# **Exhibit10.1**

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# **ExecutionCopy**

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# **Contract Manufacturing Agreement**

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**Enteredinto on this 25th day of June 2003 (the “Effective Date”)**

 

 

**Byand Between:**

 

**Vision-Sciences, Inc.**, a Delaware (U.S.A.) corporation, havingits principal place of business at 9 Strathmore Road, Natick, Massachusetts01760, U.S.A., Fax No. +1-508-650-9976 (the**“Company”**);

 

**And**

 

**ThreeBY Ltd.**, a companyduly organized under the laws of Israel and having its principal place ofbusiness at Migdal Tefen, Israel, Fax No. + 972-4-987-2340 (the **“Manufacturer”**);

 

**WHEREAS**, the Manufacturer provides contractmanufacturing services for the medical products industry including themanufacture of complicated and sensitive medical products; and

 

**WHEREAS**, the Company has developed and owns allproprietary rights in the Products (as defined in Section 1.11 below); and

 

**WHEREAS**, the Company wishes that the Manufacturer shallmanufacture the Products for and on behalf of the Company (on a non-exclusivebasis); and

 

**WHEREAS**, the Parties desire to hereby define the termsand conditions according to which the Manufacturer will manufacture Productsfor the Company; and

 

**WHEREAS**, in consideration of the mutual promises andcovenants set forth below it is mutually agreed as follows:

 

# 1.                                       Definitions

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## 1.1.                              Termsdefined in this Article 1 and/or parenthetically defined elsewhere in thisAgreement shall throughout this Agreement have the meaning here or thereprovided.  Defined terms may be used inthe singular or the plural, as context shall require.

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## 1.2.                              **“Company Equipment”**- any off-the-shelf and/or custom-made tooling for the manufactureof the Products which shall be provided to the Manufacturer by the Company. TheCompany Equipment already provided to the Manufacturer by the Company isdetailed in **Appendix “1.2”** attached hereto.

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## 1.3.                              **“ConformingProducts” –**any Product which conforms to and does not deviate from,in any manner affecting form, fit or function, the corresponding specificationscontained in the Specifications.

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## 1.4.                              **“DeliveryDate”**– the relevant delivery date pursuant to Sections 8.3 and/or8.4 below.

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## 1.5.                              **“Improvements”**- anyimprovements, modifications or adoptions pertaining to the Products made,created, invented, discovered or acquired by the Company and/or theManufacturer and/or any of its/their employees or agents.

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## 1.6.                              **“IntellectualProperty Rights”**- means patents and all applications,continuations, continuations-in-part and divisionals with respect thereto;copyrights, and all other rights in works of authorship recognized in any jurisdiction;trade secrets; trademarks, service marks, logos and product names; allapplications, registrations and renewals with respect to any of the foregoing;proprietary manufacturing methods; moral rights; all other intellectualproperty rights and rights in trade secrets, whether registered or not, thatmay be recognized in any jurisdiction; and all rights to sue for and remediesagainst past, present and future infringements or misappropriations of theforegoing.

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## 1.7.                              **“ManufacturingEquipment**- the equipment that shall be used by the Manufacturer forthe Manufacture of the Products.

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## 1.8.                              **“Manufacture”–** the manufacture, assembly, quality testing, packaging, sterilizingand labeling of the Products.

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## 1.9.                              **“Materials”**–the materials required for the Manufacture, which are detailed in **Appendix“1.9”**attached hereto, and any amendments thereto provided tothe Manufacturer by the Company and/or initiated by the Manufacturer andapproved in writing by the Company.

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## 1.10.                        **“Non-Conforming****Products**–any Product which does not conform to or which deviates from, in any manneraffecting form, fit or function, the corresponding specifications contained inthe Specifications, either during the Company’s pre-delivery inspection or atany later time, unless such deviation or non-conformity has been approved inwriting by the Company.

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## 1.11.                        **“Products”**–the products set forth in **Appendix “1.11”** attached hereto as samemay be amended from time to time by a written instrument signed by the Parties.

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## 1.12.                        **“ProprietaryInformation”**– shall mean and include any and all know-how, data andinformation relating to the Products and/or the Company, disclosed, madeavailable to and/or prepared and/or generated by the Manufacturer or on itsbehalf, including, without limitation: (i) technical, engineering andmanufacture information, packaging, designs, manufacture processes anddevelopment, quality control techniques and other know-how relating to or used,from time to time, in the Manufacture of the Products; (ii) sales, manufacturingand marketing information; and (iii) information contained in documents marked“Confidential”.

