ex10-46.htm


    Exhibit
10.46

     

     

    
      NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES  COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.

       

      COMMON
STOCK PURCHASE WARRANT

       

      To
Purchase 272,727 Shares of Common Stock of

       

      VISION-SCIENCES,
INC.

       

      THIS
COMMON STOCK PURCHASE WARRANT (the “WARRANT”) certifies that, for value
received, Lewis C. Pell or his assigns (the “HOLDER”), is entitled, upon the
terms and subject to the limitations on exercise and the conditions hereinafter
set forth, to subscribe for and purchase from Vision-Sciences, Inc., a Delaware
corporation (the “COMPANY”), up to 272,727 shares (the “WARRANT SHARES”) of
Common Stock, par value $0.01 per share, of the Company (the “COMMON STOCK”).
The purchase price of one share of Common Stock under this Warrant shall be
equal to the Exercise Price, as defined in Section 2(b).

       

      SECTION
1.  LOAN AGREEMENT.  This Warrant was issued in connection
with, and as an inducement for Holder to enter into, and/or make loans under,
the Loan Agreement (the “LOAN AGREEMENT”), dated November 9, 2009, between the
Company and the Holder.

       

      SECTION
2.  EXERCISE.

       

      a)           EXERCISE
OF WARRANT.  This Warrant may be exercised at any time on or after the
date hereof and on or prior to the later of (i) the close of business on
the five year anniversary of the date hereof or (ii) the date that is one
(1) year following the termination of the Loan Agreement and repayment of all
amounts due and payable thereunder (the “TERMINATION DATE”) but not
thereafter.  Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
date hereof and on or before the Termination Date by delivery to the Company of
a duly executed facsimile copy of the Notice of Exercise Form annexed hereto (or
such other office or agency of the Company as it may designate by notice in
writing to the registered Holder at the address of such Holder appearing on the
books of the Company); PROVIDED, HOWEVER, subject to a cashless exercise
pursuant to Section 2(d) hereof, within 5 Trading Days of the date said Notice
of Exercise is delivered to the Company, the Holder shall have surrendered this
Warrant to the Company and the Company shall have received payment of the
aggregate Exercise Price of the shares thereby purchased by wire transfer or
cashier’s check drawn on a United States bank.  For purposes of this
Warrant, “Trading Day” means a day on which the Common Stock is traded on a
Trading Market, and if not so traded, a business day in the State of New
York.  For purposes of this Warrant “Trading Market” means the Nasdaq
National Market or the New York Stock Exchange.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

      b)           EXERCISE
PRICE. The exercise price of the Common Stock under this Warrant shall be
$1.375, subject to adjustment hereunder (the “EXERCISE PRICE”).

       

      c)           CASHLESS
EXERCISE. This Warrant may also be exercised at any time prior to the
Termination Date by means of a “cashless exercise” in which the Holder shall
state in the Notice of Exercise that it desires to do so and be entitled to
receive a certificate for the number of Warrant Shares equal to the quotient
obtained by dividing ((A-B) (X)) by (A), where:

       

      
        	
                 
      

              	
                (A)

              	
                =
      the VWAP on the Trading Day immediately preceding the date of such
      election;

              


      

       

      
        	
                 
      

              	
                (B)

              	
                =
      the Exercise Price of this Warrant, in effect at such time in accordance
      with the terms hereof; and

              


      

       

      
        	
                 
      

              	
                (X)

              	
                =
      the number of Warrant Shares issuable (or in the case of exercise in part,
      desired to be issued) upon exercise of this Warrant in accordance with the
      terms of this Warrant.

              


      

       

      Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be
automatically exercised via cashless exercise pursuant to this Section
2(c).   For purposes of this Warrant, “VWAP” means for any date,
the price determined by the first of the following clauses that applies: (i) if
the Common Stock is then listed or quoted on a Trading Market, the daily volume
weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed
or quoted as reported by Bloomberg Financial L.P. (based on a Trading Day from
9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (ii) if the Common Stock is
not then listed or quoted on a Trading Market and if prices for the Common Stock
are then quoted on the OTC Bulletin Board, the volume weighted average price of
the Common Stock for such date (or the nearest preceding date) on the OTC
Bulletin Board; (iii) if the Common Stock is not then listed or quoted on the
OTC Bulletin Board and if prices for the Common Stock are then reported in the
"Pink Sheets" published by the Pink Sheets, LLC (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent bid
price per share of the Common Stock so

      reported;
or (iv) in all other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by the
Company.

       

      
        
          
          

        

        
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      d)           MECHANICS
OF EXERCISE.

       

      i.           AUTHORIZATION
OF WARRANT SHARES. The Company covenants that all Warrant Shares which may be
issued upon the exercise of the purchase rights represented by this Warrant
will, upon exercise of the purchase rights represented by this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such
issue).

       

      ii.           DELIVERY
OF CERTIFICATES UPON EXERCISE.  Certificates for shares purchased
hereunder shall be transmitted by the transfer agent of the Company to the
Holder by crediting the account of the Holder’s broker with the Depository Trust
Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the
Company is a participant in such system, and otherwise by physical delivery to
the address specified by the Holder in the Notice of Exercise within 3 Trading
Days from the delivery to the Company of the Notice of Exercise Form, surrender
of this Warrant and payment of the aggregate Exercise Price as set forth above
(“WARRANT SHARE DELIVERY DATE”). This Warrant shall be deemed to have been
exercised on the with respect to the Warrant Shares exercised on the date the
Exercise Price is received by the Company. The Warrant Shares shall be deemed to
have been issued, and Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such shares for all
purposes, as of the date the Warrant has been exercised by payment to the
Company of the Exercise Price and all taxes required to be paid by the Holder,
if any, pursuant to Section 2(d)(vii) prior to the issuance of such shares, have
been paid.

