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                                 EXHIBIT 10 (E)

                        SILICON VALLEY FINANCIAL SERVICES
                        A Division of Silicon Valley Bank
                                3003 Tasman Drive
                             Santa Clara, Ca. 95054
                        (408)654-1000 - Fax (408)980-6410

                               FACTORING AGREEMENT

         This Factoring Agreement (the "Agreement) is made on the SIXTH day of
SEPTEMBER, 1996, by and between Silicon Valley Financial Services (a division of
Silicon Valley Bank) ("Buyer") having a place of business at the address
specified above and OXIS INTERNATIONAL, INC., A DELAWARE corporation, (the
"Parent"), and its wholly owned subsidiary, OXIS ACQUISITION CORPORATION (the
"Subsidiary"). The Parent and the Subsidiary are jointly referred to herein as
the "Seller" having its principal place of business and chief executive office
at
                    Street Address:     6040 N. Cutter Circle, Suite 317
                              City:     Portland
                            County:     Multnomah
                             State:     Oregon
                          Zip code:     97271
                               Fax:     94-1620407
1.  DEFINITIONS. When used herein, the following terms shall have the following
     meanings.
     1.1.     "Account Balance" shall mean, on any given day, the gross amount
              of all Purchased Receivables unpaid on that day.
     1.2.     "Account Debtor" shall have the meaning set forth in the
              California Uniform Commercial Code and shall include any person
              liable on any Purchased Receivable, including without limitation,
              any guarantor of the Purchased Receivable and any issuer of a
              letter of credit or banker's acceptance.
     1.3.     "Adjustments" shall mean all discounts, allowances, returns,
              disputes, counterclaims, offsets, defense, rights of recoupment,
              rights of return, warranty claims, or short payments, asserted by
              or on behalf of any Account Debtor with respect to any Purchased
              Receivable.
     1.4.     "Administrative Fee" shall have the meaning as set forth in
              Section 3.3 hereof.
     1.5.     "Advance" shall have the meaning set forth in Section 2.2 hereof.
     1.6.     "Collateral" shall have the meaning set forth in Section 8 hereof.
     1.7.     "Collections" shall mean all good funds received by Buyer from or
              on the behalf of an Account Debtor with respect to Purchased
              Receivables.
     1.8.     "Compliance Certificate" shall mean a certificate, in a form
              provided by Buyer to Seller, which contains the certification of
              the chief financial officer of Seller that, among other things,
              the representations and warranties set forth in this Agreement are
              true and correct as of the date such certificate is delivered.

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     1.9.     "Event of Default" shall have the meaning set forth in Section 9
              hereof.
     1.10.    "Finance Charges" shall have the meaning set forth in Section 3.2
              hereof.
     1.11.    "Invoice Transmittal" shall mean a writing signed by an authorized
              representative of Seller which accurately identifies the
              receivables which Buyer, at its election, may purchase, and
              includes for each such receivable the correct amount owed by the
              Account Debtor, the name and address of the Account Debtor, the
              invoice number, the invoice date and the account code.
     1.12.    "Obligations" shall mean all advances, financial accommodations,
              liabilities, obligations, covenants and duties owing, arising, due
              or payable by Seller to Buyer of any kind or nature, present or
              future, arising under or in connection with this Agreement or
              under any other document, instrument or agreement, whether or not
              evidenced by any note, guarantee or other instrument, whether
              arising on account or by overdraft, whether direct or indirect
              (including those acquired by assignment) absolute or contingent,
              primary or secondary, due or to become due, now owing or hereafter
              arising, and however acquired; including, without limitation, all
              Advances, Finance Charges, Administrative Fees, interest,
              Repurchase Amounts, fees, expenses, professional fees and
              attorneys' fees and other sums chargeable to Seller hereunder or
              otherwise.
     1.13.    "Purchased Receivable" shall mean all those accounts, receivables,
              chattel paper, instruments, contract rights, documents, general
              intangibles, letters of credit, drafts, bankers acceptances, and
              rights to payment, and all proceeds thereof (all of the foregoing
              being referred to as "receivables") arising out of the invoices
              and other agreements identified on or delivered with any Invoice
              Transmittal delivered by Seller to Buyer which Buyer elects to
              purchase and for which Buyer makes an Advance.
     1.14.    "Refund" shall have the meaning set forth in Section 3.5 hereof.
     1.15.    "Reserve" shall have the meaning set forth in Sections 2.4 hereof.
     1.16.    "Repurchase Amount" shall have the meaning set forth in Section
              4.2 hereof.
     1.17.    "Reconciliation Date" shall mean the last calendar day of each
              Reconciliation Period.
     1.18.    "Reconciliation Period" shall mean each calendar month of the
              year.

