAN’s conviction of, or entry of a plea of guilty to, or entry of a plea of
      nolo contendere with respect to, any felony; (iv) HAUSMAN’s habitual drunkenness
      or use or possession of illegal drugs while performing his duties under this
      Agreement or excessive absenteeism not related to illness; (v) HAUSMAN’s
      material breach of any written policy applicable to all employees adopted by
      the
      Corporation; or (vi) material breach by HAUSMAN of any of his agreements in
      this
      Agreement having a material detrimental impact on the Corporation.

    


    (b)
       “Disability”
      Defined.“Disability”
      shall mean HAUSMAN’s incapacity due to physical or mental illness that results
      in his being unable to substantially perform his duties hereunder for six
      consecutive months (or for six months out of any nine-month period). During
      a
      period of Disability, HAUSMAN shall continue to receive his base salary
      hereunder, provided that if the Corporation provides HAUSMAN with disability
      insurance coverage, payments of HAUSMAN’s base salary shall be reduced by the
      amount of any disability insurance payments received by HAUSMAN due to such
      coverage. Upon termination, after the end of the period of Disability, all
      compensation due HAUSMAN under this Agreement shall cease.

    


    (c)
       “Change
      of Control” Defined. “Change
      of Control” shall mean the occurrence of any one or more of the following
      events:

    


    (i) An
      acquisition (whether directly from the Corporation or otherwise) of any voting
      securities of the Corporation (the “Voting Securities”) by any “Person” (as the
      term person is used for purposes of Section 13(d) or 14(d) of the Securities
      and
      Exchange Act of 1934, as amended (the “1934 Act”)), immediately after which such
      Person has “Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated
      under the 1934 Act) of fifty percent (50 %) or more of the combined voting
      power
      of the Corporation’s then outstanding Voting Securities.

    


    (ii) The
      individuals who, as of the Commencement Date, are members of the Board (the
      “Incumbent Board”), cease for any reason to constitute at least fifty-one
      percent (51%) of the Board; or


    
      
        
        

      

      
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    (iii) Approval
      by the Board and, if required, stockholders of the Corporation of, or execution
      by the Corporation of any agreement with respect to, or the consummation of
      (it
      being understood that the mere execution of a term sheet, memorandum of
      understanding or other non-binding document shall not constitute a Change of
      Control):

     

    (A) A
      merger,
      consolidation or reorganization involving the Corporation, where either or
      both
      of the events described in Section 7(c)(i) or 7(c)(ii) would be the
      result;

     

    (B) A
      liquidation or dissolution of or appointment of a receiver, rehabilitator,
      conservator or similar person for, the Corporation; or

    


    (C) An
      agreement for the sale or other disposition of all or substantially all of
      the
      assets of the Corporation to any Person (other than a transfer to a subsidiary
      of the Corporation).

    


    Notwithstanding
      anything contained in this Agreement to the contrary, if HAUSMAN’s employment is
      terminated prior to a Change in Control and HAUSMAN reasonably demonstrates
      that
      such termination (i) was at the request of a third party who has indicated
      an
      intention or taken steps reasonably calculated to effect a Change in Control
      and
      who effectuates a Change in Control (a “Third Party”) or (ii) otherwise occurred
      in connection with, or in anticipation of, a Change in Control which actually
      occurs, then for all purposes of this Agreement, the date of a Change in Control
      with respect to HAUSMAN shall mean the date immediately prior to the date of
      such termination of HAUSMAN’s employment.

    


    (d)
       “Good
      Reason” Defined. “Good
      Reason” shall mean the occurrence, whether or not after a Change in Control, of
      any of the events or conditions described below:

     

    (i) a
      change
      in HAUSMAN’s status, title, position or responsibilities (including reporting
      responsibilities) which represents a material adverse change from his status,
      title, position or responsibilities as in effect immediately prior to such
      change; the assignment to HAUSMAN of any duties or responsibilities which are
      inconsistent with his status, title, position or responsibilities as in effect
      immediately prior to such change; or any removal of HAUSMAN from any of such
      offices or positions (except in those cases where a change is either at the
      request of HAUSMAN, in connection with a general corporate restructuring of
      officer responsibilities, or a result of the promotion of HAUSMAN);

    


    (ii) the
      Corporation’s requiring HAUSMAN to spend substantially all of his time
      performing his duties hereunder at a location other than his current home office
      facility, including requiring him to relocate to Foster City or the San
      Francisco area, except for required travel relating to the Corporation’s
      business;

    


    (iii) the
      failure by the Corporation to provide HAUSMAN with benefits, in the aggregate,
      at least equal (in terms of benefit levels) to those provided for under each
      employee benefit plan, program and practice in which HAUSMAN was participating
      at any time prior to such failure; or

    


    (iv) any
      material breach by the Corporation of any provision of this Agreement which
      is
      not cured within ten (10) days after the receipt of written notice by the
      Corporation of a description of the breach. 