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## 1.13.                        **“Specifications”**– the specifications of the Products and the Materials which are setforth in **Appendix 1.13”** attached hereto, including all relevantdrawings pertaining to the Products and the Materials, as may be amended fromtime to time pursuant to the provisions of Section 3.3 of this Agreement.

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# 2.                                       Representationsof the Manufacturer

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The Manufacturer hereby warrants andrepresents that at all times during which this Agreement is in effect:

 

## 2.1.                              Itwill continue to have all adequate working capital, facilities andhighly-qualified personnel to accomplish all of its undertakings pursuant tothis Agreement.

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## 2.2.                              Itand the sterilization facilities it utilizes will maintain the certificationsset forth in **Appendix “2.2”** attached hereto and fully meet all therequirements pertaining thereto.

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## 2.3.                              Itwill not be involved, during the term of this Agreement and for three yearsthereafter, in any way, directly or indirectly, in the manufacturing of sheathsfor the use in medical imaging applications or in the manufacturing of productsrelated to the Products, for any person or entity other than the Company,except with the prior written consent of the Company, which consent shall notbe unreasonably withheld.

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# 3.                                       GeneralObligation of the Manufacturer

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## 3.1.                              TheManufacturer undertakes to Manufacture all Products for the Company inaccordance with the terms and conditions of this Agreement.

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## 3.2.                              TheManufacturer undertakes to Manufacture the Products on a regular and on-goingbasis, according to the highest quality standards, in strict conformity withthe Specifications and with the terms and conditions of this Agreement and theManufacturer shall not deviate from nor change the Specifications, theManufacture process or the Materials without the prior written approval of theCompany. The Manufacturer shall control all environmental conditions to assurethat there is no adverse effect to the Products.

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## 3.3.                              TheSpecifications may be modified by the Company upon reasonable advance writtennotice to the Manufacturer. The Company shall not be liable to pay any sum tothe Manufacturer as a result of any such modifications, provided however, thatif any such modification shall directly affect the cost of production of theProducts, then the Parties shall renegotiate, in good faith, the Purchase Price(as defined in Section 10.1 below) of the relevant modified Products. Allchanges to the Specifications will be communicated to the Manufacturer inwriting and the Manufacturer shall promptly confirm in writing the receiptthereof.

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## 3.4.                              AllMaterials shall be procured by the Manufacturer at its own cost and expense.The Company may provide the Manufacturer with sample quantities of Materialsfor validation and testing purposes.

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## 3.5.                              TheManufacturer undertakes to make on-going efforts to reduce the manufacturingcosts, including but not limited to cost reduction of the materials and/or thelabor, by suggesting Improvements and modifications to the Products and/or themanufacturing processes.  Any such costreduction shall reduce the Purchase Price by the same amount. The Company shallreimburse the Manufacturer for pre-approved out-of-pocket expenses incurred byit in reducing the aforementioned manufacturing costs.

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# 4.                                       CompanyEquipment

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## 4.1.                              Titleof any Company Equipment shall, at all times, be vested solely with the Companyand the Manufacturer shall have no right with respect thereto, including lienin accordance with any applicable law, and until return of same to the Companyin accordance with the terms of this Agreement, the Manufacturer shall ensurethat the Company Equipment is always maintained in good working order andcondition, free and clear of any liens, charges, attachments, encumbrances orother third party rights. Notwithstanding the above, Company Equipment financed by the Company,but purchased by the Manufacturer, shall be the property of theManufacturer.  The Company shall havethe sole right to move and lease such Company Equipment that the Companyfinanced.

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## 4.2.                              Upontermination of this Agreement, for any reason whatsoever, the Manufacturershall forthwith return all Company Equipment to the Company, at its own riskand expense, in good working order and condition.

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## 4.3.                              TheManufacturer shall insure the Company Equipment, at its own expense, in anappropriate amount, which shall not be less than the full replacement valuethereof, under a valid and enforceable insurance policy issued by a reputableinsurer (the **“Policy”**).  The termsof the Policy shall be subject to the approval of the Company which shall beincluded as a loss payee and an additional insured party in said Policy, andthe Manufacturer shall deliver to the Company a certificate from the insurancecompany evidencing the addition of the Company as such additional insured partyto the Policy, and confirming that the insurance company undertakes not toterminate the Policy or to let it expire or change its terms, without givingthe Company a written notice of at least 60 days. The Policy shall furtherstipulate that any monies payable thereunder shall be remitted directly to the Company.The Manufacturer shall furnish the Company with a copy of the relevant Policytogether with a copy of each receipt issued, from time to time, by the insurerin respect of the payment of premium thereon.

