Document:

Exhibit 10.5

 

 

EXECUTION COPY

 

SHARED SERVICES AGREEMENT

 

This SHARED SERVICES
AGREEMENT (this “Agreement”) is dated May 23, 2013 (“Signature Date”), is made effective
as of the Effective Date (defined below), and is entered into by and between Oculus Innovative Sciences, Inc., a Delaware corporation
(“Oculus”), and Ruthigen, Inc., a Nevada corporation (“Ruthigen”). Oculus and Ruthigen are
sometimes referred to herein collectively as the “Parties” and each individually as a “Party.”

 

RECITALS

 

WHEREAS, Ruthigen is,
as of the Signature Date, a subsidiary of Oculus and was created to carry on separately certain operations;

 

WHEREAS, Ruthigen will
seek to raise equity in an IPO (defined below) and, in connection therewith, to issue shares of its capital stock to investors
to be used to finance its operations;

 

WHEREAS, Ruthigen may
use certain space at the Facilities (defined below) in addition to maintaining its own separate facilities;

 

WHEREAS, Oculus has
provided and, at the request of Ruthigen, shall continue to provide to Ruthigen through the closing of the IPO the Standard Activities
(defined below) on a non-billed basis and, Ruthigen may request  Standard Activities after the IPO on a non-billable basis;

 

WHEREAS, Oculus
has provided and, at the request of Ruthigen, shall continue to provide to Ruthigen through the closing of the IPO the
General Services (defined below) and Consulting Services (defined below), which amounts have been charged to the general
ledger investment account maintained by Oculus in accordance with US GAAP and are not payable by Ruthigen, and, Ruthigen may
request additional General Services, as well as Consulting Services, after the IPO on a billed basis pursuant to Statements
of Work (defined below);

 

WHEREAS, pursuant to
that certain License and Supply Agreement dated as of the Signature Date by and between Oculus and Ruthigen (the “License
and Supply Agreement”), Oculus shall agree to license certain of Oculus’ proprietary technology to Ruthigen for
Development and Commercialization of Products in the Field and in the Territory (each term as defined in the License and Supply
Agreement) on the terms and subject to the conditions thereof; and

 

WHEREAS, in connection
therewith, Ruthigen and Oculus desire to enter into this Agreement to address certain matters which are outside the scope of, but
relate to, the License and Supply Agreement.

 

NOW, THEREFORE, in
consideration of the mutual premises and covenants set forth herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Oculus and Ruthigen hereby agree as follows:

 

    	1

    	 

    

AGREEMENT

 

1.       Definitions.
Capitalized terms used herein without definition shall have the definition ascribed thereto in the License and Supply Agreement.

 

“Consulting
Services” means consulting and technical services provided by Oculus to Ruthigen hereunder (including, without limitation,
services in support of clinical trials and lab testing), specified in a Statement of Work.

 

“Effective Date”
means the date of the closing of the IPO.

 

“IPO”
means the a public offering of the common stock of Ruthigen, whether consummated through the declaration of effectiveness of an
S-1 registration statement in the United States or similar documentation under the laws of another jurisdiction, by reverse merger
or any other mechanism for gaining access to the public markets of any country.

 

“Standard Activities”
means the following activities performed by Oculus for Ruthigen prior to the IPO on a non-billable basis: (i) the transfer of
protocols, procedures and standard operating procedures, directly or indirectly related to the Oculus Method of Manufacturing
and the Ruthigen Method of Manufacturing, and related quality control, quality assurance systems, testing protocols and procedures;
and (ii) all procedures for building Manufacturing Equipment, including without limitation supplier information, specifications,
preventative maintenance procedures and all regulatory and R&D related compliance procedures and protocols; and (iii) the
training of Ruthigen employees for test methods, manufacturing and manufacturing transfer and the items described in (i) and (ii),
and SOX documents and related protocols.

 

“Statement
of Work” means a written statement of work describing Consulting Services, substantially in the form attached hereto
as Exhibit B, signed by both Parties,.

 

2.       Standard
Activities. Oculus shall provide Ruthigen with additional Standard Activities during the term of this Agreement if reasonably
requested by Ruthigen.

 

3.       General
Services. During the term of this Agreement, Ruthigen may request
Oculus to provide Ruthigen with general accounting and human resources services (such as administration of payroll and benefit
plans) for Ruthigen of the type Oculus has performed for Ruthigen prior to the IPO and in respect to its own business. Oculus will
make available to Ruthigen, from time to time, such General Services as Ruthigen shall reasonably request. All services performed by Oculus’ internal staff shall
be performed in substantially the same manner as it performs comparable services for its own business and in a reasonably prompt
manner. Oculus shall invoice Ruthigen for such services on a monthly basis in the amount specified in Exhibit A. All invoices
shall be payable within thirty (30) days after receipt thereof.

 

4.       Access
to Oculus Facilities. From the Effective Date continuing throughout the term of this Agreement, authorized personnel of Ruthigen
shall be permitted access to Oculus’ facilities currently located at 1129 N. McDowell Blvd., Petaluma, California, and the
Seattle facilities currently located at 454 North 34th Street, Seattle, WA 98103 (the “Facilities”) at any and
all times and with or without notice to Oculus as long as Ruthigen maintains an office in such Facility, or upon advance notice
to Oculus as provided herein after Ruthigen no longer maintains an office in a Facility, for the purposes contained herein but
not limited to: conducting general business functions, conducting meetings, conducting laboratory tests; and compliance audits,
manufacturing training, and performing research and development; meeting with Oculus personnel with respect to the services to
be provided by certain personnel to Ruthigen under this Agreement, including general business, research and development, manufacturing
and laboratory activities; quality assurance testing and operations; and other activities. For so long as Ruthigen maintains an
office within a Facility, Ruthigen shall be billed at the monthly rent set forth on Exhibit A hereto. After Ruthigen no
longer maintains an office in a Facility, Ruthigen shall not be obligated to pay rent. As long as Ruthigen personnel have access
to the Facilities pursuant to this Agreement, such Ruthigen personnel agree to comply with all terms and conditions of the real
property lease between Oculus and its landlord with respect to the use of the Facilities. Unlimited access to Oculus Facilities
will end one-hundred eighty days after the Effective Date, at which time Ruthigen may access the Facilities but must first inform
Oculus about the function and purpose of such access in advance.

    	2

    	 

    

 

5.       Consulting
and Services and Standard Activities. Oculus shall provide Ruthigen with Consulting Services as reasonably requested by
Ruthigen from time to time, subject to Oculus’ reasonable personnel and scheduling constraints, and to the
extent described in a Statement of Work. Ruthigen shall include in each Statement of Work its authorization for a fixed
number of billable hours for the identified employees of Oculus to carry out certain projects or function or perform any
services for or on behalf of Ruthigen. Any additional billable hours shall be requested in a Statement of Work or amendment
thereto signed by both Parties in advance of such work. Oculus shall maintain records relating to the billed hours and
personnel involved in supporting Ruthigen’s projects and functions and shall deliver a copy of such records to Ruthigen
upon request received during the term of this Agreement or for three years thereafter. All services performed by
Oculus’ internal staff shall be performed in substantially the same manner as it performs comparable services for its
own business and in a reasonably prompt manner. Consulting Services shall be billable at the hourly or fixed monthly rate set
forth on Exhibit A, which are subject to change based upon written agreement between Ruthigen and Oculus. Oculus shall
bill Ruthigen on a monthly basis for the Consulting Services, and Ruthigen shall pay invoices generated by Oculus within
thirty (30) days of receipt thereof. Ruthigen reserves the right to audit the billing and time records during the term of
this Agreement and for three (3) years thereafter. Oculus shall provide services in a reasonably prompt manner.

 

6.       Laboratory
and Other Expenses. Oculus shall make available to Ruthigen Oculus’ laboratories and/or cause to make available Micromed’s
laboratory personnel for the purpose of stability testing and other testing required for Pre-Clinical Development and Clinical
Development under the License and Supply Agreement. Micromed Laboratories, Inc. is a wholly owned subsidiary of Oculus and operates
within the Facilities.  Oculus shall provide, or cause Micromed to provide, Ruthigen with
an estimated cost similar to the estimate customarily given to other Oculus / Micromed customers in advance of completing the work.
The fees for such tests conducted by Micromed shall be the same as those Micromed charges its current clients for the same services
and Ruthigen shall receive the same pricing offered to Micromed’s clients. All services performed by Oculus’ internal
staff shall be performed in substantially the same manner as it performs comparable services for its own business. Oculus shall
bill Ruthigen for all such fees on a monthly basis, and Ruthigen shall pay invoices within thirty (30) days of receipt thereof.
Ruthigen will not reimburse expenses except where preapproved in writing.

 

7.       Use
of Subcontractors All services shall be performed by Oculus’ internal staff, except as otherwise
expressly permitted herein.  Oculus may subcontract Consulting Services, General Services  or Standard Activities subject
to Ruthigen’s prior written consent in each instance. When services are requested by Ruthigen that will require the use of
outside resources and/or materials, Oculus shall provide an estimate of costs for such services, without mark-up or
commission, which can be accepted or rejected by Ruthigen. Subcontractors having access to Ruthigen Confidential Information
and/or intellectual property must have a valid written agreement in place with Oculus with terms to protect Ruthigen’s
confidential information and intellectual property protection under terms no less burdensome than those set forth in this
Agreement and the License and Supply Agreement.

 

8.       Cooperation. Ruthigen and Oculus agree to confer in
good faith to resolve any conflicts regarding personnel or other resources in connection with the performance of services by Oculus
hereunder.

 

9.       Intellectual
Property Rights. The Parties acknowledge that their interaction and performance hereunder as such relates to intellectual property
rights and manufacturing are defined and set forth in the License and Supply Agreement.

    	3

    	 

    

 

10.     Term
of Agreement. This Agreement shall commence on the Effective Date and shall continue until terminated as provided herein.

 

11.     Termination.
Except as otherwise expressly provided herein, this Agreement may be terminated:

 

a.       upon
mutual written agreement of the Parties, or

 

b.       by
the non-defaulting Party upon or after the occurrence (but solely upon or after such occurrence) of any one of the following events
(each, an “Event of Default”): (i) a material breach by the other Party of any terms or conditions of this Agreement
which (A) is not corrected within thirty (30) days after receipt of written notification thereof, if correctable within such thirty
(30) days, or (B) if it is not correctable within such thirty (30) days, the correction of which is not initiated within such thirty
(30) day period and thereafter diligently pursued until completed; or (ii) one of the Parties hereto shall go into liquidation,
a receiver or a trustee appointed for the property or estate of that Party and said receiver or trustee is not removed within one
hundred twenty (120) days, or the Party makes an assignment for the benefit of creditors, whether any of the aforesaid bankruptcy
events be the outcome of the voluntary act of that Party, or otherwise, or

 

c.       Ruthigen
may terminate this Agreement upon 30 days written notice to Oculus.

 

d.       Oculus
may terminate this Agreement upon 30 days written notice to Ruthigen, but any such termination shall not be effective prior
to the six-month anniversary of the Effective Date.

