Exhibit 10.33

LICENSE AGREEMENT

THIS LICENSE AGREEMENT (this “Agreement”) is made and entered into as of March
26, 2007 (the “Effective Date”), by and among Medtronic Xomed, Inc., a Delaware
corporation (“Medtronic”), and Vision-Sciences, Inc., a Delaware corporation
(“Vision-Sciences”).

WITNESSETH:

WHEREAS, Medtronic and Vision-Sciences have entered into an Asset Purchase
Agreement, dated as of January 16, 2007 (the “Asset Purchase Agreement”)
pursuant to which Vision-Sciences is selling to Medtronic certain assets;

WHEREAS, Medtronic and Vision-Sciences have entered into an Amended Distribution
Agreement (as defined in the Asset Purchase Agreement) pursuant to which
Vision-Sciences is supplying Medtronic endoscopes for use in the Field of Use in
connection with EndoSheath Products;

WHEREAS, as part of the transaction between the parties relating to the Asset
Purchase Agreement and Amended Distribution Agreement, Vision-Sciences will
exclusively license to Medtronic rights to certain intellectual property in
accordance with the terms of this Agreement; and

WHEREAS, the execution and delivery of this Agreement is a condition precedent
to the consummation of the Asset Purchase Agreement and the Amended Distribution
Agreement.

NOW, THEREFORE, in consideration of the respective representations, warranties,
covenants and agreements contained herein, and subject to the terms and
conditions set forth herein, the parties hereto agree as follows:

ARTICLE 1
DEFINITIONS

1.1)          SPECIFIC DEFINITIONS.  AS USED IN THIS AGREEMENT, THE FOLLOWING
TERMS SHALL HAVE THE MEANINGS SET FORTH OR REFERENCED BELOW:

“Affiliate” of a specified person (natural or juridical) means a person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the person specified. For
purpose of this definition, “control” shall mean ownership of more than fifty
percent (50%) of the shares of stock entitled to vote for the election of
directors in the case of a corporation, and more than fifty percent (50%) of the
voting power in the case of a business entity other than a corporation.

“Agreement” means this Agreement and all Exhibits hereto.

“Amended Distribution Agreement” has the meaning set forth in the Asset Purchase
Agreement.

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“Asset Purchase Agreement” has the meaning set forth in the Recitals.

“Asset Sale” has the meaning set forth in Section 7.8.

“Competitor” has the meaning set forth in Section 7.8.

“Confidential Information” means information disclosed by or on behalf of one of
the parties (the “disclosing party”) to the other party (the “receiving party”),
generated under this Agreement, or otherwise learned by the receiving party from
the disclosing party, excluding information which:

(A)           WAS ALREADY IN THE POSSESSION OF THE RECEIVING PARTY PRIOR TO ITS
ORIGINAL RECEIPT FROM THE DISCLOSING PARTY (PROVIDED THAT THE RECEIVING PARTY IS
ABLE TO PROVIDE THE DISCLOSING PARTY WITH WRITTEN PROOF THEREOF AND, IF RECEIVED
FROM A THIRD PARTY, THAT SUCH INFORMATION WAS ACQUIRED WITHOUT ANY PARTY’S
BREACH OF A CONFIDENTIALITY OR NON-DISCLOSURE OBLIGATION TO THE DISCLOSING PARTY
RELATED TO SUCH INFORMATION);

(B)           IS OR BECOMES PART OF THE PUBLIC DOMAIN BY REASON OF ACTS NOT
ATTRIBUTABLE TO THE RECEIVING PARTY;

(C)           IS OR BECOMES AVAILABLE TO THE RECEIVING PARTY FROM A SOURCE OTHER
THAN THE DISCLOSING PARTY WHICH SOURCE HAS RIGHTFULLY OBTAINED SUCH INFORMATION
AND HAS NO DIRECT OR INDIRECT OBLIGATION OF NON-DISCLOSURE OR CONFIDENTIALITY TO
THE DISCLOSING PARTY WITH RESPECT THERETO; OR

(D)           HAS BEEN INDEPENDENTLY DEVELOPED BY OR FOR THE RECEIVING PARTY
WITHOUT BREACH OF THIS AGREEMENT OR USE OF ANY SUCH INFORMATION OF THE OTHER
PARTY (PROVIDED THAT THE RECEIVING PARTY IS ABLE TO PROVIDE THE DISCLOSING PARTY
WITH WRITTEN PROOF THEREOF).

“EndoSheath Products” means the products described on Schedule A, and any and
all related sheath technology owned or controlled by Vision-Sciences which are
used or can be used for the development, manufacture, and sale of products or
other use in the Field of Use.

“Enforcement Action” has the meaning set forth in Section 3.2(b).

“Field of Use” means the field of otorhinolaryngology (as defined by the
American Academy of Otorhinolaryngology and Head and Neck Surgery), including,
without limitation, sinus endoscopy, laryngoscopy, esophagoscopy and other
applications or procedures where flexible or rigid scopes are inserted into the
ear, nose or throat, all of the foregoing as and to the extent it is practiced
by licensed otorhinolaryngologists.

“Indemnifiable Losses” has the meaning set forth in Section 6.1.

“Indemnified Parties” has the meaning set forth in Section 6.2.

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“Intellectual Property” means all forms of intellectual property in any
jurisdiction and under any law, whether now or hereafter existing, including,
without limitation: (a) inventions, discoveries, patent applications, patents
(including letters patent, industrial designs, and inventor’s certificates),
design registrations, invention disclosures, and applications to register
industrial designs, and any and all rights to any of the foregoing anywhere in
the world, including any provisionals, substitutions, extensions, supplementary
patent certificates, reissues, re-exams, renewals, divisions, continuations,
continuations in part, continued prosecution applications, and other similar
filings or notices provided for under the laws of the United States, or of any
other country; (b) trademarks and any all rights thereto anywhere in the world;
(c) trade secrets and other confidential or non-public business information,
including ideas, formulas, compositions, inventor’s notes, discoveries,
improvements, concepts, know-how, manufacturing and production processes and
techniques, testing information, research and development information, data
resulting or derived from research activities, invention disclosures, unpatented
blue prints, drawings, specifications designs, plans, proposals and technical
data, business and marketing plans, market surveys, market know-how and customer
lists and related information; (d) copyrights, whether or not registered, and
any non-registered copyright to any writings and other copyrightable works of
authorship, including source code, object code, documentation (whether or not
released), and databases; (e) integrated circuit topographies and mask works;
(f) moral rights; (g) features of shape, configuration, pattern or ornament; and
(h) registrations of, and applications to register, any of the foregoing with
any governmental entity and any renewals or extensions thereof and all other
rights to any of the foregoing.

“Knowledge” of Vision-Sciences means, with respect to the individual officers
and employees of Vision-Sciences listed on Schedule B, actual knowledge of such
individuals or the knowledge any of such individuals would reasonably be
expected to have, assuming reasonable inquiry of any facts or circumstances
actually known to and recognized by such persons to create significant doubt
concerning the accuracy of any representation, warranty, or statement without
regard to such “knowledge” qualifier.

“Medtronic Indemnified Parties” has the meaning set forth in Section 6.1.

“Notice of Dispute” has the meaning set forth in Section 7.7.

“Patents” means (a) the patents and patent applications, together with any
patents that may issue based thereon, set forth on Schedule C; (b) any other
patents or patent applications owned by or licensed (with the right to
sublicense) to Vision-Sciences which claim inventions conceived or reduced to
practice within the three year period after the Effective Date that are
necessary or useful for designing, developing, processing, manufacturing, using
or selling EndoSheath Products in the Field of Use; (c) any patents or patent
applications that could claim priority to, or from which priority could be
claimed by, any of the foregoing referenced patents or patent applications,
including, but not limited to, all continuation, divisional, continuation in
part, re-issue, re-examination and substitution applications that may be filed
by or for the benefit of Vision-Sciences based on the foregoing referenced
patents or patent applications, together with any patents that may issue based
thereon; and (d) all foreign applications that may be filed by or for the
benefit of Vision-Sciences based on the foregoing referenced U.S. patents and
patent applications, together with all patents which may issue based thereon.

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“Product Liability” means any liability, claim or expense related to the
EndoSheath Products, including but not limited to reasonable attorneys’ fees and
medical expenses, arising in whole or in part out of a breach of any express or
implied product warranty, strict liability in tort, negligent manufacture of
product, negligent provision of services, product recall, or any other
allegation of liability arising from the design, testing, manufacture,
packaging, labeling (including instructions for use), marketing, distribution or
sale of EndoSheath Products (whether for clinical trial purposes, commercial use
or otherwise).

“Response to Dispute” has the meaning set forth in Section 7.7.

“Trademarks” means the trademark and trademark applications, together with any
registrations that may issue based thereon, set forth on Schedule D.