2. PURCHASE AND SALE OF RECEIVABLE.
     2.1.     OFFER TO SELL RECEIVABLES. During the term hereof, and provided
              that there does not then exist any Event of Default or any event
              that with notice, lapse of time or otherwise would constitute an
              Event of Default, Seller may request that Buyer purchase
              receivables and Buyer may, in its sole discretion, elect to
              purchase receivables. Seller shall deliver to Buyer an Invoice
              Transmittal with respect to any receivable for which a request for
              purchase is made. An authorized representative of Seller shall
              sign each Invoice Transmittal delivered to Buyer. Buyer shall be
              entitled to rely on all the information provided by Seller to
              Buyer on or with the Invoice Transmittal and to rely on the
              signature on any Invoice Transmittal as an authorized signature of
              Seller.

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     2.2.     ACCEPTANCE OF RECEIVABLES. Buyer shall have no obligation to
              purchase any receivable listed on an Invoice Transmittal. Buyer
              may exercise its sole discretion in approving the credit of each
              Account Debtor before buying any receivable. Upon acceptance by
              Buyer of all or any of the receivables described on any Invoice
              Transmittal, Buyer shall pay to Seller 80 (%) percent of the face
              amount of each receivable Buyer desires------to purchase. Such
              payment shall be the "Advance" with respect to such receivable.
              Buyer may, from time to time, in its sole discretion, change the
              percentage of the Advance. Upon Buyer's acceptance of the
              receivable and payment to Seller of the Advance, the receivable
              shall become a "Purchased Receivable." It shall be a condition to
              each advance that (i) all of the representations and warranties
              set forth in Section 6 of this Agreement be true and correct on
              and as of the date of the related Invoice Transmittal and on and
              as of the date of such Advance as though made at and as of each
              such date, and (ii) no Event of Default or any event or condition
              that with notice, lapse of time or otherwise would constitute an
              Event of Default shall have occurred and be continuing, or would
              result from such Advance. Notwithstanding the foregoing, in no
              event shall the aggregate amount of all Purchased Receivables
              outstanding at any time exceed FIVE HUNDRED THOUSAND AND
              NO/100**** Dollars ($500,000.00).
     2.3.     EFFECTIVENESS OF SALE TO BUYER. Effective upon Buyers' payment of
              an Advance, and for and in consideration thereof and in
              consideration of the covenants of this Agreement, Seller hereby
              absolutely sells, transfers and assigns to Buyer, all of Seller's
              right, title and interest in and to each Purchased Receivable and
              all monies due or which may become due on or with respect to such
              Purchased Receivable. Buyer shall be the absolute owner of each
              Purchased Receivable. Buyer shall have, with respect to any goods
              related to the Purchased Receivable, all the rights and remedies
              of an unpaid seller under the California Uniform Commercial Code
              and other applicable law, including the rights of replevin, claim
              and delivery, reclamation and stoppage in transit.
     2.4.     ESTABLISHMENT OF A RESERVE. Upon the purchase by Buyer of each
              Purchased Receivable, Buyer shall establish a reserve. The reserve
              shall be the amount by which the face amount of the Purchased
              Receivable exceeds the advance on that Purchased Receivable (the
              "Reserve"); provided, the Reserve with respect to all Purchased
              Receivables outstanding at any one time shall be an amount not
              less than 20(%) percent of the Account Balance at that time and
              may be set at a higher percentage at Buyer's sole discretion. The
              reserve shall be a book balance maintained on the records of Buyer
              and shall not be a segregated fund.

3. COLLECTIONS, CHARGES AND REMITTANCES.
     3.1.     COLLECTIONS. Upon receipt by Buyer of Collections, Buyer shall
              promptly credit such Collections to Seller's Account Balance on a
              daily basis; provided, that if Seller is in default under this
              Agreement, Buyer shall apply all Collections to Seller's
              Obligations hereunder in such order and manner as Buyer may
              determine. If an item

