Exhibit 10.16
AMENDMENT NO. 1
TO
SUPPLEMENT TO LOAN AND SECURITY AGREEMENT
     This Amendment No. 1 (the “Amendment”) to Supplement to Loan and Security
Agreement, dated June 14, 2006 (the “Supplement”), entered into by and among
Oculus Innovative Sciences, Inc. (“OIS”), Oculus Technologies of Mexico, S.A. de
C.V., and Oculus Innovative Sciences Netherlands B.V., on the one hand
(together, “Borrowers”), and Venture Lending & Leasing IV, Inc. (“Lender”), and
together with Creditor and Debtors, the “Parties”) is made and entered into as
of March 29, 2007, by and among the Parties.
RECITALS
     A. The Parties previously entered into the Supplement.
     B. On January 23, 2007, the Parties previously agreed to modify certain
terms of the Supplement and now wish to formally memorialize such modification,
as set forth in this Amendment.
     C. Concurrently herewith, Borrowers and VLL IV are entering into an
amendment to that certain Subordination Agreement entered into effective as of
November 7, 2006 by and among OIS, R. C. Burlingame (the “Creditor”), Lender,
and Venture Lending & Leasing III, LLC, as successor in interest to Venture
Lending & Leasing III, Inc.
     D. Concurrently herewith, OIS and Creditor are entering into an amendment
to that certain Non-Negotiable Promissory Note made by OIS to Borrower dated
November 7, 2006.
          NOW, THEREFORE, in consideration of the mutual covenants, agreements
and representations contained in this Amendment, the Loan and Security Agreement
and the Supplement thereto, the Parties agree as follows:
     1. Definitions. Except as may be expressly provided in this Amendment, all
capitalized terms used in this Amendment which are defined in the Supplement
shall have meanings in this Amendment as in the Supplement.
     2. Addition to Subsection 3(b) of Part II. The following sentence is hereby
added to the end of Subsection 3(b) of Part II of the Supplement to read in its
entirety as follows:
WTI agrees to partially release the Lien on Borrower’s Intellectual Property
upon execution of this Amendment. The Parties agree that notwithstanding the
partial release by Lender of the Lien on Borrower’s Intellectual Property upon
the execution of this Amendment and on one or more occasions during the term of
this Agreement, the security interest in that portion of the Collateral

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consisting of Intellectual Property may be reinstated if at any time Borrower’s
Unrestricted Cash is less than 600% of Average Expenses, as provided in this
Section 3(b). Notwithstanding any such reinstatement, Lender agrees that, if
after such Lien has been put in place, if Borrower’s Unrestricted Cash position
exceeds 600% of Average Expenses for a period of thirty days and no Event of
Default has occurred and is then continuing, Lender shall partially release the
Lien on Borrower’s Intellectual Property upon written request by Borrower.
     3. Conflict. In the event of any conflict between the provisions of this
Amendment and the unamended provisions of the Supplement, the provisions of this
Amendment shall prevail and the provisions of the Supplement shall be deemed
modified by this Amendment as necessary to resolve such conflict.
     4. Effect of Amendment. Except as expressly amended by this Amendment
and/or by the preceding sentence, the terms and provisions of the Supplement
shall continue in full force and effect.
     IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as
of the day and year first above written.

              BORROWER:   LENDOR:
 
            Oculus Innovative Sciences, Inc.   Venture Lending & Leasing IV,
Inc.  
By:
  /s/ Jim Schutz   By:   /s/ Maurice Werdegar
 
           
Name:
  Jim Schutz   Name:   Maurice Werdegar
Title:
  VP & General Counsel   Title:   Vice President
 
            BORROWER:   BORROWER:
 
            Oculus Technologies of Mexico, S.A. de C.V.   Oculus Innovative
Sciences Netherlands B.V.
 
           
By:
  /s/ Everardo Garibay   By:   /s/ H. Alimi
 
           
Name:
  Everardo Garibay   Name:   H. Alimi
Title:
  Director of Finance and Admin.   Title:   President

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