Exhibit 10.3

 

APPENDIX B

 

PLEDGE AGREEMENT

 

Entered into on this      day of    2003

 

By and Between:

 

Vision-Sciences, Inc., a Delaware (U.S.A.) corporation, having its principal
place of business at 9 Strathmore Road, Natick, Massachusetts 01760, U.S.A., Fax
No. +1-508-650-9976 (the “Company”);

 

And

 

Three BY Ltd., a company duly organized under the laws of Israel and having its
principal place of business at Migdal Tefen, Israel, Fax No. + 972-4-987-2340
(the “Manufacturer”);

 

WHEREAS, the Parties entered into a Loan Agreement dated June 25, 2003 (the
“Loan Agreement”), pursuant to which the Manufacturer undertook to create in
favor of the Company a first priority specific pledge on the equipment set forth
in Appendix “A” attached hereto (the “Equipment”);

 

1.                                       THE PLEDGE

 

1.1.                              THE MANUFACTURER HEREBY CREATES IN FAVOR OF
THE COMPANY A FIRST PRIORITY SPECIFIC PLEDGE ON THE EQUIPMENT.

 

1.2.                              THE MANUFACTURER HEREBY UNDERTAKES NOT TO
TRANSFER, ASSIGN OR MAKE ANY OTHER DISPOSITION WITH OR IN RELATION TO THE
EQUIPMENT OR TO FURTHER ENCUMBER OR PLEDGE THE EQUIPMENT (WHETHER BY WAY OF A
LOWER PRIORITY PLEDGE OR BY WAY OF GIVING A FLOATING CHARGE ON THE ASSETS OF THE
MANUFACTURER THAT DOES NOT SPECIFICALLY EXCLUDE THE EQUIPMENT), EXCEPT WITH THE
PRIOR WRITTEN APPROVAL OF THE COMPANY.

 

1.3.                              THE MANUFACTURER WILL TAKE SUCH ACTION AND
EXECUTE SUCH ADDITIONAL DOCUMENTS AS MAY BE REQUIRED BY THE COMPANY IN
CONNECTION WITH THIS AGREEMENT OR IN ORDER TO ENABLE IT TO ENFORCE ITS RIGHTS
HEREUNDER.

 

1.4.                              UPON THE OCCURRENCE OF ANY EVENT OF DEFAULT
UNDER THE LOAN AGREEMENT, THE COMPANY MAY, SUBJECT TO ANY APPLICABLE LAW, TAKE
SUCH ACTION AS IT DEEMS APPROPRIATE WITH RESPECT TO THE EQUIPMENT, THE
ENFORCEMENT OF THE PLEDGE GRANTED TO IT HEREUNDER AND THE TRANSFER OF THE
EQUIPMENT TO ITS NAME OR THE NAME OF ITS DESIGNEE.

 

2.                                       REPRESENTATION OF THE MANUFACTURER

 

The Manufacturer hereby represents and warrants to the Company, as follows:

 

2.1.                              THAT IT IS THE SOLE OWNER OF THE EQUIPMENT;

 

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2.2.                              THAT THE EQUIPMENT IS NOT SUBJECT TO ANY
ENCUMBRANCE, CLAIM OR RIGHT IN FAVOR OF ANY PARTY OTHER THAN THE COMPANY;

 

2.3.                              THAT THE PLEDGE OF THE EQUIPMENT TO THE
COMPANY PURSUANT TO THIS AGREEMENT CREATES A VALID AND PERFECTED FIRST PRIORITY
SPECIFIC PLEDGE IN FAVOR OF THE COMPANY IN THE EQUIPMENT;

 

2.4.                              IT HAS THE CORPORATE POWER AND AUTHORITY TO
ENTER INTO THIS AGREEMENT AND TO CONSUMMATE THE TRANSACTIONS CONTEMPLATED
HEREIN;

 

2.5.                              THE EXECUTION, DELIVERY AND PERFORMANCE OF
THIS AGREEMENT HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY CORPORATE ACTION AND
THIS AGREEMENT CONSTITUTES A VALID, LEGAL AND BINDING AGREEMENT OF THE
MANUFACTURER, ENFORCEABLE AGAINST IT IN ACCORDANCE WITH ITS TERMS;

 

2.6.                              NEITHER THE EXECUTION AND DELIVERY OF THIS
AGREEMENT BY IT NOR THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED HEREBY
WILL (I) VIOLATE, OR RESULT IN A DEFAULT UNDER ANY NOTE, AGREEMENT, CONTRACT,
UNDERSTANDING, ARRANGEMENT, RESTRICTION OR OTHER INSTRUMENT OR OBLIGATION TO
WHICH IT IS A PARTY OR BY WHICH IT MAY BE BOUND; OR (II) VIOLATE ANY ORDER,
AWARD, INJUNCTION, JUDGMENT OR DECREE TO WHICH IT IS SUBJECT;

 

2.7.                              NO CONSENT, APPROVAL, ORDER OR AUTHORIZATION
OF OR REGISTRATION, QUALIFICATION, DESIGNATION, DECLARATION, NOTICE OR FILING
WITH ANY GOVERNMENTAL AUTHORITY OR AGENCY OR ANY OTHER PERSON OR BODY IS
REQUIRED IN CONNECTION WITH THE VALID EXECUTION, DELIVERY AND PERFORMANCE OF
THIS AGREEMENT;