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# 5.                                       ManufacturingEquipment

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## 5.1.                              TheManufacturer shall work with the Company to prepare a protocol setting forththe procedures for testing and validating the quality of the ManufacturingEquipment (the **“Equipment Validation Protocol”**). The Manufacturer shall thenperform the testing outlined in the Equipment Validation Protocol as well asrecord the test data and provide the Company with a detailed report.

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## 5.2.                              TheEquipment Validation Protocol shall be subject to the approval of the Company.The Manufacturer shall promptly implement all changes in the EquipmentValidation Protocol required by the Company in accordance with the Company’sinstructions.

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## 5.3.                              Priorto using the Manufacturing Equipment for the Manufacture pursuant to thisAgreement, the Company shall be entitled to inspect same, in accordance withthe Equipment Validation Protocol, and the Manufacturer shall not commence anymanufacturing activities, save for testing and validation purposes, without theprior written approval of the Company.

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# 6.                                       Sub-Contracting  

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The Parties recognize that the Manufacturermay need to use sub-contractors for the Manufacture of the Products, however,the Manufacturer shall not have the right to subcontract the Manufacture or anyportion thereof to any third party, without the prior written consent of theCompany and subject to the terms and conditions to be mutually agreed upon withrespect to any subcontract.

 

# 7.                                       Qualityand Regulatory Procedures

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## 7.1.                              TheCompany shall have the right to observe the Products in the process ofManufacture and to inspect finished Products at any time during normal businesshours, either at the manufacturing facilities or at the storage facilities ofthe Manufacturer, and to inspect the Manufacturer’s subcontractors. Any suchinspection or the lack of it shall not derogate from any undertaking orobligation of the Manufacturer contained herein.

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## 7.2.                              TheManufacturer agrees that the Company, for the purpose of maintaining theCompany’s status as meeting the requirements under ISO 9001, EN46001 and ISO13485 or any other purpose, or a third party on its behalf, shall be entitled,during normal business hours and upon reasonable advance notice, to perform aquality audit of the Manufacturer’s manufacturing operations (including itssubcontractors) and the Manufacturer shall respond to all audit findings in atimely manner.

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## 7.3.                              TheManufacturer shall Manufacture the Products solely with the Materials and shallnot use any substitute materials without the prior

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## writtenapproval of the Company. The Manufacturer shall purchase the Materials solelyfrom suppliers approved by the Company.

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## 7.4.                              EachProduct lot shall be identified during all phases of Manufacture and finishedProducts permanently identified by a control number to facilitate fulltraceability of its Manufacture and field placement.

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## 7.5.                              TheManufacturer shall carefully document the Manufacture of each Product lot inthe **DeviceHistory Record (“DHR”)**.  TheDHR shall document, *inter alia,* the lot control number, thedate of manufacture, the quantity manufactured for the lot, identification ofthe individual(s) performing the manufacturing operations, identification ofthe individual(s) performing the quality testing procedures, acceptance recordsincluding results of the quality testing procedures, the quantity released fordistribution, a sample of the labeling, and identification of the individual(s)responsible for verification of the DHR and final release of the Product. Themanufacturing operations and quality testing procedures shall be carried out inaccordance with the written procedures prepared by the Parties, as aforesaid.For each Product lot, the Manufacturer shall provide the Company with ahard-copy of the DHR, appropriately signed by all manufacturing and qualitypersonnel.  All records generated by theManufacturer and related to the Manufacture of the Product, shall be maintainedfor a period of at least 2 years following the expiration of the shelf life ofeach lot of the Product. In the event that the Company receives information ofany failure of a Product purchased from the Manufacturer, the Manufacturershall, within 72 hours of receiving any request from the Company, furnish theCompany with a copy of the DHR pertaining to such Product.

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## 7.6.                              TheManufacturer shall certify that all of the Manufacturer’s personnel, and anysub-contractor, who engage in the Manufacture hereunder, shall receive allnecessary and appropriate training.

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## 7.7.                              TheManufacturer agrees at no additional cost to the Company, to fully cooperate asrequired to prepare for and participate in quality audits of the Manufacturer’sfacility by all applicable regulatory agencies.  The Manufacturer agrees to make all appropriate personnelavailable as necessary for this purpose. The Manufacturer agrees to notify theCompany of all observations made by regulatory agencies, which perform auditsof the Manufacturer’s facility from time to time in relation to the Products aswell as to any products other than the Products. For the sake of clarity, theManufacturer shall not charge the Company for said audits. To further clarify,the Manufacturer shall not be responsible to pay the out-of-pocket cost,including travel related expenses, for audits of the Manufacturer performed byan agent of the Company as part of the agent’s audit of the Company.