    


    8. Payment
      Terms.
      Payment
      of any amounts to which HAUSMAN shall be entitled pursuant to the provisions
      of
      Sections 6 and 7 shall be made no later than sixty (60) days following receipt
      of notice of termination or the event giving rise to such termination. Any
      amounts payable pursuant to Sections 6 and 7 which are not made within the
      period specified in this Section 8 shall bear interest at a rate equal to the
      lesser of (i) the maximum interest rate allowable pursuant to applicable law
      or
      (ii) five points above the “prime rate” of interest as published from
      time-to-time in the Eastern Edition of the Wall Street Journal.

    
      
        
        

      

      
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    9. Post-Termination
      Benefits.

    


    The
      benefits hereunder shall be deemed the “Other Compensation” referenced in
      Section 6(d), 6(e) and 6(f) hereof. Except if HAUSMAN resigns without Good
      Reason (other than retirement on or after the age of 62), in the event HAUSMAN’s
      employment with the Corporation is terminated for any reason prior to the end
      of
      the Term, HAUSMAN and his dependents, if any, will continue to participate
      in
      any group health plan sponsored by the Corporation in which HAUSMAN was
      participating on the date of such termination, at
      a cost
      to HAUSMAN and his dependents equal to the amount charged by the Corporation
      to
      similarly situated employees while employed by the Corporation, for the
      remainder of the Initial Term or, if termination occurs within an Additional
      Term, for the remainder of such Additional Term. Thereafter, HAUSMAN and his
      dependents, if any, shall be entitled to elect to continue such health coverage,
      at a cost to HAUSMAN and his dependents equal to the amount paid by the
      Corporation for similarly situated employees while employed by the Corporation,
      for the longest period of time permitted by the agents of the Corporation who
      arrange for such health coverage, with such period to last at least twelve
      (12)
      months from the date of termination. Upon termination for any reason, in
      addition to any payments to which HAUSMAN may be entitled upon termination
      of
      his Employment pursuant to any provision of this Agreement, HAUSMAN shall be
      entitled to any benefits under any pension, supplemental pension, savings,
      or
      other employee benefit plan (other than life insurance) in which HAUSMAN was
      participating on the date of any such termination.

    


    10.
       Confidentiality.

    


    (a)
       "Corporation
      Information" Defined.“Corporation
      Information” means all information, knowledge or data of or pertaining to (i)
      the Corporation, its employees and all work undertaken on behalf of the
      Corporation, and (ii) any other person, firm, corporation or business
      organization with which the Corporation may do business during the Term, that
      is
      not in the public domain (and whether relating to methods, processes,
      techniques, discoveries, pricing, marketing or any other matters). 

    


    (b) Confidentiality.
      HAUSMAN
      hereby recognizes that the value of all trade secrets and other proprietary
      data
      and all other information of the Corporation not in the public domain disclosed
      by the Corporation in the course of his employment with the Corporation is
      attributable substantially to the fact that such confidential information is
      maintained by the Corporation in strict confidentiality and secrecy and would
      be
      unavailable to others without the expenditure of substantial time, effort or
      money. HAUSMAN therefore, except as provided in the next two sentences,
      covenants and agrees that all Corporation Information shall be kept secret
      and
      confidential at all times during and after the end of the Term and shall not
      be
      used or divulged by him outside the scope of his employment as contemplated
      by
      this Agreement, except as the Corporation may otherwise expressly authorize
      by
      action of the Board. In the event that HAUSMAN is requested in a judicial,
      administrative or governmental proceeding to disclose any of the Corporation
      Information, HAUSMAN will promptly so notify the Corporation so that the
      Corporation may seek a protective order or other appropriate remedy and/or
      waive
      compliance with this Agreement. If disclosure of any of the Corporation
      Information is required, HAUSMAN may furnish the material so required to be
      furnished, but HAUSMAN will furnish only that portion of the Corporation
      Information that legally is required. 