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              of collection is not honored or Buyer does not receive good funds
              for any reason, the amount shall be included in the Account
              Balance as if the Collections had not been received and Finance
              Charges under Section 3.2 shall accrue thereon.
     3.2.     FINANCE CHARGES. On each Reconciliation Date Seller shall pay to
              Buyer a finance charge in an amount equal to 2.0(%) percent per
              month of the average daily Account Balance outstanding during the
              applicable Reconciliation Period (the "Finance Charges"). Buyer
              shall deduct the accrued Finance Charges from the Reserve as set
              forth in Section 3.5 below.
     3.3.     ADMINISTRATIVE FEE. On each Reconciliation Date Seller shall pay
              to Buyer an Administrative Fee equal to 1.0 (%) percent of the
              face amount of each Purchased Receivable first purchased during
              that Reconciliation Period (the "Administrative Fee"). Buyer shall
              deduct the Administrative Fee from the Reserve as set forth in
              Section 3.5 below.
     3.4.     ACCOUNTING. Buyer shall prepare and send to Seller after the close
              of business for each Reconciliation Period, an accounting of the
              transactions for that Reconciliation Period, including the amount
              of all Purchased Receivables, all Collections, and Adjustments,
              Finance Charges, and the Administrative Fee. The accounting shall
              be deemed correct and conclusive unless Seller makes written
              objection to Buyer within thrity (30) days after the Buyer mails
              the accounting to Seller.
     3.5.     REFUND TO SELLER. Provided that there does not exist an Event of
              Default or any condition that with notice, lapse of time or
              otherwise would constitute an Event of Default, Buyer shall refund
              to Seller by check after the Reconciliation Date, the amount, if
              any, which Buyer owes to Seller at the end of the Reconciliation
              Period according to the accounting prepared by Buyer for the
              Reconciliation Period (the "Refund"). The Refund shall be an
              amount equal to:
              (A) (1) The Reserve as of the beginning of that Reconciliation
                  Period, PLUS
                  (2) the Reserve created for each Purchased Receivable
                  purchased during that Reconciliation Period, MINUS
              (B) The total for that Reconciliations Period of:
                  (1) the Administrative Fee;
                  (2) Finance Charges;
                  (3) Adjustments;
                  (4) Repurchase Amounts, to the extent Buyer has agreed to
                  accept payment thereof by deduction from the Refund;
                  (5) the Reserve for the Account Balance as of the first day of
                  the following Reconciliation Period in the minimum percentage
                  set forth in Section 2.4 hereof; and
                  (6) all amounts due, including professional fees and expenses,
                  as set forth Section 12 for which oral or written demand has
                  been made by Buyer to Seller during that Reconciliation Period
                  to the extent Buyer has agreed to accept payment thereof by
                  deduction from the Refund.

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     In the event the formula set forth in this Section 3.5 results in an amount
     due to Buyer from Seller, Seller shall make such payment in the same manner
     as set forth in Section 4.3 hereof for repurchases. If the formula set
     forth in this Section 3.5 results in an amount due to Seller from Buyer,
     Buyer shall make such payment by check, subject to Buyer's rights under
     Section 4.3 and Buyer's rights of offset and recoupment.

4.  RECOURSE AND REPURCHASE OBLIGATIONS.
     4.1      RECOURSE. Buyer's acquisition of Purchased Receivables from Seller
              shall be with full recourse against Seller. In the event the
              Obligations exceed the amount of Purchased Receivables and
              collateral, Seller shall be liable for any deficiency.
     4.2      SELLER'S AGREEMENT TO REPURCHASE.  Seller agrees to pay to Buyer
              on demand, the full face amount, or any unpaid portion, of any
              Purchased
              Receivable:
              (A) which remains unpaid ninety (90) calendar days after the
                  invoice date; or
              (B) which is owed by any Account Debtor who has filed, or has had
                  filed against it, any bankruptcy case, assignment for the
                  benefit of creditors, receivership, or insolvency proceeding
                  or who is generally not paying its debts as such debts become
                  due; or
              (C) with respect to which there has been any breach of warranty of
                  representation set forth in Section 6 hereof or any breach of
                  any covenant contained in this Agreement; or
              (D) with respect to which the Account Debtor asserts any discount,
                  allowance, return, dispute, counterclaim, offset, defense,
                  right of recoupment, right of return, warranty claim, or short
                  payment;
              together with all reasonable attorneys' and professional fees and
              expenses and all court costs incurred by Buyer in collecting such
              Purchased Receivable and/or enforcing its rights under, or
              collecting amounts owned by Seller in connection with, this
              Agreement (collectively, the "Repurchase Amount").
     4.3.     SELLER'S PAYMENT OF THE REPURCHASE AMOUNT OR OTHER AMOUNTS DUE
              BUYER. When any Repurchase Amount or other amount owing to Buyer
              becomes due, Buyer shall inform Seller of the manner of payment
              which may be any one or more of the following in Buyer's sole
              discretion: (a) in cash immediately upon demand therefor; (b) by
              delivery of substitute invoices and an Invoice Transmittal
              acceptable to Buyer which shall thereupon become Purchased
              Receivables; (c) by adjustment to the Reserve pursuant to Section
              3.5 hereof; (d) by deduction from or offset against the amount
              that otherwise would be forwarded to Seller in respect of any
              further Advances that may be made by Buyer; or (f) by any
              combination of the foregoing as Buyer may from time to time
              choose.
     4.4.     SELLER'S AGREEMENT TO REPURCHASE RECEIVABLES. Upon and after the
              occurrence of an Event of Default, Seller shall, upon Buyer's
              demand (or, in the case of an Event of Default under Section 9(B),
              immediately without notice or demand from Buyer) repurchase all
              the Purchased Receivables then outstanding, or such portion
              thereof as Buyer may demand. Such demand may, at Buyer's option,
              include and Seller shall

