Document:

exv10w7

 

Exhibit 10.7

OCULUS INNOVATIVE SCIENCES, INC.

2006 Stock Incentive Plan

NOTICE OF STOCK UNIT AWARD

     You have been granted Stock Units representing shares of Common Stock of Oculus
Innovative Sciences, Inc. (the “Company”) on the following terms and pursuant to such other terms
and conditions as are set forth in the Stock Unit Agreement (the “Agreement”) and the Oculus
Innovative Sciences, Inc. 2006 Stock Incentive Plan (the “Plan”), both of which are attached to and
made a part of this document. Certain capitalized terms used in this Notice of Stock Unit Award
are defined in the Plan.

	 	 	 	 
	 	 Name of Participant:
	 	Robert Miller
	 	 	 	 
	 	 Total Number of Stock Units Granted:
	 	60,000
	 	 	 	 
	 	 Settlement Dates:
	 	30,000 on January 15, 2009
	 	 	 	 
	 	 	 	30,000 on January 15, 2010
	 	 	 	 
	 	 Date of Grant:
	 	April 26, 2007

     By signing this document, you acknowledge receipt of a copy of the Plan, and agree that
(a) these Stock Units are granted under and governed by the terms and conditions of the Plan and
the Stock Unit Agreement; (b) you have carefully read, fully understand and agree to all of the
terms and conditions described in the attached Stock Unit Agreement and the Plan; (c) you
understand and agree that the Stock Unit Agreement, including its cover sheet and attachments,
constitutes the entire understanding between you and the Company regarding this Award, and that any
prior agreements, commitments or negotiations concerning this Award are replaced and superseded;
and (d) you have been given an opportunity to consult legal counsel with respect to all matters
relating to this Award prior to signing this cover sheet and that you have either consulted such
counsel or voluntarily declined to consult such counsel.

	 	 	 	 	 
	ROBERT MILLER	 	OCULUS INNOVATIVE SCIENCES, INC.
	 
	 	 	 	 
	/s/ Robert Miller

	 	By:
	 	/s/ Hojabr Alimi
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Its:
	 	President & CEO

 

 

OCULUS INNOVATIVE SCIENCES, INC.

2006 STOCK INCENTIVE PLAN

STOCK UNIT AGREEMENT

	 	 	 
	Vesting

	 	Your Stock Units are fully vested
on the Date of Grant set forth in
the Notice of Stock Unit Award.
	 
	 	 
	Settlement of Stock Units

	 	Upon the applicable settlement date
for your Stock Units, as set forth
in the Notice of Stock Unit Award,
you will receive one share of the
Company’s Common Stock for each
Stock Unit; provided, however,
that:
	 
	 	 
	 

	 	(a) The number of shares you
receive will be reduced by that
number of shares having an
aggregate Fair Market Value on that
date equal to $3.00 for each Stock
Unit to be settled on that date,
unless you pay such amount to the
Company, in cash or by check, prior
to such settlement date;
	 
	 	 
	 

	 	(b) The number of shares you
receive will be subject to
reduction for payment of
withholding taxes, as set forth
below; and
	 
	 	 
	 

	 	(c) No fractional Share will be
issued or delivered pursuant to the
Plan or this Agreement, and the
Committee will determine whether
cash will be paid in lieu of any
fractional Share or whether such
fractional Share and any rights
thereto will be canceled,
terminated or otherwise eliminated.

	 
	 	 
	 

	 	
Subject to the foregoing, no cash
payment is required to be made by
you in consideration of the Stock
Unit Award.
	 
	 	 
	Acceleration of Settlement Upon
Change in Control or Death

	 	In the event of a Change in Control
or your death prior to a scheduled
settlement date, the outstanding
Stock Units will be settled upon
such Change in Control or as soon
as practicable following the date
of death; provided, however, that
in the case of a Change in Control,
the events constituting the Change
in Control qualify as a permitted
payment event under Section 409A of
the Code and applicable guidance
thereunder.
	 
	 	 
	Termination of Service

	 	This Award does not terminate if
your Service terminates prior to
settlement of the Award.
	 
	 	 
	Nature of Stock Units

	 	Your Stock Units are mere
bookkeeping entries. They represent
only the Company’s unfunded and
unsecured promise to issue shares
of Common Stock (or distribute cash
for fractional shares) on a future
date. As a holder of Stock Units,
you have no rights other than the
rights of a general creditor of the
Company.

-2-

 

	 	 	 
	No Voting Rights or Dividends

	 	Your Stock Units carry neither
voting rights nor rights to
dividends. You, or your estate or
heirs, have no rights as a
stockholder of the Company unless
and until your Stock Units are
settled by issuing shares of the
Company’s Common Stock (or cash for
fractional shares). No adjustments
will be made for dividends or other
rights if the applicable record
date occurs before your stock
certificate is issued, except as
described in the Plan.
	 
	 	 
	Stock Units Nontransferable

	 	You may not sell, transfer, assign,
pledge or otherwise dispose of any
Stock Units. For instance, you may
not use your Stock Units as
security for a loan.
	 
	 	 
	Withholding Taxes and Stock
Withholding

	 	No stock certificates will be
distributed to you unless any
withholding taxes that may be due
as a result of this Award have been
paid. By signing this Agreement,
you authorize the Company or your
actual employer to withhold all
applicable withholding taxes
legally payable by you. The
Company, in its sole discretion,
will withhold shares of Common
Stock that otherwise would be
distributed to you when the Stock
Units are settled to satisfy the
withholding obligation, but not in
excess of the amount of shares
necessary to satisfy the minimum
withholding amount. The Fair
Market Value of these shares,
determined as of the date when
taxes otherwise would have been
withheld in cash, will be applied
to the withholding taxes. You also
authorize the Company, or your
actual employer, to satisfy all
withholding obligations of the
Company or your actual employer
from your wages or other cash
compensation payable to you by the
Company or your actual employer.
	 
	 	 
	Restrictions on Resale

	 	By signing this Agreement, you
agree not to sell any shares of the
Company’s Common Stock issued upon
settlement of the Stock Units at a
time when applicable laws or
Company policies prohibit a sale.
	 
	 	 
	No Retention Rights

	 	Neither your Award nor this
Agreement gives you the right to be
retained by the Company or a
subsidiary of the Company in any
capacity. The Company and its
subsidiaries reserve the right to
terminate your Service at any time,
with or without cause.
	 
	 	 
	Adjustments

	 	In the event of a stock split, a
stock dividend or a similar change
in Company stock, the number of
Stock Units covered by this Award
(and the cash settlement amount per
Stock Unit) shall be adjusted
pursuant to the Plan.
	 
	 	 
	Beneficiary Designation

	 	You may dispose of your Stock Units
in a written beneficiary
designation. A beneficiary
designation must be filed with the
Company on the proper form. It
will be recognized only if it has
been received at the Company’s
headquarters before your death. If
you file no beneficiary designation
or if none of your designated
beneficiaries survives you, then
your estate will receive any Stock
Units that you hold at the time of
your death.

-3-

 

	 	 	 
	Applicable Law

	 	This Agreement will be interpreted
and enforced under the laws of the
State of California (without regard
to choice-of-law provisions).
	 
	 	 
	The Plan and Other Agreements

	 	The text of the Plan is
incorporated in this Agreement by
reference. All capitalized terms in
this Agreement shall have the
meanings assigned to them in the
Plan. This Agreement and the Plan
constitute the entire understanding
between you and the Company
regarding this Award. Any prior
agreements, commitments or
negotiations concerning this Award
are superseded. This Agreement may
be amended only by another written
agreement, signed by both parties.

BY SIGNING THE COVER SHEET OF THIS AGREEMENT,

YOU AGREE TO ALL OF THE TERMS AND CONDITIONS

DESCRIBED ABOVE AND IN THE PLAN.

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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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