Exhibit
10.2

     

    SUPPLEMENT

    to
the

    Loan
and Security Agreement

    dated
as of May 1, 2010

    between

    Oculus
Innovative Sciences, Inc. (“Borrower”)

    and

    Venture
Lending & Leasing V, Inc. (“Lender”) 

       

      
        

      

    

    


    This is a Supplement identified in the
document entitled Loan and Security Agreement dated as of May 1, 2010, as
the same may be amended, restated, supplemented and modified from time to time
(the “Loan and
Security Agreement”), by and between Borrower and Lender.  All
capitalized terms used in this Supplement and not otherwise defined in this
Supplement have the meanings ascribed to them in Article 10 of the Loan and
Security Agreement, which is incorporated in its entirety into this
Supplement.  In the event of any inconsistency between the provisions
of that document and this Supplement, this Supplement is
controlling.

    


    In addition to the provisions of the
Loan and Security Agreement, the parties agree as follows:

    


    Part 1. - Additional
Definitions:

    


    “Commitment” Subject
to the terms and conditions set forth in the Loan and Security Agreement and
this Supplement, Lender commits to make Growth Capital Loans to Borrower up to
the aggregate original principal amount of Three Million Dollars
($3,000,000).  The Commitment shall be divided into two tranches in
the following amounts:  (i) Two Million Dollars ($2,000,000), which
shall be referred to herein as the “First Tranche” of the
Commitment; and (ii) One Million Dollars ($1,000,000), which shall be referred
to herein as the “Second Tranche” of
the Commitment.

    


    “Designated
Rate”:  The Designated Rate for each Loan shall be a fixed rate
of interest per annum equal to the Prime Rate as published on the Business Day
on which Lender prepares the Note for such Loan, plus six and three-quarters of
one percent (6.75%); provided, however, that in no event shall the Designated
Rate for a Loan be less than ten percent (10.00%).

    


    “Final Payment”: Each
Growth Capital Loan shall have a Final Payment equal to six and 617/1000 percent
(6.617%) of the original principal amount of such Growth Capital
Loan.

    


    “Growth Capital Loan”
means any Loan requested by Borrower and funded by Lender under its Commitment
for general corporate purposes of Borrower.  Growth Capital Loans are
sometimes referred to herein individually as a “Loan” or collectively
as “Loans”.

    


    “Interest-Only
Rate”:  The Interest-Only Rate for each Loan shall be a fixed rate
of interest per annum equal to ten percent (10.00%).

    


    “Interim
Rate”:  The Interim Rate for each Loan shall be a fixed rate of
interest per annum equal to thirteen percent (13.00%).

    


    “Loan Commencement
Date” means, with respect to a Loan, (i) the first day of the first full
calendar month following the Borrowing Date of such Loan if such Borrowing Date
is not the first day of a month; or (ii) the same day as the Borrowing Date if
the Borrowing Date is the first day of a month.

    


    “Prime Rate” means the
“prime rate” of interest, as published from time to time by The Wall Street
Journal in the “Money Rates” section of its Western Edition
newspaper.


    
      
         


      

      
         


        
          

        

      

      
         


      

    

    


    “Termination Date”:
The Termination Date is the earlier of (i) the date Lender may terminate making
Loans or extending other credit pursuant to the rights of Lender under Article 7
of the Loan and Security Agreement, or (ii) (A) with respect to the First
Tranche of the Commitment, the earlier of (x) two (2) Business Days following
the Closing Date or (y) May 1, 2010; and (B) with respect to the Second Tranche
of the Commitment, November 30, 2010.

    


    “Threshold Amount”
means Fifty Thousand Dollars ($50,000).

    


    Part 2. - Additional Covenants and
Conditions:

    


    1.           Growth Capital Loan
Facility.

    


    (a)           Funding of Growth Capital
Loan under First Tranche of Commitment. Subject to the terms and
conditions of the Loan and Security Agreement and this Supplement, Lender agrees
to make a Growth Capital Loan to Borrower under the First Tranche of the
Commitment from the Closing Date up to and including the applicable Termination
Date in an original principal amount equal to but not exceeding the First
Tranche of the Commitment.

    


    (b)           Funding of Growth Capital
Loan under Second Tranche of Commitment; Additional Condition Precedent
Regarding Second Tranche.  In addition to the satisfaction of
all the other conditions precedent specified in Article 4.2 of the Loan and
Security Agreement and this Supplement, Lender’s obligation to fund the Growth
Capital Loan under the Second Tranche of the Commitment is subject to receipt by
Lender of evidence satisfactory to it, as determined by Lender in its reasonable
judgment, that Borrower has achieved certain financial milestones, as determined
by  Borrower and Lender on the date hereof (the “Second Tranche
Milestone”).  Subject to the foregoing and the other conditions
precedent specified in Article 4.2 of the Loan and Security Agreement and this
Supplement, Lender agrees to make a Growth Capital Loan to Borrower under the
Second Tranche of the Commitment on from and after the date Borrower satisfies
the Second Tranche Milestone up to and including the applicable Termination Date
in an original principal amount equal to but not exceeding the Second Tranche of
the Commitment.