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              pay to Buyer Immediately upon demand, cash in an amount equal to
              the Advance with respect to each Purchased Receivable then
              outstanding together will all accrued Finance Charges,
              Adjustments, Administrative Fees, attorney's and professional
              fees, court costs and expenses as provided for herein, and any
              other Obligations. Upon receipt of payment in full of the
              Obligations, Buyers shall immediately instruct Account Debtors to
              pay Seller directly, and return to Seller any Refund due to
              Seller. For the purpose of calculating any Refund due under this
              Section only, the Reconciliation Date shall be deemed to be the
              date Buyer receives payment in good funds of all the Obligations
              as provided in this Section 4.4.

5.   POWER OF ATTORNEY. Seller does hereby irrevocably appoint Buyer and its
     successors and assigns as Seller's true and lawful attorney in fact, and
     hereby authorizes Buyer, regardless of whether there has been as Event of
     Default, (a) to sell, assign, transfer, pledge, compromise, or discharge
     the whole or any part of the Purchased Receivables; (b) to demand, collect,
     receive, sue, and give releases to any Account Debtor for the monies due or
     which may become due upon or with respect to the Purchased Receivables and
     to compromise, prosecute, or defend any action, claim, case or proceeding
     relating to the Purchased Receivables, including the filing of a claim or
     the voting of such claims in any bankruptcy case, all in Buyer's name or
     Seller's name, as Buyer may choose (c) to prepare, file and sign Seller's
     name in any notice, claim, assignment, demand, draft, or notice of or
     satisfaction of lien or mechanics' lien or similar document with respect to
     Purchased Receivables;(d) to notify all Account Debtors with respect to the
     Purchased Receivables to pay directly;(e) to receive, open and dispose of
     all mail addressed to Seller for the purpose of collecting the Purchased
     Receivables;(f) to endorse Seller's name on any check or other forms of
     payment on the Purchased Receivables; (g) to execute on behalf of Seller
     any and all instruments, documents, financing statements and the like to
     perfect Buyer's interest in the Purchased Receivables and Collateral; and
     (h) to do all acts and things necessary or expedient, in furtherance of any
     such purposes. If Buyer receives a check or item which is payment for both
     a Purchased Receivable and another receivable, the funds shall first be
     applied to the Purchased Receivable and, so long as there does not exist an
     Event of Default or an event that with notice, lapse of time or otherwise
     would constitute an Event of Default, the excess shall be remitted to
     Seller. Upon the occurrence and continuation of an event of Default, all of
     power of attorney rights granted by Seller to Buyer hereunder shall be
     applicable with respect to all Purchased Receivables and all Collateral.

6.   REPRESENTATIONS, WARRANTIES AND COVENANTS
     6.1      RECEIVABLES' WARRANTIES, REPRESENTATIONS AND COVENANTS. To induce
              Buyer to buy receivables and to render its services to Seller, and
              with full knowledge that the truth and accuracy of the following
              are being relied upon by the Buyer in determining whether to
              accept receivables as Purchased Receivables, Seller represents,
              warrants, covenants and agrees, with respect to each Invoice
              Transmittal delivered to Buyer and each receivable described
              therein, that:


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              (A) Seller is the absolute owner of each receivable set forth in
                  the Invoice Transmittal and legal rights to sell, transfer and
                  assign such receivables;
              (B) The correct amount of each receivables is as set forth in the
                  Invoice Transmittal and is not in dispute;
              (C) The payment of each receivable is not contingent upon the
                  fulfillment of any obligation or contract, past or future and
                  any and all obligations required of the Seller have been
                  fulfilled as of the date of the Invoice Transmittal;
              (D) Each receivable set forth on the Invoice Transmittal is based
                  on an actual sale and delivery of goods and/or services
                  actually rendered, is presently due and owing to Seller, is
                  not past due or in default, has not been previously sold,
                  assigned, transferred, or pledged, and is free of any and all
                  liens, security interests and encumbrances other than liens,
                  security interests or encumbrances in favor of Buyer or any
                  other division or affiliate of Silicon Valley Bank;
              (E) There are no defenses, offsets, or counterclaims against any
                  of the receivables, and no agreement has been made under which
                  the Account Debtor may claim any deduction or discount, except
                  as otherwise stated in the Invoice Transmittal;
              (F) Each Purchased Receivable shall be the property of the Buyer
                  and shall be collected by Buyer, but if for any reason it
                  should be paid to the Seller, Seller shall promptly notify
                  Buyer of such payment, shall hold checks, drafts, or monies so
                  received in trust for the benefit of Buyer, and shall promptly
                  transfer and deliver the same to the Buyer;
              (G) Buyer shall have the right of endorsement, and also the right
                  to require endorsement by Seller, on all payments received in
                  connection with each Purchased Receivable and any proceeds of
                  Collateral;
              (H) Seller, and to Seller's best knowledge , each Account Debtor
                  set forth in the Invoice Transmittal, are and shall remain
                  solvent as that term is defined in the United States
                  bankruptcy Code and the California Uniform Commercial Code,
                  and no such Account Debtor has filed or had filed against it a
                  voluntary petition for relief under the United States
                  Bankruptcy Code;
              (I) Each Account Debtor named on the Invoice Transmittal will not
                  object to the payment for, or the quality or the quantity of
                  the subject matter of, the receivable and is liable for the
                  amount set forth on the Invoice Transmittal;
              (J) Each Account Debtor shall promptly be notified, after
                  acceptance by Buyer, that the Purchased Receivable has been
                  transferred to and is payable to Buyer, and Seller shall not
                  take or permit any action to countermand such notification;
                  and
              (K) All receivables forwarded to and accepted by Buyer after the
                  date hereof, and thereby becoming Purchased Receivables, shall
                  comply with each and every one of the foregoing
                  representations, warranties, covenants and agreements referred
                  to above in this Section 6.1
     6.2      ADDITIONAL WARRANTIES, REPRESENTATIONS AND COVENANTS. In addition
              to the foregoing warranties, representation and covenants, to
              induce Buyer to buy

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              receivables and to render its services to Seller, hereby Seller
              represents, warrants, covenants and agrees that:
              (A) Seller will not assign, transfer, sell, or grant, or permit
                  any lien or security interest any Purchased Receivables or
                  Collateral to or favor of any other party, without Buyer's
                  prior written consent;
              (B) The Seller's name, form of organization, chief executive
                  office, and the place where records concerning all Purchased
                  Receivables and Collateral are kept is set forth at the
                  beginning of this Agreement, Collateral is located only at the
                  location set forth in the beginning of this Agreement, or, if
                  located at any additional location, as set forth on a schedule
                  attached to this Agreement, and Seller will give Buyer at
                  least thirty (30) days prior written notice if such name,
                  organization, chief executive office or other locations of
                  Collateral or records concerning Purchased Receivables or
                  Collateral is changed or added and shall execute any documents
                  necessary to perfect Buyer's interest in the Purchased
                  Receivables and the Collateral;
              (C) Seller shall(i) pay all of its normal gross payroll for
                  employees, and all federal and state taxes, as and when due,
                  including without limitation all payroll and withholding taxes
                  and state sales taxes; (ii) deliver at any time and from time
                  to time at Buyer's request, evidence satisfactory to Buyer
                  that all such amounts have been paid to the proper taxing
                  authorities: and; (iii) if requested by Buyer, pay its payroll
                  and related taxes through the bank or any independent payroll
                  service acceptable Buyer.
              (D) Seller has not, as of the time Seller delivers to Buyer an
                  Invoice Transmittal or as of the time Seller accepts any
                  Advance from Buyer, filed a voluntary petition for relief
                  under the United States Bankruptcy Code or had filed against
                  it an involuntary petition for relief:
              (E) If Seller owns, holds or has any interest in, any copyrights
                  (whether registered, or unregistered), and licenses of any of
                  the foregoing, such interest has been disclosed to Buyer and
                  specifically listed and identified on a schedule to this
                  Agreement, and Seller shall immediately notify Buyer if Seller
                  hereafter obtains any interest in any additional copyrights,
                  or licenses that are significant in value or are material it
                  the conduct of its business; and
              (F) Seller shall provide Buyer with a Compliance Certificate (i)
                  on a quarterly basis to be received by Buyer no later than the
                  fifth calendar day following each calendar quarter, and; (ii)
                  on a more frequent or other basis if and as requested by
                  Buyer.