“Vision-Sciences Indemnified Parties” has the meaning set forth in Section 6.2.

“VISION-SCIENCES INTELLECTUAL PROPERTY” MEANS COLLECTIVELY ALL INTELLECTUAL
PROPERTY RELATED TO ENDOSHEATH PRODUCTS THAT IS (A) OWNED BY, CONTROLLED BY OR
LICENSED TO VISION-SCIENCES AS OF THE EFFECTIVE DATE, SPECIFICALLY INCLUDING,
WITHOUT LIMITATION, THE PATENTS AND TRADEMARKS; AND (B) OWNED BY, ACQUIRED BY,
LICENSED TO, OR FILED, CONCEIVED OR REDUCED TO PRACTICE BY OR ON BEHALF OF
VISION-SCIENCES WITHIN THE THREE YEAR PERIOD AFTER THE EFFECTIVE DATE.

“Vision-Sciences Current Intellectual Property” means collectively all
Intellectual Property related to EndoSheath Products that is owned by,
controlled by or licensed to Vision-Sciences as of the Effective Date,
specifically including, without limitation, the Patents and Trademarks.

1.2)          OTHER TERMS.  OTHER TERMS MAY BE DEFINED ELSEWHERE IN THE TEXT OF
THIS AGREEMENT AND SHALL HAVE THE MEANING ASCRIBED THERETO IN THIS AGREEMENT.

ARTICLE 2
LICENSE TO MEDTRONIC

2.1)          GRANT OF LICENSE.

(A)           SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT,
VISION-SCIENCES HEREBY GRANTS TO MEDTRONIC AND ITS AFFILIATES, AND MEDTRONIC AND
ITS AFFILIATES HEREBY ACCEPT, A PERPETUAL, IRREVOCABLE, WORLDWIDE, SUBLICENSABLE
(INCLUDING THROUGH MULTIPLE TIERS, BUT IN NO EVENT SHALL THE RIGHTS OR
OBLIGATIONS UNDER SECTION 3.1 OR 3.2 BE SUBLICENSED, ASSIGNED, TRANSFERRED OR
OTHERWISE DELEGATED), PAID-UP, ROYALTY-FREE, EXCLUSIVE LICENSE (OR SUBLICENSE,
AS THE CASE MAY BE) TO EXPLOIT THE VISION-SCIENCES INTELLECTUAL PROPERTY SOLELY
IN THE FIELD OF USE, INCLUDING THE RIGHT TO RESEARCH, DEVELOP, MAKE, HAVE MADE,
USE, SELL, IMPORT, HAVE IMPORTED, OFFER TO SELL, HAVE SOLD, DISTRIBUTE, AND HAVE
DISTRIBUTED ENDOSHEATH PRODUCTS.

(B)           MEDTRONIC HEREBY ACKNOWLEDGES AND AGREES THAT THE FIELD OF USE
LICENSE GRANTED TO MEDTRONIC PURSUANT TO THIS AGREEMENT DOES NOT EXTEND TO ANY
APPLICATION OUTSIDE OF THE FIELD OF USE, AND THAT VISION-SCIENCES OTHERWISE
RETAINS ALL RIGHTS IN AND TO INTELLECTUAL

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PROPERTY OWNED OR LICENSED BY VISION-SCIENCES (INCLUDING WITHOUT LIMITATION, THE
VISION-SCIENCES INTELLECTUAL PROPERTY) NOT GRANTED TO MEDTRONIC HEREIN,
INCLUDING, BUT NOT LIMITED TO, THE RIGHT TO RESEARCH, DEVELOP, MAKE, HAVE MADE,
USE, SELL, IMPORT, HAVE IMPORTED, OFFER TO SELL, HAVE SOLD, DISTRIBUTE, AND HAVE
DISTRIBUTED ENDOSHEATH PRODUCTS OUTSIDE THE FIELD OF USE.  FOR THE AVOIDANCE OF
DOUBT, AS BETWEEN THE PARTIES HERETO, EACH PARTY ACKNOWLEDGES AND AGREES THAT
ANY AND ALL INTELLECTUAL PROPERTY WHICH IS CONCEIVED, DEVELOPED, REDUCED TO
PRACTICE OR ACQUIRED BY OR ON BEHALF OF SUCH PARTY SHALL BE THE SOLE AND
EXCLUSIVE PROPERTY OF SUCH PARTY, SUBJECT TO THE LICENSES EXPRESSLY GRANTED IN
THIS AGREEMENT.

2.2)          ASSISTANCE.    FROM AND AFTER THE TRANSITION COMPLETION DATE (AS
DEFINED IN THE TRANSITION AGREEMENT BETWEEN THE PARTIES DATED AS OF THE
EFFECTIVE DATE), AT MEDTRONIC’S REQUEST AND EXPENSE, VISION-SCIENCES SHALL
PROVIDE TO MEDTRONIC COPIES, OR ELECTRONIC FILES, OF ALL WRITINGS, DRAWINGS AND
MATERIALS, IF ANY, THAT DOCUMENT THE VISION-SCIENCES INTELLECTUAL PROPERTY,
INCLUDING COPIES OF ANY PATENTS, PATENT APPLICATIONS AND DOCUMENTS REPRESENTING
EMBODIMENTS OF THE VISION-SCIENCES INTELLECTUAL PROPERTY.  IN ADDITION, AT
MEDTRONIC’S REQUEST, VISION-SCIENCES WILL PROVIDE EXPLANATION AND ASSISTANCE TO
MEDTRONIC TO ALLOW MEDTRONIC TO UNDERSTAND ANY INVENTION COVERED BY THE
VISION-SCIENCES INTELLECTUAL PROPERTY CONCEIVED OF OR REDUCED TO PRACTICE AFTER
THE TRANSITION COMPLETION DATE.

ARTICLE 3
INTELLECTUAL PROPERTY

3.1)          PROSECUTION AND MAINTENANCE OF VISION-SCIENCES INTELLECTUAL
PROPERTY.

(A)           VISION-SCIENCES SHALL, AT ITS OWN EXPENSE, USE COMMERCIALLY
REASONABLE EFFORTS TO PROTECT THE VISION-SCIENCES INTELLECTUAL PROPERTY BY
APPLYING FOR AND MAINTAINING APPROPRIATE WORLDWIDE PATENT AND TRADEMARK
REGISTRATIONS, EXCEPT AS ALLOWED OTHERWISE BELOW, AND VISION-SCIENCES AGREES TO
CONSULT WITH PATENT COUNSEL REGARDING PATENT PROSECUTION MATTERS. 
VISION-SCIENCES AND ITS ATTORNEYS OR AGENTS SHALL CONSULT WITH MEDTRONIC WITH
RESPECT TO THE PREPARATION, FILING, PROSECUTION, FOREIGN FILING AND MAINTENANCE
OF ANY PATENT AND SHALL PROVIDE MEDTRONIC SUFFICIENT OPPORTUNITY TO COMMENT, AT
ITS OWN EXPENSE, ON ANY MATERIAL DOCUMENT THAT VISION-SCIENCES INTENDS TO FILE
OR TO CAUSE TO BE FILED WITH THE RELEVANT PATENT OFFICE.

(B)           VISION-SCIENCES SHALL ADVISE MEDTRONIC IN THE EVENT THAT IT
INTENDS TO ABANDON ANY PATENT OR IF IT ELECTS NOT TO FILE A PATENT APPLICATION
WITH RESPECT TO AN INVENTION THAT IS NECESSARY OR USEFUL FOR DESIGNING,
DEVELOPING, PROCESSING, MANUFACTURING OR SELLING ENDOSHEATH PRODUCTS IN THE
FIELD OF USE, AND THE PARTIES SHALL THEREUPON CONSULT IN GOOD FAITH IN AN EFFORT
JOINTLY TO DECIDE WHETHER SUCH PATENT SHOULD BE ABANDONED OR WHETHER SUCH PATENT
APPLICATION SHOULD BE FILED.  IF, FOLLOWING SUCH CONSULTATION, VISION-SCIENCES
WISHES TO ABANDON SUCH PATENT AND MEDTRONIC WISHES TO MAINTAIN IT, OR
VISION-SCIENCES WISHES NOT TO FILE SUCH PATENT APPLICATION AND MEDTRONIC WISHES
TO FILE SUCH PATENT APPLICATION, THEN MEDTRONIC SHALL BE ENTITLED, AT ITS OWN
COST AND EXPENSE, TO MAINTAIN SUCH PATENT OR TO FILE SUCH PATENT APPLICATION. 
IF MEDTRONIC ELECTS TO MAINTAIN SUCH PATENT OR TO FILE SUCH PATENT APPLICATION,
VISION-SCIENCES WILL ASSIGN THE RIGHTS IN SUCH PATENT OR INVENTION, AS
APPLICABLE, TO MEDTRONIC.