       

      iii.           DELIVERY
OF NEW WARRANTS UPON EXERCISE. If this Warrant shall have been exercised in
part, the Company shall, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to Holder a new Warrant
evidencing the rights of Holder to purchase the unpurchased Warrant Shares
called for by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.

       

      iv.           RESCISSION
RIGHTS. If the Company fails to cause its transfer agent to transmit to the
Holder a certificate or certificates representing the Warrant Shares pursuant to
Section 2(d)(ii) by the Warrant Share Delivery Date, then the Holder will have
the right to rescind such exercise.

       

      
        
          
          

        

        
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      v.           NO
FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the Exercise
Price.

       

      vi.           CHARGES,
TAXES AND EXPENSES. Issuance of certificates for Warrant Shares shall be made
without charge to the Holder for any issue or transfer tax or other incidental
expense in respect of the issuance of such certificate, all of which taxes and
expenses shall be paid by the Company, and such certificates shall be issued in
the name of the Holder or in such name or names as may be directed by the
Holder; PROVIDED, HOWEVER, that in the event certificates for Warrant Shares are
to be issued in a name other than the name of the Holder, this
Warrant  when  surrendered  for  exercise  shall
be accompanied by the Assignment Form attached hereto duly executed by the
Holder; and the Company may require, as a condition thereto, the payment of a
sum sufficient to reimburse it for any transfer tax incidental
thereto.

       

      vii.           CLOSING
OF BOOKS. The Company will not close its stockholder books or records in any
manner which prevents the timely exercise of this Warrant, pursuant to the terms
hereof.

       

      SECTION
3.  CERTAIN ADJUSTMENTS.

       

      a)           STOCK
DIVIDENDS AND SPLITS. If the Company, at any time while this Warrant is
outstanding: (A) pays a stock dividend or otherwise make a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for avoidance of
doubt, shall not include any shares of Common Stock issued by the Company
pursuant to this Warrant), (B) subdivides outstanding shares of Common Stock
into a larger number of shares, (C) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of shares, or
(D) issues by reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock (excluding treasury shares, if any) outstanding before such event
and of which the denominator shall be the number of shares of Common Stock
outstanding after such event and the number of shares issuable upon exercise of
this Warrant shall be proportionately adjusted. Any adjustment made pursuant to
this Section 3(a) shall become effective immediately  after the record
date for the  determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classification.

       

      
        
          
          

        

        
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      b)           FUNDAMENTAL
TRANSACTION. If, at any time while this Warrant is outstanding, (A) the Company
effects any merger or consolidation of the Company with or into another Person,
(B) the Company effects any sale of all or substantially all of its assets in
one or a series of related transactions, (C) any tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, or (D) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (in any such case, a “FUNDAMENTAL TRANSACTION”),
then, the Holder shall have the right to receive, for each Warrant Share that
would have been issuable upon such exercise absent such Fundamental Transaction,
at the option of the Holder, (a) upon exercise of this Warrant, the number of
shares of Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and/or the other kind and amount of
securities and/or cash (the “ALTERNATE CONSIDERATION”) receivable as
consideration for the Fundamental Transaction by a Holder of the number of
shares of Common Stock for which this Warrant is exercisable immediately prior
to such event or (b) if the Company is acquired in an all cash transaction, cash
equal to the value of this Warrant as determined in accordance  with
the Black-Scholes option pricing formula. For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to
such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as
to the Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. To the extent necessary to effectuate
the foregoing provisions, any successor to the Company or surviving entity in
such Fundamental Transaction shall issue to the Holder a new warrant consistent
with the foregoing provisions and evidencing the Holder’s right to exercise such
warrant into Alternate Consideration. The terms of any agreement pursuant to
which a Fundamental Transaction is effected shall include terms requiring any
such successor or surviving entity to comply with the provisions of this Section
3(b) and insuring that this Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.

       

      c)           CALCULATIONS.
All calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.

       

      
        
          
          

        

        
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      d)           NOTICE
TO HOLDERS.

       

      i.           ADJUSTMENT
TO EXERCISE PRICE. Whenever the Exercise Price is adjusted pursuant to this
Section 3, the Company shall promptly mail to the Holder a notice setting forth
the Exercise Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment.

       

      ii.           NOTICE
TO ALLOW EXERCISE BY HOLDER. If (A) the Company shall declare a dividend (or any
other distribution) on the Common Stock; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock; (C) the
Company shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock of any
class or of any rights; (D) the approval of any stockholders of the Company
shall be  required in connection with any reclassification of the
Common Stock, any consolidation or merger to which the Company is a party, any
sale or transfer of all or substantially all of the assets of the Company, of
any compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall  authorize the
voluntary or  involuntary dissolution, liquidation or winding up of
the affairs of the Company; then, in each case, the Company shall cause to be
mailed to the Holder at its last addresses as it shall appear upon the Warrant
Register of the Company, at least 20 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to
be  determined  or (y) the  date
on  which  such reclassification, consolidation, merger,
sale, transfer or share exchange is expected to become effective or close, and
the date as of which it is expected that holders of the Common Stock of record
shall be entitled to exchange their shares of the Common Stock for securities,
cash or other
property  deliverable  upon  such  reclassification,
consolidation, merger, sale, transfer or share exchange; PROVIDED, that the
failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. The Holder is entitled to exercise this Warrant during the
20-day period commencing on the date of such notice to the effective date of the
event triggering such notice.