7.   ADJUSTMENTS. In the event of a breach of any of the representations
     warranties or covenants set forth in Section 6.1, or in the event any
     Adjustment or dispute is asserted by any Account Debtor, Seller shall
     promptly advise Buyer and shall, subject to the Buyer's approval, resolve
     such disputes and advise Buyer of any adjustments. Unless the disputed
     Purchased Receivable is repurchased by Seller and the full Repurchase
     Amount is paid, Buyer shall remain the absolute owner of any Purchased
     Receivable which is subject to Adjustment or

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     repurchased under Section 4.2 hereof, and any rejected, returned, or
     recovered personal property, with the right to take possession thereof at
     any time. If such possession is not taken by Buyer, Seller is to resell it
     for the Buyer's account at Seller's expense with the proceeds made payable
     to Buyer. While Seller retains possession of said returned goods, Seller
     shall segregate said goods and mark them "property of Silicon Valley
     Financial Services."

8.   SECURITY INTEREST. To secure the prompt payment and performance to Buyer of
     all Obligations, Seller hereby grants to Buyer a continuing lien upon and
     security interest in all of Seller's now existing or hereafter arising
     rights and interest in the following, whether now owned or existing or
     hereafter created, acquired, or arising and wherever located (collectively,
     the "Collateral"):
              (A) All accounts, receivables, contract rights, chattel paper,
                  instruments, documents, letters of credit, bankers
                  acceptances, drafts, checks, cash, securities, and general
                  intangibles ( including, without limitation, all claims,
                  causes of action, deposit accounts, guaranties, rights in and
                  claims under insurance policies ( including rights to premium
                  refunds), rights to tax refunds, copyrights, rights in and
                  under license agreements and all other intellectual property
                  excluding patents and trademarks);
              (B) All Inventory, including Seller's rights to any returned or
                  rejected goods, with respect to which Buyer shall have all the
                  rights of any unpaid seller, including the rights of repelvin,
                  claim and delivery, reclamation, and stoppage in transit;
              (C) All monies, refunds and other amounts due Seller, including,
                  without limitation, amounts due Seller under this Agreement (
                  including Seller's right of offset and recoupment);
              (D) All equipment, machinery, furniture, furnishing, fixtures,
                  tools, supplies and motor vehicles;
              (E) All farm products, crops, timber, minerals and the like
                  (including oil and gas);
              (F) All accessions to, substitutions for, and replacements of all
                  of the foregoing;
              (G) All books and records pertaining to all of the foregoing; and
              (H) All proceeds of the foregoing, whether due to voluntary or
                  involuntary disposition, including insurance proceeds.
     Seller is not authorized to sell, assign, transfer or otherwise convey any
     Collateral without Buyer's prior written consent, except for the sale of
     finished inventory in the Seller's usual course of business. Seller agrees
     to sign UCC financing statements, in a form acceptable to Buyer, and any
     other instruments and documents requested by Buyer to evidence, perfect, or
     protect the interests of Buyer in the Collateral. Seller agrees to deliver
     to Buyer the originals of all instruments, chattel paper and documents
     evidencing or related to Purchased Receivables and Collateral.

9.  DEFAULT.  The occurrence of any one or more of the following shall
              constitute an Event of Default here under.
              (A) Seller fails to pay any amount owed to Buyer as and when due;

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              (B) There shall be commenced by or against Seller any voluntary or
                  involuntary case under the United States Bankruptcy Code, or
                  any assignment for the benefit of creditors, or appointment of
                  a receiver or custodian for any of its assets;
              (C) Seller shall become insolvent in that its debts are greater
                  than the fair value of its assets, or Seller is generally not
                  paying its debts as they become due or is left with
                  unreasonably small capital;
              (D) Any involuntary lien, garnishment, attachment or the like is
                  issued against or attaches to the Purchased Receivables or any
                  Collateral;
              (E) Seller shall breach any covenant, agreement, warranty, or
                  representation set forth herein, and the same is not cured to
                  Buyer's satisfaction within ten (10) days after Buyer has
                  given Seller oral or written notice thereof; provided, that if
                  such breach is incapable of being cured it shall constitute an
                  immediate default hereunder;
              (F) Seller is not in compliance with, or otherwise is in default
                  under, any term of any document, instrument or agreement
                  evidencing a debt, obligation or liability of any kind or
                  character of Seller, now or hereafter existing, in favor of
                  Buyer or any division or affiliate of Silicon Valley Bank,
                  regardless of whether such debt, obligation or liability is
                  direct or indirect, primary or secondary, joint, several or
                  joint and several, or fixed or contingent, together with any
                  and all renewals and extensions of such debts, obligations and
                  liabilities, or any part thereof;
              (G) An event of default shall occur under any guaranty executed by
                  any guarantor of the Obligations of Seller to Buyer under this
                  Agreement, or any material provision of any such guaranty
                  shall for any reason cease to be valid or enforceable or any
                  such guaranty shall be repudiated or terminated, including by
                  operation of law;
              (H) A default or event of default shall occur under any agreement
                  between Seller and any creditor of Seller that has entered
                  into a subordination agreement with Buyer; or
              (I) Any creditor that has entered into a subordination agreement
                  with Buyer shall breach any of the terms or not comply with
                  such subordination agreement.

