Document:

Exhibit 10.33

LICENSE
AGREEMENT

THIS LICENSE AGREEMENT (this “Agreement”) is
made and entered into as of March 26, 2007 (the “Effective Date”), by
and among Medtronic Xomed, Inc., a
Delaware corporation (“Medtronic”), and Vision-Sciences, Inc., a Delaware corporation (“Vision-Sciences”).

WITNESSETH:

WHEREAS, Medtronic and Vision-Sciences have entered
into an Asset Purchase Agreement, dated as of January 16, 2007 (the “Asset
Purchase Agreement”) pursuant to which Vision-Sciences is selling to
Medtronic certain assets;

WHEREAS, Medtronic and Vision-Sciences have entered
into an Amended Distribution Agreement (as defined in the Asset Purchase
Agreement) pursuant to which Vision-Sciences is supplying Medtronic endoscopes
for use in the Field of Use in connection with EndoSheath Products;

WHEREAS, as part of the
transaction between the parties relating to the Asset Purchase Agreement and
Amended Distribution Agreement, Vision-Sciences will exclusively license to
Medtronic rights to certain intellectual property in accordance with the terms
of this Agreement; and

WHEREAS, the execution and delivery of this Agreement
is a condition precedent to the consummation of the Asset Purchase Agreement
and the Amended Distribution Agreement.

NOW, THEREFORE, in consideration of the respective
representations, warranties, covenants and agreements contained herein, and
subject to the terms and conditions set forth herein, the parties hereto agree
as follows:

ARTICLE 1

DEFINITIONS

1.1)          Specific Definitions.  As used in this Agreement, the following
terms shall have the meanings set forth or referenced below:

“Affiliate”
of a specified person (natural or juridical) means a person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, the person specified. For purpose of this
definition, “control” shall mean ownership of more than fifty percent (50%) of
the shares of stock entitled to vote for the election of directors in the case
of a corporation, and more than fifty percent (50%) of the voting power in the
case of a business entity other than a corporation.

“Agreement”
means this Agreement and all Exhibits hereto.

“Amended
Distribution Agreement” has the meaning set forth in the Asset Purchase
Agreement.

 

“Asset
Purchase Agreement” has the meaning set forth in the Recitals.

“Asset
Sale” has the meaning set forth in Section 7.8.

“Competitor”
has the meaning set forth in Section 7.8.

“Confidential
Information” means information disclosed by or on behalf of one of the
parties (the “disclosing party”) to the other party (the “receiving
party”), generated under this Agreement, or otherwise learned by the
receiving party from the disclosing party, excluding information which:

(a)           was already in the possession of the
receiving party prior to its original receipt from the disclosing party
(provided that the receiving party is able to provide the disclosing party with
written proof thereof and, if received from a third party, that such
information was acquired without any party’s breach of a confidentiality or
non-disclosure obligation to the disclosing party related to such information);

(b)           is or becomes part of the public domain by reason of acts
not attributable to the receiving party;

(c)           is or becomes available to the
receiving party from a source other than the disclosing party which source has
rightfully obtained such information and has no direct or indirect obligation
of non-disclosure or confidentiality to the disclosing party with respect
thereto; or

(d)           has been independently developed by
or for the receiving party without breach of this Agreement or use of any such
information of the other party (provided that the receiving party is able to provide the
disclosing party with written proof thereof).

“EndoSheath Products”
means the products described on Schedule A, and any
and all related sheath technology owned or controlled by Vision-Sciences which
are used or can be used for the development, manufacture, and sale of products
or other use in the Field of Use.

“Enforcement
Action” has the meaning set forth in Section 3.2(b).

“Field of Use”
means the field of otorhinolaryngology (as defined by the American Academy of
Otorhinolaryngology and Head and Neck Surgery), including, without limitation,
sinus endoscopy, laryngoscopy, esophagoscopy and other applications or
procedures where flexible or rigid scopes are inserted into the ear, nose or
throat, all of the foregoing as and to the extent it is practiced by licensed
otorhinolaryngologists.

“Indemnifiable
Losses” has the meaning set forth in Section 6.1.

“Indemnified
Parties” has the meaning set forth in Section 6.2.

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“Intellectual
Property” means all forms of intellectual property in any jurisdiction and
under any law, whether now or hereafter existing, including, without
limitation: (a) inventions, discoveries, patent applications, patents
(including letters patent, industrial designs, and inventor’s certificates),
design registrations, invention disclosures, and applications to register
industrial designs, and any and all rights to any of the foregoing anywhere in
the world, including any provisionals, substitutions, extensions, supplementary
patent certificates, reissues, re-exams, renewals, divisions, continuations,
continuations in part, continued prosecution applications, and other similar
filings or notices provided for under the laws of the United States, or of any
other country; (b) trademarks and any all rights thereto anywhere in the world;
(c) trade secrets and other confidential or non-public business information,
including ideas, formulas, compositions, inventor’s notes, discoveries,
improvements, concepts, know-how, manufacturing and production processes and
techniques, testing information, research and development information, data
resulting or derived from research activities, invention disclosures,
unpatented blue prints, drawings, specifications designs, plans, proposals and
technical data, business and marketing plans, market surveys, market know-how
and customer lists and related information; (d) copyrights, whether or not
registered, and any non-registered copyright to any writings and other
copyrightable works of authorship, including source code, object code,
documentation (whether or not released), and databases; (e) integrated circuit
topographies and mask works; (f) moral rights; (g) features of shape,
configuration, pattern or ornament; and (h) registrations of, and applications
to register, any of the foregoing with any governmental entity and any renewals
or extensions thereof and all other rights to any of the foregoing.

