**EXHIBIT 10.1**

 

 

SUPPLY AGREEMENT

 

This Supply Agreement(the “Agreement”), dated as of March 16, 1992, between Vision-Sciences,Inc., a Delaware corporation (“VSI”), and Asahi Optical Co., Ltd., a Japanesecorporation (“Asahi”),

 

WITNESSETH:

 

WHEREAS, Asahimanufactures certain endoscope units and accessories; and

 

WHEREAS, VSI desires topurchase certain endoscope units, parts and accessories from Asahi and Asahidesires to sell such products to VSI all upon the terms and conditions setforth in this Agreement.

 

NOW, THEREFORE, inconsideration of the foregoing and the mutual covenants and agreementscontained herein, and for other good and valuable consideration, the receiptand adequacy of which are hereby acknowledged, the parties hereto hereby agreeas follows:

 

# SECTION 1:  PRODUCTS AND DEFINITIONS

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## 1.1           PRODUCTS.  Subject to the terms and conditions of this Agreement, Asahiagrees to manufacture and sell to VSI and VSI agrees to purchase from Asahicertain Asahi Components.

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## 1.2           DEFINITIONS.  For purposes of this Agreement capitalizedterms used herein shall have the following meanings:

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### (a)          Asahi Components shall mean any standard or catalogdevices, subassemblies and components used to assemble or repair VSIEndoscopes.

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### (b)         Asahi Information shall mean any design documentationwhich are the property of Asahi and utilized in the manufacture of AsahiComponents, VSI Endoscopes or any improvements of either.

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### (c)          VSI Endoscope shall mean any endoscope designed by VSIwhich incorporates a disposable sheath assembly including disposable channelsand which is manufactured using VSI Information.

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### (d)         VSI Information shall mean any design documentation,information, knowledge, data, issued or pending patents or materials which arethe property of VSI and utilized in the manufacture of VSI Endoscopes or anyimprovements thereof.

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### (e)          VSI Specification shall mean any product or qualitystandard specified to Asahi by VSI for Asahi Components to be purchased by VSI.

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# SECTION 2:  PURCHASE AND SALE OF PRODUCTS

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## 2.1           QUANTITY.  During the term of this Agreement, VSI will provide Asahi with athree month firm written purchase order for the exact quantity and VSISpecifications of the Products it shall purchase during such three monthperiod.  Asahi will confirm purchaseorder with expected delivery dates within fourteen (14) days.  Once Asahi has confirmed purchase order,Asahi shall give equal priority to the production and delivery of Products forVSI as to any such Products or substantially similar products produced for thebenefit of Asahi.  Nothing in thisAgreement shall prohibit VSI from manufacturing or contracting with anotherparty to manufacture any VSI endoscope.

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## 2.2           PRICE.  Asahi will provide VSI with firm price quotations prior topurchase order.

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## 2.3           DELIVERY.  Asahi shall deliver to VSI any Products ordered by VSI infinished form according to VSI Specifications and packaged in the mannerrequested by VSI.  Asahi shall shipVSI’s orders to such locations as VSI may from time to time hereafter designatein writing to Asahi, F.O.B. Asahi’s place of manufacture.  Shipping costs will be added to VSI’sinvoice or shipped freight collect.  IfAsahi fails to meet VSI’s delivery requirements and VSI finds it necessary torequire shipment of any Product by a method of transportation other than themethod originally specified, Asahi shall reimburse VSI the amount, if any, bywhich the cost of the more expeditious method of transportation exceeds thecost of the method of transportation originally specified unless such failureis due to causes beyond the control and without fault or negligence of Asahi.

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## 2.4           PAYMENT.  Payment for each shipment to VSI of the Products is due from VSIwithin thirty (30) days following VSI’s receipt of the Products.

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# SECTION 3:  WARRANTY AND NON-CONFORMING PRODUCTS

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## 3.1           WARRANTY.  The Products purchased by VSI and delivered by Asahi hereundershall conform to VSI Specification. Asahi provides no warranty to VSI but agrees to discuss in good faithany Asahi Products problems requiring product exchange or recall.