10.  REMEDIES UPON DEFAULT. Upon the occurrence of an Event of Default, (1)
     without implying any obligation to buy receivables, Buyer may cease buying
     receivables or extending any financial accommodations to Seller; (2) all or
     a portion of the Obligations shall be, at the option and upon demand by
     Buyer, or with respect to an Event of Default described in Section 9(B),
     automatically and without notice or demand, due and payable in full; and
     (3) Buyer shall have and may exercise all the rights and remedies under
     this Agreement and under applicable law, including the rights and remedies
     of a secured party under the California Uniform Commercial Code all the
     power of attorney rights described in Section 5 with respect to all
     Collateral, and the right to collect, dispose of, sell, lease, use, and
     realize upon all Purchased Receivables and all Collateral in any commercial
     reasonable manner. Seller and Buyer agree that any notice of sale required
     to be given to Seller shall be deemed to be reasonable if given five (5)
     days prior to the date on or after which the sale may be held.

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     In the event that the Obligations are accelerated hereunder, Seller shall
     repurchase all of the Purchased Receivables as set forth in Section 4.4.

11.  ACCRUAL OF INTEREST. If any amount owed by Seller hereunder is not paid
     when due, including, without limitation, amounts due under Section 3.5,
     Repurchase Amounts, amounts due under Section 12, and any other
     Obligations, such amounts shall bear interest at a per annum rate equal to
     the per annum rate of the Finance Charges until the earlier of (i) payment
     in good funds or (ii) entry of a final judgment thereof, at which time the
     principal amount of any money judgment remaining unsatisfied shall accrue
     interest at the highest rate allowed by applicable law.

12.  FEES, COSTS AND EXPENSES; INDEMNIFICATION. The Seller will pay to Buyer
     immediately upon demand all fees, costs and expenses (including fees of
     attorneys and professionals and their costs and expenses) that Buyer incurs
     or may from time to time impose in connection with any of the following:
     (a) preparing, negotiating, administering, and enforcing this Agreement or
     any other agreement executed in connection herewith, including any
     amendments, waivers or consents in connection with any of the foregoing,
     (b) any litigation or dispute (whether instituted by Buyer, Seller or any
     other person) in any way relating to the Purchased Receivables, the
     Collateral, this agreement or any other agreement executed in connection
     herewith or therewith, (d) enforcing any rights against Seller or any
     guarantor, or any Account Debtor, (e) protecting or enforcing its interest
     in the Purchased Receivables or the Collateral, (f) collecting the
     Purchased Receivables and the Obligations, and (g) the representation of
     Buyer in connection with any bankruptcy case or insolvency proceedings
     involving Seller, any Purchased Receivable, the Collateral, any Account
     Debtor, or any guarantor. Seller shall indemnify and hold Buyer harmless
     from and against any and all claims, actions, damages, costs, expenses, and
     liabilities of any nature whatsoever arising in connection with any of the
     foregoing.

13.  SEVERABILITY, WAIVER, AND CHOICE OF LAW. In the event that any provision of
     this Agreement is deemed invalid by reason of law, this Agreement will be
     construed as not containing such provision and the remainder of the
     Agreement shall remain in full force and effect. Buyer retains all of its
     rights, even if it makes an Advance after default. If Buyer waives a
     default, it may enforce a later default. Any consent or waiver under, or
     amendment of, this Agreement must be in writing. Nothing contained herein,
     or any action taken or not taken by Buyer at any time, shall be construed
     at any time to be indicative of any obligation or willingness on the part
     of Buyer to amend this Agreement or to grant to Seller any waivers or
     consents. This Agreement has been transmitted by Seller to Buyer at Buyer's
     office in the State of California and has been executed and accepted by
     Buyer in the State of California. This Agreement shall be governed by and
     interpreted in accordance with the internal laws of the State of
     California.