“Knowledge”
of Vision-Sciences means, with respect to the individual officers and employees
of Vision-Sciences listed on Schedule B, actual knowledge of such
individuals or the knowledge any of such individuals would reasonably be
expected to have, assuming reasonable inquiry of any facts or circumstances
actually known to and recognized by such persons to create significant doubt
concerning the accuracy of any representation, warranty, or statement without
regard to such “knowledge” qualifier.

“Medtronic
Indemnified Parties” has the meaning set forth in Section 6.1.

“Notice
of Dispute” has the meaning set forth in Section 7.7.

“Patents”
means (a) the patents and patent applications, together with any patents that
may issue based thereon, set forth on Schedule C; (b) any other patents or patent applications owned
by or licensed (with the right to sublicense) to Vision-Sciences which claim
inventions conceived or reduced to practice within the three year period after
the Effective Date that are necessary or useful for designing, developing,
processing, manufacturing, using or selling EndoSheath Products in the Field of
Use; (c) any patents or patent applications that could claim priority to, or
from which priority could be claimed by, any of the foregoing referenced
patents or patent applications, including, but not limited to, all
continuation, divisional, continuation in part, re-issue, re-examination and
substitution applications that may be filed by or for the benefit of Vision-Sciences
based on the foregoing referenced patents or patent applications, together with
any patents that may issue based thereon; and (d) all foreign applications that
may be filed by or for the benefit of Vision-Sciences based on the foregoing
referenced U.S. patents and patent applications, together with all patents
which may issue based thereon.

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“Product
Liability” means any liability, claim or expense related to the EndoSheath
Products, including but not limited to reasonable attorneys’ fees and medical
expenses, arising in whole or in part out of a breach of any express or implied
product warranty, strict liability in tort, negligent manufacture of product,
negligent provision of services, product recall, or any other allegation of
liability arising from the design, testing, manufacture, packaging, labeling
(including instructions for use), marketing, distribution or sale of EndoSheath
Products (whether for clinical trial purposes, commercial use or otherwise).

“Response
to Dispute” has the meaning set forth in Section 7.7.

“Trademarks”
means the trademark and trademark applications, together with any registrations
that may issue based thereon, set forth on Schedule D.

“Vision-Sciences
Indemnified Parties” has the meaning set forth in Section 6.2.

“Vision-Sciences
Intellectual Property” means collectively all Intellectual Property related to EndoSheath Products
that is (a) owned by, controlled by or licensed to Vision-Sciences as of the
Effective Date, specifically including, without limitation, the Patents and
Trademarks; and (b) owned by, acquired by, licensed to, or filed, conceived or
reduced to practice by or on behalf of Vision-Sciences within the three year
period after the Effective Date.

“Vision-Sciences
Current Intellectual Property” means collectively all Intellectual Property
related to EndoSheath Products that is owned by, controlled by or licensed to
Vision-Sciences as of the Effective Date, specifically including, without
limitation, the Patents and Trademarks.

1.2)          Other Terms. 
Other terms may be defined elsewhere in the text of this Agreement and
shall have the meaning ascribed thereto in this Agreement.

ARTICLE 2

LICENSE
TO MEDTRONIC

2.1)          Grant of License.

(a)           Subject to the terms and conditions
of this Agreement, Vision-Sciences hereby grants to Medtronic and its Affiliates, and Medtronic
and its Affiliates hereby accept, a perpetual, irrevocable, worldwide,
sublicensable (including through multiple tiers, but in no event shall the
rights or obligations under Section 3.1 or 3.2 be sublicensed,
assigned, transferred or otherwise delegated), paid-up, royalty-free, exclusive
license (or sublicense, as the case may be) to exploit the Vision-Sciences
Intellectual Property solely in the Field of Use, including the right to
research, develop, make, have made, use, sell, import, have imported, offer to
sell, have sold, distribute, and have distributed EndoSheath Products.

(b)           Medtronic hereby acknowledges and agrees that the
Field of Use license granted to Medtronic pursuant to this Agreement does not
extend to any application outside of the Field of Use, and that Vision-Sciences
otherwise retains all rights in and to Intellectual 

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Property owned
or licensed by Vision-Sciences (including without limitation, the
Vision-Sciences Intellectual Property) not granted to Medtronic herein,
including, but not limited to, the right to research, develop, make, have
made, use, sell, import, have imported, offer to sell, have sold, distribute,
and have distributed EndoSheath Products outside the Field of Use.  For the avoidance of doubt, as between the
parties hereto, each
party acknowledges and agrees that any and all Intellectual Property which is
conceived, developed, reduced to practice or acquired by or on behalf of such
party shall be the sole and exclusive property of such party, subject to the
licenses expressly granted in this Agreement.

2.2)            Assistance.    From and after the Transition Completion
Date (as defined in the Transition Agreement between the parties dated as of
the Effective Date), at Medtronic’s request and expense, Vision-Sciences shall provide to Medtronic copies,
or electronic files, of all writings, drawings and materials, if any, that
document the Vision-Sciences Intellectual Property, including copies of any
patents, patent applications and documents representing embodiments of the
Vision-Sciences Intellectual Property. 
In addition, at Medtronic’s request, Vision-Sciences will provide
explanation and assistance to Medtronic to allow Medtronic to understand any
invention covered by the Vision-Sciences Intellectual Property conceived of or
reduced to practice after the Transition Completion Date.

ARTICLE 3

INTELLECTUAL PROPERTY

3.1)          Prosecution
and Maintenance of Vision-Sciences Intellectual Property.