     


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    


    11. Non-Competition,
      Non-disparagement and Non-Solicitation Covenants; Intellectual Property.


     

    (a) Non-Competition.
      The
      Corporation and HAUSMAN acknowledge that: (i) the Corporation has a special
      interest in and derives significant benefit from the unique skills and
      experience of HAUSMAN; (ii) HAUSMAN will use and have access to proprietary
      and
      valuable Corporation Information (as defined in Section 10 hereof) during the
      course of his employment; and (iii) the agreements and covenants contained
      herein are essential to protect the business and goodwill of the Corporation
      or
      any of its subsidiaries, affiliates or licensees. Accordingly, except as
      hereinafter noted, HAUSMAN covenants and agrees that during the Term, and for
      a
      period of one year following the termination of HAUSMAN’s employment, HAUSMAN
      shall not provide any labor, work, services or assistance (whether as an
      officer, director, employee, partner, agent, owner, independent contractor,
      stockholder or otherwise) to a “Competing Business.” For purposes hereof,
“Competing Business” shall mean any business engaged in (i) the research,
      diagnosis, treatment and prevention of diseases of oxidative stress associated
      with damage from free radical and reactive oxygen species or (ii) the provision
      of high quality enzyme immunoassay research services and products including
      immunoassay kits for cardiac and tumor markers, infectious diseases, thyroid
      function, steroids, and fertility hormones or
      any
      other business engaged in by the Company during the Term. Notwithstanding the
      foregoing, a “Competing Business” shall not include any of the business
      activities identified on Schedule A annexed hereto, activities which the
      Corporation hereby acknowledges do not constitute corporate opportunities of
      the
      Corporation and in which HAUSMAN has previously engaged and may continue to
      engage. In consideration of all of the compensation provisions in this
      Agreement, HAUSMAN agrees to the provisions of this Section 11 and also agrees
      that the non-competition obligations imposed herein, are fair and reasonable
      under all the circumstances.

     

    (b) Non-Solicitation
      of Employees.
      HAUSMAN
      covenants and agrees that during the Term, and for a period of one year
      following termination of employment hereunder for any reason whatsoever, HAUSMAN
      shall not directly or indirectly solicit any other employee of or consultant
      to
      the Corporation, or any of its subsidiaries or affiliates to terminate such
      employee’s employment or consultant’s relationship with the Corporation, or any
      of its subsidiaries or affiliates, as the case may be, or to become employed
      by
      or a consultant to a Competing Business.

     

    (c)  Ownership
      of Intellectual Property.
      Any
      material or other work which may be subject to copyright or patent, and which
      is
      conceived, derived, made or written by HAUSMAN in connection with the
      Corporation Information shall be deemed a “work for hire,” (and is herein
      referred to as a “Development”). As between HAUSMAN and the Corporation, HAUSMAN
      acknowledges that all Developments will be the sole and exclusive property
      of
      the Corporation and shall also be deemed Corporation Information under this
      Agreement. HAUSMAN further acknowledges the Corporation may in turn negotiate
      with any third party regarding their respective ownership rights to such
      Developments. HAUSMAN shall execute such documents as may be necessary to vest
      in the Corporation or any third party, if applicable, all right, title and
      interest in and to the Developments. The Corporation (or a third party, if
      applicable) will pay all costs and expenses associated with any applications
      and
      the transfer of title to Developments, including paying HAUSMAN’s reasonable
      attorneys’ fees for reviewing such documents and instruments presented for
      execution. 

    


    (d)  HAUSMAN’s
      Intellectual Property Rights. Notwithstanding
      the foregoing, the assignment by HAUSMAN to the Corporation (or a third party,
      if applicable) of Developments, as well as the right to apply for and obtain
      patents and/or registered copyrights on the same, shall be expressly limited
      to
      those specifically involving the Corporation Information relating to such
      projects as mutually agreed upon by the parties hereto, and shall specifically
      not include (i) any right, license or interest of the Corporation to general
      concepts, formats, methods, testing techniques, study designs, computer software
      or other procedures utilized or designed by HAUSMAN in performing his duties
      hereunder, or any general inventions, discoveries, improvements, or
      copyrightable materials relating thereto, nor (ii) any patentable or
      copyrightable materials which can be shown by competent proof not to concern
      the
      subject matter of the Corporation Information, or, which predate this Agreement
      or HAUSMAN’s receipt of the Corporation Information, or (iii) any intellectual
      property relating to HAUSMAN’s current activities identified on Schedule
      A.