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(C)           EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 3.1(A) AND 3.1(B)
ABOVE, MEDTRONIC SHALL NOT HAVE ANY RIGHTS TO PROSECUTE AND MAINTAIN ANY OF THE
VISION-SCIENCES INTELLECTUAL PROPERTY OR TO FILE OR PROSECUTE ANY APPLICATIONS
WITH RESPECT THERETO WITHOUT VISION-SCIENCES’ PRIOR WRITTEN CONSENT.

(D)           EACH PARTY SHALL COOPERATE WITH THE OTHER PARTY, AS REASONABLY
REQUESTED, TO EXECUTE ALL LAWFUL PAPERS AND INSTRUMENTS AND TO MAKE ALL RIGHTFUL
OATHS AND DECLARATIONS AS MAY BE NECESSARY IN THE PREPARATION, PROSECUTION,
MAINTENANCE AND ENFORCEMENT OF ANY AND ALL PATENTS.

(E)           VISION-SCIENCES SHALL NOT BREACH AND SHALL COMPLY WITH ALL OF THE
MATERIAL PROVISIONS OF, AND SHALL MAINTAIN IN FULL FORCE AND EFFECT, ALL LICENSE
AGREEMENTS WITH THIRD PARTIES PURSUANT TO WHICH VISION-SCIENCES IS A LICENSEE OF
VISION-SCIENCES INTELLECTUAL PROPERTY, INCLUDING WITHOUT LIMITATION THE LICENSES
SET FORTH ON SCHEDULE E.  VISION-SCIENCES SHALL PROMPTLY NOTIFY MEDTRONIC IF ANY
SUCH THIRD PARTY LICENSOR ALLEGES ANY MATERIAL BREACH BY VISION-SCIENCES OF ANY
SUCH LICENSE AGREEMENT.  TO THE EXTENT PERMITTED BY SUCH CONTRACT, MEDTRONIC
SHALL BE ENTITLED, BUT NOT OBLIGATED, AFTER CONSULTATION WITH VISION-SCIENCES,
TO CURE, ON BEHALF OF VISION-SCIENCES, ANY ALLEGED BREACH BY VISION-SCIENCES OF
SUCH LICENSE AGREEMENT AND SEEK TO RECAPTURE THE COST OF SUCH CURE AGAINST
VISION-SCIENCES TO THE EXTENT VISION-SCIENCES DOES NOT CURE SUCH BREACH.  IF
VISION-SCIENCES BECOMES AWARE OF ANY THIRD PARTY’S BREACH OF ANY LICENSE
AGREEMENT WITH VISION-SCIENCES PURSUANT TO WHICH VISION-SCIENCES IS LICENSEE OF
VISION-SCIENCES INTELLECTUAL PROPERTY, INCLUDING WITHOUT LIMITATION THE LICENSES
SET FORTH ON SCHEDULE E, VISION-SCIENCES SHALL PROMPTLY NOTIFY MEDTRONIC. 
MEDTRONIC SHALL BE ENTITLED, BUT NOT OBLIGATED, TO TAKE ACTION AGAINST ANY SUCH
THIRD PARTY AT ITS OWN EXPENSE AFTER CONSULTATION WITH AND APPROVAL OF
VISION-SCIENCES TO THE EXTENT VISION-SCIENCES DOES NOT TAKE SUCH ACTION.  FOR
THE AVOIDANCE OF DOUBT, VISION-SCIENCES MAY TAKE ANY SUCH ACTION AT ITS OWN
EXPENSE.

(F)            VISION-SCIENCES SHALL PROMPTLY NOTIFY MEDTRONIC OF ANY
VISION-SCIENCES INTELLECTUAL PROPERTY CREATED, OBTAINED, LICENSED, OR ACQUIRED
BY VISION-SCIENCES AFTER THE EFFECTIVE DATE BUT BEFORE THE THIRD ANNIVERSARY OF
THE EFFECTIVE DATE.

(G)           MEDTRONIC SHALL, IN EXERCISING ITS TRADEMARK RIGHTS HEREUNDER: (I)
ADHERE TO THE VISION-SCIENCES BRAND EQUITY AND DESIGN GUIDELINES, AS PROVIDED BY
VISION-SCIENCES FROM TIME TO TIME; (II) ENSURE THAT ITS ADVERTISING AND
PROMOTIONAL MATERIAL ARE CONSISTENT WITH INDUSTRY NORMS; AND (III) ENSURE THAT
ITS PRODUCTS ARE OF GOOD QUALITY CONSISTENT WITH INDUSTRY STANDARDS. MEDTRONIC
ACKNOWLEDGES AND AGREES THAT ALL USE OF THE TRADEMARKS AND GOODWILL IN RELATION
THERETO WILL INURE TO THE BENEFIT OF VISION-SCIENCES.

(H)           SO LONG AS ANY ENDOSHEATH PRODUCTS OR OTHER PRODUCTS SOLD BY
MEDTRONIC ARE COVERED IN ANY COMMERCIALLY MEANINGFUL MANNER BY ANY VALID CLAIM
OF AN UNEXPIRED PATENT INCLUDED WITHIN THE PATENTS, MEDTRONIC SHALL INCLUDE ON
THE PRODUCT PACKAGING FOR SUCH ENDOSHEATH PRODUCTS OR SUCH OTHER PRODUCTS SOLD
IN THE COUNTRY WHERE SUCH PATENT HAS ISSUED A REFERENCE THAT SUCH ENDOSHEATH
PRODUCTS OR SUCH OTHER PRODUCTS ARE SOLD UNDER A LICENSE FROM VISION-SCIENCES,
INC., OR WORDS TO SIMILAR AFFECT IDENTIFYING VISION-SCIENCES BY NAME.

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3.2)          ENFORCEMENT OF INFRINGEMENT OF VISION-SCIENCES INTELLECTUAL
PROPERTY.

(A)           NOTICE.  EACH PARTY SHALL PROMPTLY REPORT IN WRITING TO THE OTHER
PARTY DURING THE TERM OF THIS AGREEMENT ANY (I) KNOWN OR SUSPECTED INFRINGEMENT
OF VISION-SCIENCES INTELLECTUAL PROPERTY; AND (II) KNOWN OR SUSPECTED
UNAUTHORIZED USE OR MISAPPROPRIATION OF VISION-SCIENCE INTELLECTUAL PROPERTY, OF
WHICH SUCH PARTY BECOMES AWARE, AND SHALL PROVIDE THE OTHER PARTY WITH ALL
AVAILABLE EVIDENCE SUPPORTING SUCH INFRINGEMENT, SUSPECTED INFRINGEMENT,
UNAUTHORIZED USE OR MISAPPROPRIATION OR SUSPECTED UNAUTHORIZED USE OR
MISAPPROPRIATION.

(B)           GENERAL. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, NEITHER
PARTY SHALL BE OBLIGATED TO BRING SUIT OR TAKE SUCH OTHER ACTIONS AGAINST
INFRINGEMENT, MISUSE OR MISAPPROPRIATION OF THE VISION-SCIENCES INTELLECTUAL
PROPERTY, DEFEND AGAINST CHALLENGES TO THE VISION-SCIENCES INTELLECTUAL PROPERTY
OR OTHERWISE ENFORCE THE VISION-SCIENCES INTELLECTUAL PROPERTY (AN “ENFORCEMENT
ACTION”).

(C)           ENFORCEMENT WITHIN THE FIELD OF USE.  MEDTRONIC SHALL HAVE THE
FIRST RIGHT TO INITIATE AN ENFORCEMENT ACTION THAT IT BELIEVES IS REASONABLY
REQUIRED TO PROTECT VISION-SCIENCE INTELLECTUAL PROPERTY IN THE FIELD OF USE AND
TO CONTROL AND SETTLE ALL RESULTING ACTIONS AND LITIGATION, INCLUDING SELECTION
AND DIRECTION OF LEGAL COUNSEL.

(D)           ENFORCEMENT OUTSIDE OF THE FIELD OF USE.  VISION-SCIENCES SHALL
USE COMMERCIALLY REASONABLE EFFORTS TO INITIATE AN ENFORCEMENT ACTION THAT IT
BELIEVES (IN ITS SOLE DISCRETION) IS REASONABLY REQUIRED TO PROTECT
VISION-SCIENCE INTELLECTUAL PROPERTY OUTSIDE OF THE FIELD OF USE AND TO CONTROL
AND SETTLE ALL RESULTING ACTIONS AND LITIGATION, INCLUDING SELECTION AND
DIRECTION OF LEGAL COUNSEL.