 

2.8.                              UPON THE SIGNATURE HEREOF, IT SHALL SUBMIT TO
THE COMPANY A LETTER FROM ITS LEGAL ATTORNEY, IN A FORM ACCEPTABLE TO THE
COMPANY, CONFIRMING ITS POWERS AND AUTHORITY TO ENTER INTO THIS AGREEMENT AND TO
PERFORM ITS OBLIGATIONS HEREUNDER, AND THAT THE EXECUTION, DELIVERY AND
PERFORMANCE OF THIS AGREEMENT HAVE BEEN DULY AUTHORIZED BY ALL NECESSARY
CORPORATE ACTION AND EACH OF THIS AGREEMENT CONSTITUTES A VALID, LEGAL AND
BINDING AGREEMENT OF THE MANUFACTURER, ENFORCEABLE AGAINST IT IN ACCORDANCE WITH
ITS TERMS, AND THAT THE PERSON WHO SIGNED THIS AGREEMENT ON BEHALF OF THE
MANUFACTURER IS DULY AUTHORIZED AND EMPOWERED TO SIGN IT ON THE MANUFACTURER’S
BEHALF.

 

3.                                       LAW AND JURISDICTION

 

This Agreement shall be governed by and construed in accordance with the laws of
the State of Israel, without giving effect to the rules of conflict of laws
thereof. The Parties hereby submit to the exclusive jurisdiction of the
competent courts of the city of Tel-Aviv-Jaffa in all matters pertaining to this
Agreement, to the exclusion of any other jurisdiction.

 

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4.                                       MISCELLANEOUS

 

4.1.                              THE COMPANY MAY, WITHOUT OBTAINING THE CONSENT
OF THE MANUFACTURER, ASSIGN OR TRANSFER THIS AGREEMENT OR ANY PART THEREOF, TO
ANY THIRD PARTY. THE MANUFACTURER SHALL NOT BE ENTITLED TO ASSIGN OR TRANSFER
THIS AGREEMENT OR ANY OF ITS RIGHTS OR OBLIGATIONS HEREUNDER, IN WHOLE OR IN
PART, TO ANY THIRD PARTY, WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY.

 

4.2.                              FAILURE OF EITHER PARTY TO ENFORCE ANY RIGHT
HEREUNDER SHALL NOT WAIVE ANY RIGHT IN RESPECT OF THE SAME OR OTHER FUTURE
OCCURRENCES.

 

4.3.                              THE HEADINGS OF THIS AGREEMENT ARE FOR EASE OF
REFERENCE ONLY AND SHALL NOT GOVERN OR AFFECT THE CONSTRUCTION HEREOF.

 

4.4.                              THE TERMS AND CONDITIONS HEREIN CONTAINED,
CONSTITUTE THE ENTIRE AND ONLY AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT
TO THE SUBJECT MATTER HEREOF AND SHALL SUPERSEDE ALL PREVIOUS COMMUNICATIONS,
REPRESENTATIONS AND/OR AGREEMENT, EITHER WRITTEN OR ORAL, BETWEEN THE PARTIES IN
RESPECT OF SUCH SUBJECT MATTER.  NO MODIFICATION OF SAID TERMS AND CONDITIONS
SHALL BE BINDING UNLESS AGREED UPON IN WRITING AND SIGNED BY BOTH PARTIES.

 

4.5.                              THE PREAMBLE TO THIS AGREEMENT AND ALL THE
APPENDICES ATTACHED THERETO SHALL BE DEEMED INCORPORATED BY REFERENCE HEREIN AND
SHALL FORM AN INTEGRAL PART HEREOF.

 

4.6.                              ANY NOTICE AND/OR DOCUMENTS REQUIRED OR
PERMITTED TO BE SUBMITTED BY EITHER PARTY TO THE OTHER UNDER THIS AGREEMENT,
SHALL BE IN WRITING TO THE PARTY’S RESPECTIVE ADDRESSES SET FORTH IN THE
PREAMBLE OF THIS AGREEMENT, OR TO ANY OTHER ADDRESS, AS EITHER PARTY MAY
DESIGNATE BY GIVING A WRITTEN NOTICE TO THE OTHER, AND BE DEEMED EFFECTIVELY
DELIVERED:

 

4.6.1.                                       IF DELIVERED PERSONALLY, UPON THE
DATE OF DELIVERY;

 

4.6.2.                                       IF REGISTERED MAILED, WITHIN 4
(FOUR) WORKING DAYS FROM THE DISPATCH THEREOF;

 

4.6.3.                                       IF DELIVERED BY FACSIMILE, WITHIN
24 (TWENTY FOUR) WORKING HOURS FROM THE DISPATCH THEREOF.

 

IN WITNESS WHEREOF, the Parties have signed this Agreement on the date first
hereinabove written.

 

Vision-Sciences, Inc.

Three BY Limited

[SEAL]

 

 

By:

/s/ Ron Hadani

 

By:

 

 

Title:

Title:

 

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