Document:

exv10w24

 

Exhibit 10.24

STOCK PURCHASE AGREEMENT

     This Stock Purchase Agreement (the “Agreement”) is entered into as of this [16] day June,
2005, by and between Oculus Innovative Sciences, Inc., a California corporation (“Oculus”), on the
one hand, and Quimica Pasteur, S de R.L. (“QP”), Francisco Javier Orozco Gutierrez (“JO”) and Jorge
Paulino Hermosillo Martin (“JH”) (JO and JH are each referred to sometimes herein as a “Purchaser”
and collectively as the “Purchasers”).

RECITALS

     A. Purchaser is a general partner of Quimica Pasteur, S de R.L. (“QP”). QP is owned at this
date as to fifty percent (50%) by JO and as to fifty percent (50%) by JH (each interest is referred
to as a “Partnership Interest”).

     B. QP distributes products of Oculus in Mexico pursuant to that certain agreement between QP
and Oculus Technologies de Mexico, the wholly-owned subsidiary of Oculus (“OTM”).

     C. Concurrently herewith, JO is entering into a certain Contrato de Opcion de Compra de Parte
Social (Partnership Interest Purchase Option Agreement) with Oculus, pursuant to which JO grants to
Oculus the option to purchase ninety-nine and seventy-five percent (99.75%) partnership interest in
QP (after the issuance of the Designee Interest), subject to the conditions contained therein.

     D. Concurrently herewith, the following additional agreements are being entered into:

          (i) Contrato Maestro between Oculus, OTM, QP and JH and JO (the “Framework Agreement”); and

          (ii) Contrato de Consignacion Mercantil between QP and OTM (“Consignment Agreement”).

     E. On the date following the date hereof, JH and JO are conducting a Asamblea de Socios de QP
(or partner meeting of QP) (the “QP Partner Meeting”), pursuant to which JH and JO shall resolve to
authorize and irrevocably direct the assignment of JH’s Partnership Interest to JO, and to admit a
new partner designated by Oculus (the “Oculus Designee”, who will hold a partnership interest in QP
equal to .25% of the total partnership interests of QP (the “Designee Interest”).

     NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, and in
consideration of the representations, warranties, and covenants herein contained, the parties agree
as follows.

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     1. Purchase and Sale of Shares. On the terms and subject to the conditions of this
Agreement, Purchasers each hereby agrees to purchase from Oculus, and, expressly conditioned upon
the occurrence of the things specified in Section 3.1 hereof), Oculus hereby agrees to sell to each
Purchaser, 300,000 shares of the Common Stock of Oculus (each a “Share and collectively, the
“Shares”) in consideration of the following:

          1.1 receipt by JO from JH of JH’s Partnership Interest as authorized in the Partner’s Meeting
and issuance of the Designee Interest to a person designated by Oculus, each by way of an
irrevocable assignment in form and substance satisfactory to Oculus (together, the “Irrevocable
Assignment”);

          1.2 receipt by Oculus from JO of the Partnership Interest Purchase Option Agreement.

     2. Closing. The closing of the assignment and transfer of JH’s QP Partnership
Interests to JO and the transfer and assignment of the Partnership Interest Purchase Option
Agreement to Oculus will take place at the offices of QP, in Guadalajara, Jalisco, Mexico on the
date of the QP Partner Meeting and immediately after it is adjourned, which meeting is scheduled to
take place on June 17, 2005, unless another date, time or place is agreed to in writing by Oculus
and QP (the “Closing”).

          2.1 Deliveries of Purchasers.

               (a) Upon execution and delivery of the Agreement, each Purchaser shall deliver or cause to be
delivered to Oculus or the person designated below:

                    (i) the QP Partner Meeting authorization, effecting (among other things) an irrevocable
assignment of the JH Partnership Interest to JO and the issuance of the Designee Interest to a
designee of Oculus, and otherwise in form and substance satisfactory to Oculus (the “QP
Authorization”);

                    (ii) the Partnership Interest Purchase Option Agreement, executed by JO;

                    (iii) this Agreement, executed by JO and JH.

                    (iv) the Framework Agreement, executed by all involved parties; and

                    (v) the Consignment Agreement, executed by QP and OTM.

               (b) At the Closing, each Purchaser shall deliver or cause
to be delivered to Oculus or the person designated below the QP Meeting Authorization, duly signed,
sealed and delivered.

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          2.2 Deliveries of Oculus. Upon execution and delivery of the Agreement, Oculus shall
deliver or cause to be delivered to the appropriate person or persons:

               (a) this Agreement, executed by a duly authorized representative of Oculus.

               (b) the Framework Agreement, executed by Oculus; and

               (c) the Consignment Agreement, executed by Oculus.

     3. Issuance of Shares.

          3.1 Conditions Precedent. Oculus’ obligation to issue the Shares is expressly
conditioned on the occurrence of the following:

               (a) Oculus shall have received revenue from the sale by QP of Microcyn of at least $500,000 on
or before the date which is six months after the date of this Agreement;

               (b) Oculus shall have received revenue from the sale by QP of the Products (as that term is
defined in the Framework Agreement) other than Microcyn of at least $834,000 on or before the date
which is six months after the date of this Agreement;

               (c) QP shall have restructured the long-term debt evidenced on the Financials which is
outstanding as of the date hereof on or before December 31, 2005, to the satisfactions of Oculus;

               (d) All payroll, tax, accounting, and legal issues relating to QP shall have been resolved to
the satisfaction of Oculus, in its sole discretion, and evidence of the resolution of such issues
in form and substance acceptable to QP, shall have been provided to Oculus on or before December
31, 2006;

               (e) The monthly costs, liabilities and expenses of QP for each of the months during the period
commencing on July 1, 2005 and ending on December 31, 2005 shall not exceed ninety percent (90%) of
gross revenues collected during such period;

               (f) JO shall have entered into an employment agreement with QP for a term of five years (or
such other period as QP shall determine) and
otherwise on terms reasonably satisfactory to QP, and JO shall not

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be in breach thereunder;

               (g) The representations and warranties made by QP and each of the Purchasers in this Agreement
and in the Agreements herein described shall be true and correct as of the Issuance Date as though
made on and as of the Issuance Date, except as affected by the transactions contemplated by this
Agreement, and each of the Purchases shall have delivered to Oculus a certificate, dated the
Issuance Date, and executed by such Purchaser, to such effect; and

               (h) The issuance of the Shares would not violate any applicable securities law.

               (i) The credit facility with Nafinsa (as such terms and entity is known by the Parties)
remains available for use for the sales to public hospitals for Microcyn and non Microcyn sales.

          3.2 Issuance. On December 31, 2005, or such later date as the parties shall agree in
writing (the “Issuance Date”), (a) if Purchasers shall have made all deliveries required to be made
in Section 2.1 hereof, (b) if the events specified in Section 3.1 above shall have occurred, as
determined in good faith solely by Oculus, (c) and if this Agreement shall not have been earlier
terminated, upon delivery of the certificate by each of the Purchasers described in Section 3.1(g)
hereof, Oculus shall deliver as soon as practicable to each of the Purchasers certificates
evidencing the Shares purchased by the Purchaser at such Purchaser’s address specified on the
signature page hereof.

     4. Representations of Oculus. Oculus hereby acknowledges and agrees, and represents
and warrants to each of the Purchaser as of the date hereof, as follows:

               (a) Oculus is duly organized, validly existing and in good standing under the laws of the
State of California, with full power and authority to conduct its business as it is now being
conducted, and is lawfully qualified to do business in those jurisdictions in which failure to
qualify would have a material adverse effect on Oculus.

               (b) This Agreement has been duly authorized, executed and delivered by Oculus and constitutes
Oculus’ valid and legally binding obligation, enforceable against Oculus in accordance with its
terms, subject as to enforcement to general principles of equity.

               (c) The execution and delivery of this Agreement and the issuance of the Shares has been
approved by the Board of Directors of Oculus, and the execution and delivery of this Agreement and
issuance of the Shares do not and will not (i) conflict with or result in a breach of any of the
terms or provisions
of, or constitute a default under, Oculus’ Amended and Restated Articles of Incorporation or
By-Laws or (ii) infringe any existing applicable law,

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rule, regulation, judgment, order or decree
of any government, governmental body or court, domestic or foreign, having jurisdiction over
Oculus.