(a)           Vision-Sciences shall, at its own expense,
use commercially reasonable efforts to protect the Vision-Sciences Intellectual
Property by applying for and maintaining appropriate worldwide patent and
trademark registrations, except as allowed otherwise below, and Vision-Sciences
agrees to consult with patent counsel regarding patent prosecution
matters.  Vision-Sciences and its
attorneys or agents shall consult with Medtronic with respect to the
preparation, filing, prosecution, foreign filing and maintenance of any Patent
and shall provide Medtronic sufficient opportunity to comment, at its own
expense, on any material document that Vision-Sciences intends to file or to
cause to be filed with the relevant patent office.

(b)           Vision-Sciences shall advise Medtronic in the event
that it intends to abandon any Patent or if it elects not to file a patent
application with respect to an invention that is necessary or useful for
designing, developing, processing, manufacturing or selling EndoSheath Products
in the Field of Use, and the parties shall thereupon consult in good faith in
an effort jointly to decide whether such Patent should be abandoned or whether
such patent application should be filed. 
If, following such consultation, Vision-Sciences wishes to abandon such
Patent and Medtronic wishes to maintain it, or Vision-Sciences wishes not to
file such patent application and Medtronic wishes to file such patent
application, then Medtronic shall be entitled, at its own cost and expense, to
maintain such Patent or to file such
patent application.  If Medtronic elects
to maintain such Patent or to file such patent application, Vision-Sciences
will assign the rights in such Patent or invention, as applicable, to
Medtronic.

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(c)           Except as expressly provided in this Section 3.1(a) and 3.1(b)
above, Medtronic shall not have any rights to prosecute and maintain any of the
Vision-Sciences Intellectual Property or to file or prosecute any applications
with respect thereto without Vision-Sciences’ prior written consent.

(d)           Each party shall cooperate with the other party, as
reasonably requested, to execute all lawful papers and instruments and to make
all rightful oaths and declarations as may be necessary in the preparation,
prosecution, maintenance and enforcement of any and all Patents.

(e)           Vision-Sciences shall not breach and shall comply with all of the material
provisions of, and shall maintain in full force and effect, all license
agreements with third parties pursuant to which Vision-Sciences is a licensee
of Vision-Sciences Intellectual Property, including without limitation the
licenses set forth on Schedule E.  Vision-Sciences shall promptly
notify Medtronic if any such third party licensor alleges any material breach
by Vision-Sciences of any such license agreement.  To the extent permitted by such contract,
Medtronic shall be entitled, but not obligated, after consultation with
Vision-Sciences, to cure, on behalf of Vision-Sciences, any alleged breach by
Vision-Sciences of such license agreement and seek to recapture the cost of
such cure against Vision-Sciences to the extent Vision-Sciences does not cure
such breach.  If Vision-Sciences becomes
aware of any third party’s breach of any license agreement with Vision-Sciences
pursuant to which Vision-Sciences is licensee of Vision-Sciences Intellectual Property,
including without limitation the licenses set forth on Schedule E, Vision-Sciences shall promptly
notify Medtronic.  Medtronic shall be
entitled, but not obligated, to take action against any such third party at its
own expense after consultation with and approval of Vision-Sciences to the
extent Vision-Sciences does not take such action.  For the avoidance of doubt, Vision-Sciences
may take any such action at its own expense.

(f)            Vision-Sciences shall promptly notify Medtronic of
any Vision-Sciences Intellectual Property created, obtained, licensed, or
acquired by Vision-Sciences after the Effective Date but before the third anniversary of the Effective
Date.

(g)           Medtronic shall, in exercising its Trademark rights
hereunder: (i) adhere to the Vision-Sciences brand equity and design
guidelines, as provided by Vision-Sciences from time to time; (ii) ensure that
its advertising and promotional material are consistent with industry norms;
and (iii) ensure that its products are of good quality consistent with industry
standards. Medtronic acknowledges and agrees that all use of the Trademarks and
goodwill in relation thereto will inure to the benefit of Vision-Sciences.

(h)           So long as any EndoSheath Products or other
products sold by Medtronic are covered in any commercially meaningful manner by
any valid claim of an unexpired patent included within the Patents, Medtronic
shall include on the product packaging for such EndoSheath Products or such
other products sold in the country where such patent has issued a reference
that such EndoSheath Products or such other products are sold under a license
from Vision-Sciences, Inc., or words to similar affect identifying
Vision-Sciences by name.

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3.2)          Enforcement
of Infringement of Vision-Sciences Intellectual Property.

(a)           Notice. 
Each party shall promptly report in writing to the other party during
the term of this Agreement any (i) known or suspected infringement of
Vision-Sciences Intellectual Property; and (ii) known or suspected unauthorized
use or misappropriation of Vision-Science Intellectual Property, of which such
party becomes aware, and shall provide the other party with all available
evidence supporting such infringement, suspected infringement, unauthorized use
or misappropriation or suspected unauthorized use or misappropriation.

(b)           General. Except as otherwise expressly
provided herein, neither party shall be obligated to bring suit or take such
other actions against infringement, misuse or misappropriation of the
Vision-Sciences Intellectual Property, defend against challenges to the
Vision-Sciences Intellectual Property or otherwise enforce the Vision-Sciences
Intellectual Property (an “Enforcement Action”).

(c)           Enforcement Within the Field of Use.  Medtronic shall have the first right to
initiate an Enforcement Action that it believes is reasonably required to
protect Vision-Science Intellectual Property in the Field of Use and to control
and settle all resulting actions and litigation, including selection and
direction of legal counsel.

(d)           Enforcement Outside of the Field of Use.  Vision-Sciences shall use commercially
reasonable efforts to initiate an Enforcement Action that it believes (in its
sole discretion) is reasonably required to protect Vision-Science Intellectual
Property outside of the Field of Use and to control and settle all resulting
actions and litigation, including selection and direction of legal counsel.