    


    (c)           Minimum Funding Amount;
Maximum Number of Borrowing Requests.  Except to the extent the
remaining Commitment is a lesser amount, each Growth Capital Loan requested by
Borrower to be made on a single Business Day shall be for a minimum original
principal amount of One Hundred Thousand Dollars ($100,000).  Borrower
shall not submit a Borrowing Request more frequently than once each
month.

    


    (d)           Repayment of Growth Capital
Loans Funded Under the First Tranche.  Principal of and
interest on the Growth Capital Loan funded under the First Tranche of the
Commitment shall be payable as set forth in a Note evidencing such Loan
(substantially in the form attached hereto as Exhibit “A-1”), which
Note shall provide substantially as follows:  principal and interest
at the Designated Rate shall be fully amortized over a period of thirty (30)
months in equal, monthly installments commencing after an eight (8) month period
of interest-only payments at the Interest-Only Rate.  In particular,
on May 1, 2010, Borrower shall pay to Lender the first interest-only installment
at the Interest-Only Rate, in advance, on the outstanding principal balance of
the Note evidencing the Loan for the month of May, 2010.  Commencing
on June 1, 2010 and continuing on the first day of the month for seven months
thereafter, Borrower shall pay interest at the Interest-Only Rate, in advance,
on the outstanding principal balance of the Loan evidenced by such Note for the
ensuing month.  Commencing on January 1, 2011 and continuing on the
first day of each consecutive calendar month thereafter, principal and interest
at the Designated Rate shall be payable, in advance, in 30 equal consecutive
monthly installments. Borrower shall pay the Final Payment on the same date that
the final amortization payment is due and payable.  For purposes of
illustration and not of limitation, attached hereto as  Exhibit “H” is an
Amortization Schedule that describes the repayment term of the Loan based upon
the facts set forth therein for purposes of such illustration.


    
      
         


      

      
        2

        
          

        

      

      
         


      

    

    


    (e)           Repayment of Growth Capital
Loan Funded Under the Second Tranche.  Principal of and
interest on the Growth Capital Loan funded under the Second Tranche of the
Commitment shall be payable as set forth in a Note evidencing such Loan
(substantially in the form attached hereto as Exhibit “A-2”), which
Note shall provide substantially as follows:  principal and interest
at the Designated Rate shall be fully amortized over a period of thirty (30)
months in equal, monthly installments, commencing after a six (6) month period
of interest-only payments at the Interest-Only Rate.  In particular,
on the Borrowing Date applicable to such Growth Capital Loan, Borrower shall pay
to Lender:  (i) if the Borrowing Date is earlier than the Loan
Commencement Date, interest only at the Interim Rate, in advance, on the
outstanding principal balance of the Growth Capital Loan for the period from the
Borrowing Date through the last day of the calendar month in which such
Borrowing Date occurs, and (ii) a first (1st) interest only installment at the
Interest-Only Rate, in advance, on the outstanding principal balance of the Note
for the ensuing month.  Commencing on the first day of the second full
month after the Borrowing Date and continuing on the first day of the third,
fourth, fifth and sixth full months after the Borrowing Date, Borrower shall pay
interest at the Interest-Only Rate, in advance, on the outstanding principal
balance of the Loan evidenced by such Note for the ensuing
month.  Commencing on the first day of the seventh full month after
the Borrowing Date and continuing on the first day of each consecutive calendar
month thereafter, principal and interest at the Designated Rate shall be
payable, in advance, in 30 equal consecutive monthly
installments.  Borrower shall pay the Final Payment to Lender on the
date on which the final amortization payment is due and payable.

    


    2.           Prepayment of
Loans.  No Loan may be voluntarily prepaid except as provided
in this Section 2.

    


    (a)           Prepayment
Generally.  Borrower may voluntarily prepay all, but not less
than all, Loans in whole, but not in part, at any time by tendering to Lender
cash payment in respect of such Loans in an amount equal to the sum
of:  (i) all accrued and unpaid interest on such Loans as of the date
of prepayment; (ii) all outstanding principal balances of such Loans as of the
date of prepayment; (iii) the undiscounted Final Payment(s); and (iv) an amount
equal to the total amount of all of the interest that would have accrued and
been payable from the date of prepayment through the stated maturity of the
Loans had they remained outstanding and been paid in accordance with the terms
of the related Note(s).