               (d) Neither Oculus nor any of its affiliates nor any persons acting on its or their behalf,
have engaged or will engage in any directed selling efforts (as defined in Regulation S
(“Regulation S”) under the Securities Act of 1933, as amended (the “Securities Act”)) with respect
to the Shares and each of them has complied or will comply with the offering restrictions
requirements of Regulation S.

     5. Representations of Purchasers. JO and JH hereby acknowledges and agrees, and
represents and warrants to Oculus, jointly and severally, as of the date hereof, and as of the
Issuance Date, as follows:

          5.1 General Representations of Purchaser.

               (a) QP is duly organized, validly existing and in good standing under the laws of Mexico, with
full power and authority to conduct its business as it is now being conducted, and is lawfully
qualified to do business in those jurisdictions in which business is conducted by it.

               (b) This Agreement has been duly authorized, executed and delivered by each of QP, JH and JO
and constitutes QP’s, JH’s and JO’s valid and legally binding obligation, enforceable against QP,
JH and JO, respectively, in accordance with its terms.

               (c) The execution and delivery of this Agreement do not and will not (i) conflict with or
result in a breach of any of the terms or provisions of, or constitute a default under, the
partnership agreement of QP or any other agreement governing QP or (ii) infringe any agreement or
instrument which is material and by which QP or its respective assets is bound or any existing
applicable law, rule, regulation, judgment, order or decree of any government, governmental body or
court, domestic or foreign, having jurisdiction over QP.

               (d) Attached hereto as Attachment 5.1(d) are the unaudited consolidated financial statements
of QP as of and for the twelve-month period ending December 31, 2004, and for the three-month
period ended March 30, 2005 (the “Financial Statements”). The Financial Statements were prepared in
accordance with generally accepted accounting principles in Mexico consistently applied and present
fairly the financial position of QP as at the dates specified therein, and the results of
operations and changes in financial position of QP for the periods specified therein, subject to
normal year-end audit adjustments.

               (e) Attached hereto as Attachment 5.1(e) is a copy of
QP’s management accounts for the year to date period ending April 30, 2005 (the “Management
Accounts”). The Financial Statements and the Management

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Accounts make full provision for or, in the
case of actual liabilities, disclose or take into account, all liabilities of QP and each of its
subsidiaries (including taxation (including deferred taxation)), whether actual, contingent or
disputed. To the best of the knowledge and belief of QP, the Financial Statements and the
Management Accounts are accurate in all respects. The Management Accounts have been prepared on a
basis consistent with the Financial Statements and reasonably reflect the financial position of QP
for the period concerned.

               (f) Since April 30, 2005, except as disclosed in the Financial Statements and the Management
Accounts, (i) there has been no material adverse change in the financial condition, the earnings or
business affairs of QP, whether or not arising in the ordinary course of business, and (ii) there
have been no transactions entered into by QP, other than those in the ordinary course of business,
which are material with respect to QP.

               (g) QP is not subject to any legal proceedings involving claims or amounts which are material
and, to the best of its knowledge, no such legal proceedings are pending or threatened against it,
other than the Interventor litigation.

               (h) Immediately prior to the QP Partner Meeting, one hundred percent (100%) of the Partnership
Interests are held by JO (as to fifty percent (50%) and as to fifty percent (50%) by JH.
Immediately after the QP Partner Meeting, one hundred percent (100%) of the Partnership Interests
shall be held by JO (as to forty-nine and eighty-eight percent (49.88%)), by JH (as to forty-nine
and eighty-eight percent (49.88%)), and by the Oculus Designee (as to twenty-five hundredths
percent (.25%). Each of JO and JH represents he holds (or with respect to JH, did hold until
transfer to JO) his Partnership Interest free and clear of any restrictions on transfer, taxes,
encumbrances, security interests, options, warrants, purchase rights, contracts, commitments,
equities, claims, and demands. Neither Purchaser is a party to any option, warrant, purchase right,
or other contract or commitment that could require QP to sell, transfer, or otherwise dispose of
the Partnership Interest (other than this Agreement). Neither Purchaser is a party to any voting
trust, proxy, or other agreement or understanding with respect to the voting of any Partnership
Interest. There are no outstanding options, warrants or other securities exercisable or
exchangeable for or convertible into any interest in QP, and there is no agreement or arrangement
to sell, transfer or assign any interest in QP.

               (i) Neither Purchaser is in violation or default of any provision of the QP partnership
agreement or other charter document, or of any judgment, order, writ, decree or material contract
or agreement to which it is a party or by which it or any of its property or assets are bound, or,
to the best of its knowledge, of any material federal, state, local or foreign statute, rule or
regulation applicable to its business.

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          5.2 Representations of Purchaser Concerning Securities. Each Purchaser hereby
acknowledges and agrees, and represents and warrants to Oculus, as of the date hereof, and on the
Issuance Date, as follows:

               (a) The Shares have not been registered under the United States Securities Act, or any other
applicable securities laws, and may not be offered, sold, transferred or otherwise disposed of
other than pursuant to a registration statement which has been declared effective under the
Securities Act or an exemption from the registration requirements of the Securities Act.

               (b) Each Purchaser is either (i) an “Accredited Investor” within the meaning of Rule 501 under
Regulation D promulgated under the United States Securities Act of 1933, as amended (the
“Securities Act”), and makes the additional representations in Exhibit A, attached hereto;
or (ii) not a “U.S. Person”, and makes the additional representations in Exhibit B attached
hereto.

               (c) The offer and sale of the Shares to such Purchaser has taken place outside of the United
States of America, its territories and possessions (the “US”), and Purchaser has executed this
Agreement outside of the US.

               (d) Such Purchaser is an investor in securities of companies in the development stage and
acknowledges that it has such knowledge and experience in financial and business matters that
Purchaser is capable of evaluating the merits and risks of purchasing the Shares. Such Purchaser
is aware that Purchaser (or any account for which Purchaser is purchasing) may be required to bear
the economic risk of an investment in the Shares for an indefinite period of time, and Purchaser
(or such institutional account) is able to bear such risk for an indefinite period. Such Purchaser
has relied solely on this Agreement, the Confidential Private Placement Memorandum of Oculus, and
independent investigations made by such Purchaser in making a decision to purchase any Shares.
Purchaser reviewed the section of the Confidential Private Place Memorandum of Oculus headed “Risk
Factors”, and has received all the information that it considers necessary or appropriate for
deciding whether to purchase the Shares. Purchaser further represents that it has had an
opportunity to ask questions and receive answers from Oculus regarding the terms and conditions of
the offering of the Shares and the business, properties, prospects and financial condition of
Oculus. If not a natural person, Purchaser represents that it has not been organized for the
specific purpose of acquiring the Shares.

               (e) Such Purchaser is purchasing the Shares for Purchaser’s own account, or for one or more
institutional accounts for which such Purchaser is acting as a fiduciary or agent, in each case,
for investment, and not with a view to, or for offer or sale in connection with, any distribution
thereof, and such Purchaser has no present intention of selling, granting any participation in, or
otherwise distributing, the Shares.

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               (f) Purchaser has had an opportunity to discuss with the management of Oculus, the business,
management and financial affairs of Oculus.

               (g) Purchaser’s advisors and/or Purchaser have had an opportunity to inspect all records and
books pertaining to an investment in Oculus and have had reasonable opportunities to ask questions
of and receive answers from the officers of Oculus or other persons authorized by Oculus to act on
its behalf concerning the offering of shares, and all questions have been answered to Purchaser’s
full satisfaction and the satisfaction of Purchaser’s advisors.

               (h) Oculus will rely upon the truth and accuracy of the foregoing acknowledgments,
representations, warranties and agreements of such Purchaser, including any and all representations
and warranties made under Exhibits A and B, and if any such acknowledgment,
representation or warranty made by such Purchaser is no longer accurate, such Purchaser shall
promptly notify Oculus thereof in writing. Purchaser has sole investment discretion with respect
to any institutional account for which Purchaser is acquiring any Shares as a fiduciary or agent,
and Purchaser has full power to make the foregoing acknowledgments, representations, warranties and
agreements on behalf of each such account.