(e)           Step-in Right.  If either party, pursuant to Section
3.2(c) or 3.2(d) above, as applicable, fails to initiate an
Enforcement Action within sixty (60) days after becoming aware of the cause for
an Enforcement Action (or such shorter period as the other party may deem
reasonable in the event such party believes that pursuing equitable relief is
necessary or appropriate), then the other party may, in its discretion, provide
to the party failing to initiate the Enforcement Action with notice of its
intent to initiate an Enforcement Action, such notice to be provided within
thirty (30) days after the expiration of such sixty (60) day period.  If a party provides such notice and the other
party fails to initiate a suit or take other appropriate action within thirty
(30) days after receipt of such notice (or ten (10) days after receipt of
notice if the party providing such notice has specified in such notice that it
desires to pursue equitable relief), then the party providing such notice shall
have the right to initiate an Enforcement Action that it believes is reasonably
required to enforce, defend or protect the Vision-Sciences Intellectual
Property. The party providing such notice and initiating the Enforcement Action
shall give the other party sufficient advance notice of its intent to initiate
an Enforcement Action and the reasons therefor, and shall provide such party
with an opportunity to make suggestions and comments regarding such action.

(f)            Updates. 
Each party shall take all reasonably necessary steps to ensure that the
other party is informed and updated with respect to all material aspects of
actual or potential Enforcement Actions, providing upon request copies of all
material court filings in 

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connection
with any Enforcement Action and notice of any and all material developments,
including, without limitation, any claims or other challenges (threatened or
pending) affecting the Vision-Sciences Intellectual Property. All notices
hereunder shall be provided as set forth below in Section 7.5.

(g)           Cooperation.

(i)            The parties agree to consult and cooperate in good
faith with respect to any actual or potential Enforcement Action.  Except as provided herein, each party shall bear its own expenses in any
Enforcement Action.  Each of the parties
agree to join in any Enforcement Action (or allow the other party to sue in
such party’s name) if requested by the party initiating the Enforcement Action,
at the expense of the party initiating the Enforcement Action.  Where the parties agree to join in any
Enforcement Action, any monetary benefit arising from such Enforcement
Action shall first be applied to
reimburse each party its costs and expenses, and the remainder shall be
distributed to the party that initiated the Enforcement Action.

(ii)           In the event that an Enforcement Action is
reasonably required to protect Vision-Sciences Intellectual Property both
within and outside the Field of Use, Vision-Sciences and Medtronic agree to
consult and cooperate in good faith to determine if the parties will
co-initiate any such Enforcement Action. 
Any monetary benefit arising from any such co-initiated Enforcement
Action shall first be applied to reimburse each party its costs and expenses,
and the remainder shall be shared between the parties on the basis of the
damages within or outside of the Field of Use. If a party declines to
co-initiate any such Enforcement Action, the other party shall have the right
to initiate any such Enforcement Action and solely retain any benefit obtained
after both parties’ costs and expenses have been reimbursed.

(h)           No Settlement Without Consent.  In no event shall either party
enter into any settlement, make any statement or take any other action with
respect to the Vision-Sciences Intellectual Property without the prior written
consent of the other party, which shall not unreasonably withheld.

(i)            Information Confidential.  Each of the parties hereby acknowledges and
agrees that information, if any, shared by a party regarding Enforcement
Actions is highly confidential and shall not be disclosed to any third party
without prior written consent from the party producing or disclosing such
information.  The parties agree that
there shall be a community of interest with respect to any shared information
regarding enforcement and that disclosure to one another of such information
shall in no way affect the confidential nature of the information or its
qualification for protection from discovery as attorney client communications
and/or attorney work product.

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ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF VISION-SCIENCES

Vision-Sciences represents and
warrants to Medtronic as follows:

4.1)          Organization; Directors and Officers. 
Vision-Sciences is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.  Vision-Sciences has all necessary power and
authority to own its properties and assets and conduct the business presently
being conducted by it.

4.2)          Authority.  Vision-Sciences has full power and authority
to enter into this Agreement and to perform its obligations hereunder.  This Agreement has been duly authorized,
executed, and delivered by Vision-Sciences, and constitutes a legal, valid and
binding agreement of Vision-Sciences, enforceable against it in accordance with
its terms, subject to (a) bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors’ rights and to general equity principles and (b) laws
relating to the availability of specific performance, injunctive relief
or other equitable remedies.  No further
proceeding on the part of Vision-Sciences is necessary to authorize this
Agreement and the transactions contemplated hereby.  Neither the execution and delivery of this
Agreement nor compliance by Vision-Sciences with its terms and provisions will
violate (i) any provision of the certificate of incorporation, bylaws or other
governing instruments of Vision-Sciences, 
(ii) any contract, or governmental permit or license of Vision-Sciences,
or (iii) to the knowledge of Vision-Sciences, any law, statute, regulation,
injunction, order or decree of any government agency or authority or court to
which Vision-Sciences or any of the Specified
Assets is subject.

4.3)          Intellectual Property.

(a)           All right, title and
interest in and to the Vision-Sciences Current Intellectual Property licensed
under the License Agreement is exclusively owned by Vision-Sciences or to the
extent licensed by Vision-Sciences, is licensed exclusively to Vision-Sciences
for use in applications including, but not limited to, in connection with
EndoSheath Products without royalties, fees or commissions, and free and clear
of any liens. The manufacture and sale of the EndoSheath Products listed on Schedule
A by Vision-Sciences do not infringe, misuse, or misappropriate the rights,
including Intellectual Property rights or contract rights, of others.  The Vision-Sciences Current Intellectual
Property has not been challenged in any judicial or administrative
proceeding.  Neither any shareholder nor
any employee or consultant of Vision-Sciences (or the employer of any such
consultant) has any rights in or to any of the Vision-Sciences Current
Intellectual Property or any of the EndoSheath Products.  All Patents are still pending in good
standing and have not been abandoned, and all fees necessary to maintain such
Patents in full force and effect have been and as of the Closing will have been
paid.  To the knowledge of Vision-Sciences,
other than as set forth on Schedule F, no person nor such person’s
business nor any of its products has infringed, misused, or misappropriated the
Vision-Sciences Intellectual Property or currently is infringing, misusing,
misappropriating or conflicting with such rights.  All former or current employees or
independent contractors of Vision-Sciences that had or have access to
Vision-Sciences’ confidential information that relates to EndoSheath Products
or Vision-Sciences Intellectual Current Property have entered into customary confidentiality
and invention assignment 