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# 3.2           NON-CONFORMING PRODUCTS.  VSI may reject any Product (or shipment)which does not conform to VSI Specifications. In order to reject a Product, VSI must give notice to Asahi of VSI’sintent to reject within ten (10) days after VSI’s receipt of the allegednon-conforming Products.  Asahi willreplace Non-Conforming Products with other Products of good quality as soon aspossible.

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# SECTION 4:  PATENT

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VSI takes allresponsibilities regarding the patent infringement claimed by any third partyas to the VSI endoscopes including the patent regarding the parts VSI purchasedfrom Asahi and keeps Asahi indemnified from the third party’s claim.  On the other hand, Asahi does not requireVSI to pay to Asahi royalty for the parts VSI purchases from Asahi and Asahioffers assistance to VSI in defending the claim brought up by third party.  In case VSI endoscope or its parts purchasedfrom third party infringes Asahi’s patent, VSI is ready to pay royalty.

 

# SECTION 5:  PROPRIETARY INFORMATION

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## 5.1           CONFIDENTIALITY.  VSI and Asahi each shall, during the InitialTerm or any Renewal Term of this Agreement and thereafter for eternity, hold inconfidence, and use its best efforts to have all of its affiliates, agents,officers, directors and employees hold in confidence, all knowledge andinformation of a secret or confidential nature with respect to the business ofthe other party and shall not disclose, publish or make use of the same withoutthe consent of the other party for any purpose whatsoever, except to the extentnecessary to fulfill its obligations hereunder or if such information shall havebecome public knowledge other than by breach of this Agreement or except as maybe required by law.  Upon termination orexpiration of this Agreement, each party shall, within two (2) business days ofreceipt of a request thereof, return to the other party all copies of allconfidential information of the requesting party and all other tangiblemanifestations of such confidential information.

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## 5.2           COMPENSATION.  VSI and Asahi each agree that the remedy atlaw for any breach of this Section 5 would be inadequate and that thenon-breaching party shall be entitled to injunctive relief in addition to anyother remedy it may have upon breach of any provision of this Section 5.

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# SECTION 6:  TERM OF AGREEMENT

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## 6.1           INITIAL TERM.  The term of this Agreement shall commence asof the date hereof and shall remain in full force and effect until the thirdanniversary of the date hereof (the “Initial Term”), unless renewed as providedin Subsection 6.2 below or sooner terminated pursuant to Section 7hereof.

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## 6.2           RENEWAL TERM.  At the expiration of the Initial Term (and,if applicable, at the expiration of any Renewal Term), the term of thisAgreement shall be automatically renewed for additional two (2) year period(“Renewal Term”) unless this Agreement is terminated pursuant to Section 7hereof or unless either party provides the other with one (1) year priorwritten notice of its intent not to renew this Agreement.

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# SECTION 7:  TERMINATION

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This Agreement may beterminated during the Initial Term or any Renewal Term, at any time, asfollows:

 

## 7.1           MUTUAL CONSENT.  By the written mutual consent of VSI andAsahi.  In the event of such terminationby agreement, except as set forth in Section 5 hereof, neither party shallhave any further obligation or liability under this Agreement.

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## 7.2           BREACH.  By the non-breaching party if there has been a breach of anymaterial provision of this Agreement by the other party which breach either(i) cannot be cured by the breaching party, or (ii) has not beencured by the breaching party within thirty (30) days of having received writtennotice of such breach from the non-breaching party.

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## 7.3           BANKRUPTCY.  At the option of the other party, if either party makes anyassignment for the benefit of creditors, or if a receiver, trustee inbankruptcy or similar officer shall be appointed to take charge of all ofeither party’s property, or if either party files a 

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## voluntary petition underfederal bankruptcy laws or similar statutes or such a petition is filed againsteither party and is not dismissed within sixty (60) days.

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# SECTION 8:  FORCE MAJEURE

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Neither party hereto willbe liable to the other for default or delay in the performance of any of itsobligations hereunder (except an obligation to make payments when due),including, but not limited, due to Act of God, accident, fire, riot, war,strike, concerted acts of workers, governmental law, ordinance, rule orregulation, whether valid or invalid, inability to obtain electricity or othertype of energy, raw material, labor, equipment or transportation, or anysimilar or different contingency beyond its reasonable control which would makeperformance commercially impracticable. If such party shall have used its reasonable efforts to avoid suchoccurrence and minimize its duration, such party shall give notice to the otherparty in writing promptly, and thereupon the affected party’s performance shallbe excused and the time for performance shall be extended for the period ofdelay or inability to perform due to such occurrence.