    


    (b)           Prepayment After December
31, 2011.  Notwithstanding anything to the contrary in Section
2(a), at any time after December 31, 2011, provided that no Default or Event of
Default has occurred and is continuing, Borrower may voluntarily prepay all, but
not less than all, Loans in whole, but not in part, by tendering to Lender
payment in respect of such Loans in an amount equal to the sum
of:  (i) the amounts indicated in Part 2, Sections 2(a)(i), (a)(ii)
and (a)(iii) above, plus (ii) an amount equal to eighty five percent (85%) of
the amount indicated in Part 2, Section 2(a)(iv) above.

    


    3.           Special Provisions Relating
to Lien on Intellectual Property; Scope of Collateral Security for Loans;
Negative Pledge on Intellectual Property.

    


    (a)           Initial Exclusion of
Intellectual Property from “Collateral”.  In reliance on
Borrower’s covenant in Section 6.2 of the Loan and Security Agreement to keep
all of its Intellectual Property assets free and clear of Liens other than as
set forth in Section 6.2 of the Loan and Security Agreement, Lender has agreed,
subject to the provisions of this Supplement, to exclude Intellectual Property
from the Collateral over which Borrower has granted to Lender a Lien to secure
the Obligations; provided that
Collateral shall include Accounts and General Intangibles that consist of rights
to payment and proceeds from the sale, licensing or disposition of all or any
part, or rights in, the Intellectual Property (the “IP Rights to
Payment”); and further provided,
that if at any time while the Obligations are outstanding a judicial authority
(including a U.S. Bankruptcy Court) that has or would have jurisdiction over
Borrower determines that a security interest in Intellectual Property is
necessary to the creation or perfection of the Liens in the IP Rights to
Payment, then the Collateral shall automatically, retroactive to the Closing
Date, include the Intellectual Property solely to the extent necessary to permit
perfection of Lender’s Lien in the IP Rights to Payment.  Consistent
with the foregoing, notwithstanding anything to the contrary in Section 2.10 of
the Loan and Security Agreement, or in the definition of “Collateral” or
elsewhere in Article 10 of the Loan and Security Agreement, Borrower’s initial
grant and the perfection of Lender’s security interests in Borrower’s assets as
security for the Obligations and the definition of “Collateral” shall be limited
to the following:


    
      
         


      

      
        3

        
          

        

      

      
         


      

    

    


    “Collateral” means all
of Borrower’s right, title and interest in and to the following property,
whether now owned or hereafter acquired and wherever located: (a) all
Receivables; (b) all Equipment; (c) all Fixtures; (d) all General Intangibles
(subject to the exclusion
described below with respect to Intellectual Property); (e) all
Inventory; (f) all Investment Property; (g) all Deposit Accounts; (h) all
Shares; (i) all other Goods and personal property of Borrower (subject to the exclusion described
below with respect to Intellectual Property), whether tangible or
intangible and whether now or hereafter owned or existing, leased, consigned by
or to, or acquired by, Borrower and wherever located; (j) all Records; and (k)
all Proceeds of each of the foregoing and all accessions to, substitutions and
replacements for, and rents, profits and products of each of the foregoing,
subject to limitations and exclusions set forth in any
Supplement.  Notwithstanding the foregoing, the Collateral shall not
include Intellectual Property; provided, however, that the
Collateral shall include all Accounts and General Intangibles that consist of
rights to payment and proceeds from the sale, licensing or disposition of all or
any part, or rights in, the Intellectual Property (the “IP Rights to
Payment”); provided, further, that if at
any time while the Obligations are outstanding a judicial authority (including a
U.S. Bankruptcy Court) that has or would have jurisdiction over Borrower
determines that a security interest in the intellectual property is necessary to
the creation or perfection of Lender’s Lien in the IP Rights to Payment, then
the Collateral shall automatically, retroactive to the Closing Date, include the
Intellectual Property solely to the extent necessary to permit perfection of
Lender’s security interest in the IP Rights to Payment.

    


    (b)           IP Lien Upon Reduced
Liquidity; Release of IP Lien.  If during a period in which a
Loan is outstanding Borrower’s Remaining Months Liquidity (hereinafter defined)
drops below 6 months or an Event of Default occurs, then Borrower agrees that
the definition of Collateral in Article 10 of the Loan and Security Agreement
shall be amended automatically and immediately, without any further action or
writing required by the parties, to read as stated in Article 10 of the Loan and
Security Agreement without reference to Section 3(a) above, such that all of
Borrower’s Intellectual Property then owned and thereafter arising or acquired
becomes part of the Collateral for all purposes of the Loan and Security
Agreement and the other Loan Documents.  In connection therewith: (A)
Lender may file an amendment to any previously filed UCC-1 financing statement,
and/or a new UCC-1 financing statement, as applicable, to reflect the broader
scope of the Collateral to cover Intellectual Property; and (B) Borrower shall
execute and deliver, at Borrower’s sole cost and expense, all documents and
instruments reasonably necessary to perfect such Lien, including an Intellectual
Property Security Agreement, substantially the form attached hereto as Exhibit
“G”.

