**Exhibit10.3**

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# **AppendixB**

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# **Pledge Agreement**

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**Enteredinto on this      day of    2003**

 

**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 Parties entered into a Loan Agreement datedJune 25, 2003 (the **“Loan Agreement”**), pursuant to which theManufacturer undertook to create in favor of the Company a first priorityspecific pledge on the equipment set forth in **Appendix “A”** attachedhereto (the **“Equipment”**);

 

# 1.                                       **ThePledge**

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## 1.1.                              TheManufacturer hereby creates in favor of the Company a first priority specificpledge on the Equipment.

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## 1.2.                              TheManufacturer hereby undertakes not to transfer, assign or make any otherdisposition with or in relation to the Equipment or to further encumber orpledge the Equipment (whether by way of a lower priority pledge or by way ofgiving a floating charge on the assets of the Manufacturer that does notspecifically exclude the Equipment), except with the prior written approval ofthe Company.

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## 1.3.                              TheManufacturer will take such action and execute such additional documents as maybe required by the Company in connection with this Agreement or in order toenable it to enforce its rights hereunder.

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## 1.4.                              Uponthe occurrence of any Event of Default under the Loan Agreement, the Companymay, subject to any applicable law, take such action as it deems appropriatewith respect to the Equipment, the enforcement of the pledge granted to ithereunder and the transfer of the Equipment to its name or the name of itsdesignee.

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# 2.                                       **Representationof the Manufacturer**

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The Manufacturer hereby represents andwarrants to the Company, as follows:

 

## 2.1.                              Thatit is the sole owner of the Equipment;

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## 2.2.                              Thatthe Equipment is not subject to any encumbrance, claim or right in favor of anyparty other than the Company;

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## 2.3.                              Thatthe pledge of the Equipment to the Company pursuant to this Agreement creates avalid and perfected first priority specific pledge in favor of the Company inthe Equipment;

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## 2.4.                              Ithas the corporate power and authority to enter into this Agreement and toconsummate the transactions contemplated herein;

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## 2.5.                              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 the Manufacturer, enforceable against it in accordancewith its terms;

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## 2.6.                              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;

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## 2.7.                              Noconsent, approval, order or authorization of or registration, qualification,designation, declaration, notice or filing with any governmental authority oragency or any other person or body is required in connection with the validexecution, delivery and performance of this Agreement;

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## 2.8.                              Uponthe signature hereof, it shall submit to the Company a letter from its legalattorney, in a form acceptable to the Company, confirming its powers and authorityto enter into this Agreement and to perform its obligations hereunder, and thatthe execution, delivery and performance of this Agreement have been dulyauthorized by all necessary corporate action and each of this Agreementconstitutes a valid, legal and binding agreement of the Manufacturer,enforceable against it in accordance with its terms, and that the person whosigned this Agreement on behalf of the Manufacturer is duly authorized andempowered to sign it on the Manufacturer’s behalf.

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# 3.                                       **Law andJurisdiction**

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This Agreement shall be governed by andconstrued in accordance with the laws of the State of Israel, without givingeffect to the rules of conflict of laws thereof. The Parties hereby submit tothe exclusive jurisdiction of the competent courts of the city ofTel-Aviv-Jaffa in all matters pertaining to this Agreement, to the exclusion ofany other jurisdiction.

 

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# 4.                                       **Miscellaneous**

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## 4.1.                              TheCompany may, without obtaining the consent of the Manufacturer, assign ortransfer this Agreement or any part thereof, to any third party. TheManufacturer shall not be entitled to assign or transfer this Agreement or anyof its rights or obligations hereunder, in whole or in part, to any third party,without the prior written consent of the Company.

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## 4.2.                              Failureof either Party to enforce any right hereunder shall not waive any right inrespect of the same or other future occurrences.

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## 4.3.                              Theheadings of this Agreement are for ease of reference only and shall not governor affect the construction hereof.

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## 4.4.                              Theterms and 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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## 4.5.                              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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## 4.6.                              Anynotice and/or documents required or permitted to be submitted by either Partyto the other under this Agreement, shall be in writing to the Party’srespective addresses set forth in the Preamble of this Agreement, or to anyother address, as either Party may designate by giving a written notice to theother, and be deemed effectively delivered:

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

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

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### 4.6.3.                                       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  Limited** | [SEAL] |
|----------------------------|-----------------------|--------|
|                       |                  |
| By:                        | /s/ Ron Hadani        |   | By: |
|                       |                  |
| Title:                     | Title:                |
|                            |                       |        |  |  |

 

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