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agreements with Vision-Sciences and no such employee
or consultant has any rights in such EndoSheath Products or Vision-Sciences
Current Intellectual Property. 
Vision-Sciences has the right to grant the licenses granted under this
Agreement.  To the Knowledge of
Vision-Sciences, the Vision-Sciences Intellectual Property is valid and
enforceable.

(b)           There are no actions, suits, claims,
disputes or proceedings or governmental investigations pending or threatened in
writing against Vision-Sciences or any of its Affiliates with respect to the
Vision-Sciences Current Intellectual Property or the use thereof by
Vision-Sciences, either at law or in equity, before any court or administrative
agency or before any governmental department, commission, board, bureau, agency
or instrumentality, or before any arbitration board or panel whether located in
the United States or a foreign country. 
Vision-Sciences has complied with any and all laws, rules, regulations,
writs, judgments, injunctions, decrees, determinations, awards or other orders
of any court or other governmental agency or instrumentality, domestic or
foreign, except which the failure in any case would not in any material respect
impair any rights of Medtronic under this Agreement.

(c)           All Vision-Sciences Intellectual
Property identified in Schedule C has the status indicated therein and
all applications are still pending in good standing and have not been
abandoned.  The Patents identified in Schedule C  constitute all of the current patents and patent
applications owned by or licensed (with the right to sublicense) to
Vision-Sciences which claim inventions that are necessary or useful for
designing, developing, processing, manufacturing, using or selling EndoSheath Products
in the Field of Use.  Vision-Sciences has
made all statutorily required filings, if any, to record its interests and
taken reasonable actions to protect its rights in the Vision-Sciences Current
Intellectual Property.

4.4)          Endosheath Products. All current EndoSheath Products are set forth on Schedule A,
including any EndoSheath Products that are currently under development by
Vision-Sciences.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF MEDTRONIC

Medtronic represents and warrants to
Vision-Sciences as follows:

5.1)          Organization of Medtronic.  Medtronic is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware.  Medtronic
has all necessary power and authority to own its properties and assets and
conduct the business presently being conducted by it.

5.2)          Authority.  Medtronic has full power and authority to
enter into this Agreement and to perform its obligations hereunder.  This Agreement has been duly authorized,
executed, and delivered by Medtronic, and constitutes a legal, valid and
binding agreement of Medtronic, enforceable against Medtronic in accordance
with its terms, subject to (a) bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors’ rights and to general equity principles and (b) laws
relating to the availability of specific performance, injunctive relief or
other equitable remedies.  No further
proceeding on the part of Medtronic is necessary to authorize this Agreement
and the 

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transactions contemplated hereby. 
Neither the execution and delivery of this Agreement nor compliance by
Medtronic with its terms and provisions will violate (i) any provision of the
articles of incorporation or bylaws of Medtronic, (ii) any contract, permit or
license of Medtronic, or (iii) to the knowledge of Medtronic, any law, statute,
regulation, injunction, order or decree of any government agency or authority
or court to which Medtronic or any of Medtronic’s assets are subject.

ARTICLE 6

INDEMNIFICATION

6.1)          Indemnification
of Medtronic.  Vision-Sciences shall
indemnify, defend and hold harmless Medtronic and each of its subsidiaries,
divisions, officers, directors, employees, and shareholders (the “Medtronic
Indemnified Parties”) from and against and in respect of any and all
demands, claims, actions or causes of action, assessments, losses, damages,
liabilities, interest and penalties, costs and expenses (including, without
limitation, reasonable legal fees and disbursements incurred in connection
therewith and in seeking indemnification therefor, and any amounts or expenses
required to be paid or incurred in connection with any action, suit,
proceeding, claim, appeal, demand, assessment or judgment) whether or not involving
a third-party claim (collectively “Indemnifiable Losses”),
directly or indirectly resulting from, arising out of, or imposed upon or
incurred by any Medtronic Indemnified Party by reason of the following:

(a)           any
breach of any representation or warranty of Vision-Sciences contained in this
Agreement; or

(b)           any
alleged infringement of any valid and enforceable claim of a third party patent
or other Intellectual Property by any EndoSheath Product set forth on Schedule
A, except to the extent such infringement is due to an alteration of the
EndoSheath Product made after the Effective Date.

6.2)          Indemnification of Vision-Sciences.  Medtronic
shall indemnify, defend and hold harmless Vision-Sciences and each of its
subsidiaries, divisions, officers, directors, employees and shareholders (the “Vision-Sciences
Indemnified Parties” and together with the Medtronic Indemnified Parties,
the “Indemnified Parties”) from and against and in respect of any and
all Indemnifiable Losses resulting from, arising out of, or imposed upon or
incurred by any Vision-Sciences Indemnified Party by reason of the following:

(a)               any breach of any representation or warranty of
Medtronic contained in this Agreement; or

(b)           any Product Liability claims in connection with the
EndoSheath Products designed, manufactured or sold by or on behalf of Medtronic
after the Effective Date.

6.3)          Third-Party Claims and Other Claims.