    


    If at any
time after Lender’s Lien includes Intellectual Property Borrower completes an
additional equity financing of at least Six Million Dollars ($6,000,000) that
funds Borrower for at least twelve (12) months, then so long as no Event of
Default has occurred and is then continuing, Lender agrees upon written request
of the Borrower that Lender shall release its Lien with respect to that portion
of the Collateral consisting of Intellectual Property, and upon such release of
Lien the provisions of Section 3(a) above shall become applicable.

    


    (c)           Reporting.  Borrower
agrees that it shall immediately notify Lender if Borrower’s Remaining Months
Liquidity has dropped below 6 months or an Event of Default
occurs.  Borrower further agrees to include a calculation of Remaining
Months Liquidity as part of each Compliance Certificate furnished to Lender
pursuant to Section 5.2(c) of the Loan and Security Agreement; provided,
however, that the inclusion of any such calculation shall not affect Borrower’s
obligations pursuant to the previous sentence.


    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    “Remaining Months
Liquidity” means, as of any date of determination, the number of months
equal to (x) Unrestricted Cash (hereinafter defined), divided by (y) Borrower’s
average monthly net cash expenditures (including Loan repayments) during the 5
months immediately preceding the date of determination; and “Unrestricted
Cash” means,
as of any date of determination, Borrower’s cash on hand (which shall include
the proceeds of any Loans) and Cash Equivalents (hereinafter defined) which are
not subject to any Liens, other than Permitted Liens.  “Cash Equivalents”
means, as of any date of determination, the following assets or rights of
Borrower: (i) marketable direct obligations issued or unconditionally guaranteed
by the United States government having maturities of not more than 12 months
from the date of acquisition; and (ii) domestic certificates of deposit and time
deposits having maturities of not more than 12 months from the date of
acquisition, and overnight bank deposits, in each case issued by a commercial
bank organized under the laws of the United States or any state thereof which at
the time of acquisition are rated A-1 or better by Standard & Poor’s
Corporation (or equivalent), and not subject to any offset rights in favor of
such bank arising from any banking relationship with such bank.

    


    4.           Forbearance of Exercise of
Remedies Against Intellectual Property.

    


    (a)           Notwithstanding
anything to the contrary contained in Article 7 and 8 of the Loan and Security
Agreement or elsewhere in the Loan Documents (including any Intellectual
Property Security Agreement hereafter executed and delivered by Borrower
pursuant to Section 3 above), following the occurrence and during the
continuance of an Event of Default, other than an Event of Default under Section
7.1(c)(ii) or an Event of Default under Section 7.1(f) of the Loan and Security
Agreement, if at such time Lender has a Lien over Borrower’s Intellectual
Property, Lender agrees to forbear from selling, leasing, licensing or otherwise
disposing of any Collateral comprising Intellectual Property (“Intellectual Property
Collateral”) for a period of up to sixty (60) days after the occurrence
of such Event of Default (such period being referred to herein as a “Forbearance
Period”),
provided that at all times during the Forbearance Period:

    


    (i)           Borrower
shall continue to have a duly constituted and acting board of directors, and
executive management actively involved in Borrower’s operations who have not
resigned their positions;

    


    (ii)          Borrower
is able to demonstrate to Lender that Borrower is exercising on a continuous and
diligent basis reasonable commercial efforts to resolve such Event of Default or
consummate a financing or other transaction that will enable it to satisfy and
discharge its Obligations to Lender;

    


    (iii)         Borrower
shall cooperate with Lender in its exercise of rights under Sections 5.3 and
5.9(a) of the Loan and Security Agreement;

    


    (iv)         No
Insolvency Proceeding is commenced by or against Borrower; and

    


    (v)          No
Person who holds or acquires a Lien on or against all or any material portion of
the Intellectual Property Collateral actually exercises foreclosure or similar
remedies against such property.

    


    Subject
to paragraph (b) below, upon the non-occurrence of any of the events under
clauses (i) through (v) above, the Forbearance Period shall immediately and
automatically terminate and Lender may thereupon commence, continue and complete
any exercise of its rights and remedies against Intellectual Property
Collateral, all as provided in the Loan Documents and under applicable
law.