 

In the event of a termination as a result of an Event of Default, the
non-defaulting Party shall be entitled to pursue any remedy provided in law or equity, including the right to recover any
damages it may have suffered by reason of such Event of Default. Upon a termination of this Agreement, the terms and
conditions of this Agreement that, by their terms, require performance following the termination or expiration of this
Agreement shall survive such termination or expiration, including without limitation, this Section 10 (Termination), Section
13 (Indemnification) and Section 14 (Miscellaneous).

 

12.       Representations
by Oculus. Oculus hereby represents and warrants to Ruthigen that:

 

a.       Oculus
is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware;

 

b.       Oculus
has all requisite corporate power and authority to own, lease, and operate its properties and its business and to enter into and
perform its obligations hereunder;

 

c.       The
execution, delivery, and performance of this Agreement by Oculus have been duly authorized by all requisite corporate action on
the part of Oculus. This Agreement has been duly executed and delivered by Oculus and constitutes the legal, valid and binding
obligation of Oculus, enforceable against Oculus in accordance with its terms, except to the extent that enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally and
subject to general principals of equity;

 

d.       Oculus
shall ensure that all Products are Manufactured in accordance with cGMP requirements, and FDA regulations;

    	4

    	 

    

 

e.       Oculus’
performance of services will not breach any agreement that Oculus has with another party including, without limitation, any agreement
to keep in confidence proprietary information acquired by Oculus in confidence;

 

f.       Oculus
is not and will not be bound by any agreement, nor has assumed or will assume any obligation, which would in any way be inconsistent
with the services to be performed by Oculus under this Agreement; and

 

g.       Oculus
will perform all services in a professional and workmanlike and diligent manner.

 

13.       Representations
of Ruthigen. Ruthigen hereby represents and warrants to Oculus that:

 

a.       Ruthigen
is a corporation duly organized, validly existing, and in good standing under the laws of the State of Nevada;

 

b.       Ruthigen
has all requisite corporate power and authority to own, lease, and operate its properties and business and to enter into and perform
its obligations hereunder;

 

c.       The
execution, delivery, and performance of this Agreement by Ruthigen have been duly authorized by all requisite corporate action
on the part of Ruthigen; and

 

d.       This
Agreement has been duly executed and delivered by Ruthigen and constitutes the legal, valid, and binding obligation of Ruthigen,
enforceable against Ruthigen in accordance with its terms, except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally and subject to general principles
of equity.

 

14.       Indemnification.

 

Indemnification
by Ruthigen. Ruthigen shall indemnify, defend, and hold Oculus, its Affiliates and their respective employees, agents, officers
and directors (the “Oculus Indemnified Parties”) harmless from and against any and all demands, claims, actions,
suits, proceedings, judgments, assessments, costs, expenses, losses, damages, liabilities, fines, and penalties (including, without
limitation, reasonable attorneys’ fees) (collectively, “Loss”) alleged against or incurred by the Oculus
Indemnified Parties for property damage or personal injury to the extent caused by Ruthigen’s use of the Facilities. Ruthigen
shall indemnify, defend, and hold Oculus, its Affiliates and their respective employees, agents, officers and directors (the “Oculus
Indemnified Parties”) harmless from and against any and all Third Party Loss alleged against the Oculus Indemnified
Parties by such Third Party as a result of (a) Ruthigen’s gross negligence or willful misconduct; or (b) Ruthigen’s
breach of Section 13.

 

a.       Indemnification
by Oculus. Oculus shall indemnify, defend, and hold Ruthigen, its Affiliates and their respective employees, directors, officers
and agents (the “Ruthigen Indemnified Parties”) harmless from and against any and all Third Party Loss alleged
against any of the Ruthigen Indemnified Parties by such Third Party as a result of (i) Oculus’ gross negligence
or willful misconduct; or (ii) Oculus’ breach of Section 12.

 

b.       Procedure
for Claims. Each indemnified Party agrees to give the indemnifying Party prompt written notice of any Loss or discovery of
fact upon which such indemnified Party intends to base a request for indemnification under Sections 13(a) or 13(b). Each Party
shall furnish promptly to the other copies of all papers and official documents received in respect of any Loss. The indemnifying
Party shall have the sole right to defend, settle, or otherwise dispose of such Loss, on such terms as the indemnifying Party,
in its sole discretion, shall deem appropriate. The indemnifying Party shall obtain the written consent of the indemnified Party,
which shall not be unreasonably withheld or delayed, prior to ceasing to defend, settling or otherwise disposing of any Loss if
as a result thereof the indemnified Party would become subject to injunctive or other equitable relief or any remedy other than
the payment of money, which payment would be the responsibility of the indemnifying Party. The indemnifying Party shall not be
liable for any settlement or other disposition of a Loss by the indemnified Party which is reached without the written consent
of the indemnifying Party. The reasonable costs and expenses, including reasonable fees and disbursements of counsel incurred by
any indemnified Party in cooperating with the indemnifying Party in its defense of a Loss, shall be reimbursed on a quarterly basis
by the indemnifying Party, without prejudice to the indemnifying Party’s right to contest the indemnified Party’s right
to indemnification and subject to refund in the event the indemnifying Party is ultimately held not to be obligated to indemnify
the indemnified Party.

    	5

    	 

    

 

15.       Miscellaneous.

 

a.       Assignment.
This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective successors and permitted
assigns. This Agreement shall not be assignable by either Party without the prior written consent of the other Party.

 

b.       Expenses.
Except for payments expressly required to be made by Ruthigen hereunder, each Party shall bear its own expenses with respect to
the transactions contemplated by this Agreement, including, without limitation, its attorneys’ fees and other expenses related
to the preparation and execution of this Agreement and the completion of this Agreement.

 

c.       Severability.
Each of the provisions contained in this Agreement shall be severable, and the unenforceability of one shall not affect the enforceability
of any others or of the remainder of this Agreement.

 

d.       Amendment.
This Agreement may not be amended, supplemented or otherwise modified except by an instrument in writing signed by both Parties
hereto.

 

e.       Waiver.
The failure of any Party to enforce any condition or part of this Agreement at any time shall not be construed as a waiver of that
condition or part, nor shall it forfeit any rights to future enforcement thereof.

 

f.       Governing
Law. This Agreement shall be construed and enforced in accordance with and governed by the laws of the State of California,
excluding the conflicts of laws and provisions thereof. If any dispute arises under this Agreement, the Parties shall follow
the process for dispute resolution described in Section 15.10 of the License and Supply Agreement.

 

g.       Headings.
The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute
a part hereof.

 

h.       Counterpart.
The Parties may execute this Agreement in one or more counterparts, and each fully executed counterpart shall be deemed an original.

    	6

    	 

    

 

i.       Notices.
All notices and consents hereunder shall be in writing, effective upon receipt, and shall be delivered personally, mailed by registered
or certified mail (return receipt requested, postage prepaid), or sent by express courier service, to the other Party at the following
addresses (or at such other address for a Party as shall be specified by like notice):

 

	To Oculus:	
        Oculus Innovative Sciences, Inc.

        Attn.: President

        1129 N. McDowell Blvd.

        Petaluma, CA 94954

         

	To Ruthigen:	
        Ruthigen, Inc.

        Attn: President

        2455 Bennett Valley Road, Suite C116

        Santa Rosa, CA 95404

         

All notices and consents provided for herein
shall become effective: (a) on delivery if given in person; or (b) two (2) business days after delivery to the overnight service.

 

j.       Entire
Agreement. This Agreement, together with the License and Supply Agreement, constitute the entire and exclusive agreement between
the Parties with respect to the subject matter herein, and supersede all prior and contemporaneous communications and understandings
between the Parties, written or oral, relating to this subject matter. This Agreement may only be amended in a writing executed
by an authorized representative of each Party.

 

k.       Relationship
of Parties. The status of the Parties under this Agreement shall be that of independent contractors. Neither Party shall have
the right to enter into any agreements on behalf of the other Party, nor shall it represent to any person that it has any such
right or authority. Nothing in this Agreement shall be construed as establishing a partnership or joint venture relationship between
the Parties. Neither Party shall have authority to enter into contracts or binding commitments in the name or on behalf of the
other Party. Neither Party will use the other Party’s logo or marks without prior written approval, and then such use shall
be only for the benefit of the other Party and at the direction of the other Party. Neither Party shall be, nor represent itself
as being, an agent of the other Party, and shall not be, nor represent itself as being, authorized to bind the other Party. Each
Party agrees, acknowledges and understands that neither it nor its employees or agents shall have the status of an employee of
the other Party and shall not participate in any employee benefit plans or group insurance plans or programs (including, but not
limited to salary, bonus or incentive plans, stock option or purchase plans, or plans pertaining to retirement, deferred savings,
disability, medical or dental), even if it is considered eligible to participate pursuant to the terms such plans. In addition,
each Party understands and agrees that consistent with its independent contractor status, neither it nor its employees or agents
will apply for any of the other Party’s government-sponsored benefits intended only for employees, including, but not limited
to, unemployment benefits. Such Party’s exclusion from benefit programs maintained by the other Party is a material component
of this Agreement. To the extent a Party or its employees or agents may become eligible for any benefit programs maintained by
the other Party (regardless of timing or reason for eligibility), such Party hereby waives its right to participate in the programs.
Each Party shall defend, indemnify and hold the other Party harmless from any and all claims made by its personnel on account of
an alleged failure by the other Party to satisfy any tax or withholding obligations.

 

l.       Compliance
with Laws. Each Party will comply with all applicable laws, rules, ordinances and regulations of any governmental entity or
regulatory agency governing the actions to be taken and provided hereunder. Neither Party will take any action in violation of
any applicable law, rule, ordinance or regulation that could result in liability being imposed on the other Party.

    	7

    	 

    

 

m.       Confidentiality.
Each Party agrees that all information observed, communicated or otherwise disclosed to it by the other Party in connection with
this Agreement (which information shall at all times be the property of the Party communicating such information) shall constitute
“Confidential Information” as defined in the License and Supply Agreement and be subject to the confidentiality obligations
and other provisions of Article X of the License and Supply Agreement.

 

[SIGNATURES ON FOLLOWING PAGE]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	8

    	 

    

 

IN WITNESS WHEREOF,
the Parties have caused this Agreement to be executed by their duly authorized representatives effective as of the Effective Date.

 

	"Ruthigen"	 	"Oculus"
	 	 	 
	Ruthigen, Inc., a Nevada corporation	 	Oculus Innovative Sciences, Inc., a Delaware corporation
	 	 	 
	By: /s/ Hoji Alimi                     	 	By: /s/ Jim Schutz                         
	Name: Hoji Alimi	 	Name: Jim Schutz
	Title: CEO	 	Title: CEO

 

 

 

 

 

 

    	9

    	 

    

 

EXHIBIT A

 

Consulting Services &
Facilities

 

	Consulting Services	Hourly Rate1
	Research and Development	(Employee’s salary + 15%) / 2080
	Operations	(Employee’s salary + 15%) / 2080
	Micromed	(Employee’s salary + 15%) / 2080
	Finance	(Employee’s salary + 15%) / 2080
	Other	(Employee’s salary + 15%) / 2080

 

 

	General Services	Monthly Rate
	General Accounting and Human Resources	$3,000 / month

 

 

 

	Facilities	Monthly Rate
	Ruthigen Monthly Rent Payment	$2,000 / month

 

 

 

 

 

 

 

 

 

 

 

	
         

 

12080 means the fee
is calculated based on 2,080 work hours per employee per year

 

 

 

    	10

    	 

    

 

EXHIBIT B

 

STATEMENT OF WORK 

 

This Statement of Work is delivered pursuant to the Shared Services
Agreement entered into by and between Oculus Innovative Sciences, Inc. and Ruthigen, Inc.