               (i) Purchaser understands that the Shares are “restricted securities” under the United States
federal securities laws inasmuch as they are being acquired from the Company in a transaction (i)
not involving a public offering and (ii) subject to the conditions of Regulation D or Regulation
S, as applicable, and that under such laws and applicable regulations such securities may be resold
without registration under the Securities Act only in certain limited circumstances. In this
connection, such Purchaser represents that it is familiar with Rule 144 under the Securities Act,
as presently in effect, and understands the resale limitations imposed thereby and by the
Securities Act.

               (j) Purchaser understands that no public market now exists for any of the securities issued by
Oculus (including the Shares), that Oculus has made no assurances that a public market will ever
exist for the Shares and that, even if such a public market exists at some future time, Oculus may
not then be satisfying the current public information requirements of Rule 144 under the Securities
Act.

          5.3 Legends.

               (a) If a Purchaser makes the representations in Exhibit A, it is understood and agreed
that the certificates evidencing the Shares will bear the following legend:

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“The shares of Common Stock represented by this stock certificate (the “Shares”)
have been acquired for investment and have not been registered under the
Securities Act. The Shares may not be sold or transferred in the absence of
such registration or an exemption therefrom under said Act.”

               (b) If a Purchaser makes the representations in Exhibit B, it is understood and agreed
that the certificates evidencing the Shares will bear the following legend:

“The shares of Common Stock represented by this stock certificate (the “Shares”)
have not been registered under the Securities Act, or any other securities laws,
and have been issued in reliance on the exemption from the registration
requirements of the Securities Act provided by Regulation S under the Securities
Act. The Shares may not be offered, sold, transferred or otherwise disposed of
in the United States or to, or for the benefit of account of, any “U.S. Person”
(as defined in said Regulation S), other than pursuant to a registration
statement which has been declared effective under the Securities Act or an
available exemption from the registration requirements of the Securities Act.
Hedging transactions involving the Shares may not be conducted other than in
compliance with the Securities Act.”

          5.4 Effect of Representation. Each of the foregoing representations, warranties and
undertakings, and each of the representations, warranties and undertakings contained in
Exhibits A or B, as applicable, shall be deemed to be made on the date of this
Agreement and shall be deemed to be repeated and made by the party making them on each day up to
and including the Issuance Date. Each of the representations contained in this Section 5 and in
Exhibits A or B shall survive the Closing or the termination of, or the issuance
of Shares under, this Agreement.

          5.5 Indemnification. QP and each of the Purchasers agrees to indemnify and hold
harmless Oculus (and each of its partners, officers, directors, employees and agents and each of
its affiliates) (each, an “Indemnified Party”) against any and all loss, liability, claim, damage
and expense whatsoever (including, without limitation, any reasonable legal or other expenses
incurred by such Indemnified Party in investigating or defending any such claim, damage or
expense), relating to or arising out of (i) any of the representations and warranties
made by QP or a Purchaser herein or in any other agreement referenced herein being untrue or
incorrect, (ii) the breach by QP or any of the Purchasers of any of its covenants contained herein
or in any of the agreements referenced herein, (iii) the Interventor litigation; (iv) any liability
not expressly assumed by Oculus; and (v) any theory of successor liability or similar principle of
law or equity.

     6. Covenants.

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          6.1 Access to Information. QP and each Purchaser shall afford to Oculus, OTM and each
of their respective accountants, counsel, financial advisors and other representatives (the
“Representatives”) full access during normal business hours throughout the period prior to the
Issuance Date to all of its properties, books, contracts, insurance policies, studies and reports,
environmental studies and reports, commitments and records (including without limitation tax
returns) and, during such period, shall furnish promptly upon written request (i) a copy of each
report, schedule and other document filed or received by it with any governmental authority.

          6.2 No Transfer. Neither Purchaser shall sell, assign, transfer or encumber in any
way his Partnership Interest, or enter into any agreement or arrangement granting an option or
right to acquire his Partnership Interest, except as expressly provided herein.

          6.3 No Issuance. QP shall not sell, issue or authorize the issuance of (i) any
partnership interest or other security, (ii) any option or right to acquire any partnership
interest or other security, or (iii) any instrument convertible into or exchangeable for any
partnership interest or other security, except as expressly provided herein.

     7. Term and Termination.

          7.1 Termination Events. The Agreement may be terminated at any time prior to the
Issuance Date:

               (a) by mutual written agreement of each of the parties hereto;

               (b) by Oculus, if the QP Meeting shall not have taken place, and the QP Authorizations shall
not have been adopted, on or prior to June [17], 2005;

               (c) by Oculus, upon written notification to QP if the issuance of the Shares without
registration can not be consummated without violation of applicable securities law, or if any court
of competent jurisdiction or other competent governmental or regulatory authority shall have issued
an order
making illegal or otherwise restricting, preventing or prohibiting the issuance of the Shares;

               (d) by Oculus, upon written notice of Oculus to QP, if any of the events listed in Section 2.1
shall not have occurred on or before the date specified for the occurrence of such event set forth
in Section 2.1;

               (e) by Oculus, upon written notice to QP, JH and JO, if JO shall be in material breach of his
obligations under his employment agreement

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with QP, and such breach shall not have been cured
within thirty (30) days after Oculus gives written notice thereof to QP;

               (f) by Oculus, upon written notice QP, JH and JO, upon breach by QP, JO and/or JH of any of
their obligations under the Framework Agreement or the Consignment Agreement;

               (g) by Oculus, upon written notice of Oculus to QP, JH and JO, if a filing for bankruptcy
protection shall have been made with respect to QP (whether voluntarily or involuntarily), or QP
shall have made an assignment for the benefit of its creditors; or

               (h) by Oculus, if the Issuance Date shall not have occurred on or prior to December 31, 2005.

          7.2 Effect of Termination. If this Agreement is validly terminated by either Oculus
or any of QP, JH or JO pursuant to Section 7.1, this Agreement will forthwith become null and void
and there will be no liability or obligation on the part of Oculus, QP or the Purchasers (or any
representative of any of them, or any subsidiary of Oculus) under this Agreement.

     8. Miscellaneous Provisions.

          8.1 No Amendment. This Agreement may not be amended except by a written instrument
signed by each of the parties hereto.

          8.2 No Waiver. Any failure of a Purchaser to comply with any obligation, covenant or
agreement contained herein may be waived only by a written notice from the party entitled to the
benefits thereof. No failure by any party hereto to exercise, and no delay in exercising, any
right hereunder, shall operate as a waiver thereof, nor shall any single or partial exercise of
either right hereunder preclude any other or future exercise of that right by that party.

          8.3 Notices. Any notice or communication required or permitted by this Agreement
shall be deemed sufficiently given if in writing and, if delivered personally, when it is delivered
or, if delivered in another manner, the earlier of when it is actually received by the party to
whom it is directed, or when
the period set forth below expires (whether or not it is actually received), to the address
set forth on the signature page hereof:

               (a) if transmitted by telecopier, telex or facsimile transmission (“Fax”), 24 hours after (i)
transmission to the party’s telecopier number set forth below, with the party’s name and address
set forth below clearly shown on the page first transmitted, and (ii) receipt by the transmitting
party of written confirmation of successful transmission, which confirmation may be produced by the
transmitting party’s equipment;

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               (b) if deposited with the U.S. Postal Service, postage prepaid, and addressed to the party to
receive it as set forth below, (i) 48 hours after such deposit as registered or certified mail if
addressed to a location in the US, or (ii) ten days after such deposit as registered or certified
airmail if addressed to a location outside of the US; or

               (c) if accepted by Federal Express or a similar reputable delivery services in general usage
for delivery to the dress of the party to receive it as set forth below, 24 hours after the
delivery time promised by the delivery services.

A party may change its address or telecopier number of the address or telecopier number to which
copies shall be sent by giving notice of the change to each other party. The new address shall
become effective for purposes of this Agreement five days after notice of the new address is given.

          8.4 No Assignment. This Agreement may not be assigned by Purchaser without Oculus’
prior written consent, and may not be amended or any provision hereof waived or modified except by
an instrument in writing signed by each of the parties hereto.

          8.5 No Third Party Beneficiaries. Except for the Indemnified Parties, and only to the
extent set forth in Section 5.5 hereof, neither this Agreement or any provision hereof, nor any
agreement to be entered into pursuant hereto or concurrently herewith, is intended to create any
right, claim or remedy in favor of any person or entity, other than the parties hereto and their
respective successors and permitted assigns.