       

      SECTION
4.  TRANSFER OF WARRANT.

       

      a)           TRANSFERABILITY.
Subject to compliance with any applicable securities laws and the conditions set
forth in Sections 5(a) and 4(d) hereof, this Warrant and all rights hereunder
are transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the Holder or
its agent or attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued.

       

      
        
          
          

        

        
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      b)           NEW
WARRANTS. This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.

       

      c)           WARRANT
REGISTER. The Company shall register this Warrant, upon records to be maintained
by the Company for that purpose (the “WARRANT REGISTER”), in the name of the
record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose
of any exercise hereof or any distribution to the Holder, and for all other
purposes, absent actual notice to the contrary.

       

      d)           TRANSFER
RESTRICTIONS. If, at the time of the surrender of this Warrant in connection
with any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective registration statement under the Securities
Act and under applicable state securities or blue sky laws, the Company may
require, as a condition of allowing such transfer (i) that the Holder or
transferee of this Warrant, as the case may be, furnish to the Company a written
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
such transfer may be made without registration under the Securities Act and
under applicable state securities or blue sky laws and (ii) that the holder or
transferee execute and deliver to the Company such other instruments or
information reasonably requested by the Company.

       

      SECTION
5. MISCELLANEOUS.

       

      e)           TITLE
TO WARRANT. Prior to the Termination Date and subject to compliance with
applicable laws and Section 4 of this Warrant, this Warrant and all rights
hereunder are transferable, in whole or in part, at the office or agency of the
Company by the Holder in person or by duly authorized attorney, upon surrender
of this Warrant together with the Assignment Form annexed hereto properly
endorsed. The transferee shall sign an investment letter in form and substance
reasonably satisfactory to the Company.

       

      
        
          
          

        

        
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      f)           NO
RIGHTS AS SHAREHOLDER UNTIL EXERCISE. This Warrant does not entitle the Holder
to any voting rights or other rights as a shareholder of the Company prior to
the exercise hereof. Upon the surrender of this Warrant and the payment of the
aggregate Exercise Price (or by means of a cashless exercise), the Warrant
Shares so purchased shall be and be deemed to be issued to such Holder as the
record owner of such shares as of the close of business on the later of the date
of such surrender or payment.

       

      g)           LOSS,
THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The Company covenants that upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant or any stock certificate
relating to the Warrant Shares, and in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it (which, in the case of the
Warrant, shall not include the posting of any bond), and
upon  surrender  and  cancellation  of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

       

      h)           SATURDAYS,
SUNDAYS, HOLIDAYS, ETC. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein shall be a
Saturday, Sunday or a legal holiday, then such action may be taken or such right
may be exercised on the next succeeding day not a Saturday, Sunday or legal
holiday.

       

      i)           AUTHORIZED
SHARES. The Company covenants that during the period the Warrant is outstanding,
it will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of the Warrant Shares upon the
exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to
its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares
may be issued as provided herein without violation of any
applicable  law or  regulation, or of any requirements of
the Trading Market upon which the Common Stock may be listed. Except and to the
extent as waived or consented to by the Holder, the Company shall not by any
action, including, without limitation, amending its certificate of incorporation
or through any reorganization, transfer  of  assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to comply with the terms set forth in this
Warrant.  Without limiting the generality of the foregoing, the
Company will (a) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares upon the exercise of this Warrant, and (b) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of
Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or
consents thereto, as may be necessary from any
public  regulatory  body or bodies having jurisdiction
thereof.

       

      
        
          
          

        

        
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      j)           JURISDICTION.
All questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Each party agrees that all legal
proceedings  concerning the interpretations, enforcement and defense
of the transactions contemplated by this Warrant shall be commenced exclusively
in the state and federal courts sitting in the City of New York. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. The parties hereby waive all rights to a trial by jury. If
either party shall commence an action or proceeding to enforce any provisions of
this Warrant, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.

       

      k)           RESTRICTIONS.
The Holder acknowledges that the Warrant Shares  acquired upon the
exercise of this Warrant, if not registered, will have restrictions upon resale
imposed by state and federal securities laws.

       

      l)           NONWAIVER
AND EXPENSES. No course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such right or
otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the
fact that all rights hereunder  terminate on the Termination Date. If
the Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall
pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees,
including  those  of  appellate proceedings,
incurred by Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder.

       

      
        
          
          

        

        
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                 m)           NOTICES.  All
notices, consents, approvals and requests required or permitted hereunder shall
be given in writing and shall be effective for all purposes if hand delivered or
sent by (a) certified or registered United States mail, postage prepaid, return
receipt requested; (b) expedited prepaid delivery service, either commercial or
United States Postal Service, with proof of attempted delivery, or (c) by
telecopier (confirmation), addressed as follows (or at such other address and a
person as shall be designated from time to time by any party hereto, in a
written notice to the other parties hereto in the manner provided for in this
Section):

       

      
        
          
            
              
                
                  
                    
                      
                        	

                                                If to
      Lender:

                              	Lewis C. Pell
	 	40 Ramland Road
      South, Suite 200
	 	Orangeburg,
      NY 10962
	 	Facsimile 845-365-0620
	 	 
	                With a
      copy to:	Proskauer Rose LLP
	 	1585 Broadway
	 	New York, New York 10036-8299 
	 	Attention: Paul I. Rachlin, Esq.
	 	Facsimile: (212) 969- 3640
	 	 
	                If to
      Borrower:  	Vision-Sciences, Inc.
	 	