 

1.Services.
Oculus will render the following Services to the Company:

 

 

 

 

 

 

 

2.Consultant Designee. Employee
designated to perform the Services:

 

Name: _________________________________

 

		3.	Requested Start Date:______________________

 

		4.	Requested Completion Date:_________________

 

		5.	*Authorized Billable Time:___________________

 

		6.	*Authorized Expense:_______________________

_________________________________________

_________________________________________

_________________________________________

 

*If none stated, Ruthigen agrees that Oculus will invoice for
full amount billed by employee and Ruthigen shall pay all such amounts

  

	Ruthigen, Inc.	 	Oculus Innovative Sciences, Inc.
	 	 	 
	 	 	 
	By: ______________________	 	By: ______________________
	Name: ____________________	 	Name: ____________________
	Title: _____________________	 	Title: _____________________

 

 

 

 

 

    	11Exhibit 10.9

 

Execution Version

 

SEPARATION AGREEMENT

 

This Separation Agreement
(this “Agreement”), by and between Ruthigen, Inc., a Nevada corporation (“Ruthigen”), and
Oculus Innovative Sciences, Inc., a Delaware corporation (“Oculus” and, together with Ruthigen, the “Parties”
and each, a “Party”), is made and entered into as of August 2, 2013, and shall be effective as of the closing
of the IPO (as defined herein) (the “Effective Date”).

 

RECITALS

 

WHEREAS, Ruthigen is
currently a wholly-owned subsidiary of Oculus;

 

WHEREAS, the board
of directors of Oculus has determined that it is appropriate, desirable and in the best interests of Oculus and its shareholders,
to separate its businesses into two publicly-traded companies (the “Separation”), all as more fully described
in this Agreement and both the License and Supply Agreement, dated May 23, 2013, and the Shared Services Agreement, dated May 23,
2013, by and between the Parties (together, the “Ancillary Agreements”);

 

WHEREAS, in order to
effect the Separation, Oculus is contemplating the initial public
offering (the “IPO”) of Ruthigen’s common stock, par value $0.0001 per share (the “Common Stock”),
immediately following which Oculus will continue to hold certain shares of Common Stock (the “Ruthigen Shares”);
and

 

WHEREAS, the Parties
desire to set forth certain terms and conditions with respect to the Separation and Oculus’ ownership of the Ruthigen Shares.

 

NOW, THEREFORE, in
consideration of the foregoing and of the mutual covenants and agreements set forth herein, the Parties agree as follows:

 

ARTICLE I

THE SEPARATION

 

Section 1.1General.
Subject to the terms and conditions of this Agreement, the Parties shall use, and shall cause their respective Affiliates (as defined
below) to use, their respective reasonable best efforts to consummate the transactions contemplated hereby. “Affiliate”
shall mean, when used with respect to a specified person, a person that directly or indirectly, through one or more intermediaries,
controls, is controlled by or is under common control with such specified person, including, without limitation, a subsidiary,
where “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of such person, whether through ownership of voting securities or other interests, by contract or otherwise;
provided, that if control is deemed solely on the basis of ownership of voting securities or other interests, such ownership must
be in excess of fifty percent (50%) of the then outstanding shares of common stock or the combined voting power of such person;
provided further, that (i) neither Ruthigen nor Oculus shall be considered an Affiliate of each other or of each other’s
Affiliates, (ii) insofar as an officer or director of any Affiliate is an officer or director of Ruthigen or Oculus, in reference
to such other Party, the term shall exclude such officer or director in such capacity of such other Party, and (iii) no respective
Oculus or Ruthigen shareholder shall be considered an Affiliate of Oculus or Ruthigen unless such shareholder is a subsidiary of
Oculus or Ruthigen respectively.

 

Section 1.2Assumption
of Liabilities. Oculus and Ruthigen shall accept, assume (or, as applicable, retain), perform, discharge, pay and
fulfill, in accordance with their respective terms,

 

    	 

    	 

    

 

(i) all of Oculus’
direct, out-of-pocket expenses advanced on Ruthigen’s behalf in connection with the IPO, which expenses shall be those documented
on Oculus’ computerized books of account in the ordinary course (and will appear on Ruthigen’s financial statements),
subject to agreement by Oculus and Ruthigen, which expenses shall be reimbursed to Oculus by Ruthigen upon the closing of, and
from the proceeds raised in, the IPO; 

 

(ii) Oculus
and Ruthigen shall develop and agree on the Oculus global budget, a portion of which shall include Ruthigen’s (the “Ruthigen
Budget”) and include (a) all other Ruthigen corporate, operational expenses, such as salaries, expense allocations and
related items prior to the IPO (which expenses shall not be reimbursed by Ruthigen), (b) transaction costs related to the IPO,
which expenses shall be reimbursed in accordance with clause (i) immediately above, and (c) pre-IPO third party costs incurred
by Ruthigen which are associated with Ruthigen’s FDA pre-IPO required expenses, pre-clinical studies, clinical consulting
and related matters, which expenses shall not be reimbursed by Ruthigen; provided, however, that the Ruthigen Budget shall be approved
by management of Oculus and Ruthigen, the board of directors of Ruthigen and the Oculus Special Transaction Committee; and 

 

(iii) in compliance
with the Shared Services Agreement, Ruthigen shall pay expenses advanced or paid by Oculus on Ruthigen’s behalf or for Ruthigen’s
benefit during the transition process following the closing of the IPO, such as salaries, benefits, and other expenses, which expenses
shall be reimbursed to Oculus by Ruthigen with 30 days of receipt of an invoice for such expenses.

 

Section 1.3Governmental Approvals;
Consents. 

 

(a)To the extent
that the Separation requires any notices, reports or other filings to be made, or any consents, registrations, approvals, permits
or authorizations to be obtained from any governmental authority (“Governmental Approvals”), the Parties shall
use reasonable best efforts to obtain any such Governmental Approvals.

 

(b)The Parties
shall use reasonable best efforts to obtain any consents or waivers from third parties required in connection with the transactions
contemplated by this Agreement.

 

Section 1.4Termination
of Agreements. Except with respect to obligations under this Agreement and the Ancillary Agreements (and agreements expressly
contemplated herein or therein to survive by their terms), the Parties hereby terminate any and all written or oral agreements,
arrangements, commitments or understandings, between or among them, as of the Effective Date; and each Party shall, at the reasonable
request of the other Party, take, or cause to be taken, such other actions as may be necessary to effect the foregoing.

 

Section 1.5Disclaimer
of Representations and Warranties. ON BEHALF OF THE PARTIES AND THEIR RESPECTIVE AFFILIATES, THE PARTIES UNDERSTAND AND
AGREE THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT, NO PARTY TO THIS AGREEMENT, ANY ANCILLARY AGREEMENT
OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT HEREBY OR THEREBY, IS REPRESENTING OR WARRANTING IN ANY WAY AS
TO THE BUSINESSES OR LIABILITIES CONTRIBUTED, TRANSFERRED, DISTRIBUTED OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, AS TO ANY
CONSENTS OR GOVERNMENTAL APPROVALS REQUIRED IN CONNECTION HEREWITH OR THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS
OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY, OR AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SETOFF OR FREEDOM
FROM COUNTERCLAIM WITH RESPECT TO ANY CLAIM OR OTHER ASSET, INCLUDING ANY ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL
SUFFICIENCY OF ANY CONTRIBUTION, DISTRIBUTION, ASSIGNMENT, DOCUMENT, CERTIFICATE OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY TITLE
TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF.

 

    	2

    	 

    

 

ARTICLE II

 

Stock Transfer Restrictions;
Registration Rights

 

Section 2.1Lock-Up
Period. As of the Effective Date and expiring twelve months following the closing of the IPO (the “Lock-Up Period”),
Oculus and its Affiliates shall not, without the consent of the managing underwriter of the IPO and the board of directors of Ruthigen,
directly or indirectly, (1) offer, pledge, assign, encumber, announce the intention to sell, sell, contract to sell (including
any short sale), sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant
to purchase, distribute to its shareholders or any other individual or entity, or otherwise transfer or dispose of, any of the
Ruthigen Shares, or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences
of ownership of any of the Ruthigen Shares, whether the consideration for any such transaction described in clause (1) or (2) above
(each, a “Transfer”) is cash or otherwise.

 

Section 2.2Additional
Marketing and Transfer Restrictions.

 

(a)Marketing
Restrictions. If during the Term Oculus and its Affiliates own greater than 19.9% of the issued and outstanding Common Stock,
Oculus and its Affiliates shall not, and shall not engage an investment banker, investor relations firm or firms performing similar
functions to, directly or indirectly, market or Transfer the Ruthigen Shares outside of an Oculus Transfer Period (as defined below)
or the Registration Transfer Period (as defined below), without the prior written consent of Ruthigen’s board of directors
(the “Consent”). However, for purposes of clarity, it is understood that Oculus may engage investment bankers, investor
relations firms or firms performing similar functions for its own marketing, fundraising or similar purposes (other than those
involving the Ruthigen Shares) and Oculus’ communications with such firms, or the third parties with whom Oculus or such
firms are communicating, may include information regarding Ruthigen, including information for due diligence purposes and communications
with auditors, subject to customary confidentiality agreements, and furthermore, Oculus may disclose information regarding Ruthigen
as required by law. Outside of an Oculus Transfer Period or the Registration Period, in the event that anyone approaches or inquires
of Oculus or its Affiliates regarding the Transfer or potential Transfer of the Ruthigen Shares, Oculus shall direct such inquiries
to Ruthigen.

 

(b)Consent Restriction.
Commencing on the expiration of the Lock-Up Period and during the Term that Oculus and its Affiliates own greater than 19.9% of
the issued and outstanding Common Stock, Oculus and its Affiliates shall not enter into any Transfer without the Consent, other
than pursuant to Sections 2.2(c) or 2.2(d) below. The expense allocation provisions set forth in Section 2.2(c)(3) shall apply
with equal force to this Section 2.2(b), if the first completed Transfer is pursuant to this Section 2.2(b), rather than pursuant
to Section 2.2(c).

 

    	3

    	 

    

 

(c)Additional
Transfer Restrictions. Commencing two years after the closing of the IPO and during the Term that Oculus and its Affiliates
own greater than 19.9% of the issued and outstanding Common Stock, Oculus may deliver to Ruthigen a written request to Transfer
some or all of the Ruthigen Shares through a private placement transaction (a “Transfer Request”). Once the Transfer
Request is submitted, Ruthigen may take up to 120 calendar days, through private marketing efforts, to Transfer such Ruthigen Shares
on behalf of Oculus (the “Ruthigen Transfer Period”). If no Transfer is completed during the Ruthigen Transfer Period,
then Oculus shall have 90 calendar days, through private marketing efforts (meaning Oculus shall not make public statements regarding
any proposed Transfer of the Ruthigen Shares), to Transfer such Ruthigen Shares (the “Oculus Transfer Period”). A Transfer
completed pursuant to Section 2.2(c) must meet the following requirements, unless the Consent is provided otherwise:

 

		1.	Any Transfer hereunder shall be a private placement transaction that complies with Rule 144, or
Section 4(1) and any other applicable SEC regulations and rules, which may be marketed only through private marketing efforts (meaning
Oculus shall not make public statements regarding any proposed Transfer of the Ruthigen Shares). For the avoidance of doubt, Oculus
shall not publicly announce or market its intention to sell the Ruthigen Shares.