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    


    (e) Remedies.
      HAUSMAN
      acknowledges that any such breach of the provisions of this Section 11 is likely
      to result in immediate and irreparable harm to the Corporation for which money
      damages are likely to be inadequate. Accordingly, HAUSMAN consents to injunctive
      and other appropriate equitable relief upon the institution of proceedings
      therefor by the Corporation in order to protect its rights hereunder. Such
      relief may include, without limitation, an injunction to prevent: (i) the breach
      or continuation of HAUSMAN’s breach; (ii) HAUSMAN from disclosing any trade
      secrets or Corporation Information; (iii) any Competing Business from receiving
      from HAUSMAN or using any such trade secrets or Corporation Information; and/or
      (iv) any such Competing Business from retaining or seeking to retain any
      employees of the Corporation. The provisions of this Section 11(e) shall survive
      the termination of this Agreement and HAUSMAN’s Term of employment.

     

    12. Successors
      and Assigns; Expenses.

    


    (a) The
      Employee.
      This
      Agreement is a personal contract, and the rights and interests that the
      Agreement accords to HAUSMAN may not be sold, transferred, assigned, pledged,
      encumbered, or hypothecated by him. All rights and benefits of HAUSMAN shall
      be
      for the sole personal benefit of HAUSMAN, and no other person shall acquire
      any
      right, title or interest under this Agreement by reason of any sale, assignment,
      transfer, claim or judgment or bankruptcy proceedings against HAUSMAN. Except
      as
      so provided, this Agreement shall inure to the benefit of and be binding upon
      HAUSMAN and his personal representatives, distributees and
      legatees.

    


    (b) The
      Corporation. This
      Agreement shall be binding upon the Corporation and inure to the benefit of
      the
      Corporation and its successors and assigns. 

    


    (c) Expenses.
      The
      costs
      of HAUSMAN’s counsel, Adam Eilenberg, related to the negotiation, preparation
      and review of this Agreement, in the amount of $5,000, shall be paid by the
      Corporation, in the form of shares of Common Stock, based on a price equal
      to
      85% of the Market Price, and shall be issued to Adam Eilenberg. Any shares
      issued pursuant to the foregoing sentence shall have the same registration
      rights as those being provided to HAUSMAN hereunder and pursuant to the
      Registration Rights Agreement. Furthermore, in the event of any dispute between
      HAUSMAN and the Corporation relating to this Agreement which follows a Change
      of
      Control, the Corporation will pay all reasonable legal expenses incurred by
      HAUSMAN in connection with such dispute unless a court of competent jurisdiction
      determines that the facts surrounding such dispute originates from events that
      occurred prior to the Change of Control.

    


    13. Entire
      Agreement.
      This
      Agreement, together with the Initial Option Grant and the Registration Rights
      Agreement, represents the entire agreement between the parties concerning
      HAUSMAN’s employment with the Corporation and supersedes all prior negotiations,
      discussions, understandings and agreements, whether written or oral, between
      HAUSMAN and the Corporation relating to the subject matter of this Agreement,
      including any existing consulting agreements.

    


    14. Amendment
      or Modification; Waiver.
      No
      provision of this Agreement may be amended or waived unless such amendment
      or
      waiver is agreed to in writing signed by HAUSMAN and by a duly authorized
      officer of the Corporation. No waiver by any party to this Agreement of any
      breach by another party of any condition or provision of this Agreement to
      be
      performed by such other party shall be deemed a waiver of a similar or
      dissimilar condition or provision at the same time, any prior time or any
      subsequent time.

    



    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    


    15. Notices.
      Any
      notice to be given under this Agreement shall be in writing and delivered
      personally or sent by overnight courier or registered or certified mail, postage
      prepaid, return receipt requested, addressed to the party concerned at the
      address indicated below, or to such other address of which such party
      subsequently may give notice in writing:

    


    If
      to
      HAUSMAN:         MARVIN
      S.
      HAUSMAN, M.D 

    90
      NW
      Second Street, P.O. Box 910, 

    Stevenson,
      Washington 98648

    


    with
      a
      copy to:        Eilenberg
      & Krause LLP

    11
      East
      44th
      Street

    New
      York,
      NY 10017

    Attention:
      Adam Eilenberg, Esq.

    


    If
      to the
      Corporation:       OXIS
      International, Inc. 