                                40 Ramland Road
      South

                              
	
                                 
      

                              	
                                Orangeburg, New York
      10962

                              
	 	
                                Attention: Katherine
      L. Wolf

                              
	 	Fascimile:
      (845) 365-0620
	 	 
	                With a
      copy to:	Cole,
      Schotz, Meisel, Forman & Leonard P.A.
	 	25
      Main Street
	 	

                                Hackensack,
      New Jersey 07602-0800

                              
	 	

                                Attention:  Marc
      P. Press, Esq.

                              
	 	Facsimile
      No.:  (201)
625-6271


                      

                    

                  

                

                                                         

              

            

          

        

      

      A notice
shall be deemed to have been given: in the case of hand and telecopier delivery,
at the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a business day; or in the case of
expedited prepaid delivery and telecopy, upon the first attempted delivery on a
business day.

       

      
        
          
          

        

        
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      m)           LIMITATION
OF LIABILITY. No provision hereof, in the absence of any affirmative action by
Holder to exercise this Warrant or purchase Warrant Shares, and no enumeration
herein of the rights or privileges of Holder, shall give rise to any liability
of Holder for the purchase price of any Common Stock or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

       

      n)           REMEDIES.
Holder, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Warrant and hereby agrees to waive the defense in any action
for specific performance that a remedy at law would be adequate.

       

      o)           SUCCESSORS
AND ASSIGNS. Subject to applicable securities laws, this Warrant and the rights
and obligations evidenced hereby shall inure to the benefit of and be binding
upon the successors of the Company and the successors and permitted assigns of
Holder. The provisions of this Warrant are intended to be for the benefit of all
Holders from time to time of this Warrant and shall be enforceable by any such
Holder or holder of Warrant Shares.

       

      p)           AMENDMENT.
This Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.

       

      q)           SEVERABILITY.
Wherever possible, each provision of this Warrant shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.

       

      r)           HEADINGS.
The headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

         

      

      IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.

       

      Dated:
November 9, 2009

       

      
        
          	 	VISION-SCIENCES,
      INC.	 
	 	 	 	 
	
                   

                	
                  By:
      

                	 	 
	 	Name: 	 	 
	 	Title: 	 	 
	 	 	 	 


        

      

       

       

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

         

      

      NOTICE OF
EXERCISE

       

      TO:  VISION-SCIENCES,
INC.

       

      (1)           The
undersigned hereby elects to purchase _______ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.

       

      (2)           Payment
shall take the form of (check applicable box):

       

      
        	
                 
      

              	
                [
      ]

              	
                in
      lawful money of the United States;
or

              


      

       

      
        	
                 
      

              	
                [
      ]

              	
                the
      cancellation of such number of Warrant Shares as is necessary, in
      accordance with the formula set forth in subsection 2(c), to exercise this
      Warrant with respect to the maximum number of Warrant Shares purchasable
      pursuant to the cashless exercise procedure set forth in subsection
      2(c).

              


      

       

      (3)           Please
issue a certificate or certificates representing said Warrant Shares in the name
of the undersigned or in such other name as is specified below:

       

       

        
          

        

      

      The
Warrant Shares shall be delivered to the following:

       

      
        
 

      
        
 

      
        
 

      (4)           ACCREDITED
INVESTOR. The undersigned is an “accredited investor” as defined in Regulation D
promulgated under the Securities Act of 1933, as amended.

       

      [SIGNATURE
OF HOLDER]

       

      
        
          
          

        

      

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            	
                                                    Name
      of Investing Entity:

                                                  	 	
                                                     

                                                  	 	
                                                     

                                                  
	
                                                    SIGNATURE
      OF AUTHORIZED SIGNATORY OF INVESTING ENTITY:

                                                  	 	 	 	 
	Name
      of Authorized Signatory:	 	 	 	 
	Title of Authorized Signatory:	 	 	 	 
	Date:	 	 	 	 


                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

       

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

       

       

       

      ASSIGNMENT
FORM

       

      (To
assign the foregoing warrant, execute

      this form
and supply required information.

      Do not
use this form to exercise the warrant.)

       

      FOR VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to ------------------------------------------------ whose address is
---------------------------------------------------------------------------------------------------------------------,
------------.

       

      
        
          
            	 	 	 	 Dated:	                         
      
	 	 	 	 	 
	
                  	
                    Holder’s
      Signature:

                  	
                     

                  	 	
                     

                  
	 	 	 	 	 
	
                  	

                    Holder’s
      Address:

                  	 	 	 
	 	 	 	 	 


          

           

        

      

      
        
          
            	
                    Signature
      Guaranteed:

                  	
                     

                  	
                     

                  


          

        

      

       

      NOTE: The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust company. Officers of
corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing
Warrant.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

         

      

      
        NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES  COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.

         

        COMMON
STOCK PURCHASE WARRANT

         

        To
Purchase 378,788 Shares of Common Stock of

         

        VISION-SCIENCES,
INC.

         

        THIS
COMMON STOCK PURCHASE WARRANT (the “WARRANT”) certifies that, for value
received, Lewis C. Pell or his assigns (the “HOLDER”), is entitled, upon the
terms and subject to the limitations on exercise and the conditions hereinafter
set forth, to subscribe for and purchase from Vision-Sciences, Inc., a Delaware
corporation (the “COMPANY”), up to 378,788 shares (the “WARRANT SHARES”) of
Common Stock, par value $0.01 per share, of the Company (the “COMMON STOCK”).
The purchase price of one share of Common Stock under this Warrant shall be
equal to the Exercise Price, as defined in Section 2(b).

         

        SECTION
1.  LOAN AGREEMENT.  This Warrant was issued in connection
with, and as an inducement for Holder to enter into, and/or make loans under,
the Loan Agreement (the “LOAN AGREEMENT”), dated November 9, 2009, between the
Company and the Holder.

