Consulting Agreement between OXIS International, Inc. and John E. Repine, M.D.
      dated November 6, 2006


      

    
      Exhibit
        10.3

        

    

    CONSULTING
      AGREEMENT dated
      as
      of November 6, 2006, between Oxis International, Inc., a Delaware corporation
      (the “Company”), and John E. Repine, M.D. (the “Consultant”).

    


    The
      Company desires to retain the Consultant to perform consulting services in
      the
      field of antioxidant and inflammation research for the Company, and the
      Consultant desires to perform such consulting services for the Company, in
      each
      case, upon the terms and conditions hereinafter set forth. 

    


    NOW,
      THEREFORE,
      in
      consideration of the mutual covenants and obligations hereinafter set forth,
      the
      parties agree as follows:

    


    1.
      Retention
      of Consultant.
      The
      Company hereby retains the Consultant as a consultant, and the Consultant hereby
      accepts such retention by the Company, upon the terms and conditions hereinafter
      set forth. The Consultant shall perform all such services as an independent
      contractor to the Company and not as an employee, agent or representative of
      the
      Company.

    


    2.
      Term.
      The
      retention of the Consultant hereunder shall be for a period commencing as of
      October 15, 2006 (the “Commencement Date”) and ending on October 15, 2009 or
      such earlier date provided in this Section 2. This Agreement shall automatically
      terminate prior to such date upon the first to occur of (i) the death or
      disability of the Consultant, (ii) the resignation by the Consultant following
      the delivery by him to the Company of ten days’ advance written notice of such
      resignation or (iii) termination by the Company following the delivery to the
      Consultant of 60 days’ advance written notice from the Company’s Board of
      Directors of its intention to terminate the Agreement. The period commencing
      on
      the Commencement Date and ending on the date of termination of the Consultant’s
      retention hereunder shall be called the “Term”. 

    


    3.
      Duties.
      During
      the Term, the Consultant shall advise the Company concerning matters of
      antioxidant and inflammation research and potential acquisitions (including
      products/compounds/intellectual property as well as companies), and product
      research and development. The Consultant shall also advise the Company regarding
      the development and establishment of reference labs for oxidative stress and
      inflammatory reactions. For each such matter, the Consultant will initiate
      his
      advisory services only after being requested to do so by the Chief Executive
      Officer of the Company (the “CEO”). At the outset of each project, the CEO will
      define its scope and timing. The Consultant shall report directly to, and shall
      reasonably update, the CEO or his designee on the status of each project, and
      shall reasonably coordinate his efforts with members of management and other
      consultants to the Company. 

    


    4.
      Time
      to be Devoted to Services.
      During
      the Term, the Consultant shall not be required to devote any specified amount
      of
      time to the provisions of services hereunder and shall only be required to
      devote such reasonable amount of time to the business of the Company as the
      Consultant shall reasonably determine to be necessary to fulfill his duties
      hereunder.

    



    
      
         

        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    5.
      Compensation.
      The
      Company shall pay to the Consultant a consulting fee of $36,000 per annum.
      The
      consulting fee initially will be payable quarterly in advance in the form of
      the
      Company’s common stock (“Common Stock”), at a price equal to 85% of the “Market
      Price” for the Company’s common stock, which shall equal the average of the
      closing prices 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, the Consultant 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 $9,000 of the annual
      consulting fee, and payable at the Consultant’s election either in the shares of
      Common Stock of form of warrants described in the foregoing sentence, 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 Company 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”), the consultant may elect, at any time, in lieu of
      receiving a quarterly issuance of stock (or warrants in lieu thereof), to
      receive his consulting fee in cash, payable quarterly. All shares of Common
      Stock issuable to the Consultant under this Agreement (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 Company and the
      Consultant (the “Registration Rights Agreement”); provided, however, that the
      failure to execute such a Registration Rights Agreement shall not limit the
      Consultant’s piggyback registration rights hereunder.