    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    (b)  If during the
Forbearance Period, Lender proposes or arranges a private or public sale of all
or a material portion of the Intellectual Property Collateral (which sale shall
not be consummated during the Forbearance Period), Lender shall give notice of
such proposed sale to Borrower, including notice of the minimum price to be paid
or bid in such sale.  If Borrower’s Board of Director determines in
good faith that the proposed sale would not be commercially reasonable, then
Borrower may, within five (5) Business Days of receipt of the initial notice
from Lender, deliver a written objection, following which the parties agree to
meet promptly and to confer in good faith to resolve any disagreements as to
value or the proposed sale.  Unless the parties have otherwise agreed
as a result of such meet-and-confer, Borrower shall obtain, at its sole expense,
within thirty (30) days after the initial notice from Lender, a written
appraisal of the orderly liquidation value of the Intellectual Property,
prepared by a recognized, independent appraiser with experience evaluating
similar types of property (in which event, the 60-day limitation on the
Forbearance Period shall be extended if, and only as, necessary to afford
Borrower the full thirty (30) days to obtain such appraisal).  If such
appraisal is not timely delivered, or if the value concluded by the independent
appraisal is not more than one hundred twenty percent (120%) of the minimum
price or bid in any transaction proposed by Lender for the same Intellectual
Property Collateral, then Lender may proceed with the proposed transaction (but
not sooner than 60 days after the occurrence of an Event of Default unless
Borrower approves otherwise) on price terms not materially more favorable to the
transferee than originally proposed by Lender.  If the value concluded
by the independent appraisal is more than one hundred twenty percent (120%) of
the minimum price or bid in any transaction proposed by Lender, then the 60-day
limitation on the Forbearance Period (as may have been extended for the
appraisal as aforesaid) shall be extended and the parties shall cooperate with
one another to realize the higher valuation, provided that if the Forbearance
Period (as so extended) terminates for any reason other than that set forth in
clause (ii) of paragraph (a) above, Lender may thereupon commence, continue and
complete any exercise of its rights and remedies against Intellectual Property
Collateral, all as provided in the Loan Documents and under applicable law, and
in all events, Lender shall be free to enforce such rights and remedies and
complete one or more sales or other dispositions of the Intellectual Property
after the earlier of (i) one hundred twenty (120) days after the occurrence of
the Event of Default, or (ii) sixty (60) days after the delivery of the
appraisal report to Borrower.

    


    (c)  At any time during the
Forbearance Period, Lender will discontinue and forbear from enforcing its
rights and remedies against the Collateral upon tender to Lender by Borrower or
by another Person for its account all amounts payable under Section 2(a) of Part
2 hereunder.

    


    5.           Issuance of
Warrant.  As additional consideration for the making of the
Commitment, Lender has earned and is entitled to receive immediately upon the
execution of the Loan and Security Agreement and this Supplement, a warrant
instrument issued by Borrower substantially in the form attached hereto as Exhibit “D” (the
“Warrant”).  Borrower
acknowledges that Lender has assigned its rights to receive the Warrant to its
parent, Venture Lending & Leasing V, LLC (“LLC”).  In
connection therewith, Borrower shall issue the Warrant directly to
LLC.  Upon request of Borrower, Lender shall furnish to Borrower a
copy of the agreement in which Lender assigned the Warrant to LLC.

    


    6.           Commitment
Fee.  As an additional condition precedent under Section 4.1 of
the Loan and Security Agreement, Lender shall have completed to its satisfaction
its due diligence review of Borrower’s business and financial condition and
prospects and Lender’s investment committee shall have approved its
Commitment.  If this condition is not satisfied, the Thirty Thousand
Dollar ($30,000) commitment fee (the “Commitment Fee”)
previously paid by Borrower shall be refunded.  Lender agrees that
with respect to each Loan advanced by it under the Commitment, on the Borrowing
Date applicable to such Loan, Lender shall credit against the payments due from
Borrower on such date in respect of such Loan an amount equal to the product of
Thirty Thousand Dollars ($30,000) and a fraction, the numerator of which is the
principal amount of such Loan and the denominator of which is Three Million
Dollars ($3,000,000), until the aggregate amount of such credits equals but does
not exceed Thirty Thousand Dollars ($30,000).  Except as set forth in
this section, the Commitment Fee is not refundable.

    


    7.           Documentation Fee
Payment.  Pursuant to Section 9.8(a) of the Loan and Security
Agreement Borrower shall pay Lender, on demand, the total amount of Lender’s
actual costs and expenses incurred in connection with the preparation and
negotiation of the Loan Documents, including reasonable legal fees not to exceed
$15,000 and Lender’s actual costs and filing fees related to perfection of its
Liens.

    


    8.           Borrower’s Account and Wire
Transfer Instructions.  Borrower’s Primary Operating Account
and Wire Transfer Instructions shall be provided to Lender on or prior to the
Closing Date.


    
      
         


      

      
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    9.           Debits to Account for ACH
Transfers.  For purposes of Section 2.2 and 5.10 of the Loan
and Security Agreement, Borrower’s Primary Operating Account shall be the bank
account set forth in Section 8 above.  Borrower hereby agrees that
Loans will be advanced to the account specified above and regularly scheduled
monthly payments of principal and interest and any Final Payments will be
automatically debited from the same account.

    


    Part 3. - Additional
Representations:

    


    Borrower represents and warrants that
as of the Closing Date and each Borrowing Date:

    


    
      	
               
      

            	
              a)

            	
              Its
      chief executive office is located at: 1129 North McDowell Boulevard,
      Petaluma, CA 94954.