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## 7.8.                              TheManufacturer shall immediately report to the Company any problems, difficultiesor deviations from the Specifications, which it encounters during theManufacture of the Products.

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## 7.9.                              TheManufacturer shall supply to the Company, free of charge, at least one completeset of documentation for each Product, including the documentation detailed in **Appendix“7.9”**attached hereto.

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# 8.                                       Ordersand Delivery

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## 8.1.                              Within30 days of the Effective Date, the Company shall furnish the Manufacturer witha non-binding forecast, estimating the quantity of each Product that theCompany intends to purchase from the Manufacturer during the following 6-monthperiod (the **“Forecast”**). The Forecast will be revolving and updated, fromtime to time, by the Company prior to the expiration of each month covered bythe Forecast, so that the Forecast shall at any given time cover a period of 6months.

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## 8.2.                              Uponsubmission of the Forecast to the Manufacturer, the Company shall furnish theManufacturer with a binding purchase order for Products for the ensuing 3-monthperiod and shall, 30 days prior to the expiration of the aforementioned 3-monthperiod and of each consecutive 3-month period furnish the Manufacturer with abinding purchase order for Products for the respective following 3-monthperiod(s) (the **“Binding Purchase Orders”**).

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## 8.3.                              AnyProducts covered by a Binding Purchase Order shall be Manufactured by theManufacturer and delivered to the Company, or to a destination specified by theCompany, within 5 days, earlier or after, of the date specified in the BindingPurchase Order, provided however that with respect to any Additional IncreasedProducts (as defined in Section 8.4.1 below), the delivery period shall bewithin 30 days of submission by the Company of the notice requiring therelevant increase.

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## 8.4.                              Notwithstandinganything else to the contrary contained herein, the Company shall be entitledto (by giving written notice to the Manufacturer):

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### 8.4.1.                     Increasethe number of Products covered by any Binding Purchase Order (the **“AdditionalIncreased Products”**), provided that the aggregate Products orderedby the Company during any given 6-month period shall not exceed by more than35% the respective Forecast, unless accepted by the Manufacturer in writing; or

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### 8.4.2.                     Requirethe Manufacturer to postpone delivery of any Product covered by a BindingPurchase Order (including any Additional Increased Products) by up to 60 days,provided that such requirement is submitted to the Manufacturer not later than30 days prior to the specified Delivery Date; or

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### 8.4.3.                     Cancelany Binding Purchase Order, in whole or in part, provided that a notice withrespect thereto is submitted to the Manufacturer not later than 45 days priorto the specified Delivery Date and that the Company shall reimburse the

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### Manufacturer for all costs actually spent in the purchase of theMaterials pertaining thereto, as evidenced by proper documentation, againstdelivery of such Materials to the Company.

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## 8.5.                              Deliveryof Products shall be made on a FCA (as such term is defined in Incoterms 2000,publication 560 of the International Chamber of Commerce) Ben-Gurion airportbasis. The Company shall have the right to designate one or more destinationsfor the Products of each Binding Purchase Order 10 days prior to the shipmentby the Manufacturer.

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## 8.6.                              Ifthe Manufacturer discovers at any time that, using best efforts, it is unableto deliver a Binding Purchase Order on a respective Delivery Date, theManufacturer shall immediately so notify the Company and inform the Company ofthe earliest possible alternative delivery date. Upon the Company’s receipt ofsuch notice or if the Manufacturer has failed to so notify the Company at least30 days prior to the relevant Delivery Date, the Company may, at its soleoption (without derogating from any additional or other remedy or right thatmay be available to it pursuant to this Agreement and/or the applicable law):

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### 8.6.1.                     Cancel,in whole or in part, the Binding Purchase Order, refuse to accept delivery andreturn the cancelled Products, as aforesaid, to the Manufacturer, freightcollect, at the Manufacturer’s risk; or

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### 8.6.2.                     Reschedulethe delivery date to a date agreeable to the Manufacturer, which date shallbecome the Delivery Date.

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## 8.7.                              TheManufacturer may make delivery of less than the full number of Productsincluded in a Binding Purchase Order only with the prior written approval ofthe Company.

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## 8.8.                              TheManufacturer warrants that it has obtained all standard government, health,consumer protection and safety approvals required by the applicable law, ifany, in Israel, Europe and in the U.S.A., with respect to the Manufacture, saleand delivery of the Products.