    323
      Vintage Park Drive, Suite B, 

    Foster
      City, California 94404

    Attention:
      Chairman of the Board 

    


    with
      a
      copy to:        __________________________

    __________________________

    __________________________

    Attention:
      __________________

    


    Any
      notice delivered personally or by overnight courier shall be deemed given on
      the
      date delivered and any notice sent by registered or certified mail, postage
      prepaid, return receipt requested, shall be deemed given on the date
      mailed.

    


    16. Severability.
      If any
      provision of this Agreement or the application of any such provision to any
      party or circumstances shall be determined by any court of competent
      jurisdiction to be invalid and unenforceable to any extent, the remainder of
      this Agreement or the application of such provision to such person or
      circumstances other than those to which it is so determined to be invalid and
      unenforceable shall not be affected, and each provision of this Agreement shall
      be validated and shall be enforced to the fullest extent permitted by law.
      If
      for any reason any provision of this Agreement containing restrictions is held
      to cover an area or to be for a length of time that is unreasonable or in any
      other way is construed to be too broad or to any extent invalid, such provision
      shall not be determined to be entirely null, void and of no effect; instead,
      it
      is the intention and desire of both the Corporation and HAUSMAN that, to the
      extent that the provision is or would be valid or enforceable under applicable
      law, any court of competent jurisdiction shall construe and interpret or reform
      this Agreement to provide for a restriction having the maximum enforceable
      area,
      time period and such other constraints or conditions (although not greater
      than
      those contained currently contained in this Agreement) as shall be valid and
      enforceable under the applicable law.

    


    17. Survivorship.
      The
      respective rights and obligations of the parties hereunder shall survive any
      termination of this Agreement to the extent necessary to the intended
      preservation of such rights and obligations.


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    


    18. Headings.
      All
      descriptive headings of sections and paragraphs in this Agreement are intended
      solely for convenience of reference, and no provision of this Agreement is
      to be
      construed by reference to the heading of any section or paragraph.

    


    19. Withholding
      Taxes.
      All
      salary, benefits, reimbursements and any other payments to HAUSMAN under this
      Agreement shall be subject to all applicable payroll and withholding taxes
      and
      deductions required by any law, rule or regulation of and federal, state or
      local authority. 

    


    20.
       Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original but all of which together constitute one and same
      instrument.

    


    21. Applicable
      Law; Jurisdiction.
      The laws
      of the State of California shall govern the interpretation, validity and
      performance of the terms of this Agreement, without reference to rules relating
      to conflicts of law. Any suit, action or proceeding against HAUSMAN with respect
      to this Agreement, or any judgment entered by any court in respect thereof,
      may
      be brought in any court of competent jurisdiction in the State of California,
      as
      the Corporation may elect in its sole discretion, and HAUSMAN hereby submits
      to
      the exclusive jurisdiction of such courts for the purpose of any such suit,
      action, proceeding or judgment.

    


    [THE
      BALANCE OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY]

    


    



    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    


    


    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      date
      first written above.

    


    


    


                             ___s/
      Marvin
      S. Hausman, M.D._______

                                MARVIN
      S. HAUSMAN,
      M.D. 

    


    


                                OXIS
      INTERNATIONAL,
      INC. 

    


    


    
      	 	
                                          By:

            	
              ____/s/
                Michael D. Centron_____________

            


    

                              Name:
      Michael D.
      Centron

                              Title:
      Vice President &
CFO

    
 


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    


    SCHEDULE
      A

    


    PERMITTED
      OUTSIDE BUSINESS ACTIVITIES OF HAUSMAN

    


    
      	 	
              1.

            	
              HAUSMAN’s
                previously disclosed current activities in the field of mushrooms
                and
                associated oxidative stress and bioactive substances, as well as
                to the
                avian flu virus, previously acknowledged by the Board not to constitute
                business opportunities of the Corporation.


            


    

    


    
      	 	
              2.

            	
              Patent
                activity, research and development and commercial development of
                patent
                applications and related intellectual property entitled “Identification of
                Selenoergothioneine as a Natural Organic Form of Selenium from Cultivated
                Mushrooms” for which HAUSMAN is a
                co-inventor.

            


    

    


    
      	 	
              3.

            	
              Patent
                activity, research and development and commercial development of
                patent
                applications and related intellectual property entitled “Identification of
                ergothioneine transporter and therapeutic uses thereof” to which HAUSMAN
                and related entities have acquired rights.


            


    

    


    


    


    


    14