    


    6.
      Bonus
      Awards.
      During
      the Term, the Consultant shall be eligible to annual and special bonuses based
      upon the attainment of agreed upon goals and milestones as determined by the
      CEO, relating to special contributions made by the Consultant to the Company’s
      business, product development and intellectual property. Each bonus payable
      hereunder shall be paid in cash, although at the Consultant’s sole option, such
      bonus 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
      the Consultant of the particular bonus (which shall also be the exercise price
      of the warrants, if the Consultant elects to receive warrants). The Consultant
      shall make his election no more than ten (10) days following notification by
      the
      Company of a bonus award, and the failure to make timely election shall mean
      that the Consultant shall receive the bonus in the form of cash.

    


    7.
      Stock
      Options.
      As
      soon
      as practicable following execution of this Agreement, the Consultant shall
      be
      granted ten-year options for the purchase of up to 200,000 shares (the “Initial
      Option Grant”) of Common Stock under the Company’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
      100,000 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 100,000 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
      will be determined annually by the Company’s Board of Directors (the “Board”)
      and its Compensation Committee. During the Term, the Consultant will be deemed
      to be an employee of the Company for the purpose of his existing stock options,
      including those granted pursuant to Sections 7 and 8 hereof.

    



    
      
         

        
        

      

      
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    8.
      Sign
      On Bonus.
      As
      a
      sign-on bonus and as soon as practicable following execution of this Agreement,
      the Company shall issue to the Consultant an additional ten-year option under
      the Plan for the purchase of up to 200,000 shares (the “Sign On Option Grant”).
      The terms of the grant, including the vesting schedule and exercise price of
      the
      Sign On 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 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 Commencement Date. The options issued under this
      Section 8 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. 

    


    9.
      Business
      Expenses: Benefits.
      The
      Company shall reimburse the Consultant in cash, in accordance with its practice
      from time to time, for all reasonable and necessary travel, entertainment and
      other expenses and other disbursements incurred by the Consultant for or on
      behalf of the Company in the performance of the Consultant’s duties hereunder.
      The Consultant shall provide such appropriate documentation of expenses and
      disbursements as may from time to time be required by the Company.

    


    The
      Company shall have no obligation to provide any benefits to Consultant,
      including without limitation, any health, life or disability
      benefits.

    


    10.
      Indemnification;
      Insurance.
      The
      Company will indemnify the Consultant for his actions in the capacity as a
      consultant hereunder (other than resulting from his gross negligence or willful
      misconduct) and as a director of the Company and any of its subsidiaries to
      the
      full extent permitted by law and as provided in the Company’s Certificate of
      Incorporation and by-laws. The Company also will include the Consultant on
      its
      existing Directors and Officers liability insurance policy, which the Company
      represents is for a customary amount for similar public companies in the life
      sciences industry.

    


    11.
      Additional
      Payments and Stock Issuances.
      The
      Company agrees whenever it makes any payment of cash to the Consultant hereunder
      (other than for the reimbursement of expenses), it will simultaneously pay
      to
      University Physicians Inc., 13611 East Colfax Avenue, Aurora, CO 80011 (“UPI”) a
      cash payment equal to 13.5% of the cash paid to the Consultant, and that
      whenever the Company grants a stock option to the Consultant, it will
      simultaneously grant to UPI an award for 10% of the number of options awarded
      to
      the Consultant, at the same exercise price and subject to the same rights,
      terms
      and conditions as the option grant awarded to Consultant (including, without
      limitation, exercise price, vesting provisions, cashless exercise rights and
      piggyback registration rights). UPI shall be a third party beneficiary of this
      Section 11. 

    



    
      
         

        
        

      

      
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    12.
      Termination
      Payments.
      If
      the
      Company terminates this Agreement pursuant to Section 2(iii) without Cause
      after
      the six month anniversary of the date of this Consulting Agreement, Consultant
      shall receive an amount equal to twelve (12) months of the consulting fee for
      the then current Term in a lump sum payment, and all outstanding stock options
      shall become fully vested and the warrants vested as of the date of termination
      and the stock options shall remain exercisable through their respective
      expiration dates. If the Company terminates this Agreement pursuant to Section
      2(iii) without Cause prior the six month anniversary of the date of this
      Consulting Agreement, Consultant shall be paid any expenses due to him and
      all
      vested stock options and warrants shall remain exercisable through their
      respective expiration dates. “Cause” shall mean means (i) willful malfeasance or
      willful misconduct by the Consultant in connection with the performance of
      his
      duties hereunder; (ii) the Consultant’s gross negligence in performing any of
      his duties under this Agreement; (iii) the Consultant’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) the Consultant’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) the Consultant’s material breach of any
      written policy applicable to all employees and consultants adopted by the
      Corporation; or (vi) material breach by the Consultant of any of his agreements
      in this Agreement having a material detrimental impact on the Corporation after
      written notice and a reasonable opportunity to cure of not less than 30
      days.