         

        SECTION
2.  EXERCISE.

         

        a)           EXERCISE
OF WARRANT.  The number of Warrant Shares into which this Warrant may
be exercised (“Vested Warrant Shares”) shall be subject to the vesting
provisions set forth in Section 7(b) of the Loan Agreement.  This
Warrant may be exercised for Vested Warrant Shares at any time on or after the
date hereof and on or prior to the later of (i) the close of business on
the five year anniversary of the date hereof or (ii) the date that is one
(1) year following the termination of the Loan Agreement and repayment of all
amounts due and payable thereunder (the “TERMINATION DATE”) but not
thereafter.  Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
date hereof and on or before the Termination Date by delivery to the Company of
a duly executed facsimile copy of the Notice of Exercise Form annexed hereto (or
such other office or agency of the Company as it may designate by notice in
writing to the registered Holder at the address of such Holder appearing on the
books of the Company); PROVIDED, HOWEVER, subject to a cashless exercise
pursuant to Section 2(d) hereof, within 5 Trading Days of the date said Notice
of Exercise is delivered to the Company, the Holder shall have surrendered this
Warrant to the Company and the Company shall have received payment of the
aggregate Exercise Price of the shares thereby purchased by wire transfer or
cashier’s check drawn on a United States bank.  For purposes of this
Warrant, “Trading Day” means a day on which the Common Stock is traded on a
Trading Market, and if not so traded, a business day in the State of New
York.  For purposes of this Warrant “Trading Market” means the Nasdaq
National Market or the New York Stock Exchange.

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

           

        

        b)           EXERCISE
PRICE. The exercise price of the Common Stock under this Warrant shall be $1.65,
subject to adjustment hereunder (the “EXERCISE PRICE”).

         

        c)           CASHLESS
EXERCISE. This Warrant may also be exercised at any time prior to the
Termination Date by means of a “cashless exercise” in which the Holder shall
state in the Notice of Exercise that it desires to do so and be entitled to
receive a certificate for the number of Warrant Shares equal to the quotient
obtained by dividing ((A-B) (X)) by (A), where:

         

        
          	
                   
      

                	
                  (A)

                	
                  =
      the VWAP on the Trading Day immediately preceding the date of such
      election;

                


        

         

        
          	
                   
      

                	
                  (B)

                	
                  =
      the Exercise Price of this Warrant, in effect at such time in accordance
      with the terms hereof; and

                


        

         

        
          	
                   
      

                	
                  (X)

                	
                  =
      the number of Warrant Shares issuable (or in the case of exercise in part,
      desired to be issued) upon exercise of this Warrant in accordance with the
      terms of this Warrant.

                


        

         

        Notwithstanding
anything herein to the contrary, on the Termination Date, this Warrant shall be
automatically exercised via cashless exercise pursuant to this Section
2(d).   For purposes of this Warrant, “VWAP” means for any date,
the price determined by the first of the following clauses that applies: (i) if
the Common Stock is then listed or quoted on a Trading Market, the daily volume
weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed
or quoted as reported by Bloomberg Financial L.P. (based on a Trading Day from
9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (ii) if the Common Stock is
not then listed or quoted on a Trading Market and if prices for the Common Stock
are then quoted on the OTC Bulletin Board, the volume weighted average price of
the Common Stock for such date (or the nearest preceding date) on the OTC
Bulletin Board; (iii) if the Common Stock is not then listed or quoted on the
OTC Bulletin Board and if prices for the Common Stock are then reported in the
"Pink Sheets" published by the Pink Sheets, LLC (or a similar organization or
agency succeeding to its functions of reporting prices), the most recent bid
price per share of the Common Stock so reported;
or (iv) in all other cases, the fair market value of a share of Common Stock as
determined by an independent appraiser selected in good faith by the
Company.

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

           

        

        d)           MECHANICS
OF EXERCISE.

         

        i.           AUTHORIZATION
OF WARRANT SHARES. The Company covenants that all Warrant Shares which may be
issued upon the exercise of the purchase rights represented by this Warrant
will, upon exercise of the purchase rights represented by this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such
issue).

         

        ii.           DELIVERY
OF CERTIFICATES UPON EXERCISE.  Certificates for shares purchased
hereunder shall be transmitted by the transfer agent of the Company to the
Holder by crediting the account of the Holder’s broker with the Depository Trust
Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the
Company is a participant in such system, and otherwise by physical delivery to
the address specified by the Holder in the Notice of Exercise within 3 Trading
Days from the delivery to the Company of the Notice of Exercise Form, surrender
of this Warrant and payment of the aggregate Exercise Price as set forth above
(“WARRANT SHARE DELIVERY DATE”). This Warrant shall be deemed to have been
exercised on the with respect to the Warrant Shares exercised on the date the
Exercise Price is received by the Company. The Warrant Shares shall be deemed to
have been issued, and Holder or any other person so designated to be named
therein shall be deemed to have become a holder of record of such shares for all
purposes, as of the date the Warrant has been exercised by payment to the
Company of the Exercise Price and all taxes required to be paid by the Holder,
if any, pursuant to Section 2(d)(vii) prior to the issuance of such shares, have
been paid.

         

        iii.           DELIVERY
OF NEW WARRANTS UPON EXERCISE. If this Warrant shall have been exercised in
part, the Company shall, at the time of delivery of the certificate or
certificates representing Warrant Shares, deliver to Holder a new Warrant
evidencing the rights of Holder to purchase the unpurchased Warrant Shares
called for by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.