          8.6 Arbitration. Any controversy or claim arising out of or relating to this
Agreement shall be determined by arbitration in accordance with the Rules of the American
Arbitration Association. The number of arbitrators shall be one. The place of arbitration shall
be Sacramento, California, unless otherwise agreed to by the parties to this Agreement.

          8.7 Governing Law and Venue. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California,
United States of America, without giving effect to any conflicts of laws principles thereof which
would result in the application of the laws of another jurisdiction. For purposes of enforcement
of any arbitration award, the parties submit to nonexclusive venue in the state and federal courts
located in Sacrament, California. For purposes of enforcement of any claim for injunctive or
equitable relief expressly allowed herein, the parties submit to exclusive venue in the state and
federal courts located in Sacramento, California.

          8.8 Entire Agreement. This Agreement sets forth the entire agreement and
understanding between the parties relating to the subject matter hereof and supersedes and replaces
in its entirety all other agreements, oral and

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written heretofore made between the parties with
respect to the subject matter hereof and thereof (including, without limitation, the Letters of
Intent executed by JO and JH dated May 5, 2005). In the case of a conflict between the terms of
this Agreement and the terms of any other agreement specifically referenced herein, the terms of
this Agreement shall control.

          8.9 Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be an original and all of which, when taken together, shall constitute one agreement.

          8.10 Language. This Agreement is written in the English language. No other language
version of this Agreement shall be controlling or binding on the parties.

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     IN WITNESS WHEREOF, each Purchaser has executed this Agreement as of the [17] day of June,
2005.

	 	 	 	 	 	 	 	 	 	 	 
	QUIMICA PASTEUR, S de R.L.	 	 	 	OCULUS INNOVATIVE SCIENCES, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Francisco Javier Orozco Gutiérrez
	 	 	 	By:
	 	/s/ Jim Schutz	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	Name: Francisco Javier Orozco Gutiérrez	 	 	 	Name: James Schutz	 	 
	Title: General Director	 	 	 	Title: General Counsel	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Address:	 		 	 	 	Address: 1129 N. McDowell Blvd	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Petaluma, CA 95864	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Francisco Javier Orozco Gutiérrez	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Name: Francisco Javier Orozco Gutiérrez	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Address:

	 		 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
/s/ Jorge Paulino Hermosillo Martin
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Jorge Paulino Hermosillo Martin	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Address:

	 		 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

14

 

Exhibit A

Accredited Investor Questionnaire

To:     Oculus Innovative Sciences, Inc.

     The information set forth in this Investor Questionnaire is being furnished to Oculus by the
undersigned Puchaser in order for Oculus to determine whether Purchaser’s purchase of Shares may be
accepted in light of the requirements of Section 4(2) of the Securities Act, including confirmation
that Purchaser is an “accredited investor” as defined in Rule 501 promulgated under the Securities
Act, and the requirements of certain state securities laws. Purchaser understands that (a) the
Shares will not be registered under the Securities Act in reliance upon the exemption from
registration afforded by Section 4(2) of the Securities Act, (b) Purchaser may be required to hold
the Shares indefinitely; and (c) Purchaser is required to bear the entire risk of an investment in
the Shares.

     Purchaser represents and warrants to Oculus that: (i) the information contained herein is
complete and accurate and may be relied upon by Oculus, its officers and directors and their agents
and affiliates; and (ii) Purchaser will notify Oculus immediately of any change in any of
the information contained herein prior to the acceptance of Purchaser’s subscription.

     In accordance with the foregoing, Purchaser hereby makes and provides the following
representations and information:

	1.	 	Accredited Investor Status. Purchaser is an “Accredited Investor” by reason of the
following (please check whichever of the following statements that apply):

	 	 	 	 	 
	—

	 	(a)
	 	The Purchaser is a natural person whose individual net worth,
or joint net worth with that person’s spouse, at the time of
purchase, exceeds $1,000,000.
	 
	 	 	 	 
	—

	 	(b)
	 	The Purchaser is a natural person who had an individual
income in excess of $200,000 in each of the last two calendar
years, or joint income with such Purchaser’s spouse, in
excess of $300,000 in each of those years, and has a
reasonable expectation of reaching the same level in this
calendar year.
	 
	 	 	 	 
	—

	 	(c)
	 	The Purchaser is a bank as defined in Section 3(a)(2) of the
Securities Act.
	 
	 	 	 	 
	—

	 	(d)
	 	The Purchaser is a director, executive officer, or general
partner of Oculus – the issuer of the Shares.

15

 

	 	 	 	 	 
	—

	 	(e)
	 	The Purchaser is a savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the
Securities Act, whether acting in its individual or fiduciary
capacity.
	 
	 	 	 	 
	—

	 	(f)
	 	The Purchaser is a broker or dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, as
amended.
	 
	 	 	 	 
	—

	 	(g)
	 	The Purchaser is an insurance company as defined in Section
2(13) of the Securities Act.
	 
	 	 	 	 
	—

	 	(h)
	 	The Purchaser is an investment company registered under the
Investment Company Act of 1940, as amended, or a business
development company as defined in Section 2(a)(48) of the
Investment Company Act of 1940, as amended.
	 
	 	 	 	 
	—

	 	(i)
	 	The Purchaser is a Small Business Investment Company licensed
by the U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of 1958.
	 
	 	 	 	 
	—

	 	(j)
	 	The Purchaser is a plan established and maintained by a
state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions, for
the benefit of its employees, which plan has total assets in
excess of $5,000,000.
	 
	 	 	 	 
	—

	 	(k)
	 	The Purchaser is an employee benefit plan within the meaning
of the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), and (i) the investment decision is made by
a plan fiduciary, as defined in Section 3(21) of ERISA, which
is either a bank, savings and loan association, insurance
company, or registered investment adviser, or (ii) the
employee benefit plan has total assets in excess of
$5,000,000, or (iii) if a self-directed plan, investment
decisions are made solely by persons that are accredited
investors.
	 
	 	 	 	 
	—

	 	(l)
	 	The Purchaser is a private business development company as
defined in Section 202(a)(22) of the Investment Advisers Act
of 1940, as amended.
	 
	 	 	 	 
	—

	 	(m)
	 	The Purchaser is an organization described in Section
501(c)(3) of the Internal Revenue Code, a United States or
foreign corporation, a partnership, or a Massachusetts or
similar business trust, not formed for the specific purpose
of acquiring the Shares, with total assets in excess of
$5,000,000.
	 
	 	 	 	 
	—

	 	(n)
	 	The Purchaser is a trust, with total assets in excess of
$5,000,000,
not formed for the specific purpose of acquiring the Shares, whose purchase is
directed by a sophisticated person with such

16

 

	 	 	 	 	 
	 

	 	 	 	knowledge and experience in
financial and business matters that such person is capable of evaluating the
merits and risks of the prospective investment.
	 
	 	 	 	 
	—

	 	(o)
	 	The Purchaser is an entity in which all of the equity owners are
accredited investors.

	2.	 	General Information. Please provide the following general information:

                    (1) If Purchaser is a natural person, please complete the following:

                    Purchaser is a permanent resident in the State of California.

                         Yes
o            No o

                    Purchaser maintains additional residences outside of California.

                         Yes
o            No o

                         If yes, please indicate address(es):

 

 

                    (2) If Purchaser is an entity, please complete the following:

                    Indicate Type of Ownership:

                         General
Partnership o Corporation o

                         Limited
Partnership o Trust o

                    Date of Formation (if applicable):___/___/___

                    Number
of Partners, Shareholders or Beneficiaries: o

                    Was this entity formed for the specific purpose, even among other purposes, of investing in
Oculus:

                    Yes
o          No
o          Not
applicable o

17

 

     IN WITNESS WHEREOF, the undersigned has executed this Investor Questionnaire on this 16 day of
June, 2005.

	 	 	 	 	 
	By:

	 	Francisco Javier Orozco Gutiérrez	 	 
	 
	 	 	 	 
	 

	 	Signature:                                         	 	 

18

 

EXHIBIT B

Foreign Investor Representations

To: Oculus Innovative Sciences, Inc.

