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 Japanese

corporation (“Asahi”),




 




WITNESSETH:




 




WHEREAS, Asahi

manufactures certain endoscope units and accessories; and




 




WHEREAS, VSI desires to

purchase certain endoscope units, parts and accessories from Asahi and Asahi

desires to sell such products to VSI all upon the terms and conditions set

forth in this Agreement.




 




NOW, THEREFORE, in

consideration of the foregoing and the mutual covenants and agreements

contained herein, and for other good and valuable consideration, the receipt

and adequacy of which are hereby acknowledged, the parties hereto hereby agree

as follows:




 




SECTION 1:  PRODUCTS AND DEFINITIONS




 




1.1           PRODUCTS.  Subject to the terms and conditions of this Agreement, Asahi

agrees to manufacture and sell to VSI and VSI agrees to purchase from Asahi

certain Asahi Components.




 




1.2           DEFINITIONS.  For purposes of this Agreement capitalized

terms used herein shall have the following meanings:




 




(a)          Asahi Components shall mean any standard or catalog

devices, subassemblies and components used to assemble or repair VSI

Endoscopes.




 




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(b)         Asahi Information shall mean any design documentation

which are the property of Asahi and utilized in the manufacture of Asahi

Components, VSI Endoscopes or any improvements of either.




 




(c)          VSI Endoscope shall mean any endoscope designed by VSI

which incorporates a disposable sheath assembly including disposable channels

and which is manufactured using VSI Information.




 




(d)         VSI Information shall mean any design documentation,

information, knowledge, data, issued or pending patents or materials which are

the property of VSI and utilized in the manufacture of VSI Endoscopes or any

improvements thereof.




 




(e)          VSI Specification shall mean any product or quality

standard specified to Asahi by VSI for Asahi Components to be purchased by VSI.




 




SECTION 2:  PURCHASE AND SALE OF PRODUCTS




 




2.1           QUANTITY.  During the term of this Agreement, VSI will provide Asahi with a

three month firm written purchase order for the exact quantity and VSI

Specifications of the Products it shall purchase during such three month

period.  Asahi will confirm purchase

order 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 for

VSI as to any such Products or substantially similar products produced for the

benefit of Asahi.  Nothing in this

Agreement shall prohibit VSI from manufacturing or contracting with another

party to manufacture any VSI endoscope.




 




2.2           PRICE.  Asahi will provide VSI with firm price quotations prior to

purchase order.




 




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2.3           DELIVERY.  Asahi shall deliver to VSI any Products ordered by VSI in

finished form according to VSI Specifications and packaged in the manner

requested by VSI.  Asahi shall ship

VSI’s orders to such locations as VSI may from time to time hereafter designate

in writing to Asahi, F.O.B. Asahi’s place of manufacture.  Shipping costs will be added to VSI’s

invoice or shipped freight collect.  If

Asahi fails to meet VSI’s delivery requirements and VSI finds it necessary to

require shipment of any Product by a method of transportation other than the

method originally specified, Asahi shall reimburse VSI the amount, if any, by

which the cost of the more expeditious method of transportation exceeds the

cost of the method of transportation originally specified unless such failure

is due to causes beyond the control and without fault or negligence of Asahi.




 




2.4           PAYMENT.  Payment for each shipment to VSI of the Products is due from VSI

within thirty (30) days following VSI’s receipt of the Products.




 




SECTION 3:  WARRANTY AND NON-CONFORMING PRODUCTS




 




3.1           WARRANTY.  The Products purchased by VSI and delivered by Asahi hereunder

shall conform to VSI Specification. 

Asahi provides no warranty to VSI but agrees to discuss in good faith

any Asahi Products problems requiring product exchange or recall.




 




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’s

intent to reject within ten (10) days after VSI’s receipt of the alleged

non-conforming Products.  Asahi will

replace Non-Conforming Products with other Products of good quality as soon as

possible.




 




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SECTION 4:  PATENT




 




VSI takes all

responsibilities regarding the patent infringement claimed by any third party

as to the VSI endoscopes including the patent regarding the parts VSI purchased

from Asahi and keeps Asahi indemnified from the third party’s claim.  On the other hand, Asahi does not require

VSI to pay to Asahi royalty for the parts VSI purchases from Asahi and Asahi

offers assistance to VSI in defending the claim brought up by third party.  In case VSI endoscope or its parts purchased

from third party infringes Asahi’s patent, VSI is ready to pay royalty.