 

# SECTION 9:  ARBITRATION

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In the event of adisagreement over any term or provision contained in this Agreement which hasnot been resolved by the parties hereto within sixty (60) days after bothparties have written notice of such dispute, the parties hereby agree that thematter shall be settled and finally determined by arbitration in accordancewith the rules and regulations of a mutually acceptable International ArbitrationOrganization.  The decision rendered inany such arbitration shall be final and binding upon the parties and may beentered in any court having jurisdiction thereof for a judicial acceptance ofthe award or an order of enforcement, as the case may be.  The parties 

 

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shall each payone-half of the reasonable costs and expenses incurred for the fees andexpenses of the arbitrator or arbitrators.

 

# SECTION 10:  MISCELLANEOUS PROVISIONS

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## 10.1         GOVERNING LAW.  This Agreement shall be governed by andinterpreted in accordance with the laws of Japan.  This Agreement is in the English language only, which shall becontrolling for all purposes.

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## 10.2         WAIVER.  The waiver by any party of a breach or a default of any provisionof this Agreement shall not be construed as a waiver of any succeeding breachof the same or any other provision, nor shall any delay or omission on the partof a party to exercise or avail itself of any right, power or privilege that ithas or may have hereunder operate as a waiver of any right, power or privilege.

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## 10.3         NOTICES.  Any notice or other communication required or permitted to bedelivered in connection with this Agreement must be in writing in the Englishlanguage and shall, when mailed (which mailing must be accomplished by firstclass mail, registered mail or certified mail, postage prepaid, or overnightcourier service) or telefaxed, be deemed given three (3) days after depositedin the mails or one (1) day after delivered in person or to the telefaxcompany, respectively, addressed to the addressee as follows or to such otheraddress which addressee shall have specified in a notice actually received bythe addressor:

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| To VSI: | Vision-Sciences, Inc.                         |
|---------|-----------------------------------------------|
|    | 6 Strathmore Road                             |
|    | Natick, Massachusetts 01760                   |
|    | Facsimile: (508) 650-9976                     |
|    |                                          |
|    | Attn:  Mr.  David W. Prigmore, President |

 

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| To Asahi: | Asahi Optical Co., Ltd.       |
|-----------|---------------------------------------------------|
|      | 36-9, Maeno-cho 2-chome,                          |
|      | Itabashi-ku, Tokyo                                |
|      | Facsimile: (03) 3960-5226                         |
|      |                                              |
|      | Attn:  Mr.  Kinhei Yajima, Managing Director |

 

 

## 10.4         ENTIRE AGREEMENT.  This Agreement contains the fullunderstanding of the parties hereto, except the Letter Agreement datedMarch 14, 1992 regarding indemnification provided to Asahi by VSI, withrespect to the subject matter hereof and supersedes all prior understandingsand writings relating thereto.  Nowaiver, alteration, amendment, or modification of any of the provisions of thisAgreement shall be binding unless made in writing and signed by each of theparties hereto.  The parties heretohereby confirm that this Agreement shall have no effect upon the Non–ExclusiveLicense Agreement entered into September 28, 1989 by and among Asahi,OpieLab, Inc., a wholly-owned subsidiary of VSI and O.S. Limited Partnership, alimited partnership organized and existing under the laws of the State ofWashington.

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## 10.5         SEVERABILITY.  In the event that any provision of this Agreement is held by acourt of competent jurisdiction to be unenforceable because it is invalid or inconflict with any law of any relevant jurisdiction, the validity of theremaining provisions shall not be affected, and the rights and obligations ofthe parties shall be construed and enforced as if this Agreement did notcontain the particular provision held to be unenforceable.