         

        iv.           RESCISSION
RIGHTS. If the Company fails to cause its transfer agent to transmit to the
Holder a certificate or certificates representing the Warrant Shares pursuant to
Section 2(d)(ii) by the Warrant Share Delivery Date, then the Holder will have
the right to rescind such exercise.

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

           

        

        v.           NO
FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the Exercise
Price.

         

        vi.           CHARGES,
TAXES AND EXPENSES. Issuance of certificates for Warrant Shares shall be made
without charge to the Holder for any issue or transfer tax or other incidental
expense in respect of the issuance of such certificate, all of which taxes and
expenses shall be paid by the Company, and such certificates shall be issued in
the name of the Holder or in such name or names as may be directed by the
Holder; PROVIDED, HOWEVER, that in the event certificates for Warrant Shares are
to be issued in a name other than the name of the Holder, this
Warrant  when  surrendered  for  exercise  shall
be accompanied by the Assignment Form attached hereto duly executed by the
Holder; and the Company may require, as a condition thereto, the payment of a
sum sufficient to reimburse it for any transfer tax incidental
thereto.

         

        vii.           CLOSING
OF BOOKS. The Company will not close its stockholder books or records in any
manner which prevents the timely exercise of this Warrant, pursuant to the terms
hereof.

         

        SECTION
3.  CERTAIN ADJUSTMENTS.

         

        a)           STOCK
DIVIDENDS AND SPLITS. If the Company, at any time while this Warrant is
outstanding: (A) pays a stock dividend or otherwise make a distribution or
distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for avoidance of
doubt, shall not include any shares of Common Stock issued by the Company
pursuant to this Warrant), (B) subdivides outstanding shares of Common Stock
into a larger number of shares, (C) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of shares, or
(D) issues by reclassification of shares of the Common Stock any shares of
capital stock of the Company, then in each case the Exercise Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock (excluding treasury shares, if any) outstanding before such event
and of which the denominator shall be the number of shares of Common Stock
outstanding after such event and the number of shares issuable upon exercise of
this Warrant shall be proportionately adjusted. Any adjustment made pursuant to
this Section 3(a) shall become effective immediately  after the record
date for the  determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classification.

         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

           

        

        b)           FUNDAMENTAL
TRANSACTION. If, at any time while this Warrant is outstanding, (A) the Company
effects any merger or consolidation of the Company with or into another Person,
(B) the Company effects any sale of all or substantially all of its assets in
one or a series of related transactions, (C) any tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which
holders of Common Stock are permitted to tender or exchange their shares for
other securities, cash or property, or (D) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (in any such case, a “FUNDAMENTAL TRANSACTION”),
then, the Holder shall have the right to receive, for each Warrant Share that
would have been issuable upon such exercise absent such Fundamental Transaction,
at the option of the Holder, (a) upon exercise of this Warrant, the number of
shares of Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and/or the other kind and amount of
securities and/or cash (the “ALTERNATE CONSIDERATION”) receivable as
consideration for the Fundamental Transaction by a Holder of the number of
shares of Common Stock for which this Warrant is exercisable immediately prior
to such event or (b) if the Company is acquired in an all cash transaction, cash
equal to the value of this Warrant as determined in accordance  with
the Black-Scholes option pricing formula. For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to
such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received
in a Fundamental Transaction, then the Holder shall be given the same choice as
to the Alternate Consideration it receives upon any exercise of this Warrant
following such Fundamental Transaction. To the extent necessary to effectuate
the foregoing provisions, any successor to the Company or surviving entity in
such Fundamental Transaction shall issue to the Holder a new warrant consistent
with the foregoing provisions and evidencing the Holder’s right to exercise such
warrant into Alternate Consideration. The terms of any agreement pursuant to
which a Fundamental Transaction is effected shall include terms requiring any
such successor or surviving entity to comply with the provisions of this Section
3(b) and insuring that this Warrant (or any such replacement security) will be
similarly adjusted upon any subsequent transaction analogous to a Fundamental
Transaction.

         

        c)           CALCULATIONS.
All calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.

         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

           

        

        d)           NOTICE
TO HOLDERS.

         

        i.           ADJUSTMENT
TO EXERCISE PRICE. Whenever the Exercise Price is adjusted pursuant to this
Section 3, the Company shall promptly mail to the Holder a notice setting forth
the Exercise Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment.

         

        ii.           NOTICE
TO ALLOW EXERCISE BY HOLDER. If (A) the Company shall declare a dividend (or any
other distribution) on the Common Stock; (B) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock; (C) the
Company shall authorize the granting to all holders of the Common Stock rights
or warrants to subscribe for or purchase any shares of capital stock of any
class or of any rights; (D) the approval of any stockholders of the Company
shall be  required in connection with any reclassification of the
Common Stock, any consolidation or merger to which the Company is a party, any
sale or transfer of all or substantially all of the assets of the Company, of
any compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall  authorize the
voluntary or  involuntary dissolution, liquidation or winding up of
the affairs of the Company; then, in each case, the Company shall cause to be
mailed to the Holder at its last addresses as it shall appear upon the Warrant
Register of the Company, at least 20 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to
be  determined  or (y) the  date
on  which  such reclassification, consolidation, merger,
sale, transfer or share exchange is expected to become effective or close, and
the date as of which it is expected that holders of the Common Stock of record
shall be entitled to exchange their shares of the Common Stock for securities,
cash or other
property  deliverable  upon  such  reclassification,
consolidation, merger, sale, transfer or share exchange; PROVIDED, that the
failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice. The Holder is entitled to exercise this Warrant during the
20-day period commencing on the date of such notice to the effective date of the
event triggering such notice.

