EXHIBIT 10.2
EXECUTION COPY
LOAN AGREEMENT
Entered into on this 25th day of June 2003
By and Between:
Vision-Sciences, Inc., a Delaware (U.S.A.) corporation, having its principal
place of business at 9 Strathmore Road, Natick, Massachusetts 01760, U.S.A., Fax
No. +1-508-650-9976 (the "Company");
And
Three BY Ltd., a company duly organized under the laws of Israel and having its
principal place of business at Migdal Tefen, Israel, Fax No. + 972-4-987-2340
(the "Manufacturer");
WHEREAS, the Parties entered into a Contract Manufacturing Agreement dated June
25, 2003 (the "Manufacturing Agreement"), pursuant to which the Manufacturer
undertook to manufacture the Products (as defined in the Manufacturing
Agreement) for and on behalf of the Company, in accordance with and subject to
the terms and conditions of the Manufacturing Agreement; and
WHEREAS, in order to facilitate the manufacturing of the Products, as aforesaid,
the Manufacturer is required to purchase certain equipment, detailed in Appendix
"A" of this Agreement (the "Equipment"); and
WHEREAS, the Manufacturer has asked the Company to lend it the amount of up to
US $267,5000 (the "Loan Amount"), for the purpose of purchasing the Equipment
(the "Purpose"), and the Company has agreed to extend the Loan Amount to the
Manufacturer, for the Purpose, all subject to and in accordance with the terms
and conditions of this Agreement.
1.
THE LOAN
1.1.
PRIOR TO ORDERING THE EQUIPMENT FROM THE
RELEVANT SUBCONTRACTOR/S, THE MANUFACTURER SHALL DISCUSS WITH, AND OBTAIN A
WRITTEN APPROVAL, FROM THE COMPANY. UPON RECEIPT OF AN INVOICE RESULTING FROM
SUCH APPROVED PURCHASE ORDER, THE COMPANY SHALL REMIT TO THE MANUFACTURER, THE
PART OF THE LOAN AMOUNT REQUIRED IN ORDER TO COVER 76% OF SAID INVOICE (THE
BALANCE BEING FINANCED BY GOVERNMENT GRANT/S AS SET FORTH IN SECTION 1.10
BELOW), BY TRANSFER OF SAME TO THE BANK ACCOUNT OF THE MANUFACTURER:
IT IS
RECORDED THAT PRIOR TO THE DATE OF SIGNATURE HEREOF, THE COMPANY HAS ALREADY
ADVANCED TO THE MANUFACTURER THE SUM OF US $68,000 ON ACCOUNT OF THE LOAN
AMOUNT.
1.2.
IT IS AGREED AND UNDERSTOOD THAT THE COMPANY
AGREED TO LEND THE LOAN AMOUNT TO THE MANUFACTURER, SOLELY FOR THE PURPOSE. THE
MANUFACTURER SHALL NOT BE ENTITLED TO USE THE LOAN AMOUNT FOR ANY PURPOSE, OTHER
THAN THE PURPOSE.
1.3.
EXCEPT AS OTHERWISE PROVIDED HEREIN, THE
MANUFACTURER SHALL REPAY THE OUTSTANDING LOAN AMOUNT TOGETHER WITH INTEREST
ACCRUED THEREON (THE "BALANCE") TO THE COMPANY UPON RECEIPT OF FIRST DEMAND FROM
THE COMPANY. "INTEREST" SHALL MEAN THE INTEREST PAYABLE BY THE MANUFACTURER ON
THE LOAN AMOUNT, AT THE RATE OF LIBOR PLUS 1% PER ANNUM, COMPOUNDED ANNUALLY AND
ACCRUED DAILY AND DENOMINATED IN US DOLLARS.
1.4.
PAYMENT OF THE BALANCE SHALL BE MADE IN US
DOLLARS AND REMITTED TO THE BANK ACCOUNT DESIGNATED BY THE COMPANY FROM TIME TO
TIME. ALL BANKING FEES, INCLUDING REMITTANCE COSTS, PERTAINING TO SAID
REMITTANCE SHALL BE BORNE AND PAID BY THE MANUFACTURER.
1.5.
THE MANUFACTURER SHALL NOT BE ENTITLED TO
PREPAY ANY PORTION OF THE BALANCE, WITHOUT THE PRIOR WRITTEN CONSENT OF THE
COMPANY.