(a)               If a claim by a third
party is made against any Indemnified Party, and if the Indemnified Party
intends to seek indemnity with respect thereto under this Article 6,
such 

 11
 

Indemnified Party
shall promptly notify the indemnifying party of such claim; provided, however,
that failure to give timely notice shall not affect the rights of the
Indemnified Party so long as the failure to give timely notice does not
adversely affect the indemnifying party’s ability to defend such claim against
a third party and the indemnifying party shall be entitled to settle or assume
the defense of such claim, including the employment of counsel reasonably
satisfactory to the Indemnified Party. 
If the indemnifying party elects to settle or defend such claim, the
indemnifying party shall notify the Indemnified Party within thirty (30) days
(but in no event less than twenty (20) days before any pleading,
filing or response on behalf of the Indemnified Party is due) of the
indemnifying party’s intent to do so.  If
the indemnifying party elects not to settle or defend such claim or fails to
notify the Indemnified Party of the election within thirty (30) days (or such
shorter period provided above) after receipt of the Indemnified Party’s notice
of a claim of indemnity hereunder, the Indemnified Party shall have the right
to contest, settle or compromise the claim without prejudice to any rights to
indemnification hereunder.  Regardless of
which party is controlling the settlement of defense of any claim, (i) both the
Indemnified Party and indemnifying party shall act in good faith, (ii) the
indemnifying party shall not thereby permit to exist any lien, encumbrance or
other adverse charge upon any asset of any Indemnified Party or of its
subsidiaries, (iii) the indemnifying party shall permit the Indemnified Party
to participate in such settlement or defense through counsel chosen by the
Indemnified Party, with all fees, costs and expenses of such counsel borne by
the Indemnified Party, unless the indemnifying party and Indemnified Party have
available inconsistent defenses to such third-party claim, in which case such
fees, costs and expenses shall be borne by the indemnifying party, (iv) no
entry of judgment or settlement of a claim may be agreed to without the written
consent of the Indemnified Party, which consent shall not be unreasonably
withheld, and (v) the indemnifying party shall promptly reimburse the
Indemnified Party for the indemnified amount as incurred by the Indemnified
Party pursuant to this Article 6.  So
long as the indemnifying party is reasonably contesting any such third party
claim in good faith as permitted herein, the Indemnified Party shall not pay or
settle any such claim (or, if it does, it shall not be indemnified for such
settlement amount).  The controlling
party shall upon request deliver, or cause to be delivered, to the other party
copies of all correspondence, pleadings, motions, briefs, appeals or other
written statements relating to or submitted in connection with the settlement
or defense of any such claim, and timely notices of any hearing or other court
proceeding relating to such claim.

(b)               A claim for indemnification
for any matter not involving a third-party  claim
may be asserted by notice to the party from whom indemnification is
sought.  Such notice shall state the
amount of Indemnifiable Losses, if known, the method of computation thereof,
and contain a reference to the provisions of the Agreement in respect to which
such right of indemnification is claimed or arises.

6.4)          Cooperation as to Indemnified Liability.  Each party
hereto shall cooperate fully with the other parties with respect to access to
books, records, or other documentation within such party’s control, if deemed
reasonably necessary or appropriate by any party in the defense of any claim
that may give rise to indemnification hereunder.

6.5)          Calculation of Damages.  The amount
of any Indemnifiable Losses for which indemnification is provided under this
Article 6 shall be reduced by any insurance proceeds that 

 12
 

the Indemnified Party is entitled to pursuant to any insurance policy on
account of the matter resulting in such Indemnifable Loss.

6.6)          Nature of Indemnification.  The Indemnified
Party’s right to indemnification and payment of
Indemnifiable Losses, or other remedy, based on the indemnified party’s
representations, warranties, covenants and obligations, shall not be affected
by any investigation conducted by the indemnified party or any knowledge
acquired (or capable of being acquired) at any time by the Indemnified
Party, whether before or after the execution
and delivery of this Agreement, with respect to the accuracy or inaccuracy of
or compliance with, any such representation, warranty, covenant or obligation.

6.7)          Indemnification Limitation.  Except with
respect to claims based on fraud, criminal activity, intentional
misrepresentation or intentional misconduct, the rights of the Indemnified
Parties under this Article 6 shall be the sole and exclusive remedies (other
than any equitable remedies as may be available) of the Indemnified Parties
with respect to claims resulting from or relating to Indemnifiable Losses
arising from the claims described in Sections 6.1 and 6.2 above.

ARTICLE 7

MISCELLANEOUS

7.1)          Further Assurances.  At any time and from time to time
the parties shall, without further consideration, execute and deliver or cause
to be executed and delivered to the other party any additional instruments, and
shall take such other action as the other party may reasonably request to carry
out, or evidence the consummation of, the transactions contemplated by this
Agreement.

7.2)          Complete Agreement.  The Schedules to this Agreement shall
be construed as an integral part of this Agreement to the same extent as if
they had been set forth verbatim herein. 
This Agreement and the Schedules hereto constitute the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersede all prior agreements whether written or oral relating hereto.

7.3)          Survival of Representations and Warranties.  The
representations and warranties contained in this Agreement shall survive and
remain in full force and effect for three years after the Effective Date.  No independent investigation by
Vision-Sciences or Medtronic, its counsel, or any of its agents or employees
shall in any way limit or restrict the scope of the representations and warranties
made by Vision-Sciences or Medtronic in this Agreement.

7.4)          Waiver, Discharge, Amendment, Etc.  The failure
of any party hereto to enforce at any time any of the provisions of this
Agreement, shall in no way be construed to be a waiver of any such provision,
nor in any way to affect the validity of this Agreement or any part thereof or
the right of the party thereafter to enforce each and every such
provision.  No waiver of any breach of
this Agreement shall be held to be a waiver of any other or subsequent
breach.  Any amendment to this Agreement
shall be in writing and signed by the parties hereto.

