# **Exhibit10.2**

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# **ExecutionCopy**

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# **Loan Agreement**

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**Enteredinto on this 25th day of June 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 ContractManufacturing Agreement dated June 25, 2003 (the **“Manufacturing Agreement”**),pursuant to which the Manufacturer undertook to manufacture the Products (asdefined in the Manufacturing Agreement) for and on behalf of the Company, inaccordance with and subject to the terms and conditions of the ManufacturingAgreement; and

 

**WHEREAS**, in order to facilitate the manufacturing of theProducts, as aforesaid, the Manufacturer is required to purchase certainequipment, detailed in **Appendix “A”** of this Agreement (the **“Equipment”**);and

 

**WHEREAS**, the Manufacturer has asked the Company to lendit the amount of up to US $267,5000 (the **“Loan Amount”**), for the purpose ofpurchasing the Equipment (the **“Purpose”**), and the Company has agreed toextend the Loan Amount to the Manufacturer, for the Purpose, all subject to andin accordance with the terms and conditions of this Agreement.

 

# 1.                                       **The Loan**

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## 1.1.                              Priorto ordering the Equipment from the relevant subcontractor/s, the Manufacturershall discuss with, and obtain a written approval, from the Company. Uponreceipt of an invoice resulting from such approved purchase order, the Companyshall remit to the Manufacturer, the part of the Loan Amount required in orderto cover 76% of said invoice (the balance being financed by government grant/sas set forth in Section 1.10 below), by transfer of same to the bank account ofthe Manufacturer:  It is recorded thatprior to the date of signature hereof, the Company has already advanced to theManufacturer the sum of US $68,000 on account of the Loan Amount.

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## 1.2.                              Itis agreed and understood that the Company agreed to lend the Loan Amount to theManufacturer, solely for the Purpose. The Manufacturer shall not be entitled touse the Loan Amount for any purpose, other than the Purpose.

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## 1.3.                              Exceptas otherwise provided herein, the Manufacturer shall repay the outstanding LoanAmount together with Interest accrued thereon (the **“Balance”**) to the Companyupon receipt of first demand from the Company. **“Interest”**shall mean theinterest payable by the Manufacturer on the Loan Amount, at the rate of LIBORplus 1% per annum, compounded annually and accrued daily and denominated in USDollars.

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## 1.4.                              Paymentof the Balance shall be made in US Dollars and remitted to the bank accountdesignated by the Company from time to time. All banking fees, includingremittance costs, pertaining to said remittance shall be borne and paid by theManufacturer.

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## 1.5.                              TheManufacturer shall not be entitled to prepay any portion of the Balance,without the prior written consent of the Company.

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## 1.6.                              Anyand all payments by the Manufacturer to the Company under this Agreement shallbe made without any setoff or counterclaim or deduction and shall be free andclear of and without deduction for or withholding of any and all taxes, dutiesor levies, except to the extent the Manufacturer is required by law to makesuch withholding for tax purposes and to the extent so required.

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## 1.7.                              TheManufacturer shall pay any present or future stamp or similar taxes, charges orlevies that arise from any payment made under this Agreement or from theexecution, delivery or registration of this Agreement or otherwise with respectto this Agreement.

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## 1.8.                              Inthe event of any default by the Manufacturer in payment within the relevantperiod specified in this Agreement of the Balance, the Manufacturer shall payto the Company, without prejudice to any other right or remedy available to theCompany pursuant to this Agreement or the applicable law, interest, on the outstandingsum/s, at the highest rate charged by Bank Leumi Le’Israel B.M., at therelevant time of payment, for exceeding the approved overdraft facilities/lineof credit in its bank accounts.

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## 1.9.                              Notwithstandingthe aforesaid, the Manufacturer shall be entitled to repay the Balance to theCompany, when same becomes due in accordance with the terms of this Agreement,including in accordance with the provisions of Section 3 below, by way oftransferring the Equipment to the ownership of the Company, in a workablecondition and free and clear of any liens, pledges, encumbrances or any otherthird party rights. Upon such transfer, Ex Works the premises of theManufacturer at Migdal Tefen, the Balance shall be deemed repaid in full.