            


    

    


    
      	
               
      

            	
              b)

            	
              Its
      chief executive office is located at: 1129 North McDowell Blvd., Petaluma,
      CA 94954

            


    

    


    
      	
               
      

            	
              c)

            	
              Its
      Equipment is located at:  1129 North McDowell Blvd., Petaluma,
      CA 94954

            


    

    


    
      	
               
      

            	
              d)

            	
              Its
      Records are located at:  1129 North McDowell Blvd., Petaluma, CA
      94954

            


    

    


    
      	
               
      

            	
              e)

            	
              Its
      Inventory is located at 1129 North McDowell Blvd., Petaluma, CA 94954, and
      at various distributor warehouse sites and at the Borrowers’ premises, as
      referenced below.

            


    

    


    
      	
               
      

            	
              f)

            	
              In
      addition to its chief executive office, Borrower maintains offices or
      operates its business at the following
  locations:

            


    

    


    Aquamed
Technologies

    1129 N.
McDowell Blvd.

    Petaluma,
CA 94954

    USA

    


    MicroMed
Laboratories, Inc.

    1129 N.
McDowell Blvd.

    Petaluma,
CA 94954

    USA

    


    L3
Pharmaceuticals, Inc.

    1129 N.
McDowell Blvd.

    Petaluma,
CA 94954

    USA

    


    Oculus
Technologies of Mexico S.A. de C.V.

    Industria
Vidriera 81

    Fracc
Industrial Zapopan Norte

    Zapopan,
Jalisco

    México

    45130
(manufacturing and administration)

    


    Pedro
Martinez Rivas 861

    Parque
Industrial Belenes Norte

    Zapopan,
Jalisco

    México

    45150
(warehouse)


    
      
         


      

      
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    Oculus
Innovative Sciences Netherlands B.V.

    Nusterweg
123

    6136
KT  Sittard

    P.O. Box
5056

    6130
PB  Sittard

    The
Netherlands

    


    
      	
               
      

            	
              g)

            	
              Other
      than its full corporate name, Borrower has conducted business using the
      following trade names or fictitious business names: Micromed
      Laboratories

            


    

    


    
      	
               
      

            	
              h)

            	
              Borrower’s Federal Tax I.D.
      number is: 680423298

            


    

    


    
      	
               
      

            	
              i)

            	
              Borrower’s
      Delaware state corporation I.D. number is:
  4254674

            


    

    


    
      	
               
      

            	
              j)

            	
              Borrower
      is a majority owner of or in a control relationship with the following
      business entities:

            


    

    


    Aquamed
Technologies

    1129 N.
McDowell Blvd.

    Petaluma,
CA 94954

    USA

    


    MicroMed
Laboratories, Inc.

    1129 N.
McDowell Blvd.

    Petaluma,
CA 94954

    USA

    (corporation
formed but shares not yet issued)

    


    L3
Pharmaceuticals, Inc.

    1129 N.
McDowell Blvd.

    Petaluma,
CA 94954

    USA

    (corporation
formed but shares not yet issued)

    


    Oculus
Technologies of Mexico S.A. de C.V.

    Industria
Vidriera 81

    Fracc
Industrial Zapopan Norte

    Zapopan,
Jalisco

    México

    45130

    


    Oculus
Innovative Sciences Netherlands B.V.

    Nusterweg
123

    6136
KT  Sittard

    P.O. Box
5056

    6130
PB  Sittard

    The
Netherlands

    


    
      	
               
      

            	
              k)

            	
              Borrower’s Deposit and
      Securities Accounts:  Including the Primary Operating
      Account identified in Part 2, Section 8, it maintains certain Deposit
      Accounts and investment/securities accounts, which shall be provided to
      Lender on or prior to the Closing
Date.

            


    


    
      
         


      

      
        8

        
          

        

      

      
         


      

    

    
       

    

    
      Exhibit
10.2

       
 

    

    
      [Signature
page to Supplement]

    

    


    IN WITNESS WHEREOF, the parties have
executed this Supplement as of the date first above written.

    


    
      
        	 
      	
                BORROWER:

              
	 
      	 
      
	 
      	
                OCULUS
      INNOVATIVE SCIENCES, INC.

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Robert E. Miller

              	 
      
	 
      	
                Name:

              	
                Robert
      E. Miller

              
	 
      	
                Title:

              	
                Chief
      Financial Officer

              


      

    

    


    
      
        	
                Address
      for Notices:

              	
                1129
      North McDowell Boulevard

              
	 
      	
                Petaluma,
      CA  94954

              


      

    

    
      
        
          	 
      	
                  Attn:

                	
                    Victoria Covel

                	 


        

      

    

    
      
        
          	 
      	
                  Fax
      #

                	
                     707-282-0551

                	 


        

      

    

    
      
        
          	 
      	
                  Phone
      #

                	
                     
    707-283-0550

                	 


        

      

    

    


    
      
        	 
      	
                LENDER:

              
	 
      	 
      
	 
      	
                VENTURE
      LENDING & LEASING V, INC.