         

        SECTION
4.  TRANSFER OF WARRANT.

         

        a)           TRANSFERABILITY.
Subject to compliance with any applicable securities laws and the conditions set
forth in Sections 5(a) and 4(d) hereof, this Warrant and all rights hereunder
are transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the Holder or
its agent or attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued.

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

           

        

        b)           NEW
WARRANTS. This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 4(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.

         

        c)           WARRANT
REGISTER. The Company shall register this Warrant, upon records to be maintained
by the Company for that purpose (the “WARRANT REGISTER”), in the name of the
record Holder hereof from time to time. The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose
of any exercise hereof or any distribution to the Holder, and for all other
purposes, absent actual notice to the contrary.

         

        d)           TRANSFER
RESTRICTIONS. If, at the time of the surrender of this Warrant in connection
with any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective registration statement under the Securities
Act and under applicable state securities or blue sky laws, the Company may
require, as a condition of allowing such transfer (i) that the Holder or
transferee of this Warrant, as the case may be, furnish to the Company a written
opinion of counsel (which opinion shall be in form, substance and scope
customary for opinions of counsel in comparable transactions) to the effect that
such transfer may be made without registration under the Securities Act and
under applicable state securities or blue sky laws and (ii) that the holder or
transferee execute and deliver to the Company such other instruments or
information reasonably requested by the Company.

         

        SECTION
5. MISCELLANEOUS.

         

        e)           TITLE
TO WARRANT. Prior to the Termination Date and subject to compliance with
applicable laws and Section 4 of this Warrant, this Warrant and all rights
hereunder are transferable, in whole or in part, at the office or agency of the
Company by the Holder in person or by duly authorized attorney, upon surrender
of this Warrant together with the Assignment Form annexed hereto properly
endorsed. The transferee shall sign an investment letter in form and substance
reasonably satisfactory to the Company.

         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

           

        

        f)           NO
RIGHTS AS SHAREHOLDER UNTIL EXERCISE. This Warrant does not entitle the Holder
to any voting rights or other rights as a shareholder of the Company prior to
the exercise hereof. Upon the surrender of this Warrant and the payment of the
aggregate Exercise Price (or by means of a cashless exercise), the Warrant
Shares so purchased shall be and be deemed to be issued to such Holder as the
record owner of such shares as of the close of business on the later of the date
of such surrender or payment.

         

        g)           LOSS,
THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The Company covenants that upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant or any stock certificate
relating to the Warrant Shares, and in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to it (which, in the case of the
Warrant, shall not include the posting of any bond), and
upon  surrender  and  cancellation  of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

         

        h)           SATURDAYS,
SUNDAYS, HOLIDAYS, ETC. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein shall be a
Saturday, Sunday or a legal holiday, then such action may be taken or such right
may be exercised on the next succeeding day not a Saturday, Sunday or legal
holiday.

         

        i)           AUTHORIZED
SHARES. The Company covenants that during the period the Warrant is outstanding,
it will reserve from its authorized and unissued Common Stock a sufficient
number of shares to provide for the issuance of the Warrant Shares upon the
exercise of any purchase rights under this Warrant. The Company further
covenants that its issuance of this Warrant shall constitute full authority to
its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant. The Company will take all
such reasonable action as may be necessary to assure that such Warrant Shares
may be issued as provided herein without violation of any
applicable  law or  regulation, or of any requirements of
the Trading Market upon which the Common Stock may be listed. Except and to the
extent as waived or consented to by the Holder, the Company shall not by any
action, including, without limitation, amending its certificate of incorporation
or through any reorganization, transfer  of  assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to comply with the terms set forth in this
Warrant.  Without limiting the generality of the foregoing, the
Company will (a) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares upon the exercise of this Warrant, and (b) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of
Warrant Shares for which this Warrant is exercisable or in the Exercise Price,
the Company shall obtain all such authorizations or exemptions thereof, or
consents thereto, as may be necessary from any
public  regulatory  body or bodies having jurisdiction
thereof.

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

           

        

        j)           JURISDICTION.
All questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be governed by and construed and enforced
in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof. Each party agrees that all legal
proceedings  concerning the interpretations, enforcement and defense
of the transactions contemplated by this Warrant shall be commenced exclusively
in the state and federal courts sitting in the City of New York. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in the City of New York, borough of Manhattan for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is improper or inconvenient venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. The parties hereby waive all rights to a trial by jury. If
either party shall commence an action or proceeding to enforce any provisions of
this Warrant, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its attorneys’ fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.

         

        k)           RESTRICTIONS.
The Holder acknowledges that the Warrant Shares  acquired upon the
exercise of this Warrant, if not registered, will have restrictions upon resale
imposed by state and federal securities laws.

         

        l)           NONWAIVER
AND EXPENSES. No course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such right or
otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the
fact that all rights hereunder  terminate on the Termination Date. If
the Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall
pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’ fees,
including  those  of  appellate proceedings,
incurred by Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder.

         

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

           

        

                   m)           NOTICES.  All
notices, consents, approvals and requests required or permitted hereunder shall
be given in writing and shall be effective for all purposes if hand delivered or
sent by (a) certified or registered United States mail, postage prepaid, return
receipt requested; (b) expedited prepaid delivery service, either commercial or
United States Postal Service, with proof of attempted delivery, or (c) by
telecopier (confirmation), addressed as follows (or at such other address and a
person as shall be designated from time to time by any party hereto, in a
written notice to the other parties hereto in the manner provided for in this
Section):

           

        
          
            
              
                
                  
                    
                    

                  

                  
                    
                    

                  

                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	

                                                                  If to
      Lender:

                                                	Lewis C. Pell
	 	40 Ramland Road
      South, Suite 200
	 	Orangeburg,
      NY 10962
	 	Facsimile 845-365-0620
	 	 
	                With a
      copy to:	Proskauer Rose LLP
	 	1585 Broadway
	 	New York, New York 10036-8299 
	 	Attention: Paul I. Rachlin, Esq.
	 	Facsimile: (212) 969- 3640
	 	 
	                If to
      Borrower:  	Vision-Sciences, Inc.
	 	