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# 9.                                       Inventory

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Within 90 days following the Manufacture ofthe first Products by the Manufacturer pursuant to this Agreement and duringthe entire term of this Agreement, the Manufacturer shall maintain, at itswarehouse in New Jersey, U.S.A., a rolling inventory of Products in suchquantity that meets the amount of Products set forth in the Forecast for atleast a 3 month period.

 

# 10.                                 PaymentTerms

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## 10.1.                        Inconsideration for the fulfillment of all of the Manufacturer’s undertakings andobligations hereunder, the Company undertakes to pay the Manufacturer for eachProduct delivered to it pursuant to the terms of

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## this Agreementthe price set forth in **Appendix “10.1”** attached hereto (the “**PurchasePrice”**).

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## 10.2.                        TheCompany shall pay the Purchase Price for each Product within 30 days followingthe expiration of the calendar month during which such Product shall have beendelivered to the Company in accordance with the terms of this Agreement.

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## 10.3.                        TheParties shall evaluate the costs of production of the Products on an annualbasis and any change of the Purchase Price shall not be effected, except withthe prior written consent of the Parties, who shall negotiate any requiredchange in good faith. For the sake of clarity, any Binding Purchase Ordersplaced by the Company prior to agreeing in writing with the Manufacturer on anychange in the Purchase Price, shall not be affected by any such change and besupplied to the Company at the price specified in the Binding Purchase Orders .

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# 11.                                 Acceptanceof Products

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## 11.1.                        TheCompany shall be entitled to reject any Non-Conforming Products delivered to itwithin 30 days of delivery of the relevant Product to the Company.

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## 11.2.                        TheManufacturer shall, at its sole cost and expense, replace any rejectedNon-Conforming Products and supply the Company with replaced new ConformingProducts, at its own risk and expense, within 15 days following receipt by theManufacturer of the rejected Non-Conforming Products.

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## 11.3.                        For thesake of clarity, the Company’s rights under this Section are in addition to,and not in lieu of, any other rights or remedies that the Company may haveunder this Agreement or at law.

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# 12.                                 Insurance

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## 12.1.                        TheManufacturer shall assume full liability regarding, and hold harmless andimmediately defend and indemnify the Company, its customers, officers,directors, agents, employees, shareholders, successors and assignees, and eachof them, from and against, any and all claims, actions and suits, whethergroundless or otherwise, and from and against any and all liabilities,judgments, losses, damages, costs, charges, attorney’s fees and other expensesof every nature or character regarding any death or personal injury, of anynature whatsoever, or property damages, of any nature whatsoever, caused by orresulting from the Products, including, without limiting, from the Manufacture,or otherwise, arising out of or resulting from any act or omission attributableto the Manufacturer, its permitted sub-contractors, if any, or anybody else forwhich the Manufacturer is responsible.

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## 12.2.                        TheManufacturer shall, at its own expense, keep itself insured, as long as any ofthe aforementioned risks exist, in an appropriate amount, which

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## shall not beless than $1,000,000 against any third party claims, and shall effect suchinsurance under a valid and enforceable insurance policy issued by a reputableinsurer. The Manufacturer shall procure that the Company shall be included asan additional insured party in said policy, and shall deliver to the Company,within 7 (seven) days after the signature of this Agreement, a certificate fromthe insurance company evidencing the addition of the Company as such additionalinsured party to the policy, and confirming that the insurance companyundertakes not to terminate the policy or to let it expire, without giving theCompany a written notice of at least 60 (sixty) days, prior to the terminationor expiration of said policy.  TheManufacturer shall furnish the Company with a copy of the relevant policytogether with a copy of each receipt issued, from time to time, by the insurerin respect of the payment of premium thereon.

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# 13.                                 Warranty

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## 13.1.                        TheManufacturer represents, warrants and covenants that each Product Manufacturedfor the Company hereunder shall be a Conforming Product for a period of theapplicable shelf life of such Product as set forth in the Specifications (the **“WarrantyPeriod”**).

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## 13.2.                        TheManufacturer undertakes to assume full liability towards the Company and eachperson who purchase the Products from the Company or from the Company’sdistributors or dealers, and at the request of the Company replace, free ofcharge, any Non-Conforming Product with a new Conforming Product, and supplysuch new Conforming Product to the Company or its designee(s), within 15 daysafter the receipt by the Manufacturer of the relevant returned Non-ConformingProduct. The Manufacturer shall immediately reimburse the Company for allexpenses incurred in the return of such Non-Conforming Products to theManufacturer, and shall deliver the replacement Conforming Products to theCompany or its designee(s), within the aforementioned period, at its own riskand expense.