 




SECTION 5:  PROPRIETARY INFORMATION




 




5.1           CONFIDENTIALITY.  VSI and Asahi each shall, during the Initial

Term or any Renewal Term of this Agreement and thereafter for eternity, hold in

confidence, and use its best efforts to have all of its affiliates, agents,

officers, directors and employees hold in confidence, all knowledge and

information of a secret or confidential nature with respect to the business of

the other party and shall not disclose, publish or make use of the same without

the consent of the other party for any purpose whatsoever, except to the extent

necessary to fulfill its obligations hereunder or if such information shall have

become public knowledge other than by breach of this Agreement or except as may

be required by law.  Upon termination or

expiration of this Agreement, each party shall, within two (2) business days of

receipt of a request thereof, return to the other party all copies of all

confidential information of the requesting party and all other tangible

manifestations of such confidential information.




 




5.2           COMPENSATION.  VSI and Asahi each agree that the remedy at

law for any breach of this Section 5 would be inadequate and that the

non-breaching party shall be entitled to injunctive relief in addition to any

other remedy it may have upon breach of any provision of this Section 5.




 




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SECTION 6:  TERM OF AGREEMENT




 




6.1           INITIAL TERM.  The term of this Agreement shall commence as

of the date hereof and shall remain in full force and effect until the third

anniversary of the date hereof (the “Initial Term”), unless renewed as provided

in Subsection 6.2 below or sooner terminated pursuant to Section 7

hereof.




 




6.2           RENEWAL TERM.  At the expiration of the Initial Term (and,

if applicable, at the expiration of any Renewal Term), the term of this

Agreement shall be automatically renewed for additional two (2) year period

(“Renewal Term”) unless this Agreement is terminated pursuant to Section 7

hereof or unless either party provides the other with one (1) year prior

written notice of its intent not to renew this Agreement.




 




SECTION 7:  TERMINATION




 




This Agreement may be

terminated during the Initial Term or any Renewal Term, at any time, as

follows:




 




7.1           MUTUAL CONSENT.  By the written mutual consent of VSI and

Asahi.  In the event of such termination

by agreement, except as set forth in Section 5 hereof, neither party shall

have any further obligation or liability under this Agreement.




 




7.2           BREACH.  By the non-breaching party if there has been a breach of any

material provision of this Agreement by the other party which breach either

(i) cannot be cured by the breaching party, or (ii) has not been

cured by the breaching party within thirty (30) days of having received written

notice of such breach from the non-breaching party.




 




7.3           BANKRUPTCY.  At the option of the other party, if either party makes any

assignment for the benefit of creditors, or if a receiver, trustee in

bankruptcy or similar officer shall be appointed to take charge of all of

either party’s property, or if either party files a 




 




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voluntary petition under

federal bankruptcy laws or similar statutes or such a petition is filed against

either party and is not dismissed within sixty (60) days.




 




SECTION 8:  FORCE MAJEURE




 




Neither party hereto will

be liable to the other for default or delay in the performance of any of its

obligations 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 or

regulation, whether valid or invalid, inability to obtain electricity or other

type of energy, raw material, labor, equipment or transportation, or any

similar or different contingency beyond its reasonable control which would make

performance commercially impracticable. 

If such party shall have used its reasonable efforts to avoid such

occurrence and minimize its duration, such party shall give notice to the other

party in writing promptly, and thereupon the affected party’s performance shall

be excused and the time for performance shall be extended for the period of

delay or inability to perform due to such occurrence.




 




SECTION 9:  ARBITRATION




 




In the event of a

disagreement over any term or provision contained in this Agreement which has

not been resolved by the parties hereto within sixty (60) days after both

parties have written notice of such dispute, the parties hereby agree that the

matter shall be settled and finally determined by arbitration in accordance

with the rules and regulations of a mutually acceptable International Arbitration

Organization.  The decision rendered in

any such arbitration shall be final and binding upon the parties and may be

entered in any court having jurisdiction thereof for a judicial acceptance of

the award or an order of enforcement, as the case may be.  The parties 




 




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shall each pay

one-half of the reasonable costs and expenses incurred for the fees and

expenses of the arbitrator or arbitrators.




 




SECTION 10:  MISCELLANEOUS PROVISIONS




 




10.1         GOVERNING LAW.  This Agreement shall be governed by and

interpreted in accordance with the laws of Japan.  This Agreement is in the English language only, which shall be

controlling for all purposes.




 




10.2         WAIVER.  The waiver by any party of a breach or a default of any provision

of this Agreement shall not be construed as a waiver of any succeeding breach

of the same or any other provision, nor shall any delay or omission on the part

of a party to exercise or avail itself of any right, power or privilege that it

has or may have hereunder operate as a waiver of any right, power or privilege.