(E)           STEP-IN RIGHT.  IF EITHER PARTY, PURSUANT TO SECTION 3.2(C) OR
3.2(D) ABOVE, AS APPLICABLE, FAILS TO INITIATE AN ENFORCEMENT ACTION WITHIN
SIXTY (60) DAYS AFTER BECOMING AWARE OF THE CAUSE FOR AN ENFORCEMENT ACTION (OR
SUCH SHORTER PERIOD AS THE OTHER PARTY MAY DEEM REASONABLE IN THE EVENT SUCH
PARTY BELIEVES THAT PURSUING EQUITABLE RELIEF IS NECESSARY OR APPROPRIATE), THEN
THE OTHER PARTY MAY, IN ITS DISCRETION, PROVIDE TO THE PARTY FAILING TO INITIATE
THE ENFORCEMENT ACTION WITH NOTICE OF ITS INTENT TO INITIATE AN ENFORCEMENT
ACTION, SUCH NOTICE TO BE PROVIDED WITHIN THIRTY (30) DAYS AFTER THE EXPIRATION
OF SUCH SIXTY (60) DAY PERIOD.  IF A PARTY PROVIDES SUCH NOTICE AND THE OTHER
PARTY FAILS TO INITIATE A SUIT OR TAKE OTHER APPROPRIATE ACTION WITHIN THIRTY
(30) DAYS AFTER RECEIPT OF SUCH NOTICE (OR TEN (10) DAYS AFTER RECEIPT OF NOTICE
IF THE PARTY PROVIDING SUCH NOTICE HAS SPECIFIED IN SUCH NOTICE THAT IT DESIRES
TO PURSUE EQUITABLE RELIEF), THEN THE PARTY PROVIDING SUCH NOTICE SHALL HAVE THE
RIGHT TO INITIATE AN ENFORCEMENT ACTION THAT IT BELIEVES IS REASONABLY REQUIRED
TO ENFORCE, DEFEND OR PROTECT THE VISION-SCIENCES INTELLECTUAL PROPERTY. THE
PARTY PROVIDING SUCH NOTICE AND INITIATING THE ENFORCEMENT ACTION SHALL GIVE THE
OTHER PARTY SUFFICIENT ADVANCE NOTICE OF ITS INTENT TO INITIATE AN ENFORCEMENT
ACTION AND THE REASONS THEREFOR, AND SHALL PROVIDE SUCH PARTY WITH AN
OPPORTUNITY TO MAKE SUGGESTIONS AND COMMENTS REGARDING SUCH ACTION.

(F)            UPDATES.  EACH PARTY SHALL TAKE ALL REASONABLY NECESSARY STEPS TO
ENSURE THAT THE OTHER PARTY IS INFORMED AND UPDATED WITH RESPECT TO ALL MATERIAL
ASPECTS OF ACTUAL OR POTENTIAL ENFORCEMENT ACTIONS, PROVIDING UPON REQUEST
COPIES OF ALL MATERIAL COURT FILINGS IN

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CONNECTION WITH ANY ENFORCEMENT ACTION AND NOTICE OF ANY AND ALL MATERIAL
DEVELOPMENTS, INCLUDING, WITHOUT LIMITATION, ANY CLAIMS OR OTHER CHALLENGES
(THREATENED OR PENDING) AFFECTING THE VISION-SCIENCES INTELLECTUAL PROPERTY. ALL
NOTICES HEREUNDER SHALL BE PROVIDED AS SET FORTH BELOW IN SECTION 7.5.

(G)           COOPERATION.

(I)            THE PARTIES AGREE TO CONSULT AND COOPERATE IN GOOD FAITH WITH
RESPECT TO ANY ACTUAL OR POTENTIAL ENFORCEMENT ACTION.  EXCEPT AS PROVIDED
HEREIN, EACH PARTY SHALL BEAR ITS OWN EXPENSES IN ANY ENFORCEMENT ACTION.  EACH
OF THE PARTIES AGREE TO JOIN IN ANY ENFORCEMENT ACTION (OR ALLOW THE OTHER PARTY
TO SUE IN SUCH PARTY’S NAME) IF REQUESTED BY THE PARTY INITIATING THE
ENFORCEMENT ACTION, AT THE EXPENSE OF THE PARTY INITIATING THE ENFORCEMENT
ACTION.  WHERE THE PARTIES AGREE TO JOIN IN ANY ENFORCEMENT ACTION, ANY MONETARY
BENEFIT ARISING FROM SUCH ENFORCEMENT ACTION SHALL FIRST BE APPLIED TO REIMBURSE
EACH PARTY ITS COSTS AND EXPENSES, AND THE REMAINDER SHALL BE DISTRIBUTED TO THE
PARTY THAT INITIATED THE ENFORCEMENT ACTION.

(II)           IN THE EVENT THAT AN ENFORCEMENT ACTION IS REASONABLY REQUIRED TO
PROTECT VISION-SCIENCES INTELLECTUAL PROPERTY BOTH WITHIN AND OUTSIDE THE FIELD
OF USE, VISION-SCIENCES AND MEDTRONIC AGREE TO CONSULT AND COOPERATE IN GOOD
FAITH TO DETERMINE IF THE PARTIES WILL CO-INITIATE ANY SUCH ENFORCEMENT ACTION. 
ANY MONETARY BENEFIT ARISING FROM ANY SUCH CO-INITIATED ENFORCEMENT ACTION SHALL
FIRST BE APPLIED TO REIMBURSE EACH PARTY ITS COSTS AND EXPENSES, AND THE
REMAINDER SHALL BE SHARED BETWEEN THE PARTIES ON THE BASIS OF THE DAMAGES WITHIN
OR OUTSIDE OF THE FIELD OF USE. IF A PARTY DECLINES TO CO-INITIATE ANY SUCH
ENFORCEMENT ACTION, THE OTHER PARTY SHALL HAVE THE RIGHT TO INITIATE ANY SUCH
ENFORCEMENT ACTION AND SOLELY RETAIN ANY BENEFIT OBTAINED AFTER BOTH PARTIES’
COSTS AND EXPENSES HAVE BEEN REIMBURSED.

(H)           NO SETTLEMENT WITHOUT CONSENT.  IN NO EVENT SHALL EITHER PARTY
ENTER INTO ANY SETTLEMENT, MAKE ANY STATEMENT OR TAKE ANY OTHER ACTION WITH
RESPECT TO THE VISION-SCIENCES INTELLECTUAL PROPERTY WITHOUT THE PRIOR WRITTEN
CONSENT OF THE OTHER PARTY, WHICH SHALL NOT UNREASONABLY WITHHELD.

(I)            INFORMATION CONFIDENTIAL.  EACH OF THE PARTIES HEREBY
ACKNOWLEDGES AND AGREES THAT INFORMATION, IF ANY, SHARED BY A PARTY REGARDING
ENFORCEMENT ACTIONS IS HIGHLY CONFIDENTIAL AND SHALL NOT BE DISCLOSED TO ANY
THIRD PARTY WITHOUT PRIOR WRITTEN CONSENT FROM THE PARTY PRODUCING OR DISCLOSING
SUCH INFORMATION.  THE PARTIES AGREE THAT THERE SHALL BE A COMMUNITY OF INTEREST
WITH RESPECT TO ANY SHARED INFORMATION REGARDING ENFORCEMENT AND THAT DISCLOSURE
TO ONE ANOTHER OF SUCH INFORMATION SHALL IN NO WAY AFFECT THE CONFIDENTIAL
NATURE OF THE INFORMATION OR ITS QUALIFICATION FOR PROTECTION FROM DISCOVERY AS
ATTORNEY CLIENT COMMUNICATIONS AND/OR ATTORNEY WORK PRODUCT.

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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF VISION-SCIENCES

Vision-Sciences represents and warrants to Medtronic as follows:

4.1)          ORGANIZATION; DIRECTORS AND OFFICERS.  VISION-SCIENCES IS A
CORPORATION DULY ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS
OF THE STATE OF DELAWARE.  VISION-SCIENCES HAS ALL NECESSARY POWER AND AUTHORITY
TO OWN ITS PROPERTIES AND ASSETS AND CONDUCT THE BUSINESS PRESENTLY BEING
CONDUCTED BY IT.