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## 1.10.                        It isrecorded that the Manufacturer intends to seek a grant from the Israeligovernment in the amount of 24% of the value of the Equipment in order toassist the Manufacturer in the purchase of the Equipment. Given the aforesaid,should the Manufacturer be required to reimburse

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## the Israeligovernment with any part of the said grant, solely due to the transferring ofthe Equipment to the ownership of the Company, as aforesaid, then the Companyshall bear such reimbursement, provided however, that the Manufacturer shalluse best efforts, in coordination with the Company, in order to avoid suchreimbursement.

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## 1.11.                        As apartial security for the fulfillment of the Manufacturer’s obligations pursuantto this Agreement, the Manufacturer shall create in favor of the Company afirst priority specific pledge on the Equipment in accordance with the terms ofthe Pledge Agreement attached to this Agreement as **Appendix “B”** (the **“PledgeAgreement”**). Immediately following the purchase of the Equipment,the Company and the Manufacturer shall execute the Pledge Agreement. For thesake of clarity, the pledge given to the Company, as set forth above, is inaddition to and shall not derogate from any other right or remedy available tothe Company under law. If the Manufacturer shall be legally prevented fromgranting the said first priority pledge to the Company, the Parties shall agreeon a mutually acceptable solution, including the creating in favor of theCompany of a first priority specific pledge on available assets of theManufacturer acceptable to the Company.

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# 2.                                       **Representationof the Manufacturer**

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

 

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

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

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## 2.3.                              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.

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## 2.4.                              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 and the execution,issuance and delivery of the Pledge Agreement.

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## 2.5.                              Uponthe signature hereof, it shall submit to the Company a letter from its legalattorney, in a form acceptable to the Company, confirming its powers andauthority to enter into this Agreement and to perform its obligationshereunder, and that the execution, delivery and performance

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## of thisAgreement have been duly authorized by all necessary corporate action and thisAgreement constitutes 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.                                       **Default**

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# In the event that one or more of the following events (**“Events ofDefault”**) (whatever the reason for such Event of Default and whetherit shall be voluntary or involuntary or be effected by operation of law or pursuantto any judgment, decree or order of any court or any order, rule or regulationof any administrative or governmental body), shall have occurred, then in eachcase where an Event of Default occurs the Balance shall become and beimmediately due and payable without any declaration or other act on the part ofthe Company:

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## 3.1.                              Defaultin payment of the Balance to the Company when same becomes due in accordancewith the terms of this Agreement;

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## 3.2.                              Theinsolvency of the Manufacturer;

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## 3.3.                              Thecommission of any act of bankruptcy by the Manufacturer;

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## 3.4.                              Theexecution by the Manufacturer of a general assignment for the benefit ofcreditors;

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## 3.5.                              Thefiling by or against the Manufacturer of any petition in bankruptcy or anypetition for relief under the provisions of the Bankruptcy Ordinance [Newversion], 1980, or any other law for the relief of debtors and the continuationof such petition without dismissal for a period of thirty days or more;

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## 3.6.                              Theappointment of a receiver or liquidator (including interim receiver orliquidator, if such is not dismissed within 45 days) or trustee to takepossession of all or substantially all of the property or assets of theManufacturer;

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## 3.7.                              Theentry of the Manufacturer into liquidation proceedings, voluntary or otherwise;or

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## 3.8.                              Thesale of all, or substantially all, the assets of the Manufacturer, or merger ofthe Manufacturer with or into another entity, without the prior writtenapproval of the Company.

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# 4.                                       **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

 

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courts of the city of Tel-Aviv-Jaffa in allmatters pertaining to this Agreement, to the exclusion of any otherjurisdiction.

 

# 5.                                       **Miscellaneous**

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## 5.1.                              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 thirdparty, without the prior written approval of the Company.

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## 5.2.                              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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## 5.3.                              Theheadings of this Agreement are for ease of reference only and shall not governor affect the construction hereof.

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## 5.4.                              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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## 5.5.                              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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## 5.6.                              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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### 5.6.1.                                       Ifdelivered personally, upon the date of delivery;

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

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### 5.6.3.                                       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  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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