                                                  40 Ramland Road
      South

                                                
	
                                                   
      

                                                	
                                                  Orangeburg, New York
      10962

                                                
	 	
                                                  Attention: Katherine
      L. Wolf

                                                
	 	Fascimile:
      (845) 365-0620
	 	 
	                With a
      copy to:	Cole,
      Schotz, Meisel, Forman & Leonard P.A.
	 	25
      Main Street
	 	

                                                  Hackensack,
      New Jersey 07602-0800

                                                
	 	

                                                  Attention:  Marc
      P. Press, Esq.

                                                
	 	Facsimile
      No.:  (201)
625-6271


                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

                                                      

            

          

        

        A notice
shall be deemed to have been given: in the case of hand and telecopier delivery,
at the time of delivery; in the case of registered or certified mail, when
delivered or the first attempted delivery on a business day; or in the case of
expedited prepaid delivery and telecopy, upon the first attempted delivery on a
business day.

         

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

           

        

        m)           LIMITATION
OF LIABILITY. No provision hereof, in the absence of any affirmative action by
Holder to exercise this Warrant or purchase Warrant Shares, and no enumeration
herein of the rights or privileges of Holder, shall give rise to any liability
of Holder for the purchase price of any Common Stock or as a stockholder of the
Company, whether such liability is asserted by the Company or by creditors of
the Company.

         

        n)           REMEDIES.
Holder, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Warrant. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Warrant and hereby agrees to waive the defense in any action
for specific performance that a remedy at law would be adequate.

         

        o)           SUCCESSORS
AND ASSIGNS. Subject to applicable securities laws, this Warrant and the rights
and obligations evidenced hereby shall inure to the benefit of and be binding
upon the successors of the Company and the successors and permitted assigns of
Holder. The provisions of this Warrant are intended to be for the benefit of all
Holders from time to time of this Warrant and shall be enforceable by any such
Holder or holder of Warrant Shares.

         

        p)           AMENDMENT.
This Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.

         

        q)           SEVERABILITY.
Wherever possible, each provision of this Warrant shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.

         

        r)           HEADINGS.
The headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

           

        

        IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.

         

        Dated:
November 9, 2009

         

        
          
            
              	 	VISION-SCIENCES,
      INC.	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	 	 
	 	Name: 	 	 
	 	Title: 	 	 
	 	 	 	 


            

          

           

           

           

          
            
              
              

            

            
              12

              
                

              

            

            
              
              

            

             

          

        

        NOTICE OF
EXERCISE

         

        TO:  VISION-SCIENCES,
INC.

         

        (1)           The
undersigned hereby elects to purchase _______ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.

         

        (2)           Payment
shall take the form of (check applicable box):

         

        
          	
                   
      

                	
                  [
      ]

                	
                  in
      lawful money of the United States;
or

                


        

         

        
          	
                   
      

                	
                  [
      ]

                	
                  the
      cancellation of such number of Warrant Shares as is necessary, in
      accordance with the formula set forth in subsection 2(c), to exercise this
      Warrant with respect to the maximum number of Warrant Shares purchasable
      pursuant to the cashless exercise procedure set forth in subsection
      2(c).

                


        

         

        (3)           Please
issue a certificate or certificates representing said Warrant Shares in the name
of the undersigned or in such other name as is specified below:

         

         

          
            

          

        

        The
Warrant Shares shall be delivered to the following:

         

        
          
 

        
          
 

        
          
 

        (4)           ACCREDITED
INVESTOR. The undersigned is an “accredited investor” as defined in Regulation D
promulgated under the Securities Act of 1933, as amended.

         

        [SIGNATURE
OF HOLDER]

        
           

          
            
              
                
                

              

            

            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  	
                                                          Name
      of Investing Entity:

                                                        	 	
                                                           

                                                        	 	
                                                           

                                                        
	
                                                          SIGNATURE
      OF AUTHORIZED SIGNATORY OF INVESTING ENTITY:

                                                        	 	 	 	 
	Name
      of Authorized Signatory:	 	 	 	 
	Title of Authorized Signatory:	 	 	 	 
	Date:	 	 	 	 


                                                

                                              

                                            

                                             

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

        
          
            
              
              

            

            
              13

              
                

              

            

            
              
              

            

             

          

        

        ASSIGNMENT
FORM

         

        (To
assign the foregoing warrant, execute

        this form
and supply required information.

        Do not
use this form to exercise the warrant.)

         

        FOR VALUE
RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
assigned to ------------------------------------------------ whose address is
---------------------------------------------------------------------------------------------------------------------,
------------.

         

        
          
            
              
                	 	 	 	 Dated:	                         
      
	 	 	 	 	 
	
                      	
                        Holder’s
      Signature:

                      	
                         

                      	 	
                         

                      
	 	 	 	 	 
	
                      	

                        Holder’s
      Address:

                      	 	 	 
	 	 	 	 	 


              

            

          

           

          
            
              
                	
                        Signature
      Guaranteed:

                      	
                         

                      	
                         

                      


              

            

          

        

         

        NOTE: The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust company. Officers of
corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing
Warrant.

         

         

        14