 

		2.	The Ruthigen Shares may be sold at a discount, if necessary, that, relative to the most recent
closing price of the Common Stock prior to the pricing of the Transfer, does not exceed (1) 20% if 80% or more (measured by dollars
invested) of the purchasers are institutional investors, defined for the purposes of this Agreement as entities whose sole business
is investing in companies, and (2) 15% if 20% or more (measured by dollars invested) of the purchasers are not institutional investors.

 

		3.	Oculus shall pay the reasonable, documented expenses incurred by Oculus and Ruthigen in connection
with the marketing and any proposed or completed Transfer and any associated registration of the Ruthigen Shares, including but
not limited to, expenses for marketing, travel, road shows, retention of investment bankers, registration statement or other offering
documents including any blue sky fees in connection with the registration of the Ruthigen Shares, legal and other expenses; provided,
however, that Ruthigen shall pay the reasonable, documented expenses related to any registration statement or other offering documents
including any blue sky fees or registration for (i) the first completed Transfer, whether under this Section 2.2(c) or Section
2.2(b), and (ii) a registration conducted pursuant to Section 2.2(d).

 

		4.	During the Oculus Transfer Period, Oculus may engage investment bankers or other professionals
performing similar functions to assist with a Transfer. In connection with such engagement, Oculus may agree to a “tail period”
that exceeds the time of the Oculus Transfer Period; provided, however, that any Transfers outside of the Oculus Transfer Period
are subject to the Consent.

 

		5.	A Transfer (or series of Transfers conducted as part of the same transaction) may not exceed the
greater of (1) five percent of the outstanding Common Stock on the business day prior to the date of the Transfer agreement, or
(2) $1,500,000 in net proceeds to Oculus.

 

		6.	The terms of a Transfer may not include any additional compensation payable by Ruthigen in equity
or cash to any transferee.

 

		7.	Whether Ruthigen or Oculus has initiated a Transfer meeting the requirements of this Section 2.2(c),
both parties shall cooperate to consummate such Transfer expeditiously.

 

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(d) Registration
Transfer. If during the Term that Oculus and its Affiliates own greater than 19.9% of the issued and outstanding Common Stock
and upon the expiration of the second Oculus Transfer Period, Oculus has received less than $3,800,000 in net proceeds from Transfers
of the Ruthigen Shares, Oculus may make a one-time demand to Ruthigen to register and Transfer the Ruthigen Shares in an aggregate
amount up to $3,800,000 minus the net proceeds received by Oculus at the time of such demand (the “Registration Transfer
Request”). Oculus and Ruthigen shall cooperate and communicate in a manner to enable Ruthigen to deliver such amount of registered
and freely tradable Ruthigen Shares within three days following a Transfer under this Section 2.2(d). The period of time commencing
on the date of the Registration Transfer Request and continuing through the date of a Transfer completed under this Section 2.2(d)
shall be the “Registration Transfer Period.” A Transfer completed pursuant to Section 2.2(d) must meet the following
requirements, unless the Consent is provided otherwise:

 

		1.	The Ruthigen Shares may be sold at a discount, if necessary, that, relative to the most recent
closing price of the Common Stock prior to the pricing of the Transfer, does not exceed 30%.

 

		2.	The expense allocation provisions set forth in Section 2.2(c)(3) shall apply with equal force to
this Section 2.2(d).

 

		3.	Oculus may engage investment bankers or other professionals performing similar functions to assist
with a Transfer. In connection with such engagement, Oculus may agree to a “tail period” that exceeds the time of the
Registration Transfer Period; provided, however, that any Transfers outside of the Registration Transfer Period are subject to
the Consent.

 

		4.	The terms of a Transfer may not include any additional compensation payable by Ruthigen in equity
or cash to any transferee.

 

(e)Cooling Off
Period. Notwithstanding any provision of Section 2.2, unless the parties agree otherwise in writing, (i) if the net proceeds
of the Ruthigen Shares Transferred by Oculus in any Transfer consummated under Section 2.2(b) or 2.2(c) is less than $1,500,000
or no Transfer was consummated under Section 2.2(b) or 2.2(c), then Oculus shall wait at least three and one half months (105 days)
following the consummation of such Transfer or the expiration of the Oculus Transfer Period, as the case may be, before Oculus
may request another Transfer, (ii) if the net proceeds of the Ruthigen Shares Transferred by Oculus in any Transfer consummated
under Section 2.2(b) or 2.2(c) is at least $1,500,000, then Oculus shall wait at least eight months following the consummation
of such Transfer, before Oculus may request another Transfer, and (iii) following the expiration of the Registration Transfer Period,
if any, then Oculus shall wait at least eight months following the consummation of such Transfer thereunder.

 

(f) Distribution.
Following the expiration of the Lock-Up Period, Oculus shall from time to time, Oculus shall retain investment bankers and tax
experts to re-evaluate the advisability of conducting a plan of distribution of all or a portion of the Ruthigen Shares by Oculus
to Oculus’ shareholders (a “Distribution”). Any Distribution shall be subject to the Consent and shall comply
with the notification requirements set forth in NASDAQ Listing Rule 5250(e)(6) and Rule 10b-17 of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), among other applicable rules and regulations, in connection with the Distribution.
If there is a Distribution, Ruthigen covenants to take all then-required actions to ensure that the Ruthigen Shares distributed
in the Distribution are unrestricted and freely tradable by the distributees in the Distribution, consistent with the rules and
regulations of the SEC and the applicable stock exchange customary for such Distribution transactions.

 

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Section 2.3
Registration Rights.

 

(a) Ruthigen
Registration; Piggyback. If during the Term Oculus and its Affiliates own greater than 19.9% of the issued and outstanding
Common Stock and after the Lock-Up Period, Ruthigen proposes to register any of its Common Stock under the Securities Act of 1933
(“Securities Act”) in connection with the public offering of such securities solely for cash (other than in (i) a registration
relating to the sale or issuance of securities to employees of Ruthigen or a subsidiary pursuant to a stock option, stock purchase,
or similar employee benefit plan or (ii) a registration relating to an SEC Rule 145 transaction), Ruthigen shall, at such time,
promptly give Oculus notice of such registration. Upon Oculus’ request given within twenty (20) days after such notice is
given by Ruthigen, Ruthigen shall, subject to the provisions below, cause to be registered all of the Ruthigen Shares Oculus has
requested to be included in such registration. Ruthigen shall have the right to terminate or withdraw any registration initiated
by it under this Section 2.3(a) before the effective date of such registration, whether or not Oculus has elected to include Ruthigen
Shares in such registration. However, Oculus shall have registration rights under this Section 2.3(a) for only up to 33% (thirty
three percent) of all shares or the value of all securities, if not shares, offered by Ruthigen in any such Ruthigen underwritten
securities offering. Notwithstanding the foregoing, Ruthigen shall not be required to include any of the Ruthigen Shares in such
registration unless Oculus accepts the terms of the securities offering agreed between Ruthigen and its underwriters, and then
only in such quantity as Ruthigen’s board of directors, in its sole discretion, determines will not jeopardize the success
of the securities offering by Ruthigen. Expenses incurred in connection with Section 2.3(a) shall be paid by the party who incurred
such expenses.

 

(b) Demand Registration
for Completed Transfers. If during the Term (i) a
Transfer is consummated under Section 2.2(b) or 2.2(c) of this Agreement that contains an agreement requiring Ruthigen to register
the Ruthigen Shares Transferred, and (ii) Ruthigen receives a request from Oculus, Oculus on behalf of the transferees,
or the transferees in such Transfer to register such shares; then Ruthigen shall file a Form S-1, S-3 or equivalent registration
statement with respect to the resale by such transferees of the Ruthigen Shares Transferred, as soon as practicable, and in any
event within thirty (30) calendar days after the date such request is given, subject to the limitations below. Ruthigen shall use
its commercial best efforts to have the SEC declare same effective within ninety (90) calendar days after the date of such request.

 

(c)Demand Registration
after Second Oculus Transfer Period. Section 2.2(d) sets forth additional registration rights provided to Oculus following
the expiration of the second Oculus Transfer Period, subject to certain conditions.

 

(d) Exceptions
To Registration Obligations. Notwithstanding the foregoing obligations, if Ruthigen furnishes to Oculus a certificate signed
by Ruthigen’s chief executive officer stating that in the good faith judgment of Ruthigen’s board of directors it would
be materially detrimental to Ruthigen and its stockholders for a registration statement requested pursuant to Section 2.2(d) or
2.3 either to be filed or to become effective, because such action would (i) materially interfere with a significant acquisition,
corporate reorganization, or other similar transaction involving Ruthigen; (ii) require premature disclosure of material information
that Ruthigen has a bona fide business purpose for preserving as confidential; or (iii) render Ruthigen unable to comply with requirements
under the Securities Act or Exchange Act, then Ruthigen shall have the right to defer taking action with respect to such filing,
and any time periods with respect to filing or effectiveness thereof shall be tolled correspondingly, for a period of not more
than thirty (30) calendar days after Oculus’ request; provided, however, that Ruthigen may not invoke this right more than
once in any twelve (12) month period; and provided further that Ruthigen shall not register any securities for its own account
or that of any other stockholder during such thirty (30) calendar day period, other than (i) a registration relating to the sale
or issuance of securities to employees of Ruthigen pursuant to a stock option, stock purchase, or similar employee benefit plan
or (ii) a registration relating to an SEC Rule 145 transaction.

 

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(e) Expenses
of Certain Registrations. The expenses of registrations conducted under Sections 2.2(b), 2.2(d) or 2.3(b) shall be governed
by the expense allocation provisions set forth in Sections 2.2(b), 2.2(c)(3) and 2.2(d)(2), as applicable, depending on the type
of registration conducted.

 

Section 2.4Standstill.
If during the Term Oculus and its Affiliates own greater than 19.9% of the issued and outstanding Common Stock:

 

(a)Oculus and its
Affiliates shall not, and shall not act in concert with any person to, make, or in any manner participate in, directly or indirectly,
a “solicitation” of “proxies” or “consents” (as such terms are used in the rules of the Securities
and Exchange Commission) or powers of attorney or similar rights to vote any shares of Common Stock in connection with any vote
or other action on any matter; and

 

(b)Other than as
set forth herein, Oculus and its Affiliates shall not, and shall not act in concert with any person to, deposit any of the Ruthigen
Shares in a voting trust or subject any of the Ruthigen Shares to any arrangement or agreement with any person with respect to
the voting of the Ruthigen Shares.

 

Section 2.5Restrictions
Relating to Debt.