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## 13.3.                        Allrequests with respect to the Manufacturer’s warranty hereunder should besubmitted to the Manufacturer within the Warranty Period.

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# 14.                                 ConfidentialInformation

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## 14.1.                        TheManufacturer agrees and declares that all Proprietary Information and anyrights in connection therewith shall be the sole property of the Company andits assignees at all times.

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## 14.2.                        TheManufacturer will keep in strictest confidence and trust all ProprietaryInformation and will not directly or indirectly, communicate, publish,describe, or divulge any Proprietary Information or anything relating theretoto any person or body, except to its employees and sub-contractors on a “need-to-know”basis and solely for the purpose of discharging its obligations pursuant tothis Agreement (the **“Purpose”**) and provided that any suchemployee or sub-contractor has executed an

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## undertaking prohibitingthe use and disclosure of Proprietary Information in accordance with the termsof this Agreement.

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## 14.3.                        TheManufacturer undertakes to take all necessary steps to ensure that theProprietary Information will not reach the hands of any third party and thatthe aforementioned employees and sub-contractors will maintain absolute secrecywith regards to the Proprietary Information. It is agreed and understood thatthe disclosure or use of Proprietary Information by any such employee orsub-contractor, in violation of the provisions of this Agreement, shall bedeemed for all intents and purposes as disclosure or use by the Manufactureritself, contrary to the terms and conditions of this Agreement.

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## 14.4.                        TheManufacturer undertakes not to, directly or indirectly, use or apply theProprietary Information in any way whatsoever, except for the Purpose.

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## 14.5.                        Alldrawings, prints, print-outs, calculations, computations, documents, reports,written and other records, discs, magnetic and other tapes and all other formsor methods of storage of information (all of the above shall hereinafter bereferred to as **“ISD”**) given, delivered or made available to or prepared orgenerated by or on behalf of the Manufacturer in connection with theProprietary Information hereunder shall remain at all times and for all intentsand purposes the property of the Company and shall be deemed loaned to theManufacturer for the Purpose.

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## 14.6.                        Upontermination of this Agreement the Manufacturer shall return to the Company anyand all Proprietary Information, whether contained in ISD or otherwise,including all copies thereof, if any.

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## 14.7.                        AllIntellectual Property Rights and any other rights of whatsoever kind and naturein, to and in connection with the Proprietary Information and the use,application, utilization, and commercialization thereof are and shall be vestedexclusively in the Company. This Agreement and the performance thereof do notgrant to or confer upon and shall not be construed or interpreted as grantingto or conferring upon the Manufacturer any right, license or privilege in, toor in connection with the Proprietary Information or the use, application,utilization or commercialization thereof, except for the Purpose.

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## 14.8.                        Nothing inthis Agreement shall be construed or deemed as derogating from any right orremedy available to the Company by reason of any Intellectual Property Rightwhich is or may be available to or registered in the name of the Company in anyjurisdiction, nor from any additional right or remedy available to the Companyunder the relevant laws of any applicable jurisdiction.

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# 15.                                 IntellectualProperty Rights and Improvements

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## 15.1.                        TheManufacturer acknowledges the Company’s exclusive right, title and interest inany and all Intellectual Property Rights pertaining to Company

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## and/or theProducts and/or the Proprietary Information, and the Manufacturer undertakesthat it shall not do, or cause to be done, any acts or things contesting or inany way impairing or tending to impair any portion of Company’s right, titleand interest in and to the Intellectual Property Rights or represent in anymanner that it possesses any ownership interest in the Intellectual PropertyRights or the registration thereof.

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## 15.2.                        All Improvements and allIntellectual Proprietary Rights therein, shall be and remain at all times theproperty of the Company and the Manufacturer shall not have any right, title orinterest therein.

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## 15.3.                        The Manufacturer shall forthwithcommunicate to the Company the details of any such Improvement, and, upon therequest of the Company, execute or cause any of its employees or agents toexecute, any and all documents required by the Company in order to properlyeffect the title of any such Improvement in the name of the Company.

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## 15.4.                        Without derogating from thegenerality of the aforesaid, all the provisions of this Agreement, shall apply,*mutatis**mutandis*,also with respect to all Improvements.

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## 15.5.                        The Manufacturer shall not beentitled to Manufacture, sell or distribute the Products, except to the Companyand in accordance with the terms and conditions of this Agreement.