4.2)          AUTHORITY.  VISION-SCIENCES HAS FULL POWER AND AUTHORITY TO ENTER
INTO THIS AGREEMENT AND TO PERFORM ITS OBLIGATIONS HEREUNDER.  THIS AGREEMENT
HAS BEEN DULY AUTHORIZED, EXECUTED, AND DELIVERED BY VISION-SCIENCES, AND
CONSTITUTES A LEGAL, VALID AND BINDING AGREEMENT OF VISION-SCIENCES, ENFORCEABLE
AGAINST IT IN ACCORDANCE WITH ITS TERMS, SUBJECT TO (A) BANKRUPTCY, INSOLVENCY,
FRAUDULENT TRANSFER, REORGANIZATION, MORATORIUM AND SIMILAR LAWS OF GENERAL
APPLICABILITY RELATING TO OR AFFECTING CREDITORS’ RIGHTS AND TO GENERAL EQUITY
PRINCIPLES AND (B) LAWS RELATING TO THE AVAILABILITY OF SPECIFIC PERFORMANCE,
INJUNCTIVE RELIEF OR OTHER EQUITABLE REMEDIES.  NO FURTHER PROCEEDING ON THE
PART OF VISION-SCIENCES IS NECESSARY TO AUTHORIZE THIS AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED HEREBY.  NEITHER THE EXECUTION AND DELIVERY OF THIS
AGREEMENT NOR COMPLIANCE BY VISION-SCIENCES WITH ITS TERMS AND PROVISIONS WILL
VIOLATE (I) ANY PROVISION OF THE CERTIFICATE OF INCORPORATION, BYLAWS OR OTHER
GOVERNING INSTRUMENTS OF VISION-SCIENCES,  (II) ANY CONTRACT, OR GOVERNMENTAL
PERMIT OR LICENSE OF VISION-SCIENCES, OR (III) TO THE KNOWLEDGE OF
VISION-SCIENCES, ANY LAW, STATUTE, REGULATION, INJUNCTION, ORDER OR DECREE OF
ANY GOVERNMENT AGENCY OR AUTHORITY OR COURT TO WHICH VISION-SCIENCES OR ANY OF
THE SPECIFIED ASSETS IS SUBJECT.

4.3)          INTELLECTUAL PROPERTY.

(A)           ALL RIGHT, TITLE AND INTEREST IN AND TO THE VISION-SCIENCES
CURRENT INTELLECTUAL PROPERTY LICENSED UNDER THE LICENSE AGREEMENT IS
EXCLUSIVELY OWNED BY VISION-SCIENCES OR TO THE EXTENT LICENSED BY
VISION-SCIENCES, IS LICENSED EXCLUSIVELY TO VISION-SCIENCES FOR USE IN
APPLICATIONS INCLUDING, BUT NOT LIMITED TO, IN CONNECTION WITH ENDOSHEATH
PRODUCTS WITHOUT ROYALTIES, FEES OR COMMISSIONS, AND FREE AND CLEAR OF ANY
LIENS. THE MANUFACTURE AND SALE OF THE ENDOSHEATH PRODUCTS LISTED ON SCHEDULE A
BY VISION-SCIENCES DO NOT INFRINGE, MISUSE, OR MISAPPROPRIATE THE RIGHTS,
INCLUDING INTELLECTUAL PROPERTY RIGHTS OR CONTRACT RIGHTS, OF OTHERS.  THE
VISION-SCIENCES CURRENT INTELLECTUAL PROPERTY HAS NOT BEEN CHALLENGED IN ANY
JUDICIAL OR ADMINISTRATIVE PROCEEDING.  NEITHER ANY SHAREHOLDER NOR ANY EMPLOYEE
OR CONSULTANT OF VISION-SCIENCES (OR THE EMPLOYER OF ANY SUCH CONSULTANT) HAS
ANY RIGHTS IN OR TO ANY OF THE VISION-SCIENCES CURRENT INTELLECTUAL PROPERTY OR
ANY OF THE ENDOSHEATH PRODUCTS.  ALL PATENTS ARE STILL PENDING IN GOOD STANDING
AND HAVE NOT BEEN ABANDONED, AND ALL FEES NECESSARY TO MAINTAIN SUCH PATENTS IN
FULL FORCE AND EFFECT HAVE BEEN AND AS OF THE CLOSING WILL HAVE BEEN PAID.  TO
THE KNOWLEDGE OF VISION-SCIENCES, OTHER THAN AS SET FORTH ON SCHEDULE F, NO
PERSON NOR SUCH PERSON’S BUSINESS NOR ANY OF ITS PRODUCTS HAS INFRINGED,
MISUSED, OR MISAPPROPRIATED THE VISION-SCIENCES INTELLECTUAL PROPERTY OR
CURRENTLY IS INFRINGING, MISUSING, MISAPPROPRIATING OR CONFLICTING WITH SUCH
RIGHTS.  ALL FORMER OR CURRENT EMPLOYEES OR INDEPENDENT CONTRACTORS OF
VISION-SCIENCES THAT HAD OR HAVE ACCESS TO VISION-SCIENCES’ CONFIDENTIAL
INFORMATION THAT RELATES TO ENDOSHEATH PRODUCTS OR VISION-SCIENCES INTELLECTUAL
CURRENT PROPERTY HAVE ENTERED INTO CUSTOMARY CONFIDENTIALITY AND INVENTION
ASSIGNMENT

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agreements with Vision-Sciences and no such employee or consultant has any
rights in such EndoSheath Products or Vision-Sciences Current Intellectual
Property.  Vision-Sciences has the right to grant the licenses granted under
this Agreement.  To the Knowledge of Vision-Sciences, the Vision-Sciences
Intellectual Property is valid and enforceable.

(b)           There are no actions, suits, claims, disputes or proceedings or
governmental investigations pending or threatened in writing against
Vision-Sciences or any of its Affiliates with respect to the Vision-Sciences
Current Intellectual Property or the use thereof by Vision-Sciences, either at
law or in equity, before any court or administrative agency or before any
governmental department, commission, board, bureau, agency or instrumentality,
or before any arbitration board or panel whether located in the United States or
a foreign country.  Vision-Sciences has complied with any and all laws, rules,
regulations, writs, judgments, injunctions, decrees, determinations, awards or
other orders of any court or other governmental agency or instrumentality,
domestic or foreign, except which the failure in any case would not in any
material respect impair any rights of Medtronic under this Agreement.

(C)           ALL VISION-SCIENCES INTELLECTUAL PROPERTY IDENTIFIED IN SCHEDULE C
HAS THE STATUS INDICATED THEREIN AND ALL APPLICATIONS ARE STILL PENDING IN GOOD
STANDING AND HAVE NOT BEEN ABANDONED.  THE PATENTS IDENTIFIED IN SCHEDULE C
CONSTITUTE ALL OF THE CURRENT PATENTS AND PATENT APPLICATIONS OWNED BY OR
LICENSED (WITH THE RIGHT TO SUBLICENSE) TO VISION-SCIENCES WHICH CLAIM
INVENTIONS THAT ARE NECESSARY OR USEFUL FOR DESIGNING, DEVELOPING, PROCESSING,
MANUFACTURING, USING OR SELLING ENDOSHEATH PRODUCTS IN THE FIELD OF USE. 
VISION-SCIENCES HAS MADE ALL STATUTORILY REQUIRED FILINGS, IF ANY, TO RECORD ITS
INTERESTS AND TAKEN REASONABLE ACTIONS TO PROTECT ITS RIGHTS IN THE
VISION-SCIENCES CURRENT INTELLECTUAL PROPERTY.

4.4)          ENDOSHEATH PRODUCTS. ALL CURRENT ENDOSHEATH PRODUCTS ARE SET FORTH
ON SCHEDULE A, INCLUDING ANY ENDOSHEATH PRODUCTS THAT ARE CURRENTLY UNDER
DEVELOPMENT BY VISION-SCIENCES.

ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MEDTRONIC

Medtronic represents and warrants to Vision-Sciences as follows:

5.1)          ORGANIZATION OF MEDTRONIC.  MEDTRONIC IS A CORPORATION DULY
ORGANIZED, VALIDLY EXISTING AND IN GOOD STANDING UNDER THE LAWS OF THE STATE OF
DELAWARE.  MEDTRONIC HAS ALL NECESSARY POWER AND AUTHORITY TO OWN ITS PROPERTIES
AND ASSETS AND CONDUCT THE BUSINESS PRESENTLY BEING CONDUCTED BY IT.