     The information set forth in this Foreign Investor Questionnaire is being furnished to Oculus
by the undersigned Purchaser in order for Oculus to determine whether such Purchaser’s purchase of
the Shares may be accepted in light of the requirements in Regulation S promulgated under the
Securities Act, including confirmation that Purchaser is not a U.S. Person. Purchaser understands
that (a) the Shares will not be registered under the Securities Act in reliance upon the exemption
from registration under the Securities Act, (b) Purchaser may be required to hold the Shares
indefinitely; and (c) Purchaser is required to bear the entire risk of an investment in the Shares.

     Purchaser represents and warrants to Oculus that: (i) the information contained herein is
complete and accurate and may be relied upon by Oculus, its officers and directors and their agents
and affiliates; and (ii) Purchaser will notify Oculus immediately of any change in any of
the information contained herein prior to the acceptance of Purchaser’s subscription.

     In accordance with the foregoing, Purchaser hereby makes and provides the following
representations and information:

1 Neither Purchaser nor any person for the account of whom Purchaser is acting, including the
estate of any such person, a trust of which any such person is a “U.S. Person”. For purposes of
this Questionnaire and the Agreement, “U.S. Person” means:

                                   (i) Any natural person resident in the United States of America (“U.S.”);

                                   (ii) Any partnership or corporation organized or incorporated under the laws of the U.S.;

                                   (iii) Any estate of which any executor or administrator is a U.S. Person;

                                   (iv) Any trust of which any trustee is a U.S. Person;

                                   (v) Any agency or branch of a foreign entity located in the U.S.;

                                   (vi) Any non-discretionary account or similar account (other than an estate or trust) held by
a dealer or other fiduciary organized, incorporated, or (if an individual) resident in the U.S.;
and

                                   (vii) Any partnership or corporation if:

                                        (A) Organized or incorporated under the laws of any foreign jurisdiction; and

                                        (B) Formed by a U.S. person principally for the purpose of investing in securities not
registered under the Securities Act,
unless it is organized or incorporated, and owned, by accredited investors (as

19

 

defined in Rule
501(a) of Regulation D, promulgated under the Securities Act) who are not natural persons, estates
or trusts.

     2. The offer and sale of the Shares to the Purchaser has taken place outside of the U.S., its
territories and possession, and Purchaser has executed the Agreement and this Questionnaire outside
of the U.S.

     3. The Purchaser further agrees not to make any disposition of all or any portion of the
Shares to a U.S. person unless and until:

          (a) Such disposition is in accordance with Regulation S promulgated under the Securities Act,
or

          (b) There is then in effect a registration statement under the Securities Act covering such
proposed disposition and such disposition is made in accordance with such registration statement,
or

          (c) Purchaser shall have notified Oculus of the proposed disposition and shall have furnished
Oculus with a detailed statement of the circumstances surrounding the proposed disposition, and if
reasonably requested by Oculus, with an opinion of counsel, reasonably satisfactory to Oculus, that
such disposition will not require registration under the Securities Act.

     4. The Purchaser (and any institutional account for which Purchaser is purchasing any Shares)
will not (i) offer, sell or otherwise transfer any Shares prior to the expiration of a one (1) year
period commencing on the Issuance Date other than pursuant to (A) a registration statement which
has been declared effective under the Securities Act, (B) an exemption from the registration
requirements of the Securities Act provided by Regulation S promulgated under the Securities Act,
or (C) any other exemption from the registration requirements of the Securities Act as confirmed in
an opinion of counsel (such counsel being satisfactory to Oculus), or (ii) engage in any hedging
transaction with respect to any Shares other than in compliance with the Securities Act. In order
to effectuate the foregoing restrictions on resales and other transfers of the Shares, if any
resale or other transfer is proposed to be made (other than pursuant to an effective registration
statement under the Securities Act) prior to one (1) year after the Issuance Date, (1)(a) such
Purchaser shall deliver to Oculus or Oculus’ transfer agent a Transferor Representation Statement
substantially in the form of Annex A hereto in the case of a transfer proposed to be made in
compliance with Regulation S and (b) the transferee shall deliver to Oculus or Oculus’ transfer
agent a Transferee Representation Statement substantially in the form of Annex B hereto in the case
of a transfer proposed to be made in compliance with Regulation S, or (2) such Purchaser shall
provide Oculus with an opinion of counsel satisfactory to Oculus regarding the availability of
another exemption from the registration requirements of the Securities Act.

20

 

     IN WITNESS WHEREOF, the undersigned has executed this Foreign
Investor Questionnaire on this 16 day of June, 2005.

By:      Jorge Paulino Hermosillo Martín

Signature                                        

Annex A

TRANSFEROR REPRESENTATION STATEMENT

	 	 	 	 	 
	 

	 	Transferor:	 	 
	 
	 	 	 	 
	 

	 	Transferee:	 	 
	 
	 	 	 	 
	 

	 	The Company:
	 	Oculus Innovative Sciences, Inc.
	 
	 	 	 	 
	 

	 	Shares:
	 	Common Stock
	 
	 	 	 	 
	 

	 	Amount:
	 	 300,000 (the “Shares”)
	 
	 	 	 	 
	 

	 	Date:
	 	                                        

          In connection with the transfer of the above-referenced Shares, the undersigned Transferor
hereby represents and warrants to Oculus Innovative Sciences, Inc. (the “Company”) that:

          1. The Transferor understands that the transfer of the Shares contemplated hereby is being
made pursuant to the exemption from the registration requirements of the United States Securities
Act of 1933, as amended (the “Securities Act”), afforded by Regulation S under the Securities Act.

          2. The Transferor has not engaged in any “directed selling efforts” (as such term is defined
in Regulation S) in connection with this transfer of the Shares.

          3. If the Transferor is a “distributor” (as such term is defined in Regulation S), a “dealer”
(as such term is defined in Section 2(a)(12) of the Securities Act), or a person receiving a
selling concession, fee or other remuneration in respect of the Shares, or the transfer of the
Shares contemplated hereby is being made to a known dealer or other person receiving a selling
concession, fee or other remuneration in respect of the Shares, then the Transferor has sent to the
Transferee a notice to the effect that (a) the Shares can be offered and sold only in accordance
with Regulation S, pursuant to a registration statement which has been declared effective under the
Securities Act or pursuant to an available exemption from the registration requirements of the
Secretaries Act and (b) the Transferee shall not engage in hedging transactions with respect to the
Shares other than in compliance with the Securities Act.

21

 

          4. If the Transferor is a director or officer of the Company or a distributor (as such term is
defined in Regulation S), the Transferor affirms that he or she is an affiliate of the Company or
such distributor, as the case may be, solely by virtue of such position and that no selling
concession, fee or other remuneration, other than the usual or customary broker’s commission, has
been paid in connection with the offer or sale of the Shares.

	 	 	 	 	 	 	 
	 	 	TRANSFEROR	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

22

 

Annex B

TRANSFEREE REPRESENTATION STATEMENT

	 	 	 	 	 
	 

	 	Transferor:	 	 
	 
	 	 	 	 
	 

	 	Transferee:	 	 
	 
	 	 	 	 
	 

	 	The Company:
	 	Oculus Innovative Sciences, Inc.
	 
	 	 	 	 
	 

	 	Shares:
	 	Common Stock
	 
	 	 	 	 
	 

	 	Amount:
	 	                                         (the “Shares”)
	 
	 	 	 	 
	 

	 	Date:
	 	                                                            

          In connection with the transfer of the above-referenced Shares, the undersigned Transferee
hereby represents and warrants to, and agrees with, Oculus Innovative Sciences, Inc. (the
“Company”) that:

          1. The Transferee understands that the Shares have not been registered under the United States
Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemption and/or
non-exclusive safe harbor(s) from the registration requirements of the Securities Act provided by
Regulation S thereunder.

          2. The Transferee understands that such exemption afforded by Regulation S is only available
for offers and sales of securities outside of the United States and its territories and possessions
(the “US”) and affirms that the offer and sale of the Shares occurred outside of the US. The
Transferee further agrees that it will not (a) resell the Shares other than pursuant to a
registration statement which has been declared effective under the Securities Act or an available
exemption from the registration requirements of the Securities Act or (b) engage in any hedging
transactions with respect to the Shares other than in compliance with the Securities Act. The
Transferee understands that Regulation S is not available with respect to any transaction or series
of transactions that, although in technical compliance with Regulation S, is part of a plan or
scheme to evade the registration requirements of the Securities Act.