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# 16.                                 Trademarks

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The Manufacturer shall affix to the Productssuch trademarks, brand names, copyright symbols or other intellectual propertyrights notices, as shall be required by the Company, from time to time. TheManufacturer expressly recognizes and agrees that it shall acquire no right,title or interest in or to the aforementioned by the terms of this Agreement orby performance of its obligations hereunder.

 

# 17.                                 Termand Termination

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## 17.1.                        ThisAgreement shall enter into force upon the date of signature hereof by bothParties and shall remain in force and affect for an indefinite period, unlessand until terminated by either Party in accordance with the provisions of thisAgreement.

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## 17.2.                        EitherParty shall be entitled to terminate this Agreement at any time by giving theother Party a prior written notice of at least 180 days.

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## 17.3.                        EitherParty shall have the right to terminate this Agreement without notice (withoutprejudice to other rights or remedies to which it may be entitled pursuant tothis Agreement and/or to the applicable law) by writing to the other in any ofthe following events:

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### 17.3.1.               Theother Party enters into liquidation or is declared insolvent or bankrupt, orhas a liquidator or an interim liquidator or a receiver or an interim receiverof its assets or a material part thereof appointed, and such appointment is notremoved within a period of 60 (sixty) days, or seeks or is subject to any othersimilar relief or procedure under any bankruptcy laws, insolvency laws orsimilar statutes;

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### 17.3.2.               Theother Party commits any irremediable breach of this Agreement or fails in anyother respect which is not remediable to comply with the terms of thisAgreement;

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### 17.3.3.               Theother Party commits any material breach of this Agreement or fails in any otherrespect to comply with any material term of this Agreement and shall fail toremedy such breach or failure to comply with this Agreement within a period of14 days from the service on it of a notice from the other Party, specifying thebreach or failure and requiring it to be remedied.

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## 17.4.                        The Companymay, upon thirty (30) days advance written notice to the Manufacturer,terminate this Agreement if there is any change in the ownership or effectivecontrol of the Manufacturer or the Company. Either party shall promptly advisethe other party on any such envisaged or actual change.

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# 18.                                 Effectsof Termination

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## 18.1.                        AllBinding Purchase Orders placed by the Company prior to the termination of thisAgreement shall be honored by the Manufacturer in accordance with the terms ofthis Agreement, unless the Parties agree to different terms in writing.Provided that, in the event that this Agreement is terminated by the Company inpursuant to the provisions of Section 17.3 above, the Company shall be entitledto cancel all outstanding orders not yet delivered.

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## 18.2.                        For thesake of clarity, it is hereby agreed and understood that the termination ofthis Agreement for any reason whatsoever, will not release either party fromany:

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### 18.2.1.               Obligations, duties or liabilities that have been incurred prior to suchtermination;

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### 18.2.2.               Obligations, duties or liabilities which, from the context hereof or the naturethereof, are intended to survive the termination of this Agreement, includingthose contained in Sections 4.3, 13, 14 and 15 above.

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### 13

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# 19.                                 GeneralRepresentations

#  

Either Party hereby warrants, confirms andundertakes that:

 

## 19.1.                        It has thecorporate power and authority to enter into this Agreement and to consummatethe transactions contemplated therein;

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## 19.2.                        Theexecution, delivery and performance of this Agreement have been duly authorizedby all necessary corporate action and this Agreement constitutes a valid, legaland binding agreement of such Party, enforceable against it in accordance withits terms;

##  

## 19.3.                        Neitherthe execution and delivery of this Agreement by it nor the consummation of thetransactions contemplated hereby will (i) violate, or result in a default underany note, agreement, contract, understanding, arrangement, restriction or otherinstrument 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 issubject;

##  

## 19.4.                        Upon thesignature hereof, it shall submit to the other Party a letter from its legalcounsel confirming its due establishment, powers and authority to enter intothis Agreement and to perform its obligations thereunder, and that the personwho signed this Agreement on its behalf is duly authorized and empowered tosign this Agreement on its behalf.