5.2)          AUTHORITY.  MEDTRONIC HAS FULL POWER AND AUTHORITY TO ENTER INTO
THIS AGREEMENT AND TO PERFORM ITS OBLIGATIONS HEREUNDER.  THIS AGREEMENT HAS
BEEN DULY AUTHORIZED, EXECUTED, AND DELIVERED BY MEDTRONIC, AND CONSTITUTES A
LEGAL, VALID AND BINDING AGREEMENT OF MEDTRONIC, ENFORCEABLE AGAINST MEDTRONIC
IN ACCORDANCE WITH ITS TERMS, SUBJECT TO (A) BANKRUPTCY, INSOLVENCY, FRAUDULENT
TRANSFER, REORGANIZATION, MORATORIUM AND SIMILAR LAWS OF GENERAL APPLICABILITY
RELATING TO OR AFFECTING CREDITORS’ RIGHTS AND TO GENERAL EQUITY PRINCIPLES AND
(B) LAWS RELATING TO THE AVAILABILITY OF SPECIFIC PERFORMANCE, INJUNCTIVE RELIEF
OR OTHER EQUITABLE REMEDIES.  NO FURTHER PROCEEDING ON THE PART OF MEDTRONIC IS
NECESSARY TO AUTHORIZE THIS AGREEMENT AND THE

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transactions contemplated hereby.  Neither the execution and delivery of this
Agreement nor compliance by Medtronic with its terms and provisions will violate
(i) any provision of the articles of incorporation or bylaws of Medtronic, (ii)
any contract, permit or license of Medtronic, or (iii) to the knowledge of
Medtronic, any law, statute, regulation, injunction, order or decree of any
government agency or authority or court to which Medtronic or any of Medtronic’s
assets are subject.

ARTICLE 6
INDEMNIFICATION

6.1)          INDEMNIFICATION OF MEDTRONIC.  VISION-SCIENCES SHALL INDEMNIFY,
DEFEND AND HOLD HARMLESS MEDTRONIC AND EACH OF ITS SUBSIDIARIES, DIVISIONS,
OFFICERS, DIRECTORS, EMPLOYEES, AND SHAREHOLDERS (THE “MEDTRONIC INDEMNIFIED
PARTIES”) FROM AND AGAINST AND IN RESPECT OF ANY AND ALL DEMANDS, CLAIMS,
ACTIONS OR CAUSES OF ACTION, ASSESSMENTS, LOSSES, DAMAGES, LIABILITIES, INTEREST
AND PENALTIES, COSTS AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE
LEGAL FEES AND DISBURSEMENTS INCURRED IN CONNECTION THEREWITH AND IN SEEKING
INDEMNIFICATION THEREFOR, AND ANY AMOUNTS OR EXPENSES REQUIRED TO BE PAID OR
INCURRED IN CONNECTION WITH ANY ACTION, SUIT, PROCEEDING, CLAIM, APPEAL, DEMAND,
ASSESSMENT OR JUDGMENT) WHETHER OR NOT INVOLVING A THIRD-PARTY CLAIM
(COLLECTIVELY “INDEMNIFIABLE LOSSES”), DIRECTLY OR INDIRECTLY RESULTING FROM,
ARISING OUT OF, OR IMPOSED UPON OR INCURRED BY ANY MEDTRONIC INDEMNIFIED PARTY
BY REASON OF THE FOLLOWING:

(A)           ANY BREACH OF ANY REPRESENTATION OR WARRANTY OF VISION-SCIENCES
CONTAINED IN THIS AGREEMENT; OR

(b)           any alleged infringement of any valid and enforceable claim of a
third party patent or other Intellectual Property by any EndoSheath Product set
forth on Schedule A, except to the extent such infringement is due to an
alteration of the EndoSheath Product made after the Effective Date.

6.2)          INDEMNIFICATION OF VISION-SCIENCES.  MEDTRONIC SHALL INDEMNIFY,
DEFEND AND HOLD HARMLESS VISION-SCIENCES AND EACH OF ITS SUBSIDIARIES,
DIVISIONS, OFFICERS, DIRECTORS, EMPLOYEES AND SHAREHOLDERS (THE “VISION-SCIENCES
INDEMNIFIED PARTIES” AND TOGETHER WITH THE MEDTRONIC INDEMNIFIED PARTIES, THE
“INDEMNIFIED PARTIES”) FROM AND AGAINST AND IN RESPECT OF ANY AND ALL
INDEMNIFIABLE LOSSES RESULTING FROM, ARISING OUT OF, OR IMPOSED UPON OR INCURRED
BY ANY VISION-SCIENCES INDEMNIFIED PARTY BY REASON OF THE FOLLOWING:

(A)               ANY BREACH OF ANY REPRESENTATION OR WARRANTY OF MEDTRONIC
CONTAINED IN THIS AGREEMENT; OR

(B)           ANY PRODUCT LIABILITY CLAIMS IN CONNECTION WITH THE ENDOSHEATH
PRODUCTS DESIGNED, MANUFACTURED OR SOLD BY OR ON BEHALF OF MEDTRONIC AFTER THE
EFFECTIVE DATE.

6.3)          THIRD-PARTY CLAIMS AND OTHER CLAIMS.

(A)               IF A CLAIM BY A THIRD PARTY IS MADE AGAINST ANY INDEMNIFIED
PARTY, AND IF THE INDEMNIFIED PARTY INTENDS TO SEEK INDEMNITY WITH RESPECT
THERETO UNDER THIS ARTICLE 6, SUCH

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Indemnified Party shall promptly notify the indemnifying party of such claim;
provided, however, that failure to give timely notice shall not affect the
rights of the Indemnified Party so long as the failure to give timely notice
does not adversely affect the indemnifying party’s ability to defend such claim
against a third party and the indemnifying party shall be entitled to settle or
assume the defense of such claim, including the employment of counsel reasonably
satisfactory to the Indemnified Party.  If the indemnifying party elects to
settle or defend such claim, the indemnifying party shall notify the Indemnified
Party within thirty (30) days (but in no event less than twenty (20) days before
any pleading, filing or response on behalf of the Indemnified Party is due) of
the indemnifying party’s intent to do so.  If the indemnifying party elects not
to settle or defend such claim or fails to notify the Indemnified Party of the
election within thirty (30) days (or such shorter period provided above) after
receipt of the Indemnified Party’s notice of a claim of indemnity hereunder, the
Indemnified Party shall have the right to contest, settle or compromise the
claim without prejudice to any rights to indemnification hereunder.  Regardless
of which party is controlling the settlement of defense of any claim, (i) both
the Indemnified Party and indemnifying party shall act in good faith, (ii) the
indemnifying party shall not thereby permit to exist any lien, encumbrance or
other adverse charge upon any asset of any Indemnified Party or of its
subsidiaries, (iii) the indemnifying party shall permit the Indemnified Party to
participate in such settlement or defense through counsel chosen by the
Indemnified Party, with all fees, costs and expenses of such counsel borne by
the Indemnified Party, unless the indemnifying party and Indemnified Party have
available inconsistent defenses to such third-party claim, in which case such
fees, costs and expenses shall be borne by the indemnifying party, (iv) no entry
of judgment or settlement of a claim may be agreed to without the written
consent of the Indemnified Party, which consent shall not be unreasonably
withheld, and (v) the indemnifying party shall promptly reimburse the
Indemnified Party for the indemnified amount as incurred by the Indemnified
Party pursuant to this Article 6.  So long as the indemnifying party is
reasonably contesting any such third party claim in good faith as permitted
herein, the Indemnified Party shall not pay or settle any such claim (or, if it
does, it shall not be indemnified for such settlement amount).  The controlling
party shall upon request deliver, or cause to be delivered, to the other party
copies of all correspondence, pleadings, motions, briefs, appeals or other
written statements relating to or submitted in connection with the settlement or
defense of any such claim, and timely notices of any hearing or other court
proceeding relating to such claim.

(B)               A CLAIM FOR INDEMNIFICATION FOR ANY MATTER NOT INVOLVING A
THIRD-PARTY CLAIM MAY BE ASSERTED BY NOTICE TO THE PARTY FROM WHOM
INDEMNIFICATION IS SOUGHT.  SUCH NOTICE SHALL STATE THE AMOUNT OF INDEMNIFIABLE
LOSSES, IF KNOWN, THE METHOD OF COMPUTATION THEREOF, AND CONTAIN A REFERENCE TO
THE PROVISIONS OF THE AGREEMENT IN RESPECT TO WHICH SUCH RIGHT OF
INDEMNIFICATION IS CLAIMED OR ARISES.

6.4)          COOPERATION AS TO INDEMNIFIED LIABILITY.  EACH PARTY HERETO SHALL
COOPERATE FULLY WITH THE OTHER PARTIES WITH RESPECT TO ACCESS TO BOOKS, RECORDS,
OR OTHER DOCUMENTATION WITHIN SUCH PARTY’S CONTROL, IF DEEMED REASONABLY
NECESSARY OR APPROPRIATE BY ANY PARTY IN THE DEFENSE OF ANY CLAIM THAT MAY GIVE
RISE TO INDEMNIFICATION HEREUNDER.

6.5)          CALCULATION OF DAMAGES.  THE AMOUNT OF ANY INDEMNIFIABLE LOSSES
FOR WHICH INDEMNIFICATION IS PROVIDED UNDER THIS ARTICLE 6 SHALL BE REDUCED BY
ANY INSURANCE PROCEEDS THAT

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the Indemnified Party is entitled to pursuant to any insurance policy on account
of the matter resulting in such Indemnifable Loss.