 




10.3         NOTICES.  Any notice or other communication required or permitted to be

delivered in connection with this Agreement must be in writing in the English

language and shall, when mailed (which mailing must be accomplished by first

class mail, registered mail or certified mail, postage prepaid, or overnight

courier service) or telefaxed, be deemed given three (3) days after deposited

in the mails or one (1) day after delivered in person or to the telefax

company, respectively, addressed to the addressee as follows or to such other

address which addressee shall have specified in a notice actually received by

the addressor:




 




	

  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 full

understanding of the parties hereto, except the Letter Agreement dated

March 14, 1992 regarding indemnification provided to Asahi by VSI, with

respect to the subject matter hereof and supersedes all prior understandings

and writings relating thereto.  No

waiver, alteration, amendment, or modification of any of the provisions of this

Agreement shall be binding unless made in writing and signed by each of the

parties hereto.  The parties hereto

hereby confirm that this Agreement shall have no effect upon the Non–Exclusive

License Agreement entered into September 28, 1989 by and among Asahi,

OpieLab, Inc., a wholly-owned subsidiary of VSI and O.S. Limited Partnership, a

limited partnership organized and existing under the laws of the State of

Washington.




 




10.5         SEVERABILITY.  In the event that any provision of this Agreement is held by a

court of competent jurisdiction to be unenforceable because it is invalid or in

conflict with any law of any relevant jurisdiction, the validity of the

remaining provisions shall not be affected, and the rights and obligations of

the parties shall be construed and enforced as if this Agreement did not

contain the particular provision held to be unenforceable.




 




10.6         SUCCESSORS AND ASSIGNS.  This Agreement shall be binding and inure to

the 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 this

Agreement.  VSI may request Asahi’s

written consent, which will not be unreasonably withheld, in the case VSI seeks

to assign by merger or sale of assets.




 




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10.7         STATUS OF PARTIES.  The relationship of the parties hereunder

shall be and at all times remain one of independent contractors, and neither

party shall have any authority to create or assign obligations on behalf of the

other party hereto.




 




10.8         COUNTERPARTS.  This Agreement may be executed in one or more counterparts, each

of which shall be deemed to be an original, but all of which shall be one and

the same document.




 




IN WITNESS WHEREOF, the

parties hereto have executed this Agreement as of the day and year set forth

above.




 




 




 




	

  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 Vision

Sciences, Inc., a corporation organized and existing under the laws of

Delaware, having its registered office at 9 Strathmore Road, Natick,

Massachusetts 01760, U.S.A. (hereinafter referred to as “VSI”) and Pentax

Corporation, 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 and

PC (ASAHI Optical Co., Ltd. changed its company name to Pentax Corporation as

of 1st October, 2002.) entered into a Supply Agreement as of 16th day of March,

1992 (hereinafter referred to as “Original Supply Agreement”) under which PC

sells to VSI and VSI purchases from PC the (1) standard or catalog

devices, subassemblies and components to be incorporated into VSI’s products

and (2) accessories of PC’s endoscope products; and




 




WHEREAS, VSI and

PC have recently reached an accord of their opinions to amend Original Supply

Agreement,




 




NOW, THEREFORE, it

is hereby agreed between the parties hereto as follows:




 




1.             VSI and PC

acknowledge that Original Supply Agreement have been renewed for 8 years after

the expiration of the Initial Term in accordance with Article 6.2 of Original

Supply Agreement and that current expiry date of the term of Original Supply

Agreement is March 16, 2003.




 




2.             Article 6.2 of

Original Supply Agreement shall be amended to read as follow:




 




“6.2 Renewal Term




 




At the expiration

of the Initial Term (and, if applicable, at the expiration of any Renewal

Term), the term of this Agreement may be renewed for additional two (2) year

period (“Renewal Term”) by mutual agreement at least three (3) months prior to

the expiration.”




 




3.             This Amendment

shall become effective as of the day first above written.




 




4.             Except to the

extent amended by this Amendment, Original Supply Agreement is hereby in all

respects confirmed and shall continue in full force and effect.




 




5.             This Amendment has

been signed in two counterparts each of which shall be deemed to be an

original.  Each party acknowledges, by

its signature to this Amendment, the receipt of a fully signed original

counterpart.




 




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IN WITNESS

WHEREOF, the parties have signed this Amendment as of the date first

hereinabove 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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