    


    If
      the
      Company terminates this Agreement pursuant to Section 2(iii) for Cause (other
      than pursuant to Section 8(a)(vi), for which the notice requirement is 30 days),
      the Company will only be required to give ten (10) days’ prior notice, and in
      such event the Consultant shall not be entitled to any further payments of
      his
      consulting fee hereunder, and any unexercised stock options shall
      expire.

    


    If
      the
      Consultant resigns pursuant to Section 2(ii), for whatever reason, or dies
      or
      becomes disabled, the Consultant (or his estate) shall not be entitled to any
      further payments of his consulting fee hereunder, all unvested stock options
      and
      warrants shall expire, and all vested stock options and warrants shall remain
      exercisable until their respective expiration dates. “Disability” shall mean the
      Consultant’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, the Consultant shall continue to receive his consulting fee
      hereunder. 

    


    13.
      Corporate
      Opportunities; Intellectual Property.
      

    


    (a) The
      Consultant acknowledges that by virtue of his efforts as a consultant hereunder
      to the Company and as a director, he may become aware of confidential
      information identified as such in writing by the Company relating to the
      Company’s business opportunities and potential acquisitions of companies and or
      technologies/compounds (“Confidential Information”), and that he will not,
      during the Term and for a period of 6 months thereafter (the “Restricted
      Period”), directly or indirectly use any such Confidential Information for his
      own benefit or for the benefit of any third person other than the Company or
      its
      affiliates or enter into or negotiate a transaction with any person that was
      the
      subject of the Company’s business opportunity or potential acquisition without
      the prior written approval of the Company or following an express decision
      by
      the CEO or the Board not to pursue the specific business opportunity or
      potential acquisition. The foregoing limitation shall not apply to the
      Consultant after the end of the Restricted Period. The restrictions set forth
      in
      this Section 12 are in addition to any of Consultant’s fiduciary obligations to
      the Company by virtue of his being a director of the Company.


    
      
         

        
        

      

      
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    (b)
      Notwithstanding the foregoing, the Company acknowledges that the Consultant
      may
      pursue his own independent business interests and activities during the
      Restricted Period, including those relating to life sciences and medical
      technologies. Such business interests and activities include, without
      limitation, those identified on Schedule A annexed hereto, which the Company
      acknowledges are not business opportunities of the Company and, therefore,
      which
      may be pursued by the Consultant on his own or in association with others
      independently of the Company during the Restricted Period. The Consultant is
      under no obligation hereunder to identify specific potential business
      opportunities or acquisitions for the Company. However, once the Consultant
      informs the Company of a potential opportunity during the Term (other than
      those
      set forth on Schedule A), he may not independently pursue that opportunity
      during the Restricted Period without the prior written approval of the Company
      or following an express decision by the CEO or the Board not to pursue the
      specific business opportunity or potential acquisition.

    


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

    


    (d)
      Notwithstanding the foregoing, the assignment by the Consultant to the Company
      (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 Confidential 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 Company
      to general concepts, formats, methods, testing techniques, study designs,
      computer software or other procedures utilized or designed by the Consultant
      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 Confidential Information, or, which predate
      this Agreement or the Consultant’s receipt of the Confidential Information, or
      (iii) any intellectual property relating to the Consultant’s current activities
      identified on Schedule A. 

    


    (e)
      The
      Consultant agrees that this Section 12 may be enforced by the Company by
      injunction, or other equitable relief, without prejudice to any other rights
      and
      remedies that the Company may have under this Agreement and without the posting
      of any bond.

    


    14. Legal
      Expenses.
      The
      costs of the Consultant’s counsel, Adam Eilenberg, related to the negotiation,
      preparation and review of this Agreement, up to $2,500, 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 Consultant hereunder and pursuant to the Registration
      Rights Agreement.