          3. The Transferee is not a “U.S. person” (as such term is defined in Regulation S), nor is the
Transferee acquiring the Shares for the account or benefit of a “U.S. person” (as so defined), or
the Transferee has notified the Company in writing of the circumstances of the transfer
contemplated hereby that qualify such transfer for an exemption from the registration requirements
of the Securities Act.

23

 

          4. The Transferor, not the Company, is transferring the Shares and any information the
Transferee may have received in connection with the transfer contemplated hereby was provided to
the Transferee by the Transferor, for the benefit of the Transferor, and not by or for the benefit
of the Company. The sale of the Shares was negotiated at arm’s length between the Transferor and
the Transferee, without any assistance from the Company.

          5. The Transferee authorizes the Company and its agents to place on each certificate
evidencing the Shares a legend in the form specified below:

“The shares of Common Stock represented by this stock certificate
(the “Shares”) have not been registered under the United States
Securities Act of 1933, as amended (the “Securities Act”), or any
other securities laws, and have been issued in reliance on the
exemption from the registration requirements of the Securities Act
provided by Regulation S under the Securities Act. The Shares may
not be offered, sold, transferred or otherwise disposed of in the
United States or to, or for the benefit or account of, any “U.S.
person” (as defined in said Regulation S), other than pursuant to
a registration statement which has been declared effective under
the Securities Act or an available exemption from the registration
requirements of the Securities Act. Hedging transactions
involving the Shares may not be conducted other than in compliance
with the Securities Act.”

	 	 	 	 	 	 	 
	 	 	TRANSFEREE	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 

24

 

Attachment 3.1(c)

Liabilities

25

 

Attachment 5.1(d)

Quarterly Financial Statements

for the twelve-month period ending December 31, 2004

and the three-month period ending March 31, 2005

26

 

Attachment 5.1(e)

Management Accounts for the period ending April 30, 2005

27exv10w25

 

Exhibit 10.25

FRAMEWORK AGREEMENT entered into by Mr. Javier Orozco Gutierrez in his own right (hereinafter
referred to as “JO”); Quimica Pasteur, S. de R.L., represented in this act by this legal
representative, Mr. Javier Orozco Gutierrez (hereinafter referred to as “QP”); Mr. Jorge Paulino
Hermosillo Martin in his own right (hereinafter referred to as “JH”); on other side Oculus
Innovative Sciences, Inc., represented in this act by James Schutz (hereinafter referred to as
“OIS”); and finally on other side Oculus Technologies de Mexico, S.A. de C.V., represented in this
act by Mr. Everardo Garibay (hereinafter referred to as “OTM”), in accordance with the following
Background, Whereas and Clauses:

BACKGROUND

I. OIS has had for several years, a commercial relationship with QP consisting in the sell of
different sanitary and pharmaceutical products manufactured or commercialized by its subsidiary,
OTM. Among such products there is the product called “Microcyn 60” (all the products and the
Microcyn 60 hereinafter referred to as the “Products”).

II. By virtue of this commercial relationship, as of this date, QP admits to owe OTM the amount of
$2’949,000.00 (two million nine hundred and forty nine thousand pesos 00/100 Mexican Currency),
such debt is a result of the purchase of the Products to OIS and/or OTM.

III. QP is a Limited Liability Partnership and its corporate purposes of QP includes the
commercialization of several sanitary and pharmaceutical products and its main operations are
focused on the selling of such products to entities of the public sector by its participation in
the public bids which are convened by such entities within the national territory. QP permanently
participates in such bidding processes and has become a winner in many of such bids.

IV. QP currently faces a difficult financial situation as shown in the Balance and Financial
Statements recognized and known by the Parties.

1

 

V. Notwithstanding the current financial situation of QP, QP still has the possibility to
participate in public bids called by the government. The Parties admit that this is partly due to
the experience, knowledge and ability of JO as a senior officer of QP. In consideration and by
virtue of these JO’s qualities, OIS admits that JO has to remain being a manager of QP in benefit
of its ongoing business and in order to increase its participation in the market of the
governmental sector.

VI. As of May 5th, 2005, JH and OIS signed an Intention Letter which is the background
for the execution of this Agreement. The Parties recognize that after the execution of this
Agreement, the terms and conditions of such document shall not be effective.

VII. As of May 5th, 2005, JO and OIS signed an Intention Letter which is the background
for the execution of this Agreement. The Parties recognize that after the execution of this
Agreement, the terms and conditions of such document shall not be effective.

WHEREAS

I. JO declares by his own right:

1. That he is a Mexican individual, with the profession of business man with address at Escudo
Nacional 533, telephone number 38336403 and Federal Taxpayer Registry number HEMJ720528, who is
identified by the attached document marked as Annex 1.

2. That he is the legal owner of one partnership interest of the capital stock of QP.

3. That he currently is the General Director of QP.

4. That he has legal capacity and does not have any impediment to be obligated under the terms and
conditions provided by this Agreement.

5. That he has the abilities and qualities provided in the Background of this Agreement for the
selling of Products, which are the main reason for OIS to execute this Agreement.

2

 

6. That he admits and states that all the facts mentioned in the Background of this Agreement are
true and accurate.

II. JH declares by his own right:

1. That he is a Mexican individual, with the profession of business man with address at Sierra
Leona 1726, Colonia Independencia, Guadalajara Jalisco, telephone number 36374947 and Federal
Taxpayer Registry number OOGF 700207 U01, who is identified by passport number 02140189544 (Annex
2).

2. That as of this date and previously to the Partners Meeting (as defined below) he is the legal
owner of one partnership interest of the capital stock of QP.

3. That he has legal capacity and does not have any impediment to be obligated under the terms and
conditions provided by this Agreement.

4. That he admits and states that all the facts mentioned in the Background of this Agreement are
true and accurate.

III. QP declares by means of its legal representative:

1. That it is a Limited Liability Partnership duly incorporated in accordance with the Mexican
laws, as shown in the public deed number 21,104, dated May 4th, 1993, granted before the
Notary Public number 52 of the City of Guadalajara, Jalisco, Mexico, Mr. Fernando Manuel Ramos
Arias and duly recorded before the Public Commerce Registry of the City of Guadalajara, Jalisco,
México, under the mercantile sheet number 67-68, Chapter 489, First Book or the Registry of
Commerce, as shown in the document attached as Annex 3.

2. That its legal representative has the legal power to execute this Agreement, which has not been
limited, amended or revoked in any way, as shown in the document attached as Annex 4.

3. That its corporate purposes include the commercialization of Products.

3

 

4. That it has its address at Industria Maderera 154, CP 45130, Industrial Zapopan Norte, Zapopan,
Jalisco, Mexico.

5. That it has the necessary knowledge, infrastructure, experience, permits and resources to
execute this Agreement and for the fulfillment of all the obligations provided hereunder.

6. That by virtue of its commercial relationship with OIS and OTM, as stated in the Background of
this Agreement, it owes OTM the amount of $2’949,000.00 (two million nine hundred and forty nine
thousand pesos 00/100 Mexican Currency), which is fully recognized by it.

7. That the execution of this Agreement is necessary in order to obtain from OIS the benefits
mentioned below and to be able to improve its financial situation.

8. That as of this date there are no contingencies, suits or legal proceedings against it.

IV. OIS declares by means of its legal representative:

1. That it is a company incorporated in accordance with the laws in force in United States of
America under the jurisdiction of the State of California, and with its address at 1129 N. McDowell
Blvd. Petaluma, CA 95864.

2. That its legal representative has the legal power to execute this Agreement, which has not been
limited, amended or revoked in any way.

3. That the determinant reasons of its intention to execute this Agreement are: (i) the knowledge,
infrastructure, experience, permits, authorizations and resources of QP to distribute and
commercialize the Products in Mexico in public bids convened by the federal government and the
local governments; (ii) the experience, knowledge and ability of JO to distribute and commercialize
the Products in Mexico and particularly in public bids convened by the federal government and the
local governments; and (iii) the truthfulness of the Background and the Declarations stated in this
Agreement.

4

 

4. That it has acknowledged the debt between QP and OTM which has been described in the Background
of this Agreement.

V. OTM declares by means of its legal representative:

1. That it is a Corporation with Variable Capital duly incorporated in accordance with the Mexican
laws, as shown in the public deed number 3605, dated on April 30, 2003, acknowledged before the
Public number 1 of the State of Michoacan, Mr. Armando G. Manzano Alba and duly recorded before the
Public Commerce Registry of the City of Morelia, Michoacan, under number 00000041, file 00000313,
as shown in the document attached as Annex 5.

2. That its legal representative has the legal power to execute this Agreement, which has not been
limited, amended or revoked in any way, as shown in the document attached as Annex 6.

3. That the determinant reasons of its intention to execute this Agreement are: (i) the
knowledge, infrastructure, experience, permits, authorizations and resources of QP to distribute
and commercialize the Products in Mexico in public bids convened by the federal government and the
local governments; (ii) the experience, knowledge and ability of JO to distribute and commercialize
the Products in Mexico and particularly in public bids convened by the federal government and the
local governments; and (iii) the truthfulness of the Background and the Declarations stated in this
Agreement.

4. That by virtue of the abovementioned commercial relationship with QP, it is QP’s creditor in the
amount of $2’949,000.00 (two million nine hundred and forty nine thousand pesos 00/100 Mexican
Currency), which as of this date has not been totally or partially paid.

VI. The Parties declare:

1. That they mutually recognize their personality to execute this Agreement.

2. That it is their intention to execute this Agreement and be obligated under all and each the
terms provided in the Agreement.

5

 

3. That the Attachments to this Agreement are the following:

	 	 	 
	ANNEX 1.

	 	JO’s Personal Identification.
	 
	 	 
	ANNEX 2.

	 	JH’s Personal Identification.
	 
	 	 
	ANNEX 3.

	 	Articles of Incorporation of QP.
	 
	 	 
	ANNEX 4.

	 	Public deed that includes the powers of attorney of the legal
representative of QP.
	 
	 	 
	ANNEX 5.

	 	Articles of Incorporation of OTM.
	 
	 	 
	ANNEX 6.

	 	Public deed that includes the powers of attorney of the legal representative of OTM.
	 
	 	 
	ANNEX 7.

	 	QP Partners Meeting Minutes.
	 
	 	 

NOW, THEREFORE the Parties agree as follows:

CLAUSES

FIRST. Purpose. The purpose of this Agreement is the description of the legal acts that the
Parties agree and are obligated to execute from this date and no later than July 1st,
2005, in order to perform all the operations described therein as well as the reasons that caused
the Parties to execute such legal acts (hereinafter referred to as “Legal Acts”). Such Legal Acts
are:

1. Mercantile Consignment Agreement. The execution of a Mercantile Consignment
Agreement which parties are OTM, as Consignor, and QP, as Consignee. The main purpose is that OTM
makes the Products available to QP for their selling under the terms and conditions provided under
such Agreement. The Parties recognize that this document is being drafted and reviewed by their
advisors and it should be signed not later than July 1st, 2005.

2. QP Partnership Interest Purchase Option Agreement. The issuance of a Purchase
Option for OIS by JO as partner of QP. As compensation for this Option, JO and JH shall receive
certain shares of OIS which delivery shall be subject to the terms and conditions provided in the
Stock Purchase Agreement described below. The Parties

6

 

recognize that this document is being drafted and reviewed by their advisors and it should be
signed not later than July 1st, 2005.

3. OIS Stock Purchase Agreement. As compensation for the Purchase Option of the
Partnership Interest described above as well as for the obligations undertaken hereunder, OIS shall
transfer to JO and JH certain shares of its capital stock. As OIS is a company governed by the laws
of the State of California, in the United States of America, this Agreement shall be executed and
governed by the Laws of California. The Parties recognize that this document is being drafted and
reviewed by their advisors and it should be signed not later than July 1st, 2005.

4. QP Partners Meeting. JO and JH agree to hold on June 17th, 2005, a QP
Partners Meeting (which is attached to this Agreement as Annex 7), in which the following issues
shall be resolved and approved:

I. Increase of the capital stock through the admission of a new partner.

II. Authorization requested by the partner Jorge Paulino Hermosillo for the assignment of his
partnership interest to the partner Francisco Javier Orozco Gutierrez.

III. Appointment of the General Manager, Executive Technical Manager and of the Secretary of
the Partnership, as well as the revocation and granting of powers.

IV. Appointment of the Statutory Examiner of the partnership.

V. Amendment of the bylaws.

VI. Appointment of Special Delegates to formalize the resolutions adopted during the Meeting.

SECOND. Execution of Legal Acts (hereinafter referred to as the “Closing”). The Parties agree
that all the Legal Acts shall be signed and executed not later than July 1st, 2005. The
foregoing except for the Partners Meeting minutes which is held on June 17th, 2005.

7

 

The Parties agree and understand that QP, JO and JH shall be liable for all the pending
obligations or those liabilities acquired before June 16th, 2005, as the case may be,
and hereby release OIS and/or OTM from any fiscal and legal contingency that may arise after June
16th, 2005, and they shall be obligated to carry out all the necessary actions and acts
in order that OIS and/or OTM are not economically affected in their mercantile credit or in any
other manner whatsoever, being obligated to keep OIS and OTM safe and harmless from any claim.

THIRD. Obligations after the Closing. The Parties agree to fulfill the following obligations
after the Closing and during the term of this Agreement:

(i) To negotiate and execute all the Legal Acts as described in the First clause of this
Agreement not later than July 1st, 2005.

(ii) JO, JH and QP are obligated to perform all the activities necessary to regularize the
legal, accounting, fiscal, financial and operative situation of QP following the indications and
instructions given by OIS and/or OTM or their external advisors (hereinafter referred to as the
“Advisors”). For such purpose, JO agrees and shall be obligated to deliver all the documents, files
and information of QP that are requested to him by whatever mean.

(iii) JO, JH and QP shall subscribe all the documents that are necessary, requested, drawn up,
negotiated or recommended by OIS/OTM or their Advisors in accordance with the provision of item
(ii) above. These documents include, but are not limited to: the signature of the QP Partners
Meeting Minutes; the preparation of records and entries in the QP corporate books; the contracts,
agreements and other documents that must be subscribed by QP to regularize its legal situation with
respect to third parties; tax and contribution payments and their accessories, as the case may be;
among others.

(iv) JO, JH and QP shall be obligated not to constitute any encumbrance, guarantee or
limitation of use or ownership over any of the assets of QP, including but not limited to
properties and rights acquired as of this date or in the future.

8

 

(v) JO agrees and is obligated not to constitute any encumbrance, guarantee or limitation of
use or ownership over any partnership interest held by him in QP.

(vi) JO, JH and QP are obligated to serve immediate written notice to OIS and OTM in
connection with any suit, claim, controversy, fine, garnishment or any legal action brought or
imposed by any third party or authority to QP or to JO and JH personally.

FOURTH. QP Management. JO hereby agrees to perform such office as appointed by the Partners
Meeting of QP or by the General Manager. JO shall be obligated to perform the duties assigned in QP
with all his experience, know-how, ability, professionalism and diligence that OIS and OTM have
recognized in him, looking at any time for the fulfillment of the corporate purposes as provided by
the bylaws and in accordance with the practices and advice provided by OIS and/or OTM. Furthermore,
in the performance of his duties he shall observe, at any time, the instructions received from OIS
and/or OTM.

For the performance of such duties, QP shall inform JO about the employment conditions and the
economic compensations that he will be paid, which shall be consistent with similar positions in
other companies of the pharmaceutical industry.

Notwithstanding the abovementioned, JO admits and accepts that he may be removed from such
position or be assigned to another position inside QP at the sole discretion of the General Manager
or OIS (or the person appointed by it), in its quality of partner of QP.

JO admits that the provision of this clause does not create any labor or mercantile
relationship with OIS and/or OTM as the only employer that he will have is QP.

FIFTH. Guarantees. JO and JH shall be liable for each and all the obligations personally
assumed under this Agreement as well as for those obligations assumed by QP. This in accordance
with the provisions of articles 2794 of the Civil Code for the Federal District, in the
understanding that their obligation shall be joint between them and with QP and not subsidiary,
which means that OIS and/or OTM may demand directly to each one of them the liability incurred by
JO, JH and/or QP withdrawing to

9

 

the benefit of preference and excussion under the terms of articles 2816 section I and 2823 of
the Civil Code for the Federal District.

Additionally, JO constitutes a pledge registered over the partnership interest that he holds
in QP which remains in his possession, in accordance with the provisions of article 2859 of the
Civil Code for the Federal District. For such purpose, JO shall request that the pledge over his
partnership interest in favor of OIS and/or OTM under the terms of this Agreement, is recorded in
the QP partner registration book and shall also request its recording in the Public Commerce
Registry, if applicable. JO shall comply with all the provisions regarding the pledge provided by
the Civil Code for the Federal District insofar such provisions are not contrary to the provisions
agreed by the Parties under this Agreement.

SIXTH. Primary Agreement and Secondary Agreements. The Parties admit and accept that this
Framework Agreement is the primary agreement and that the agreements described in the First Clause
of this Agreement shall be secondary. As a result of that, such secondary agreements shall follow
the effects of this primary Agreement except for the Partnership Interest Purchase Option Agreement
which shall have a compulsory duration for the term provided therein regardless the effects of this
and the other Agreements.

SEVENTH. Rescission. Any breach of the obligations assumed under this Agreement and under the
Agreements described in the First Clause of this document and in accordance with the provision of
the Sixth clause above, shall be considered as a condition precedent for the effectiveness of such
Agreements and in such case, the affected Party shall give notice of such breach to the other Party
and shall give a 10 (ten) calendar day term to remedy such breach. If the obligation is not
fulfilled within the provided term, the affected Party, under the terms of article 1949 of the
Civil Code for the Federal District, shall be entitled to choose between demanding the compulsory
fulfillment of the not fulfilled obligation or the rescission of this Agreement with the payment of
the contractual penalty provided below, in both cases, with no need of judicial intervention, by
means of a simple written notice addressed to the breaching Party. The affected Party may also
rescind this Agreement even after choosing the compulsory fulfillment, if such fulfillment is
impossible. The fulfillment of the obligation

10

 

in accordance with this proceeding, shall cancel the right to rescind the Agreement for such
cause.

EIGHTH. Duration, Anticipated Termination and Liquidated Damages. This Agreement shall have a
duration of 3 (three) years from the date of its execution and it may be automatically renewed for
equal periods, provided that neither of the Parties gives written notice 30 (thirty) calendar days
in advance of its termination, regarding its intention to terminate such Agreement, in which case
the pending obligations shall be fulfilled until de date of termination and if such obligations has
to be fulfilled at any other time different from such term, the obligations shall be fulfilled at
the time previously agreed.

Notwithstanding the abovementioned, OIS and/or OTM may terminate this Agreement at any time
and without any responsibility by giving written notice to the other Parties with 30 (thirty)
calendar days in advance, previously to the fulfillment of the pending obligations until the date
of termination and if such obligations has to be fulfilled at any other time different from such
term, the obligations shall be fulfilled at the time previously agreed.

In addition to the foregoing, in case that JO, JH and/or QP desire to terminate this Agreement
before its term, they shall pay OIS and OTM, as liquidated damages, the amount equivalent to one
year of gross profits of OTM for the sale of the Products to QP during the year before the
termination. In case that the termination occurs before one year of effectiveness of this
Agreement, such amount shall be the average of the effective months multiplied by 12 (twelve).
These liquidated damages shall be also applicable if this Agreement is rescind by breach of any
obligation in accordance with the provisions of clause Seventh of this Agreement.

NINTH. Notices. All the notices, notifications and other communications that in connection
with this Agreement are required to be made among the Parties, shall be made in writing and
delivered at the addresses stated by each Party in the Whereas of this Agreement.

The Parties agree and admit that any notice or communication shall be valid and may be made:
(i) personally; (ii) by means of a specialized or particular courier service; (iii)

11

 

by certified mail; (iv) by facsimile, e-mail or any electronic means and/or (v) by means of
notary public or mercantile notary public. In any case, such notice shall be deemed to have been
delivered since its reception and a return receipt of the legal representative or the factors,
dependent persons, agents or employees of the notified Party shall be required. Such return receipt
may be recorded in physical or electronic means. In case of notices given through notary public or
mercantile notary public, such return receipt shall not be necessary.

If the Parties did not give written notice for the change of their respective addresses, all
the notices shall be deemed to be duly given at the addresses stated hereunder and shall be fully
effective.

TENTH. Relationship between the Parties. The Parties accept that the contractual relationship
arising out of this Agreement has a mercantile nature and does not constitute in any way a
mercantile or civil partnership or a Joint Venture. In such virtue, the Parties admit that the
relationship between them as a result of this Agreement does not create a labor relationship
between them, nor between a Party and the employees, factors, dependents, agents, representatives,
commissioners and subcontractors of the other Party. Furthermore, each Party, as employer of the
personnel involved with the execution of this Agreement, shall be the only liable for the
obligations arising from the legal provisions and other applicable labor and social security
regulations regarding such personnel, and the Parties agree that they will not have any civil,
mercantile, labor, fiscal or any other liability with respect to the employees, agents,
representatives, commissioners or subcontractors of such Party. Additionally, the Parties hereby
agree to keep safe and harmless from any labor, civil, mercantile, criminal, fiscal or
administrative contingency, claim, proceeding, suite or trials, arising from the relationship they
have with such personnel, employees, factors, dependents, agents, representatives, commissioners,
subcontractors, suppliers or any other third party.

ELEVENTH. Assignment. Except for the cases provided in this Agreement, any of the Parties
shall not be able to assign or transmit in any manner whatsoever, totally or partially, the rights
and obligations undertaken by this Agreement in favor of any person, without the previous written
consent of the other Parties.

12

 

TWELFTH. Intellectual Property. OIS and/or OTM are the only holders of their direct or
indirect intellectual and industrial property rights, including those arising from the Products;
the use by any of the Parties of this Agreement of any of the trademarks, designs, trade names,
industrial signs, industrial secrets and in general, any intellectual or industrial property right,
of which OIS and/or OTM is the holder, shall be previously authorized in writing by such Party. The
breach of the provision of this clause shall constitute a violation of the intellectual property
rights held by OIS and/or OTM and shall cause the payment of a compensation for damages and losses
sustained by the affected Party as well as the cancellation of this Agreement and the entitlement
to sue the contractual penalties that may be applicable.

THIRTEENTH. Authorizations and Licenses. Each Party shall be responsible for obtaining from
the federal and/or local authorities, the applicable permits, authorizations and licenses which are
necessary for the execution of this Agreement.

FOURTEENTH. Exclusiveness. During the term of this Agreement and during 3 (three) years after
its termination for whatever cause, JO and/or QP shall be obligated not to contract by them or
through third parties, whether for their own benefit or for any company directly or indirectly
related to them or any of its relatives in any grade, the acquisition, sale or commercialization of
the Products for their sell to any third party. Additionally, they shall be obligated not to
compete with the operations of OIS and OTM in Mexico. OIS and or OTM may sell or commercialize the
Products directly with third parties.

FIFTEENTH. Language. This document is executed in both English and Spanish. The Parties agree
that in case of controversy between the English and Spanish, the English version shall control.

SIXTEENTH. Applicable Law and Jurisdiction. For the interpretation, competence, enforceability
and effectiveness of this Agreement, as well as the documents arising out of it, the Parties shall
be expressly subject to the laws and Courts of Mexico City, Federal District, waiving any other
jurisdiction that may correspond to them by virtue of their current or future addresses, or by any
other reason.

13

 

However, in connection with the Stock Purchase Agreement described in the First Clause of this
Agreement, the applicable laws and jurisdiction shall be those therein provided.

Agreeing in the content and the scope of this Framework Agreement, the Parties sign it in fivefold
on this 16th day of June, 2005, each party keeping a copy of such Agreement.

	 	 	 
	/s/ Jim Schutz

	 	/s/ Francisco Javier Orozco Gutiérrez
	 

	 	 
	Oculus Innovative Sciences, Inc.,

	 	Francisco Javier Orozco Gutiérrez

By its own right
	represented by James Schutz
	 	 
	 
	 	 
	/s/ Everardo Garibay

	 	/s/ Francisco Javier Orozco Gutiérrez
	 

	 	 
	Oculus Technologies de México, S.A.
de C.V., represented by Everardo
Garibay

	 	Química Pasteur, S. de R.L. de C.V.,
Represented by Francisco Javier Orozco
Gutiérrez
	 
	 	 
	/s/ Jorge Paulino Hermosillo Martín
	 	 
	 	 	 
	Jorge Paulino Hermosillo Martín 

By its own right
	 	 

14

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