6.6)          NATURE OF INDEMNIFICATION.  THE INDEMNIFIED PARTY’S RIGHT TO
INDEMNIFICATION AND PAYMENT OF INDEMNIFIABLE LOSSES, OR OTHER REMEDY, BASED ON
THE INDEMNIFIED PARTY’S REPRESENTATIONS, WARRANTIES, COVENANTS AND OBLIGATIONS,
SHALL NOT BE AFFECTED BY ANY INVESTIGATION CONDUCTED BY THE INDEMNIFIED PARTY OR
ANY KNOWLEDGE ACQUIRED (OR CAPABLE OF BEING ACQUIRED) AT ANY TIME BY THE
INDEMNIFIED PARTY, WHETHER BEFORE OR AFTER THE EXECUTION AND DELIVERY OF THIS
AGREEMENT, WITH RESPECT TO THE ACCURACY OR INACCURACY OF OR COMPLIANCE WITH, ANY
SUCH REPRESENTATION, WARRANTY, COVENANT OR OBLIGATION.

6.7)          INDEMNIFICATION LIMITATION.  EXCEPT WITH RESPECT TO CLAIMS BASED
ON FRAUD, CRIMINAL ACTIVITY, INTENTIONAL MISREPRESENTATION OR INTENTIONAL
MISCONDUCT, THE RIGHTS OF THE INDEMNIFIED PARTIES UNDER THIS ARTICLE 6 SHALL BE
THE SOLE AND EXCLUSIVE REMEDIES (OTHER THAN ANY EQUITABLE REMEDIES AS MAY BE
AVAILABLE) OF THE INDEMNIFIED PARTIES WITH RESPECT TO CLAIMS RESULTING FROM OR
RELATING TO INDEMNIFIABLE LOSSES ARISING FROM THE CLAIMS DESCRIBED IN SECTIONS
6.1 AND 6.2 ABOVE.

ARTICLE 7
MISCELLANEOUS

7.1)          FURTHER ASSURANCES.  AT ANY TIME AND FROM TIME TO TIME THE PARTIES
SHALL, WITHOUT FURTHER CONSIDERATION, EXECUTE AND DELIVER OR CAUSE TO BE
EXECUTED AND DELIVERED TO THE OTHER PARTY ANY ADDITIONAL INSTRUMENTS, AND SHALL
TAKE SUCH OTHER ACTION AS THE OTHER PARTY MAY REASONABLY REQUEST TO CARRY OUT,
OR EVIDENCE THE CONSUMMATION OF, THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.

7.2)          COMPLETE AGREEMENT.  THE SCHEDULES TO THIS AGREEMENT SHALL BE
CONSTRUED AS AN INTEGRAL PART OF THIS AGREEMENT TO THE SAME EXTENT AS IF THEY
HAD BEEN SET FORTH VERBATIM HEREIN.  THIS AGREEMENT AND THE SCHEDULES HERETO
CONSTITUTE THE ENTIRE AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE
SUBJECT MATTER HEREOF AND SUPERSEDE ALL PRIOR AGREEMENTS WHETHER WRITTEN OR ORAL
RELATING HERETO.

7.3)          SURVIVAL OF REPRESENTATIONS AND WARRANTIES.  THE REPRESENTATIONS
AND WARRANTIES CONTAINED IN THIS AGREEMENT SHALL SURVIVE AND REMAIN IN FULL
FORCE AND EFFECT FOR THREE YEARS AFTER THE EFFECTIVE DATE.  NO INDEPENDENT
INVESTIGATION BY VISION-SCIENCES OR MEDTRONIC, ITS COUNSEL, OR ANY OF ITS AGENTS
OR EMPLOYEES SHALL IN ANY WAY LIMIT OR RESTRICT THE SCOPE OF THE REPRESENTATIONS
AND WARRANTIES MADE BY VISION-SCIENCES OR MEDTRONIC IN THIS AGREEMENT.

7.4)          WAIVER, DISCHARGE, AMENDMENT, ETC.  THE FAILURE OF ANY PARTY
HERETO TO ENFORCE AT ANY TIME ANY OF THE PROVISIONS OF THIS AGREEMENT, SHALL IN
NO WAY BE CONSTRUED TO BE A WAIVER OF ANY SUCH PROVISION, NOR IN ANY WAY TO
AFFECT THE VALIDITY OF THIS AGREEMENT OR ANY PART THEREOF OR THE RIGHT OF THE
PARTY THEREAFTER TO ENFORCE EACH AND EVERY SUCH PROVISION.  NO WAIVER OF ANY
BREACH OF THIS AGREEMENT SHALL BE HELD TO BE A WAIVER OF ANY OTHER OR SUBSEQUENT
BREACH.  ANY AMENDMENT TO THIS AGREEMENT SHALL BE IN WRITING AND SIGNED BY THE
PARTIES HERETO.

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7.5)          NOTICES.  ALL NOTICES HEREUNDER SHALL BE DEEMED GIVEN IF IN
WRITING AND DELIVERED PERSONALLY OR SENT BY TELECOPY (WITH CONFIRMATION OF
TRANSMISSION) OR CERTIFIED MAIL (RETURN RECEIPT REQUESTED) OR REPUTABLE COURIER
SERVICE TO THE PARTIES AT THE FOLLOWING ADDRESSES (OR AT SUCH OTHER ADDRESSES AS
SHALL BE SPECIFIED BY LIKE NOTICE):

if to Medtronic, to:

Medtronic, Inc.
World Headquarters
710 Medtronic Parkway
Minneapolis, MN 55432-5604

with separate copies thereof addressed to

Attention: General Counsel
FAX No.:  (763) 572-5459

and

Attention: Vice President and Chief Development Officer
FAX No.:  (763) 505-2542

with a separate copy thereof addressed to:

General Counsel
Medtronic Xomed, Inc.
6743 Southpoint Drive North
Jacksonville, FL 32216

and if to Vision-Sciences, to:

Vision-Sciences, Inc.
40 Ramland Road South, Suite 1
Orangeburg, NY 10962
Facsimile:  (845) 365-0620
Attention:  Ron Hadani, President and CEO

with separate copies thereof addressed to:

Proskauer Rose LLP
1585 Broadway
New York, NY 10036
Facsimile:  (212) 969-2900
Attention:  Paul I. Rachlin, Esq.

Any party may change the above specified recipient and/or mailing address by
notice to all other parties given in the manner herein prescribed.  All notices
shall be deemed given on the

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day when actually delivered as provided above (if delivered personally, by
telecopy or by reputable courier service) or on the date that is three days
after the date shown on the return receipt (if delivered by mail).

7.6)          EXPENSES.  EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN,
MEDTRONIC AND VISION-SCIENCES SHALL EACH PAY THEIR OWN EXPENSES (INCLUDING, BUT
NOT LIMITED TO, ALL COMPENSATION AND EXPENSES OF COUNSEL, FINANCIAL ADVISORS,
CONSULTANTS, ACTUARIES AND INDEPENDENT ACCOUNTANTS) INCIDENT TO THIS AGREEMENT
AND THE PREPARATION FOR, AND CONSUMMATION OF, THE TRANSACTIONS PROVIDED FOR
HEREIN.

7.7)          GOVERNING LAW.

(A)           THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY, PERFORMANCE AND ENFORCEMENT, WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICT OF LAWS.

(b)           The parties shall attempt in good faith to resolve any dispute
arising out of or relating to this Agreement promptly by negotiation between
executives of each party who have authority to settle the controversy and who
are at a higher level of management than the persons with direct responsibility
for administration of this Agreement.  Either party may give the other party
written notice of any dispute not resolved in the normal course of business
(“Notice of Dispute”), which Notice of Dispute shall include (i) a statement of
that party’s position and a summary of arguments supporting that position, (ii)
the dollar amount of the dispute, if known, and the section(s) of the Agreement
to which the dispute relates and (iii) the name and title of the executive who
will represent that party and of any other person who will accompany the
executive.  Within 10 days after delivery of the Notice of Dispute, the
receiving party shall submit to the other a written response (the “Response to
Dispute”).  The Response to Dispute shall include (iv) a statement of that
party’s position and a summary of arguments including references to any
section(s) of the Agreement, if applicable, supporting that position and (v) the
name and title of the executive who will represent that party and of any other
person who will accompany the executive. Within 10 days after delivery of the
Response to Dispute, the designated executives of both parties shall meet at a
mutually acceptable time and place or by conference telephone, and thereafter as
often as they reasonably deem necessary, to attempt to resolve the dispute. All
negotiations pursuant to this clause are confidential and shall be treated as
compromise and settlement negotiations for purposes of applicable rules of
evidence.