 

(a)If during the
Term Oculus and its Affiliates own greater than 19.9% of the issued and outstanding Common Stock and Oculus or its Affiliates uses
as collateral for any Indebtedness of Oculus or its Affiliates any Ruthigen Shares (the “Collateral”), Oculus
shall disclose in writing to any creditor, as part of the loan and security agreement with such creditor holding such Collateral,
that the Ruthigen Shares are subject to the restrictions on Transfer contained in Articles II and III of this Agreement. Until
registered or otherwise Transferred consistent with the terms of this Agreement, the Ruthigen Shares shall bear restrictive legends
referencing the restrictions on Transfer contained in this Agreement. Pursuant to Section 8.2, if such creditor forecloses on the
Collateral, such creditor shall assume all of the obligations of Oculus under this Agreement. Ruthigen shall be a third party beneficiary
of these restrictions. The term “Indebtedness” means, with respect to Oculus, (i)
all obligations for borrowed money, (ii) all obligations evidenced by bonds, debentures, notes or other similar instruments, or
upon which interest payments are customarily made, (iii) all obligations to pay the deferred purchase price of property or services,
but excluding obligations to trade creditors incurred in the ordinary course of business and not past due by more than ninety (90)
days, (iv) all capital lease obligations , (v) the principal balance outstanding under any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product, (vi) all obligations to purchase securities (or other
property) which arise out of or in connection with the issuance or sale of the same or substantially similar securities (or property),
(vii) all contingent or non-contingent obligations to reimburse any bank or other person in respect of amounts paid under a letter
of credit or similar instrument, (viii) all equity securities of such person subject to repurchase or redemption otherwise than
at the sole option of such person, (ix) all “earnouts” and similar payment obligations, (x) all indebtedness secured
by a lien on any asset, whether or not such indebtedness is otherwise an obligation, (xi) all obligations under any foreign exchange
contract, currency swap agreement, interest rate swap, cap or collar agreement or other similar agreement or arrangement designed
to alter the risks arising from fluctuations in currency values or interest rates, in each case whether contingent or matured,
and (xii) all obligations or liabilities of others guaranteed by Oculus.

 

    	7

    	 

    

 

(b)If
(i) Oculus defaults under its loan and security agreements, as amended and supplemented from time to time (the “WTI
Loan Agreements”) with Venture Lending & Leasing V, Inc. or Venture Lending & Leasing VI, Inc. (each, a “Lender”
and collectively, the “Lenders”), and (ii) Ruthigen is required to make payments or transfer its assets, whether in
the form of cash or other assets, to a Lender on Oculus’ behalf to satisfy Oculus’ obligations for such default, then
Ruthigen shall not be required to make any payments due to Oculus under this Agreement or any Ancillary Agreement until such time
as Oculus reimburses Ruthigen in the amount of Ruthigen’s payments or transferred assets to such Lender or Ruthigen is made
whole in respect to having met Oculus’ default obligations (which may occur by Ruthigen’s not making payments to Oculus
which are otherwise due under any Ancillary Agreement or this Agreement), it being understood that all such payments shall be resumed
once Ruthigen has been made whole for the payment made by it for Oculus’ default under the WTI Loan Agreements.

 

ARTICLE III

VOTING;
MANAGEMENT; COMPENSATION; AND EQUITY INCENTIVE PLAN

 

Section
3.1Voting Agreement. If during
the Term Oculus and its Affiliates own greater than 19.9% of the issued and outstanding Common Stock:

 

(a)
at any duly called meeting of the stockholders of Ruthigen (or any adjournment or postponement thereof), and in any action by written
consent of the stockholders of Ruthigen, Oculus and its Affiliates, as the case may be, shall, if a meeting is held, appear at
the meeting, in person or by proxy, or otherwise cause the Ruthigen Shares to be counted as present thereof for purposes of establishing
a quorum, and Oculus and its Affiliates, as the case may be, shall vote or consent (or cause to be voted or consented), in person
or by proxy, all of the Ruthigen Shares in the same manner as the majority of the votes cast by the holders of all other shares
of the issued and outstanding Common Stock, excluding for all purposes with respect to such vote or consent all shares of Common
Stock or other securities owned, directly or indirectly, by Ruthigen employees, members of Ruthigen’s board of directors,
and/or Ruthigen officers and/or their Affiliates; and

 

(b)
Oculus and its Affiliates shall not enter into any agreement, commitment or arrangement with
any person the effect of which would be inconsistent with or violative of the provisions and agreements contained in this Section
3.1.

 

Section 3.2No
Ownership Interest. Nothing in this Agreement shall be deemed to vest in Ruthigen any direct or indirect
ownership or incidence of ownership of or with respect to the Ruthigen Shares. All rights, ownership and direct or indirect economic
benefits of and relating to the Ruthigen Shares shall remain vested in and belong to Oculus.

 

Section 3.3Matters
Affecting Compensation Guidelines and Equity Incentive Plan If during the Term Oculus and its Affiliates own greater than
19.9% of the issued and outstanding Common Stock:

 

(a) Equity Plan.

 

    	8

    	 

    

 

(i)Eligibility
and Type of Awards. Prior to the Effective Date, Ruthigen shall create and Oculus shall approve the Ruthigen, Inc. 2013 Employee,
Director and Consultant Equity Incentive Plan, consistent with the general principles described herein and in the form attached
as Exhibit A hereto (the “Equity Plan”). The Equity Plan provides for the grant to employees, directors
and consultants of Ruthigen of Common Stock, stock options and other Stock-Based Awards (as defined in the Equity Plan) issuable
for Common Stock; provided, however, restricted stock units (a form of Stock-Based Award under the Equity Plan, “RSUs”)
and stock options shall be the only form of equity that may be granted pursuant to Section 3.3(b) below on the Post Closing Grant
Date (as defined below) and stock options shall be the only form of equity that may be granted thereafter. All RSUs and stock options
shall be subject to vesting schedules of not less than three years on a quarterly basis, vesting ratably for the applicable vesting
period, unless otherwise set forth in this Section 3.3. In addition, at the sole discretion of the Ruthigen board of directors,
the vesting of any awards granted under the Equity Plan may be accelerated (a) for any grantee upon a change of control, and (b)
for any key employee if the key employee (X) is terminated by Ruthigen without “Cause” (as defined in the Equity Plan,
except that for employment agreements entered into prior to the date of this Agreement, the definitions of “Cause”
set forth in such employment agreements shall govern, or (Y) terminates his employment for “good reason,” (as defined
in such grantee’s employment agreement), in each case (X) or (Y) other than due to the death or disability of the grantee.
Ruthigen shall withhold (or cause to be withheld, as the case may be) from any amounts otherwise due or payable under or pursuant
to any award granted under the Equity Plan such federal, state and local income, employment, or other taxes as shall be required
to be withheld pursuant to any applicable law or regulation.

 

(ii)Shares Reserved.
The Equity Plan shall become effective as of the closing of the IPO and shall reserve for aggregate issuance 21.47% (twenty one
and 47/100th percent) of the Common Stock outstanding on a post-money basis immediately following the closing of the
IPO (the “Overall Plan Number”), as supported by the Radford Study provided to the Oculus Special Transaction
Committee. RSUs granted under the Equity Plan shall be counted as 1.5 (one and one half) shares for purposes of calculating both
(i) the Overall Plan Number and (ii) the shares granted as part of the Closing Current Employee Portion (as defined below); provided,
however, that Performance-Based RSUs (as defined below) shall be counted as 1.0 (one) share for purposes of calculating the Overall
Plan Number.

 

(iii)Evergreen.
The Equity Plan shall contain an annual evergreen refresh provision, pursuant to which a refresh shall occur on a calendar year
basis, on the first day of each calendar year, with the first refresh to occur on January 1, 2015. Pursuant to Paragraph 3(b) of
the Equity Plan, subject to incentive stock option rules and IRS requirements, the refresh shall provide
for the reservation of an additional number of shares equal to the lesser of (x) 5% of the Common Stock outstanding on a
post-money basis immediately following the closing of the IPO, which number of shares shall be calculated upon the closing of the
IPO and inserted into the Equity Plan; (y) 5% of the number of outstanding shares of Common Stock on the date of the applicable
evergreen refresh; or (z) an amount determined by the Ruthigen board of directors.

 

(iv)Shareholder
Proposals to Increase Shares under Equity Plan. If, in any calendar year beginning on January 1, 2015, (a) the number of shares
added to those reserved for aggregate issuance under the Equity Plan pursuant to clause (x) of Section 3.3(a)(iii) hereof (as reflected
in the corresponding clause (i) of Paragraph 3(b) of the Equity Plan), if any, is less than (b) 5% of the Common Stock outstanding
on the date that Ruthigen files its proxy statement for its annual meeting of shareholders for such year, then Ruthigen may submit
a proposal to its shareholders to increase the number of shares reserved for aggregate issuance under the Equity Plan by the number
equal to (b) minus (a).

 

(b)Post IPO
Closing Grants under the Equity Plan.

 

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(i)RSUs and
Stock Options. Of the Overall Plan Number, a number of shares equal to 11% of the Common Stock outstanding on a post-money
basis immediately following the closing of the IPO shall be reserved for the planned post-closing equity grants to employees, directors
and consultants of Ruthigen who are in service to Ruthigen on the closing of the IPO (the “Closing Current Employee Portion”),
in amounts determined by the Ruthigen board of directors. It is understood that Ruthigen intends to make such grants on the 46th
day following the closing of the IPO (such grant date, the “Post Closing Grant Date”). The Ruthigen board of
directors may elect to make the Closing Current Employee Portion grants as a combination of stock options and/or RSUs, but under
the Equity Plan the combination of grantable stock options and/or RSUs in the Closing Current Employee Portion shall never exceed
11% of the Common Stock outstanding on a post-money basis immediately following the closing of the IPO.

 

(ii)Performance-based
RSUs. In addition to the Closing Current Employee Portion, 1.47% of the Common Stock outstanding
on a post money basis immediately following the closing of the IPO shall be reserved for grants of “Performance-Based RSUs”
to employees, directors and consultants of Ruthigen who are in service to Ruthigen on the closing of the IPO, in amounts determined
by the Ruthigen board of directors. The Performance-Based RSUs shall be granted on the Post Closing Grant Date and shall vest,
if at all, in equal one-third installments, upon certification by the Compensation Committee of the Ruthigen board of directors,
of the following: (1) enrollment of the first patient in the first pivotal clinical trial for Ruthigen’s “lead drug
candidate” (as such is described in the Ruthigen S-1 Registration Statement filed with the SEC in 2013), (2) enrollment of
the first patient in the second pivotal clinical trial for Ruthigen’s lead drug candidate, and (3) completion of the clinical
study report containing the results of the second pivotal clinical trial for Ruthigen’s
lead drug candidate.

 

(c)Total Equity
Plan Share Limitation. For the avoidance of doubt, the specific percentages and numbers set forth in this Section 3.3 shall
not be exceeded and the same shall apply to the Equity Plan and any future equity plans adopted by Ruthigen during the Term of
this Agreement while Oculus and its Affiliates own greater than 19.9% of the issued and outstanding Common Stock.