              
	 
      	 
      
	 
      	
                By:

              	
                  /s/ Maurice Werdegar

              	 
      
	 
      	
                Name:

              	
                Maurice
      Werdegar

              
	 
      	
                Title:

              	
                President
      and CEO

              


      

    

    


    
      
        	
                Address
      for Notices:

              	
                2010
      North First Street, Suite 310

              
	 
      	
                San
      Jose, California 95131

              
	 
      	
                Attn:  Chief
      Financial Officer

              
	 
      	
                Fax
      # 408-436-8625

              
	 
      	
                Phone
      # 408-436-8577

              


      

    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    EXHIBIT
“A-1”

    


    FORM OF
PROMISSORY NOTE

    FIRST
TRANCHE

    


    [Note No.
X-XXX]

    


    
      
        	
                $____________________

              	
                ____________________,
      2010

              
	 
      	
                San
      Jose, California

              


      

    

    


    The undersigned (“Borrower”) promises
to pay to the order of VENTURE LENDING & LEASING V, INC., a Maryland
corporation (“Lender”) at its
office at 2010 North First Street, Suite 310, San Jose, California 95131, or at
such other place as Lender may designate in writing, in lawful money of the
United States of America, the principal sum of ______________________________
Dollars ($__________), with interest thereon from the date hereof until
maturity, whether scheduled or accelerated, at a fixed rate per annum equal
to [the Prime Rate as published
on the Business Day on which Lender prepares this Note plus 6.75%, but in no
event less than 10.00%] (the “Designated Rate”),
except as otherwise provided herein, according to the payment schedule described
herein, and a Final Payment in the sum of [6.617% of face amount]
Dollars ($____________) payable on the date set forth below.

    


    This Note is one of the Notes referred
to in, and is entitled to all the benefits of, a Loan and Security Agreement
dated as of May 1, 2010, between Borrower and Lender (as amended, restated
and supplemented from time to time, the “Loan
Agreement”).  Each capitalized term not otherwise defined
herein shall have the meaning set forth in the Loan Agreement.  The
Loan Agreement contains provisions for the acceleration of the maturity of this
Note upon the happening of certain stated events.

    


    Principal of and interest on this Note
shall be payable as follows:

    


    On May 1,
2010, Borrower shall pay  interest only at a fixed
rate per annum equal to 10.00% (the “Interest-Only Rate”),
in advance, on the outstanding principal balance of this Note in the amount of
$_____________ for the month of May, 2010.

    


    Commencing on  June 1, 2010
and continuing on the first day of each month for seven months thereafter,
Borrower shall make payments, in advance, of interest only at the Interest-Only
Rate on the outstanding principal balance of this Note in the amount of
$_____________ each.

    


    Commencing on January 1, 2011, and
continuing on the first day of each consecutive month thereafter, principal and
interest at the Designated Rate shall be payable, in advance, in thirty (30)
equal consecutive installments of _________________________________ Dollars
($__________) each.

    


    The Final Payment and any unpaid
expenses, fees, interest and principal shall be due and payable on June 1,
2013.

    


    This Note may be voluntarily prepaid
only as permitted under Section 2 of Part 2 of the Supplement to the Loan
Agreement.

    


    Any unpaid payments of principal or
interest on this Note shall bear interest from their respective maturities,
whether scheduled or accelerated, at a rate per annum equal to the Default
Rate.  Borrower shall pay such interest on demand.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    Interest, charges and fees shall be
calculated for actual days elapsed on the basis of a 360-day year, which results
in higher interest, charge or fee payments than if a 365-day year were
used.  In no event shall Borrower be obligated to pay interest,
charges or fees at a rate in excess of the highest rate permitted by applicable
law from time to time in effect.

    


    If Borrower is late in making any
payment under this Note by more than five (5) business days, Borrower agrees to
pay a “late charge” of five percent (5%) of the installment due, but not less
than fifty dollars ($50.00) for any one such delinquent payment.  This
late charge may be charged by Lender for the purpose of defraying the expenses
incidental to the handling of such delinquent amounts.  Borrower
acknowledges that such late charge represents a reasonable sum considering all
of the circumstances existing on the date of this Note and represents a fair and
reasonable estimate of the costs that will be sustained by Lender due to the
failure of Borrower to make timely payments.  Borrower further agrees
that proof of actual damages would be costly and inconvenient.  Such
late charge shall be paid without prejudice to the right of Lender to collect
any other amounts provided to be paid or to declare a default under this Note or
any of the other Loan Documents or from exercising any other rights and remedies
of Lender.

    


    This Note shall be governed by, and
construed in accordance with, the laws of the State of California without
reference to its conflict of laws principles.