    


    15.
      Notices.
      All
      notices, claims, certificates, requests, demands and other communications
      hereunder shall be in writing and shall be deemed to have been duly given and
      delivered if personally delivered or if sent by nationally-recognized overnight
      courier, by telecopy, or by registered or certified mail, return receipt
      requested and postage prepaid, addressed as follows:

    
      
         

        
        

      

      
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    If
      to the
      Company, to:

    


    OXIS
      International, Inc. 

    323
      Vintage Park Drive, Suite B

    Foster
      City, California 94404

    Attention:
      Chairman of the Board 

    


    if
      to the
      Consultant, to:

    


    John
      E.
      Repine, M.D. 

    c/o
      Webb-Waring Institute

    Box
      c322

    4200
      E.
      Ninth Avenue, Denver, CO 80262

    


    with
      a
      copy to:

    


    John
      E.
      Repine, M.D. 

    70
      Cherry
      Hills Farm Drive

    Englewood,
      CO 80113 

     

    or
      to
      such other address as the party to whom notice is to be given may have furnished
      to the other party or parties in writing in accordance herewith. Any such notice
      or communication shall be deemed to have been received in the case of personal
      delivery, on the date of such delivery, in the case of nationally-recognized
      overnight courier, on the next business day after the date when sent, in the
      case of telecopy transmission, when received, and in the case of mailing, on
      the
      third business day following that on which the piece of mail containing such
      communication is posted.

    


    16.
      Binding
      Agreement; Benefit.
      Subject
      to Section 20, the provisions of this Agreement will be binding upon, and will
      inure to the benefit of, the respective heirs, legal representatives, successors
      and assigns of the parties.

    


    17.
      Governing
      Law.
      This
      Agreement will be governed by, and construed and enforced in accordance with,
      the laws of the State of California (without giving effect to principles of
      conflicts of laws).

    


    18.
      Waiver
      of Breach.
      The
      waiver by either party of a breach of any provision of this Agreement must
      be in
      writing and shall not operate or be construed as a waiver of any other
      breach.

    


    19.
      Entire
      Agreement; Amendments.
      This
      Agreement contains the entire agreement between the parties with respect to
      the
      subject matter hereof and supersedes all prior agreements or understandings
      between the parties with respect thereto. This Agreement may be amended only
      by
      and agreement in writing signed by the parties.

    


    20.
      Headings.
      The
      section headings contained in this Agreement are for reference purposes only
      and
      shall not affect in any way the meaning or interpretation of this
      Agreement.

    
      
         

        
        

      

      
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    21.
      Assignment.
      This
      Agreement is personal in its nature and the parties shall not, without the
      consent of the other, assign or transfer this Agreement or any rights or
      obligations hereunder; provided,
      however,
      that
      the Company may assign this Agreement to any of its subsidiaries.

    


    22.
      Counterparts.
      This
      Agreement may be executed in counterparts, and each such counterpart shall
      be
      deemed to be an original instrument, but both such counterparts together shall
      constitute but one agreement.

    


    


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

    


    


                                OXIS
      INTERNATIONAL,
      INC. 

    


    


                                By:
/s/
      Marvin S.
      Hausman, M.D.           

                                  Name: 
      Marvin S. Hausman, M.D.

                           Title: 
President
      & Chief Executive Officer

    


    


                                                                                                /s/
      John E. Repine, M.D.    

                                                        John
      E. Repine, M.D. 


    
      
         

        
        

      

      
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    SCHEDULE
      A

    


    EXISTING
      BUSINESS INTERESTS AND ACTIVITIES OF THE CONSULTANT

    


    1.
      Use of
      Near-Infrared Spectrometry technique to non-invasively measure factors that
      predict and reflect changes in Diabetes, ARDS and other disorders.

    


    2.
      Development of intellectual property of ways to treat age-related macular
      degeneration.

    


    3.
      Development of CD40 T Cell diagnostics and therapeutics

    


    4.
      Development of biomarker microarrays to predict the acute respiratory distress
      syndrome (ARDS) and of proprietary elastase inhibitors to prevent
      ARDS.

    


    5.
      Development of novel glucose molecules for nutritional and therapeutic
      purposes.

     

     

     

     

     

     

     

    9