 

Section 3.4Oculus Options.
Notwithstanding the terms of any option agreements (or option plans governing such option agreements) granting employees or
directors of Ruthigen stock options to purchase the common stock of  Oculus (the “Oculus Options”), such individuals
shall continue to vest in their Oculus Options until termination of service as an employee, director or consultant of Ruthigen
and such Oculus Options shall expire on the earlier of (a) 90 days following such termination of service with Ruthigen, (b) 90
days following the date Oculus notifies the individual that Oculus and its Affiliates own less than 19.9% of the issued and outstanding
Common Stock, and (c) the option expiration date set forth in the applicable option agreement.

 

Section 3.5Election
of Directors. Prior to the Effective Date, Ruthigen shall prepare and Oculus shall approve provisions for a classified
board of directors and plurality voting for the election of directors in Ruthigen’s amended and restated bylaws and amended
and restated articles of incorporation, which will take effect on or about the Effective Date. Such classified board and plurality
voting provisions shall be substantially as those set forth in Oculus’ bylaws and certificate of incorporation.

 

Section 3.6Directors’
and Officers’ Insurance. It is Oculus’ intention to purchase a directors’
and officers’ insurance program for at least six years following the Effective Date.  So long as Oculus maintains
a directors’ and officers’ insurance program covering the past and present officers and directors of Oculus and their
respective successors and assigns, same shall have terms and conditions, limits, and retentions that are standard in Oculus’
industry for similarly sized companies at similar stages of development.   If there shall be any change in such insurance policy
so that any such ex-Oculus director who is a Ruthigen director on the Effective Date (an “ex-Oculus director”) is not
covered by such policy, then Oculus shall notify any adversely affected ex-Oculus director at least five (5) business days
prior to such adverse action being effective in order to enable such ex-Oculus director to obtain individual tail or other insurance
coverage.  Oculus shall not exclude any ex-Oculus director (including such individual in his capacity as an ex-Oculus officer)
from any insurance policy coverage if such coverage is made available to Oculus’ then existing directors and officers.

 

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ARTICLE IV

TERM

 

Section
4.1Term. This Agreement shall commence on the Effective Date and expire on the earlier of (a) the
agreement of the Parties to terminate the Agreement, and (b) eight and one-half (8.5) years after its Effective Date (the “Term”),
at which time this Agreement shall immediately terminate and cease to be of further force and effect, except with respect to Sections
5, 6, 7, and 8, all of which shall survive in accordance with their terms.

 

ARTICLE V

ADDITIONAL COVENANTS

 

Section 5.1Confidentiality.

 

(a)Until three
(3) years following the earlier of the Term or other termination of this Agreement, each Party agrees to hold, and to cause its
respective Affiliates, directors, officers, employees, agents, accountants, counsel and other advisors and representatives to hold,
in strict confidence, and undertake all reasonable precautions to safeguard and protect the confidentiality of, all information
concerning the other Party that is in its possession or furnished by the other Party or its respective Affiliates, directors, officers,
employees, agents, accountants, counsel and other advisors and representatives at any time pursuant to this Agreement or otherwise
(the “Information”), and shall not use any such Information other than for such purposes as shall be expressly
permitted hereunder or in any Ancillary Agreement, except to the extent that such Information has been (i) in the public domain
through no fault of such Party, (ii) lawfully acquired from other sources, which are not bound by a confidentiality obligation,
by such Party, or (iii) independently generated without reference to or use of any proprietary or confidential information of the
other Party.

 

(b)Each Party agrees
not to release or disclose, or permit to be released or disclosed, any such Information to any other individual or entity, except
its directors, officers, employees, agents, accountants, counsel and other advisors and representatives who need to know such Information
and who are informed and advised that the Information is confidential and subject to the obligations hereunder, except in compliance
with Section 5.2. Without limiting the foregoing, when any Information is no longer needed for the purposes contemplated by this
Agreement, after request of the other Party, a Party will promptly either (i) destroy all copies of the Information in such Party’s
possession, custody or control (including any that may be stored in any data storage device computer, or other similar device,
to the extent not commercially impractical to destroy such copies) including, without limitation, any copies, summaries, analyses,
compilations, reports, extracts or other reproductions, in whole or in part, of such written, electronic or other tangible material
or any other materials in written, electronic or other tangible format based on, reflecting or containing Information prepared
by such Party, or (ii) return to the requesting Party, at the expense of the requesting Party, all copies of the Information furnished
to such Party by or on behalf of the requesting Party.

 

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Section 5.2Protective
Arrangements. If a Party either (i) determines after consultation with counsel, in the opinion of such counsel that it
is required by law to disclose any Information or (ii) receives any demand under lawful process or from any governmental authority
to disclose or provide Information of the other Party that is subject to the confidentiality provisions hereof, then such Party
shall notify the other Party prior to disclosing or providing such Information and shall cooperate at the expense of the requesting
Party (and to the extent legally permissible) in seeking any reasonable protective arrangements requested by such other Party.
Subject to the foregoing, the Party receiving such request may thereafter (1) furnish only that
portion of the Information that is legally required, (2) give notice to the other Party of the Information to be disclosed as far
in advance as is practical, and (3) exercise reasonable best efforts to obtain reliable assurance that the confidential nature
of such Information shall be maintained.

 

Section 5.3Provision
of Corporate Records; Equipment. Upon the prior written request by Ruthigen for specific and identified books and records
which relate to Ruthigen or the conduct of its business prior to the Effective Date, as the case may be, (the “Ruthigen
Books and Records”), Oculus shall provide, as soon as practicable but no later than thirty (30) days following the date
of such request, for the transport of the Ruthigen Books and Records in its possession or control, except to the extent such items
are already in the possession of Ruthigen or a Ruthigen Affiliate, at the expense of Ruthigen to a location provided by Ruthigen.
Any and all computers and office equipment and supplies used exclusively by or in the exclusive possession of Ruthigen’s
employees as of the Effective Date, all of which shall be identified and agreed by the Parties as of the Effective Date and listed
in a written Exhibit B hereto, shall remain in the exclusive possession of and for the exclusive use of Ruthigen’s
employees after the IPO.

 

Section 5.4Access
to Information. Except as otherwise provided in any Ancillary Agreement, as of the Effective Date, Oculus shall deliver
to Ruthigen and its authorized accountants, counsel and other designated representatives all records, books, contracts, instruments,
computer data and other data and information relating to the business operations of Ruthigen (collectively, “Operations
Data”) within Oculus’ possession or control (including using reasonable best efforts to give access to persons
or firms possessing such information) insofar as such access is reasonably required by Ruthigen for the conduct of its business,
subject to appropriate restrictions for classified or privileged information. Upon delivery of the Operations Data, Ruthigen shall
be responsible for same including without limitation, the maintenance thereof. Oculus may retain a copy of all such Operations
Data for its legitimate business purposes, including, without limitation, audit, accounting, claims
(including claims for indemnification hereunder), litigation and tax purposes, as well as for purposes of fulfilling disclosure
and reporting obligations and for performing under this Agreement and the transactions contemplated hereby.

 

Section 5.5Production
of Witnesses. At all times after the consummation of the IPO, each of Oculus and Ruthigen shall use reasonable best efforts
to make available to the other, upon prior written request, its officers, directors, employees and agents as witnesses to the extent
that such persons may reasonably be required in connection with any Action.

 

Section 5.6Privileged
Matters. To allocate the interests of each Party with respect to privileged information, the Parties agree as follows:

 

(a)Oculus shall
be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information which
relates solely to the business of Oculus, whether or not the privileged information is in the possession of or under the control
of Oculus or Ruthigen. Oculus shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection
with privileged information that relates solely to the subject matter of any claims constituting Oculus Liabilities (as defined
herein), now pending or which may be asserted in the future, in any lawsuits or other Actions initiated against or by Oculus, whether
or not the privileged information is in the possession of or under the control of Oculus or Ruthigen.

 

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(b)Ruthigen shall
be entitled, in perpetuity, to control the assertion or waiver of all privileges in connection with privileged information which
relates solely to the business of Ruthigen, whether or not the privileged information is in the possession of or under the control
of Oculus or Ruthigen. Ruthigen shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges in
connection with privileged information which relates solely to the subject matter of any claims constituting Ruthigen Liabilities
(as defined herein), now pending or which may be asserted in the future, in any lawsuits or other Actions initiated against or
by Ruthigen, whether or not the privileged information is in the possession of or under the control of Oculus or Ruthigen.

 

(c)Oculus and Ruthigen
agree that they shall have a shared privilege, with equal right to assert or waive, subject to the restrictions of this Section
5.6, with respect to all privileges not allocated pursuant to the terms of Sections 5.6(a) and (b). All privileges relating to
any claims, proceedings, litigation, disputes or other matters which involve both Oculus and Ruthigen in respect of which Oculus
and Ruthigen retain any responsibility or liability under this Agreement shall be subject to a shared privilege.

 

(d)If the other
Party has a shared privilege, no Party may waive any privilege which could be asserted under any applicable law, without the consent
of the other Party, except to the extent reasonably required in connection with any litigation with third parties or as provided
in Section 5.6(e) below. Such consent shall be in writing, or shall be deemed to be granted unless written objection is made within
twenty (20) days after notice upon the other Party requesting such consent.

 

(e)In the event
of any litigation or dispute between the Parties or their Affiliates regarding the subject matter hereof, either Party may waive
a privilege in which the other Party has a shared privilege, without obtaining the consent of the other Party, provided that such
waiver of a shared privilege shall be effective only as to the use of information with respect to the litigation or dispute between
the Parties and/or their Affiliates, and shall not operate as a waiver of the shared privilege with respect to third parties.

 

(f)If a dispute
arises between the Parties regarding the subject matter hereof whether a privilege should be waived to protect or advance the interest
of either Party, each Party shall negotiate in good faith, shall endeavor to minimize any prejudice to the rights of the other
Party, and shall not unreasonably withhold consent to any request for waiver by the other Party. No Party will withhold consent
to waiver for any purpose except to protect its own legitimate interests.

 

(g)Upon receipt
by any Party of any subpoena, discovery or other request which arguably calls for the production or disclosure of information subject
to a shared privilege or as to which the other Party has the sole right hereunder to assert a privilege, or if any Party obtains
knowledge that any of its current or former directors, officers, agents or employees has received any subpoena, discovery or other
request which arguably calls for the production or disclosure of such privileged information, such Party shall promptly notify
the other Party of the existence of the request and shall provide the other Party a reasonable opportunity to review the information
and to assert any rights it may have under this Section 5.6 or otherwise to prevent the production or disclosure of such privileged
information.

 

(h)The transfer
of all Information pursuant to this Agreement is made in reliance on the Parties maintaining the confidentiality of privileged
information and to assert and maintain applicable privileges hereunder. The access to information being granted, the agreement
to provide witnesses and individuals and the transfer of privileged information between the Parties hereunder shall not be deemed
a waiver of any privilege that has been or may be asserted under this Agreement or otherwise.

 

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Section 5.7Publication.
Oculus hereby permits Ruthigen to publish and disclose in any forms, schedules or other documents required to be filed with the
Securities and Exchange Commission by Ruthigen, Oculus’ identity and ownership of the Ruthigen Shares and the nature of its
commitments, arrangements and understandings pursuant to this Agreement and any Ancillary Agreement.