##  

# 20.                                 Rightof First Refusal

#  

As long as the business of the Company withthe Manufacturer exceeds 10% of the Manufacturer’s revenues during theimmediately preceding 12-month period, the Company shall have a right of firstrefusal with respect to: (i) the sale of all or substantially all of the assetsof the Manufacturer; and/or (ii) the sale of all or substantially all of theshares of the Manufacturer; and/or (iii) the sale by Lily Baranes and/orS.P.R.A. Trustee Ltd. (or any successors thereof) of all or substantially allof their shares in the Manufacturer. The Manufacturer shall promptly advise theCompany in writing on any such envisaged sale, including all the terms andconditions pertaining thereto (the **“Offer”**), and including the price and theidentity of the envisaged purchaser (the **“Purchaser”**). If the Company shall notadvise the Manufacturer within 90 days of receipt of the Offer that it acceptsthe Offer, then the Manufacturer or its shareholders, as the case may be, shallbe entitled to consummate the relevant sale with the Purchaser, within a periodof 90 days following the expiration of said 90-day period, on terms not morefavorable to the Purchaser than those contained in the Offer. Any salefollowing the expiration of said 90-day period shall be subject to theaforementioned right of first refusal, *mutatis mutandis*.  It is agreed and understood that the rightset forth in (iii) above is subject to the right of first refusal granted toIlan Brandt under the Articles of Association of the Manufacturer. In the eventthat the Company shall desire to exercise its right of first refusal, asaforesaid, and such exercise shall be prevented due to Ilan Brandt’s desire toexercise his right of first refusal, then Lily Baranes and/or

 

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S.P.R.A. shall use best efforts to cause IlanBrandt to waive his right of first refusal or purchase his shares in theCompany. Concurrently with the signature hereof the Manufacturer shall furnishthe Company with an undertaking from Lily Baranes and/or S.P.R.A., in a formacceptable to the Company, to comply with the terms of this Section 20.

 

# 21.                                 Miscellaneous

#  

## 21.1.                        TheCompany may, without obtaining the consent of the Manufacturer, assign or transferthis Agreement or any part thereof, to any third party. The Manufacturer shallnot be entitled to assign or transfer this Agreement or any of its rights orobligations hereunder, in whole or in part, to any third party, without theprior written consent of the Company.

##  

## 21.2.                        Therelationship between the Parties is that of independent contractors. Nothing inthis Agreement shall be deemed or construed to constitute or create between theParties hereto, a partnership or a joint venture, or to create a relationshipof employer-employee between the Parties and no employee of either Party shallbe considered to be an employee of the other Party for any purpose whatsoever.

##  

## 21.3.                        TheManufacturer undertakes not to incur any liability on behalf of Company or inany way pledge or purport to pledge the credit of Company or accept any orderor enter into any obligation or any contract on behalf of Company and/or whichmay bind Company, unless so instructed by Company in writing and in advance.

##  

## 21.4.                        Failure ofeither Party to enforce any right hereunder shall not waive any right inrespect of the same or other future occurrences.

##  

## 21.5.                        In caseany one or more of the provisions of this Agreement shall be held invalid,illegal or unenforceable in any respect under any applicable law, the validity,legality and enforceability of the remaining provisions contained herein,including the affected provision to the extent valid, legal and enforceable,shall not in any way be affected or impaired thereby.

##  

## 21.6.                        The headingsof this Agreement are for ease of reference only and shall not govern or affectthe construction hereof.

##  

## 21.7.                        The termsand conditions herein contained, constitute the entire and only agreementbetween the Parties hereto with respect to the subject matter hereof and shallsupersede all previous communications, representations and/or agreement, eitherwritten or oral, between the Parties in respect of such subject matter.  No modification of said terms and conditionsshall be binding unless agreed upon in writing and signed by both Parties.

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## 21.8.                        ThePreamble to this Agreement and all the Appendices attached thereto shall bedeemed incorporated by reference herein and shall form an integral part hereof.

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## 15

## 

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## 21.9.                        ThisAgreement shall be governed by and construed in accordance with the laws of theState of Israel and the Parties hereby submit to the exclusive jurisdiction ofthe competent courts of the city of Tel-Aviv, to the exclusion of any otherjurisdiction.

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## 21.10.                  Any noticeand/or documents required or permitted to be submitted by either Party to theother under this Agreement, shall be in writing to the Party’s respectiveaddresses 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 bedeemed effectively delivered:

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### 21.10.1.         Ifdelivered personally, upon the date of delivery;

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### 21.10.2.         Ifregistered mailed, within 4 (four) working days from the dispatch thereof;

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### 21.10.3.         Ifdelivered by facsimile, within 24 (twenty four) working hours from the dispatchthereof.

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**INWITNESS WHEREOF**,the Parties have signed this Agreement on the date first hereinabove written.

 

 
| **Vision-Sciences,  Inc.** | **Three BY  Ltd.**                   | [SEAL] |
|----------------------------|--------------------------------------|--------|
|                       |                                 |
| By:                        | /s/Ron Hadani                        |   | By: | Nahum Silvio, Adv. and /s/Zvi Haim |   |
|                       |                                 |
| Title: President and CEO   | Titles: Director and General Manager |
|                            |                                      |        |  |  |  |  |

 

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