    


    
      
        
          
            
              	 
      	
                      OCULUS
      INNOVATIVE SCIENCES, INC.

                    
	 
      	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	
                      Name:

                    	 
      
	 
      	
                      Its:

                    	 
      


            

          

        

      

    


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    EXHIBIT
“A-2”

    


    FORM OF
PROMISSORY NOTE

    SECOND
TRANCHE

    


    [Note No.
X-XXX]

    


    
      
        	
                $____________________

              	
                ____________________,
      2010

              
	 
      	
                San
      Jose, California

              


      

    

    


    The undersigned (“Borrower”) promises
to pay to the order of VENTURE LENDING & LEASING V, INC., a Maryland
corporation (“Lender”) at its
office at 2010 North First Street, Suite 310, San Jose, California 95131, or at
such other place as Lender may designate in writing, in lawful money of the
United States of America, the principal sum of ______________________________
Dollars ($__________), with interest thereon from the date hereof until
maturity, whether scheduled or accelerated, at a fixed rate per annum equal
to [the Prime Rate as published
on the Business Day on which Lender prepares this Note plus 6.75%, but in no
event less than 10.00%] (the “Designated Rate”),
except as otherwise provided herein, according to the payment schedule described
herein, and a Final Payment in the sum of [6.617% of face amount]
Dollars ($____________) payable on the date set forth below.

    


    This Note is one of the Notes referred
to in, and is entitled to all the benefits of, a Loan and Security Agreement
dated as of May 1, 2010, between Borrower and Lender (as amended, restated
and supplemented from time to time, the “Loan
Agreement”).  Each capitalized term not otherwise defined
herein shall have the meaning set forth in the Loan Agreement.  The
Loan Agreement contains provisions for the acceleration of the maturity of this
Note upon the happening of certain stated events.

    


    Principal of and interest on this Note
shall be payable as follows:

    


    On the
Borrowing Date, Borrower shall pay [(i) if the Borrowing
Date is not the first day of the month:  interest only at a
fixed rate per annum equal to 13.00%, in advance, on the outstanding principal
balance of this Note for the period from the Borrowing Date through    [the last
day of the same month]___; and (ii)] interest only at a fixed
rate per annum equal to 10.00% (the “Interest-Only Rate”),
in advance, on the outstanding principal balance of this Note in the amount of
$_____________ for the month of [date of
first regular interest only installment].

    


    Commencing on the first day of the
second full month after the Borrowing Date, and continuing on the first day of
the third, fourth, fifth and sixth months thereafter, Borrower shall make
payments, in advance, of interest only at the Interest-Only Rate on the
outstanding principal balance of this Note in the amount of $_____________
each.

    


    Commencing on [the
first day of the seventh full month after the Borrowing Date], and
continuing on the first day of each consecutive month thereafter, principal and
interest at the Designated Rate shall be payable, in advance, in thirty (30)
equal consecutive installments of _________________________________ Dollars
($__________) each.

    


    The Final Payment and any unpaid
expenses, fees, interest and principal shall be due and payable on [the same
date of the last amortized payment].


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    This Note may be voluntarily prepaid
only as permitted under Section 2 of Part 2 of the Supplement to the Loan
Agreement.

    


    Any unpaid payments of principal or
interest on this Note shall bear interest from their respective maturities,
whether scheduled or accelerated, at a rate per annum equal to the Default
Rate.  Borrower shall pay such interest on demand.

    


    Interest, charges and fees shall be
calculated for actual days elapsed on the basis of a 360-day year, which results
in higher interest, charge or fee payments than if a 365-day year were
used.  In no event shall Borrower be obligated to pay interest,
charges or fees at a rate in excess of the highest rate permitted by applicable
law from time to time in effect.

    


    If Borrower is late in making any
payment under this Note by more than five (5) business days, Borrower agrees to
pay a “late charge” of five percent (5%) of the installment due, but not less
than fifty dollars ($50.00) for any one such delinquent payment.  This
late charge may be charged by Lender for the purpose of defraying the expenses
incidental to the handling of such delinquent amounts.  Borrower
acknowledges that such late charge represents a reasonable sum considering all
of the circumstances existing on the date of this Note and represents a fair and
reasonable estimate of the costs that will be sustained by Lender due to the
failure of Borrower to make timely payments.  Borrower further agrees
that proof of actual damages would be costly and inconvenient.  Such
late charge shall be paid without prejudice to the right of Lender to collect
any other amounts provided to be paid or to declare a default under this Note or
any of the other Loan Documents or from exercising any other rights and remedies
of Lender.

    


    This Note shall be governed by, and
construed in accordance with, the laws of the State of California without
reference to its conflict of laws principles.

    


    
      
        
          
            
              	 
      	
                      OCULUS
      INNOVATIVE SCIENCES, INC.

                    
	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	
                      Name:

                    	 
      
	 
      	
                      Its: