ESCALON MEDICAL CORP
ALLONGE TO AMENDED AND RESTATED LINE OF CREDIT
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<TYPE>EX-10.16
<SEQUENCE>5
<FILENAME>w83651exv10w16.txt
<DESCRIPTION>ALLONGE TO AMENDED AND RESTATED LINE OF CREDIT
<TEXT>
<PAGE>


                                  EXHIBIT 10.16

               ALLONGE TO AMENDED AND RESTATED LINE OF CREDIT NOTE

Payor:                     ESCALON MEDICAL CORP

Payee:                     SPRING STREET CAPITAL

Date of Original Note:     NOVEMBER 16, 2001

Principal Amount:          $2,000,000

                                   BACKGROUND

     The Payor executed the above-referenced amended and restated line of credit
note ("Line of Credit") to evidence a loan or loans made pursuant to various
agreements including a certain Letter Agreement dated November 16, 2001 (as
amended, the "Existing Loan Agreements") among the Borrowers (as defined in the
Existing Loan Agreements) and the Lender (as defined in the Existing Loan
Agreements).

     The Payor and the Lender are executing an amendment to Loan Agreements,
dated of even date herewith, (the "2003 Amendment" and together with the
Existing Loan Agreements, the "Loan Agreements") pursuant to which the parties
have agreed to amend certain terms and conditions.


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     NOW THEREFORE, for good and valuable consideration, the receipt and legal
sufficiency of which is hereby acknowledged and intending to be legally bound,
the parties hereto agree as follows:

          1.   Article 9. of the Line of Credit is hereby amended as follows:

               9. RIGHT OF SETOFF. In the Event of Default, in addition to all
               liens upon and rights of setoff against the money, securities or
               other property of the Borrower given to the Bank by law, the Bank
               shall have, with respect to the Borrower's obligations to the
               Bank under this Note and to the extent permitted by law, a
               contractual possessory security interest in and a contractual
               right of setoff against, and the Borrower hereby assigns,
               conveys, delivers, pledges and transfers to the Bank all of the
               Borrower's right, title and interest in and to, all deposits,
               moneys, securities and other property of the Borrower now or
               hereafter in the possession of or on deposit with, or in transit
               to, the Bank whether held in a general or special account or
               deposit, whether held jointly with someone else, or whether held
               for safekeeping or otherwise, excluding, however, all IRA, Keogh,
               and trust accounts. Every such security interest and right of
               setoff may be exercised without demand upon or notice to the
               Borrower. Every such right of setoff shall be deemed to have been
               exercised immediately upon the occurrence of an Event of Default
               hereunder without any action of the Bank, although the Bank may
               enter such setoff on its books and records at a later time.

          2. This Allonge shall be and remain attached to and shall constitute
     an integral part of the above-described Line of Credit from and after the
     date hereof. Except as modified hereby, all of the terms and provisions of
     the Line of Credit referenced above are hereby ratified and confirmed.

     INTENDING TO BE LEGALLY BOUND HEREBY, each of the undersigned has duly
executed this Allonge on February 13, 2003.

ATTEST:                             ESCALON MEDICAL CORP


By:    /s/                          By:   /s/
    ---------------------------        ----------------------------------------
Name: Harry M. Rimmer                     Name: Richard J. DePiano
Title: SVP Finance                        Title: CEO


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