 13
 

 

7.5)          Notices.  All notices hereunder shall be deemed given
if in writing and delivered personally or sent by telecopy (with confirmation
of transmission) or certified mail (return receipt requested) or reputable
courier service to the parties at the following addresses (or at such other
addresses as shall be specified by like notice):

if to Medtronic, to:

Medtronic, Inc.

World Headquarters

710 Medtronic Parkway

Minneapolis, MN 55432-5604

with separate copies thereof
addressed to

Attention: General Counsel

FAX No.:  (763) 572-5459

and

Attention: Vice President and Chief
Development Officer

FAX No.:  (763) 505-2542

with a separate copy thereof
addressed to:

General Counsel

Medtronic Xomed, Inc.

6743 Southpoint Drive North

Jacksonville, FL 32216

and if to Vision-Sciences, to:

Vision-Sciences, Inc.

40 Ramland Road South, Suite 1

Orangeburg, NY 10962

Facsimile:  (845) 365-0620

Attention:  Ron Hadani, President and CEO

with separate copies thereof addressed
to:

Proskauer Rose LLP

1585 Broadway

New York, NY 10036

Facsimile:  (212) 969-2900

Attention:  Paul I. Rachlin, Esq.

Any party may change the above
specified recipient and/or mailing address by notice to all other parties given
in the manner herein prescribed.  All
notices shall be deemed given on the 

 14
 

day when actually delivered as
provided above (if delivered personally, by telecopy or by reputable courier
service) or on the date that is three days after the date shown on the return
receipt (if delivered by mail).

7.6)          Expenses.  Except as otherwise expressly provided
herein, Medtronic and Vision-Sciences shall each pay their own expenses
(including, but not limited to, all compensation and expenses of counsel,
financial advisors, consultants, actuaries and independent accountants)
incident to this Agreement and the preparation for, and consummation of, the
transactions provided for herein.

7.7)          Governing Law.

(a)           This Agreement shall be governed by
and interpreted in accordance with the laws of the State of Delaware, including
all matters of construction, validity, performance and enforcement, without
giving effect to principles of conflict of laws.

(b)           The
parties shall attempt in good faith to resolve any dispute arising out of or
relating to this Agreement promptly by negotiation between executives of each
party who have authority to settle the controversy and who are at a higher
level of management than the persons with direct responsibility for
administration of this Agreement.  Either
party may give the other party written notice of any dispute not resolved in
the normal course of business (“Notice of Dispute”), which Notice of
Dispute shall include (i) a statement of that party’s position and a summary of
arguments supporting that position, (ii) the dollar amount of the dispute, if
known, and the section(s) of the Agreement to which the dispute relates and
(iii) the name and title of the executive who will represent that party and of
any other person who will accompany the executive.  Within 10 days after delivery of the Notice
of Dispute, the receiving party shall submit to the other a written response
(the “Response to Dispute”).  The
Response to Dispute shall include (iv) a statement of that party’s position and
a summary of arguments including references to any section(s) of the Agreement,
if applicable, supporting that position and (v) the name and title of the
executive who will represent that party and of any other person who will
accompany the executive. Within 10 days after delivery of the Response to
Dispute, the designated executives of both parties shall meet at a mutually
acceptable time and place or by conference telephone, and thereafter as often
as they reasonably deem necessary, to attempt to resolve the dispute. All
negotiations pursuant to this clause are confidential and shall be treated as
compromise and settlement negotiations for purposes of applicable rules of
evidence.

(c)           If
the dispute has not been resolved by negotiation as provided under subparagraph
(b), above, within 30 days after delivery of the initial Notice of Dispute, or
if the parties failed to meet within 30 days after delivery of the initial
Notice of Dispute, the parties shall endeavor to settle the dispute by
mediation under the Center for Public Resources (CPR) Mediation Procedure then
currently in effect, provided, however, that if one party fails to participate
in the negotiation as provided under subparagraph (b), above, the other party
can initiate mediation prior to the expiration of the 30 days.  Unless otherwise agreed, the parties will
select a mediator from the CPR Panels of Distinguished Neutrals, and if unable
to agree the CPR shall select a mediator.

 15
 

 

7.8)          Successors and Assigns.  This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and the successors or assigns of the parties hereto.  The rights and obligations of Vision-Sciences
herein may not be assigned or transferred without the written consent of
Medtronic, which consent shall not be unreasonably withheld.  The
rights of Medtronic may be assigned only to an Affiliate or to such business
organization that shall succeed to the business of Medtronic or of such
subsidiary to which this Agreement relates.  For the avoidance of doubt, Medtronic’s
rights and obligations under Sections 3.1 and 3.2 may not be sublicensed,
assigned, transferred or otherwise delegated.  For the avoidance of doubt, a
sublicense of any Vision-Sciences Intellectual Property that is not otherwise
prohibited by this Agreement shall not be considered a “transfer” of an
interest in the Vision-Sciences Intellectual Property for purposes of this Section
7.8.  In addition, Vision-Sciences shall not complete or facilitate an
acquisition by any person or group of persons of 50% or more of the voting securities
of Vision-Sciences without first (x) obtaining from the purchaser a written
statement acknowledging Vision-Sciences’ obligations pursuant to this Agreement
and agreeing not to take any action that would cause Vision-Sciences to breach
any of its obligations hereunder, and (y) promptly providing a copy of such
written commitment to Medtronic.

7.9)          Titles and Headings; Construction.  The titles
and headings to Sections herein and Schedules hereto are inserted for the
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.  This Agreement shall be construed without
regard to any presumption or other rule requiring construction hereof against
the party causing this Agreement to be drafted. 
Nothing in this Agreement, expressed or implied, is intended to confer
on any person other than the parties hereto or their respective permitted
successors or assigns, any rights, remedies, obligations or liabilities under
or by reason of this Agreement.