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## 10.6         SUCCESSORS AND ASSIGNS.  This Agreement shall be binding and inure tothe benefit of the parties hereto and their respective heirs, executors,administrators, legal representatives and successors.  It is not the intention of either party to assign thisAgreement.  VSI may request Asahi’swritten consent, which will not be unreasonably withheld, in the case VSI seeksto assign by merger or sale of assets.

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## 10.7         STATUS OF PARTIES.  The relationship of the parties hereundershall be and at all times remain one of independent contractors, and neitherparty shall have any authority to create or assign obligations on behalf of theother party hereto.

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## 10.8         COUNTERPARTS.  This Agreement may be executed in one or more counterparts, eachof which shall be deemed to be an original, but all of which shall be one andthe same document.

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IN WITNESS WHEREOF, theparties hereto have executed this Agreement as of the day and year set forthabove.

 

 

 
| VISION-SCIENCES, INC.   | ASAHI OPTICAL CO., LTD. |
|-----------------------------------|-------------------------|
|                              |                    |
|                              |                    |
| By:                               | /s/ David W. Prigmore   |   | By: | /s/ Tohru Matsumoto |   |
|                              | David W. Prigmore       |   | Tohru Matsumoto |
|                              | President               |   | President |
|                                   |                         |  |  |  |  |

 

 

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AMENDMENT

TO SUPPLY AGREEMENT

 

THIS AMENDMENT,made and entered into as of this 1st day of October, 2002 by and between VisionSciences, Inc., a corporation organized and existing under the laws ofDelaware, having its registered office at 9 Strathmore Road, Natick,Massachusetts 01760, U.S.A. (hereinafter referred to as “VSI”) and PentaxCorporation, a corporation organized and existing under the laws of Japan,having its registered office at 2-36-9, Maeno-cho, Itabashi-ku, Tokyo 174-8639,Japan (hereinafter referred to as “PC”)

 

WITNESSETH:

 

WHEREAS, VSI andPC (ASAHI Optical Co., Ltd. changed its company name to Pentax Corporation asof 1st October, 2002.) entered into a Supply Agreement as of 16th day of March,1992 (hereinafter referred to as “Original Supply Agreement”) under which PCsells to VSI and VSI purchases from PC the (1) standard or catalogdevices, subassemblies and components to be incorporated into VSI’s productsand (2) accessories of PC’s endoscope products; and

 

WHEREAS, VSI andPC have recently reached an accord of their opinions to amend Original SupplyAgreement,

 

NOW, THEREFORE, itis hereby agreed between the parties hereto as follows:

 

1.             VSI and PCacknowledge that Original Supply Agreement have been renewed for 8 years afterthe expiration of the Initial Term in accordance with Article 6.2 of OriginalSupply Agreement and that current expiry date of the term of Original SupplyAgreement is March 16, 2003.

 

2.             Article 6.2 ofOriginal Supply Agreement shall be amended to read as follow:

 

“6.2 Renewal Term

 

At the expirationof the Initial Term (and, if applicable, at the expiration of any RenewalTerm), the term of this Agreement may be renewed for additional two (2) yearperiod (“Renewal Term”) by mutual agreement at least three (3) months prior tothe expiration.”

 

3.             This Amendmentshall become effective as of the day first above written.

 

4.             Except to theextent amended by this Amendment, Original Supply Agreement is hereby in allrespects confirmed and shall continue in full force and effect.

 

5.             This Amendment hasbeen signed in two counterparts each of which shall be deemed to be anoriginal.  Each party acknowledges, byits signature to this Amendment, the receipt of a fully signed originalcounterpart.

 

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IN WITNESSWHEREOF, the parties have signed this Amendment as of the date firsthereinabove written.

 

 
| Vision Sciences, Inc. |
|-----------------------|
|                  |
|                  |   |
| By:                   | /s/ Katsumi Oneda |
|                  | Katsumi Oneda,  President/CEO |
|                  |   |
| Date:                 | 10/15/02 |
|                  |   |
|                  |   |
| Pentax Corporation    |
|                  |   |
| By:                   | /s/ Nobuo Miura |
|                  | Nobuo Miura, |
|                  | Senior General  Manager/SEO |
|                  | Life Care Business  Headquarters |
|                  |   |
| Date:                 | 3 Oct 2002 |

 

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