 

Section 5.8 Legal
Names. As soon as reasonably practicable and in any event within sixty (60) days of the Effective Date, each Party shall
(i) cease to make any use of the other Party’s respective name and any trademarks related thereto or containing or comprising
the foregoing, including any name or mark confusingly similar thereto or dilutive thereof (the “Marks”), (ii)
take steps reasonably necessary, and fully cooperate with the other Party and its Affiliates, to remove the Marks from any corporate,
trade, and assumed names and cancel any recordation of such names with any governmental authority, and change any corporate, trade,
and assumed name that uses the Marks to a name that does not include the Marks or any variation, derivation, or colorable imitation
thereof, and (iii) remove, strike over or otherwise obliterate all Marks from (or otherwise not use in) all materials owned by
each Party and its Affiliates, including without limitation, any business cards, stationery, packaging materials, displays, signs,
promotional and advertising materials, and other materials or media including any internet usage or domain names that include the
Marks. For the avoidance of doubt, the “Ruthigen” name and the Ruthigen logo are deemed to be Marks of Ruthigen, and
the “Oculus” name and the Oculus logo are deemed to be Marks of Oculus.

 

Section 5.9Further
Assurances. From time to time, as and when requested by a Party, the other Party shall execute and deliver, or cause to
be executed and delivered, all such documents and instruments, and shall take, or cause to be taken, all such further or other
actions, including, without limitation, the filing and/or recording of documents and instruments with governmental entities, as
may be reasonably necessary for the purpose of carrying out the intent of this Agreement and consummating the transactions contemplated
hereby.

 

ARTICLE VI

RELEASES AND INDEMNIFICATION 

 

Section 6.1Release
of Pre-Effective Date Claims. 

 

(a)Except as otherwise
provided in this Agreement or any Ancillary Agreement, Oculus, for itself and each of its Affiliates and all persons who at any
time on or prior to the Effective Date were directors, officers, agents or employees of Oculus or any of its Affiliates (in each
case, in their respective capacities as such Oculus person(s)), together with their respective heirs, executors, administrators,
successors and assigns, as of the Effective Date, acquits, releases and forever discharges Ruthigen, its Affiliates and all persons
who at any time on or prior to such date were directors, officers, agents or employees of Ruthigen or any of its Affiliates (in
each case, in their respective capacities as such), together with their respective heirs, executors, administrators, successors
and assigns, from and against and all claims and liabilities which Oculus may have against them arising out of or related to the
subject matter of this Agreement and the Ancillary Agreements (the “Oculus Liabilities”).

 

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(b)Except as otherwise
provided in this Agreement or any Ancillary Agreement, Ruthigen, for itself and each of its Affiliates and all persons who at any
time on or prior to the consummation of the IPO were directors, officers, agents or employees of Ruthigen or any of its Affiliates
(in each case, in their respective capacities as such Ruthigen person(s)), together with their respective heirs, executors, administrators,
successors and assigns, as of the Effective Date, acquits, releases and forever discharges Oculus, its Affiliates and all persons
who at any time on or prior to such date were directors, officers, agents or employees of Oculus or any of its Affiliates (in each
case, in their respective capacities as such), together with their respective heirs, executors, administrators, successors and
assigns, from and against all claims and liabilities which Ruthigen may have against them arising out of or related to the subject
matter of this Agreement and the Ancillary Agreements (the “Ruthigen Liabilities”).

 

(c)Nothing contained
in Section 6.1(a) and Section 6.1(b) shall impair or otherwise affect any right of any Party or its Affiliates, as applicable,
to enforce this Agreement, any Ancillary Agreement or any agreements, arrangements, commitments or understandings unrelated to
the Separation and explicitly contemplated in this Agreement or any Ancillary Agreement to continue in effect after the Separation.
In addition, nothing contained in Section 6.1(a) and Section 6.1(b) shall release any person from:

 

(i)any liability
assumed, transferred by, or assigned or allocated to, a Party or its Affiliate pursuant to or contemplated by this Agreement or
any Ancillary Agreement;

 

(ii)any liability
provided in or resulting from any other contract or understanding that is entered on or after the Effective Date between one Party
(and/or its Affiliate(s)), on the one hand, and the other Party (and/or its Affiliate(s)), on the other hand; and

 

(iii)any liability
that the Parties may have with respect to indemnification or contribution pursuant to this Agreement or otherwise for claims brought
against the Parties by a third party, which liability shall be governed by the relevant indemnification or contribution provisions
of this Article VI and, if applicable, the appropriate provisions of the Ancillary Agreements.

 

(d)No Party shall,
and no Party shall permit any of its Affiliates to, make any claim or demand, or commence any Action asserting any claim or demand,
including any claim of contribution or indemnification, against any other Party or any of such Party’s Affiliates, or any
other person released pursuant to Section 6.1(a) and/or Section 6.1(b), with respect to any and all liabilities released pursuant
to Section 6.1(a) and Section 6.1(b). If a Party breaches this Section 6.1(d), such breaching Party shall be liable for all related
expenses, including without limitation, court costs, reasonable attorneys’ fees, and all other legal expenses incurred by
the other Party in connection with such breach.

 

(e)It is the intent
of each Party, by virtue of the provisions of this Section 6.1, to provide for a full and complete release and discharge of all
liabilities released hereunder existing or arising from all acts and events occurring or failing to occur or alleged to have occurred
or to have failed to occur and all conditions existing or alleged to have existed with respect thereto on or before the consummation
of the IPO, whether such released liabilities are known or unknown, between one Party (and/or such Party’s Affiliates) and
the other Party (and/or such other Party’s Affiliates), including any contractual agreements or arrangements existing or
alleged to exist with respect to such released liabilities between or among any such persons on or before the Effective Date, except
as otherwise set forth in this Agreement. With respect to such released liabilities described in the immediately preceding sentence,
insofar as it applies, each Party releases and waives any and all rights it has or may have against the other Party, now and forever,
under California Civil Code Section 1542 which provides that “A general releases does not extend to claims which the creditor
does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.”

 

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(f)If any person
makes a claim hereunder as a result of its affiliation or association with a Party (including any director, officer or employee
of a Party) and initiates an Action with respect to claims released by this Section 6.1, the Party seeking to enforce a released
claim hereunder shall pay the reasonable costs incurred and expenses of defense (including legal fees) by the other Party against
whom such Action is brought.

 

Section 6.2Indemnification
by Oculus.

 

(a)Except
as otherwise provided in this Agreement or any Ancillary Agreement, following the Effective Date, Oculus shall indemnify, defend
and hold harmless Ruthigen and its Affiliates, including each of their respective directors and officers, and each of the heirs,
executors, successors and assigns of any of the foregoing (collectively, the “Ruthigen Indemnitees”), from and
against any and all direct losses of the Ruthigen Indemnitees relating to, arising out of or resulting from any of the following:

 

(i) those certain agreements
by and among Venture Lending & Leasing V, Inc., Venture Lending & Leasing VI, Inc. (collectively, the “Lenders”)
and Ruthigen or those certain agreement by and among one or more of the Lenders and Oculus, and any legal, accounting, banking,
processing, delivery or other fees and expenses, costs, and expenses (including reasonable attorneys’ fees and expenses)
incurred by Ruthigen in connection with negotiation, payment, collection or enforcement of the foregoing (collectively, the “WTI
Claims”). WTI Claims shall constitute Third Party Claims; and

 

(ii) Any and all liabilities
and related losses of the Ruthigen Indemnitees relating to, arising out of or resulting from a Third Party Claim.

 

Section 6.3Indemnification
by Ruthigen. Except as otherwise provided in this Agreement or any Ancillary Agreement, after the Effective Date, Ruthigen
shall indemnify, defend and hold harmless Oculus and its Affiliates, including each of their respective directors and officers,
and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “Oculus Indemnitees”),
from and against any and all liabilities and related losses of the Oculus Indemnitees relating to, arising out of or resulting
from a Third Party Claim.

 

Section 6.4Reduction
for Insurance Proceeds and Other Recoveries. 

 

(a)The amount that
any Party is required to provide indemnification (the “Indemnifying Party”) to or on behalf of the Party entitled
to such indemnification (the “Indemnitee”) pursuant to this Article VI, shall be reduced (retroactively or prospectively)
by insurance proceeds or other amounts actually recovered from third parties on behalf of such Indemnitee in respect of the Liability
or related loss. If an Indemnitee receives a payment as required by this Agreement from an Indemnifying Party in respect of any
Liability or related loss and subsequently receives insurance proceeds in respect of such Liability or related loss, then such
Indemnitee shall hold such insurance proceeds in trust for the benefit of the Indemnifying Party (or Indemnifying Parties) and
shall pay to the Indemnifying Party, as promptly as practicable after receipt, a sum equal to the amount of such insurance proceeds
received, up to the aggregate amount of any payments received from the Indemnifying Party pursuant to this Agreement in respect
of such indemnifiable loss of such insurance proceeds.

 

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(b)An insurer who
would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue
of the indemnification provisions hereof, have any subrogation rights with respect thereto, it being expressly understood and agreed
that no insurer or any other third party shall be entitled to a “windfall” (i.e., a benefit they would not be entitled
to receive in the absence of the indemnification provisions) by virtue of the indemnification provisions hereof. Notwithstanding
the foregoing, each of Ruthigen and Oculus shall be required to use reasonable best efforts to collect or recover any available
insurance proceeds.

 

Section 6.5Procedures
For Indemnification of Third Party Claims. 

 

(a)If (1) one Party
as an Indemnitee shall receive notice or otherwise learn of the assertion against it by a third party (including any governmental
authority) of any claim or of the commencement by any such person of any Action based upon a duty or obligation alleged to be due
by the other Party to such third party, (ii) such other Party has breached such duty or obligation (collectively, a “Third
Party Claim”), and (iii) with respect to such Third Party Claim the other Party as an Indemnifying Party may be obligated
to provide indemnification to such Indemnitee, then such Indemnitee shall give such Indemnifying Party and each Party to this Agreement,
written notice thereof as soon as reasonably practicable, but no later than thirty (30) days after becoming aware of such Third
Party Claim. Any such notice shall describe the Third Party Claim in reasonable detail. If any Party shall receive notice or otherwise
learn of the assertion of a Third Party Claim which may reasonably be determined to be a Liability of a Party, such Party shall
give the other Party to this Agreement written notice thereof within thirty (30) days after becoming aware of such Third Party
Claim. Any such notice shall describe the Third Party Claim in reasonable detail. Notwithstanding the foregoing, the failure of
any Indemnitee or other Party to give notice as provided in this Section 6.5(a) shall not relieve the related Indemnifying Party
of its obligations under this Article VI, except to the extent that such Indemnifying Party is actually prejudiced by such failure
to give notice.

 

(b)An Indemnifying
Party shall defend any Third Party Claim, at such Indemnifying Party’s own expense and with such Indemnifying
Party’s own counsel; provided, that if the defendants in any such claim include both the Indemnifying Party and one or more
Indemnitees and in such Indemnitees’ reasonable judgment an actual conflict of interest or one is likely to be asserted between
such Indemnitees and such Indemnifying Party in respect of such claim, then such Indemnitees shall have the right to employ separate
counsel, in which event the reasonable fees and expenses of such separate counsel (but not more than one separate counsel for all
Indemnitees and in any instance reasonably satisfactory to the Indemnifying Party) shall be paid by the Indemnifying Party. Within
thirty (30) days after the receipt of notice from an Indemnitee in accordance with Section 6.5(a) (or sooner, if the nature of
such Third Party Claim so requires), the Indemnifying Party shall notify the Indemnitee of its election whether the Indemnifying
Party will assume responsibility for defending such Third Party Claim. After notice from an Indemnifying Party to an Indemnitee
of its election to assume the defense of a Third Party Claim, such Indemnitee shall have the right to employ separate counsel and
to participate in (but not control) the defense, compromise, or settlement thereof, but the fees and expenses of such counsel shall
be the expense of such Indemnitee.

 

(c)With respect
to any Third Party Claim, the Indemnifying Party and Indemnitees agree, and shall cause their respective counsel (if applicable),
to cooperate fully (in a manner that will preserve all attorney-client privilege or other privileges) to mitigate any such claim
and minimize the defense costs associated therewith.

 

(d)If an Indemnifying
Party fails to assume the defense of a Third Party Claim within thirty (30) days after its receipt of written notice of such claim,
upon delivering notice to such effect to the Indemnifying Party, the Indemnitee will have the right to undertake the defense, compromise
or settlement of such Third Party Claim on behalf of and for the account of the Indemnifying Party subject to the limitations as
set forth in this Section 6.5; provided, however, that such Third Party Claim shall not be compromised or settled without the prior
written consent of the Indemnifying Party, which consent shall not be unreasonably withheld, delayed or conditioned. If the Indemnitee
assumes the defense of any Third Party Claim, it shall keep the Indemnifying Party reasonably informed of the progress of any such
defense, compromise or settlement. In such instance, the Indemnifying Party shall reimburse all out of pocket costs and expenses
of the Indemnitee in the event it is ultimately determined that the Indemnifying Party is obligated to indemnify the Indemnitee
with respect to such Third Party Claim. In no event shall an Indemnifying Party be liable for any settlement effected without its
consent, which consent will not be unreasonably withheld, delayed or conditioned.

 

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Section 6.6Additional
Matters. 

 

(a)In the event
of payment by or on behalf of any Indemnifying Party to any Indemnitee in connection with any Third Party Claim, such Indemnifying
Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which
such Indemnitee may have any right, defense or claim relating to such Third Party Claim against any claimant or plaintiff asserting
such Third Party Claim or against any other person. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable
manner, and at the cost and expense (including allocated costs of in-house counsel) of such Indemnifying Party, in prosecuting
any subrogated right, defense or claim.

 

(b)In the event
of an Action involving a Third Party Claim in which the Indemnifying Party is not a named defendant, if the Indemnifying Party
shall so request, the Parties shall endeavor to substitute the Indemnifying Party for the named defendant, and add the Indemnifying
Party as a named defendant if at all practicable. If such substitution or addition cannot be achieved for any reason or is not
requested, the named defendant shall allow the Indemnifying Party to manage the Action as set forth in this section and subject
to Section 6.5 with respect to liabilities, the Indemnifying Party shall fully indemnify the named defendant against all costs
of defending the Action (including court costs, sanctions imposed by a court, attorneys’ fees, experts’ fees and all
other external expenses, and the allocated costs of in- house counsel), the costs of any judgment or settlement, and the cost of
any interest or penalties relating to any judgment or settlement.

 

Section 6.7Survival
of Indemnities. The rights and obligations of each Party and its respective Indemnitees under this Article VI shall survive
the sale or other transfer by any Party or its Affiliates of any businesses or the assignment by it of any and all liabilities.

 

ARTICLE VII

DISPUTE RESOLUTION

 

Section 7.1Disputes.
Oculus and Ruthigen recognize that disputes, disagreements, claims and controversies (for purposes of this Article VII, each, a
“Dispute”) as to certain matters may from time to time arise during the Term which relate to either Party’s
rights and obligations hereunder. It is the objective of the Parties to establish procedures to facilitate the resolution of such
Disputes in an expedient manner by cooperation and without resort to litigation. In the event of such Dispute, either Party may,
by written notice to the other, have such Dispute referred to their respective chief executive officers for attempted resolution
by good faith negotiations. If the chief executive officers are not able to resolve such Dispute within fourteen (14) days after
receipt of notice, then at the request of any Party the Dispute shall be resolved as provided in Section 7.2.

 

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Section 7.2Arbitration.
 Any Dispute arising out of or relating to this Agreement, including, without limitation, Disputes relating to breach, validity
or termination hereof, that has not been resolved in accordance with Section 7.1 herein shall, at the request of any Party, be
finally resolved by binding arbitration in the manner described below to be held in San Francisco, California. The arbitration
shall be conducted in accordance with the then current Commercial Arbitration Rules (CAR) of the American Arbitration Association
(AAA). The place of arbitration shall be San Francisco, California. The arbitration shall be conducted
in English by a single arbitrator selected in accordance with the CAR. Discovery and disclosure in the arbitration shall
be limited in that there shall be no depositions taken before hearing. Hearing of testimony shall be
completed within one hundred twenty (120) days after the appointment of the arbitrator. The arbitrator shall issue a written reasoned
decision within thirty (30) days after the close of hearings. The arbitrator shall have the power to award injunctive relief, as
well as the costs and expenses of arbitration (excluding attorneys’ fees) to the Parties in the proportion that the arbitrator
deems appropriate. The arbitrator is not authorized to award punitive, exemplary, or multiple damages. Any award issued by the
arbitrator shall be enforceable in any court of competent jurisdiction.

 

Section 7.3Arbitration
Confidentiality. The arbitration proceeding shall be confidential and the arbitrator shall issue appropriate protective
orders to safeguard each Party’s confidential Information. Except as required by law or regulation or in connection with
the enforcement of an award, no Party shall make (or instruct the arbitrator to make) any public disclosure with respect to the
proceedings or any arbitral award or decision of the arbitrator without prior written consent of the other Party. The existence
of any Dispute submitted to arbitration and other aspects of any arbitration proceedings, and any awards and the contents thereof,
shall be kept in confidence by the Parties and the arbitrator, except as may be required in connection with the enforcement of
such award or as otherwise required by applicable law or regulatory authority.

 

ARTICLE VIII

MISCELLANEOUS

 

Section 8.1Governing
Law; Venue. This Agreement and the rights and obligations of the Parties hereunder are governed by, and construed and enforced
in accordance with, the laws of the State of California, without regard to principles of conflict of laws. All actions brought
to enforce this Agreement shall be brought in courts located in the county of San Francisco, California or courts of the United
States located in the Northern District of California.

 

Section 8.2Amendment;
Successors and Assigns. This Agreement may be amended only by a written instrument executed by both Parties. This Agreement
shall be binding upon, and shall inure to the benefit of, the Parties and their respective successors and assigns. Notwithstanding
the foregoing, this Agreement shall not be assignable, in whole or in part, by any Party without the prior written consent of the
other Party, and any attempt to assign any rights or obligations arising under this Agreement without such consent shall be null
and void; provided, that so long as such assignment is not to a competitor of the other Party (a competitor is defined as a person
who derives twenty percent (20%) or more of its revenues from the same or substantially the same products or reasonable substitutes
for same as the non-assigning Party), (i) a Party may assign this Agreement in connection with a merger transaction in which such
Party is not the surviving entity or the sale by such Party of all or substantially all of its assets, and (ii) upon the effectiveness
of such assignment, the assigning Party shall be released from all of its obligations under this Agreement if the surviving entity
of such merger or the transferee of such assets shall agree in writing, in form and substance reasonably satisfactory to the other
Party, to be bound by all terms of this Agreement as if named as a “Party” hereto.

 

Section 8.3Counterparts;
Entire Agreement. This Agreement may be executed in one or more counterparts, including by facsimile, PDF or other form
of electronic signature, all of which together shall be considered one and the same instrument. This Agreement shall constitute
the entire agreement between the Parties with respect to the subject matter contained in this Agreement, and supersede any and
all prior negotiations, understandings and agreements between the Parties with respect to such subject matter, whether oral or
written.

 

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Section 8.4Notice.
Any and all notices and other communications concerning this Agreement shall be in writing and addressed as follows:

 

if to Ruthigen:

Ruthigen, Inc.

2455 Bennett Valley Road, Suite
C116

Santa Rosa, CA 95404

Attn: CEO

 

with a copy to:

Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, P.C.

666 Third Avenue

New York, NY 10017

Attn: Ivan K. Blumenthal, Esq.

 

If to Oculus:

Oculus Innovative Sciences, Inc.

1129 N. McDowell

Petaluma, CA 94954

Attn: CEO

 

with a copy to:

Attn: J.F. Petruzzelli

K&L Gates LLP

630 Hansen Way

Palo Alto, California 94304

 

 

or at such other address as may be designated
in writing pursuant to the terms hereof to the other Party. All such notices and other communications shall be sent by one of the
following means - certified U.S. mail, return receipt requested, by a nationally recognized overnight delivery service, by facsimile
or by email if sent to the Party recipient’s regular business email address and facsimile number, and shall be deemed delivered:
if sent by U.S. Mail, five (5) days after certification thereof; if sent by facsimile, upon verification of receipt; if sent by
overnight delivery service, one (1) business day after delivery to the courier; or if sent by email, on the business day sent if
during the normal business hours of the recipient and otherwise on the next business day; provided, that if sent by facsimile or
email, a copy of such notice or other communication shall be sent at the same time as such facsimile or email notice by another
means permitted by this Section.

 

Section 8.5Severability.
If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions hereof, or the application of such provision in jurisdictions other than those as to which it has been held
invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby,
so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any
Party. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable
provision to effect the original intent of the Parties.

 

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Section 8.6Headings.
The article, section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.

 

Section 8.7Specific
Performance. Irreparable damage could occur in the event that the provisions of this Agreement were not performed in accordance
with their specific terms. Accordingly, solely with respect thereto and regardless of the arbitration provisions hereof, the Parties
shall be entitled to seek injunctive relief from a California court with jurisdiction of the parties and subject matter to enforce
specifically the terms and provisions hereof or other equitable remedies in addition to any other remedy or relief to which they
may be entitled.

 

Section 8.8No
Partnership, Agency or Joint Venture. This Agreement is not intended to create, and does not create, any agency, partnership,
joint venture or any like relationship between the Parties. Without limiting the generality of the foregoing sentence, Oculus is
entering into this Agreement solely on its own behalf and shall not have (x) any obligation to perform on behalf of any other holder
of Common Stock or (y) any liability (regardless of the legal theory advanced) for any breach of this Agreement by any other holder
of Common Stock and (b) by entering into this Agreement does not intend to form a “group” for purposes of Rule
13d-5(b)(1) of the Securities Exchange Act of 1934, as amended, or any other similar provision of applicable law.

 

 

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IN WITNESS WHEREOF,
this Separation Agreement has been executed by the Parties as of the date indicated above.

 

 

 

	 	RUTHIGEN, INC.
	 	 	 
	 	By:  	/s/ Hoji Alimi
	 	 	Name: Hoji Alimi
	 	 	Title:   CEO
	 	 	 
	 	 	 
	 	 	 
	 	OCULUS INNOVATIVE SCIENCES, INC.
	 	 	 
	 	By:  	/s/ Jim Schutz
	 	 	Name: Jim Schutz
	 	 	Title:   CEO

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