(c)           If the dispute has not been resolved by negotiation as provided
under subparagraph (b), above, within 30 days after delivery of the initial
Notice of Dispute, or if the parties failed to meet within 30 days after
delivery of the initial Notice of Dispute, the parties shall endeavor to settle
the dispute by mediation under the Center for Public Resources (CPR) Mediation
Procedure then currently in effect, provided, however, that if one party fails
to participate in the negotiation as provided under subparagraph (b), above, the
other party can initiate mediation prior to the expiration of the 30 days. 
Unless otherwise agreed, the parties will select a mediator from the CPR Panels
of Distinguished Neutrals, and if unable to agree the CPR shall select a
mediator.

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7.8)          SUCCESSORS AND ASSIGNS.  THIS AGREEMENT SHALL BE BINDING UPON AND
INURE TO THE BENEFIT OF THE PARTIES HERETO AND THE SUCCESSORS OR ASSIGNS OF THE
PARTIES HERETO.  THE RIGHTS AND OBLIGATIONS OF VISION-SCIENCES HEREIN MAY NOT BE
ASSIGNED OR TRANSFERRED WITHOUT THE WRITTEN CONSENT OF MEDTRONIC, WHICH CONSENT
SHALL NOT BE UNREASONABLY WITHHELD.  THE RIGHTS OF MEDTRONIC MAY BE ASSIGNED
ONLY TO AN AFFILIATE OR TO SUCH BUSINESS ORGANIZATION THAT SHALL SUCCEED TO THE
BUSINESS OF MEDTRONIC OR OF SUCH SUBSIDIARY TO WHICH THIS AGREEMENT RELATES. 
FOR THE AVOIDANCE OF DOUBT, MEDTRONIC’S RIGHTS AND OBLIGATIONS UNDER SECTIONS
3.1 AND 3.2 MAY NOT BE SUBLICENSED, ASSIGNED, TRANSFERRED OR OTHERWISE
DELEGATED.  FOR THE AVOIDANCE OF DOUBT, A SUBLICENSE OF ANY VISION-SCIENCES
INTELLECTUAL PROPERTY THAT IS NOT OTHERWISE PROHIBITED BY THIS AGREEMENT SHALL
NOT BE CONSIDERED A “TRANSFER” OF AN INTEREST IN THE VISION-SCIENCES
INTELLECTUAL PROPERTY FOR PURPOSES OF THIS SECTION 7.8.  IN ADDITION,
VISION-SCIENCES SHALL NOT COMPLETE OR FACILITATE AN ACQUISITION BY ANY PERSON OR
GROUP OF PERSONS OF 50% OR MORE OF THE VOTING SECURITIES OF VISION-SCIENCES
WITHOUT FIRST (X) OBTAINING FROM THE PURCHASER A WRITTEN STATEMENT ACKNOWLEDGING
VISION-SCIENCES’ OBLIGATIONS PURSUANT TO THIS AGREEMENT AND AGREEING NOT TO TAKE
ANY ACTION THAT WOULD CAUSE VISION-SCIENCES TO BREACH ANY OF ITS OBLIGATIONS
HEREUNDER, AND (Y) PROMPTLY PROVIDING A COPY OF SUCH WRITTEN COMMITMENT TO
MEDTRONIC.

7.9)          TITLES AND HEADINGS; CONSTRUCTION.  THE TITLES AND HEADINGS TO
SECTIONS HEREIN AND SCHEDULES HERETO ARE INSERTED FOR THE CONVENIENCE OF
REFERENCE ONLY AND ARE NOT INTENDED TO BE A PART OF OR TO AFFECT THE MEANING OR
INTERPRETATION OF THIS AGREEMENT.  THIS AGREEMENT SHALL BE CONSTRUED WITHOUT
REGARD TO ANY PRESUMPTION OR OTHER RULE REQUIRING CONSTRUCTION HEREOF AGAINST
THE PARTY CAUSING THIS AGREEMENT TO BE DRAFTED.  NOTHING IN THIS AGREEMENT,
EXPRESSED OR IMPLIED, IS INTENDED TO CONFER ON ANY PERSON OTHER THAN THE PARTIES
HERETO OR THEIR RESPECTIVE PERMITTED SUCCESSORS OR ASSIGNS, ANY RIGHTS,
REMEDIES, OBLIGATIONS OR LIABILITIES UNDER OR BY REASON OF THIS AGREEMENT.

7.10)        SEVERABILITY.  IF ANY PROVISION OF THIS AGREEMENT IS HELD INVALID,
UNENFORCEABLE OR VOID BY A COURT OF COMPETENT JURISDICTION, THE REMAINING
PROVISIONS SHALL NONETHELESS BE ENFORCEABLE ACCORDING TO THEIR TERMS.  IN SUCH
CASE, THE PARTIES AGREE TO NEGOTIATE IN GOOD FAITH TO CREATE AN ENFORCEABLE
CONTRACTUAL PROVISION TO ACHIEVE THE PURPOSE OF THE INVALID PROVISION.  FURTHER,
IF ANY PROVISION IS HELD TO BE OVERBROAD AS WRITTEN, SUCH PROVISION SHALL BE
DEEMED AMENDED TO NARROW ITS APPLICATION TO THE EXTENT NECESSARY TO MAKE THE
PROVISION ENFORCEABLE ACCORDING TO APPLICABLE LAW AND SHALL BE ENFORCED AS
AMENDED.

7.11)        COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AS ORIGINAL AND ALL OF WHICH
TOGETHER SHALL CONSTITUTE ONE INSTRUMENT.

7.12)        CONFIDENTIALITY.  EACH PARTY WILL, FOR A PERIOD OF FIVE (5) YEARS,
(I) KEEP CONFIDENTIAL AND NOT DISCLOSE TO OTHERS, ALL CONFIDENTIAL INFORMATION
OF THE OTHER PARTY, AND (II) NOT USE ANY OF THE OTHER PARTY’S CONFIDENTIAL
INFORMATION FOR ITS OWN DIRECT OR INDIRECT BENEFIT, OR THE DIRECT OR INDIRECT
BENEFIT OF ANY THIRD PARTY, EXCEPT THAT A PARTY MAY USE THE OTHER PARTY’S
CONFIDENTIAL INFORMATION TO THE EXTENT NECESSARY TO PERFORM ITS DUTIES AND
OBLIGATIONS, OR TO ENFORCE OR EXERCISE SUCH PARTY’S RIGHTS, UNDER THIS
AGREEMENT.  THE FOREGOING SHALL NOT PROHIBIT DISCLOSURES: (X) MADE TO THE
RECEIVING PARTY’S SUB-DISTRIBUTORS, EMPLOYEES OR AGENTS WHO HAVE A “NEED TO
KNOW” THE OTHER PARTY’S CONFIDENTIAL INFORMATION TO THE EXTENT SUCH DISCLOSURE
IS

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necessary to perform such party’s duties and obligations, or to enforce such
party’s rights, under this Agreement, provided that such sub-distributors,
employees or agents agree in writing or are otherwise compelled to comply with
the obligations of this Section 7.12, and the receiving party remains directly
responsible to the disclosing party for their compliance; or (y) compelled to be
made by any requirement of law or pursuant to any legal, regulatory or
investigative proceeding before any court, or governmental or regulatory
authority, agency or commission so long as the party so compelled to make
disclosure of Confidential Information of the other party provides prior written
notice to such other party so that the other party may seek a protective order
or other remedy to protect the confidentiality of the Confidential Information
and/or waive the compelled party’s compliance with this Section 7.12, provided
that all such information so disclosed (other then in a way which makes it
generally available to the public) shall remain Confidential Information for all
other purposes.  If such protective order, other remedy or waiver is not
obtained by the time the compelled party is required to comply, the compelled
party may furnish only that portion of the Confidential Information of the other
party that it is legally compelled, in the opinion of counsel, to disclose and
shall request, at the other party’s expense, that such Confidential Information
be accorded confidential treatment (if such procedure is available), including
redaction of any payment terms specified herein. Each party further agrees to
take appropriate measures to prevent any such prohibited disclosure of
Confidential Information by its present and future employees, officers, agents,
subsidiaries, or consultants.

(Remainder of page intentionally blank; signatures follow on next page)

17

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IN WITNESS WHEREOF, each of the parties has caused this License Agreement to be
executed and delivered in the manner appropriate for each, as of the date first
above written.

MEDTRONIC XOMED, INC.

 

 

 

 

By

 

 

 

Its

 

 

 

 

 

 

VISION-SCIENCES, INC.

 

 

 

 

By

 

 

 

Its

 

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Schedule A

EndoSheath Products

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Schedule B

Officers and Employees of Vision Sciences

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Schedule C

Patents and Patent Applications

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Schedule D

Tradenames

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Schedule E

License Agreements

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Schedule F

Infringements of Vision-Sciences’ Intellectual Property

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