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14.  ACCOUNT COLLECTION SERVICES. Certain Account Debtors may require or prefer
     that all of Seller's receivables be paid to the same address and/or party,
     or Seller and Buyer may agree that all receivables with respect to certain
     Account Debtors be paid to one party. In such event Buyer and Seller may
     agree that Buyer shall collect all receivables whether owned by Seller or
     Buyer and (provided that there does not then exist an Event of Default or
     event that with notice, lapse or time or otherwise would constitute an
     Event of Default, and subject to Buyer's rights in the Collateral) Buyer
     agrees to remit to Seller the amount of the receivables collections it
     receives with respect to receivables other than Purchased Receivables. It
     is understood and agreed by Seller that this Section does not impose any
     affirmative duty on Buyer to do any act other than to turn over such
     amounts. All such receivables and collections are Collateral and in the
     event of Seller's default hereunder, Buyer shall have no duty to remit
     collections of Collateral and may apply such collections to the obligations
     hereunder and Buyer shall have the rights of a secured party under the
     California Uniform Commercial Code.

15.  NOTICES. All notices shall be given to Buyer and Seller at the addresses or
     faxes set forth on the first page of this Agreement and shall be deemed to
     have been delivered and received: (a) if mailed, three(3) calendar days
     after deposited in the United Stated mail, first class, postage pre-paid,
     (b) one (1) calendar day after deposit with an overnight mail or messenger
     service; or (c) on the same date of confirmed transmission if sent by hand
     delivery, telecopy, telefax or telex.

16.  JURY TRIAL. SELLER AND BUYER EACH HEREBY (a) WAIVE THEIR RESPECTIVE RIGHTS
     TO A JURY TRIAL ON ANY CLAIM OR ACTION ARISING OUT OF OR IN CONNECTION WITH
     THIS AGREEMENT, ANY RELATED AGREEMENTS, OR ANY OF THE TRANSACTIONS
     CONTEMPLATED HEREBY OR THEREBY; (b) RECOGNIZE AND AGREE THAT THE FOREGOING
     WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR IT TO ENTER INTO THIS
     AGREEMENT; AND (c) REPRESENT AND WARRANT THAT IT HAS REVIEWED THIS WAIVER,
     HAS DETERMINED FOR ITSELF THE NECESSITY TO REVIEW THE SAME WITH ITS LEGAL
     COUNSEL, AND KNOWINGLY AND VOLUNTARILY WAIVES ALL RIGHTS TO A JURY TRIAL.

17.  TERM AND TERMINATION. The term of this Agreement shall be for one (1) year
     from the date hereof, and from year to year thereafter unless terminated in
     writing by Buyer or Seller. Seller and Buyer shall each have the right to
     terminate this Agreement at any time. Notwithstanding the foregoing, any
     termination of this Agreement shall not affect Buyer's security interest in
     the Collateral and Buyer's ownership of the Purchased Receivables and this
     Agreement shall continue to be effective and Buyer's rights and remedies
     hereunder shall survive such termination, until all transactions entered
     into and Obligations incurred hereunder or in connection herewith have been
     completed and satisfied in full.

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18.  TITLES AND SECTION HEADINGS. The titles and section headings used herein
     are for convenience only and shall not be used in interpreting this
     Agreement.

19.  OTHER AGREEMENTS. The terms and provision of this Agreement shall not
     adversely affect the rights of Buyer or any other division or affiliate of
     Silicon Valley Bank under any other document, instrument or agreement. The
     terms of such other documents, instruments and agreements shall remain in
     full force and effect notwithstanding the execution of this Agreement. In
     the event of a conflict between any provision of this Agreement and any
     provision of any other document, instrument or agreement between Seller on
     the one hand, and Buyer or any other division or affiliate of Silicon Valey
     Bank on the other hand, Buyer shall determine in its sole discretion which
     provision shall apply. Seller acknowledges specifically that any security
     agreements, liens and/or security interests currently securing payment of
     any obligations of Seller owing to Buyer or any other division or affiliate
     of Silicon Valley Bank also secure Seller's obligations under Agreement,
     and are valid and subsisting and are not adversely affected by execution of
     this Agreement. Seller further acknowledges that (a) any collateral under
     other outstanding security agreements or other documents between Seller and
     Buyer or any other division or affiliate of Silicon Valley Bank secures the
     obligations of Seller under this Agreement and (b) a default by Seller
     under this Agreement constitutes a default under other outstanding
     agreements between Seller and Buyer or any other division or affiliate of
     Silicon Valley Bank.

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IN WITNESS WHEREOF, Seller and Buyer have executed this Agreement on the day and
year above written.

SELLER: OXIS INTERNATIONAL, INC.            SELLER: OXIS ACQUISITION CORPORATION

By       s/Jon S. Pitcher                   By       s/Jon S. Pitcher
         ----------------------                      --------------------

Title    C.F.O. and Secretary               Title    C.F.O.
         ----------------------                      --------------------



BUYER: SILICON VALLEY FINANCIAL SERVICES
       A division of Silicon Valley Bank

By
   ------------------------------

Title
      ---------------------------

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