7.10)        Severability.  If any provision of this Agreement
is held invalid, unenforceable or void by a court of competent jurisdiction,
the remaining provisions shall nonetheless be enforceable according to their
terms.  In such case, the parties agree
to negotiate in good faith to create an enforceable contractual provision to
achieve the purpose of the invalid provision. 
Further, if any provision is held to be overbroad as written, such
provision shall be deemed amended to narrow its application to the extent
necessary to make the provision enforceable according to applicable law and
shall be enforced as amended.

7.11)        Counterparts.  This Agreement may be executed in
any number of counterparts, each of which shall be deemed as original and all
of which together shall constitute one instrument.

7.12)        Confidentiality.  Each party will, for a period of
five (5) years, (i) keep confidential and not disclose to others, all
Confidential Information of the other party, and (ii) not use any of the other
party’s Confidential Information for its own direct or indirect benefit, or the
direct or indirect benefit of any third party, except that a party may use the
other party’s Confidential Information to the extent necessary to perform its
duties and obligations, or to enforce or exercise such party’s rights, under
this Agreement.  The foregoing shall not
prohibit disclosures: (x) made to the receiving party’s sub-distributors,
employees or agents who have a “need to know” the other party’s Confidential
Information to the extent such disclosure is 

 16
 

necessary to perform such party’s
duties and obligations, or to enforce such party’s rights, under this
Agreement, provided that such sub-distributors, employees or agents agree in
writing or are otherwise compelled to comply with the obligations of this Section
7.12, and the receiving party remains directly responsible to the
disclosing party for their compliance; or (y) compelled to be made by any
requirement of law or pursuant to any legal, regulatory or investigative
proceeding before any court, or governmental or regulatory authority, agency or
commission so long as the party so compelled to make disclosure of Confidential
Information of the other party provides prior written notice to such other
party so that the other party may seek a protective order or other remedy to
protect the confidentiality of the Confidential Information and/or waive the
compelled party’s compliance with this Section 7.12, provided that all
such information so disclosed (other then in a way which makes it generally
available to the public) shall remain Confidential Information for all other
purposes.  If such protective order,
other remedy or waiver is not obtained by the time the compelled party is required
to comply, the compelled party may furnish only that portion of the
Confidential Information of the other party that it is legally compelled, in
the opinion of counsel, to disclose and shall request, at the other party’s
expense, that such Confidential Information be accorded confidential treatment
(if such procedure is available), including redaction of any payment terms
specified herein. Each party further agrees to take appropriate measures to
prevent any such prohibited disclosure of Confidential Information by its
present and future employees, officers, agents, subsidiaries, or consultants.

(Remainder
of page intentionally blank; signatures follow on next page)

 17

 

IN WITNESS WHEREOF, each of the
parties has caused this License Agreement to be executed and delivered in the
manner appropriate for each, as of the date first above written.

	
  

  	
  MEDTRONIC XOMED, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Its

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VISION-SCIENCES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Its

  	
   

  

Schedule A

EndoSheath
Products

Schedule B

Officers and Employees of
Vision Sciences

Schedule C

Patents and
Patent Applications

Schedule D

Tradenames

Schedule E

License
Agreements

Schedule F

Infringements
of Vision-Sciences’ Intellectual PropertyExhibit
10.34

April
4, 2007

Mr. Yoav M. Cohen

c/o Vision-Sciences, Inc.

40 Ramland Road, Suite 1

Orangeburg, New York 10962

Re:  Amendment to Employment Letter Agreement
dated September 22, 2006

Dear
Yoav:

The
purpose of this letter (the “Amendment”) is to amend certain terms and
conditions of that certain Letter Agreement dated September 22, 2006 (the “Original
Letter Agreement”) by and between you and Vision-Sciences, Inc., a Delaware
corporation (the “Company”). 
Accordingly, the following are the amended terms and conditions of your
employment with the Company which we have agreed upon:

	
  Salary:

  	
   

  	
  $205,000 per annum, payable in accordance with the
  Company’s normal payroll schedules.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Options:

  	
   

  	
  In addition to the options previously granted to you
  pursuant to the Original Letter Agreement, you are entitled to receive an
  additional incentive stock option to purchase Three Hundred Fifty Thousand
  (350,000) shares of common stock of the Company, subject to approval of the
  Compensation Committee of the Board of Directors, at a purchase price equal
  to the closing market price on your effective date, with vesting as follows:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  - 37,500 shares vesting on April 1, 2008

  	
   

  	
   

  
	
   

  	
   

  	
  - 62,500 shares vesting on April 1, 2009

  	
   

  	
   

  
	
   

  	
   

  	
  - 87,500 shares vesting on April 1, 2010

  	
   

  	
   

  
	
   

  	
   

  	
  - 87,500 shares vesting on April 1, 2011

  	
   

  	
   

  
	
   

  	
   

  	
  - 50,000 shares vesting on April 1, 2012

  	
   

  	
   

  
	
   

  	
   

  	
  - 25,000 shares vesting on April 1, 2013

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Severance:

  	
   

  	
  If the Company terminates your employment without
  cause, you will be entitled to receive, as severance, an amount equal to
  three (3) months of your base salary then in effect on the date of
  termination (“Effective Base Salary”) for each year of your employment
  with the Company (“Severance Pay”); provided, however,
  that the Severance Pay shall not exceed an amount equal to twelve (12) months
  of the Effective Base Salary. The Severance Pay shall be payable in
  accordance with the Company’s normal payroll schedules, beginning on the
  first pay day following the date of termination of your employment with the
  Company.

  

 

 

	
  Governing Law:

  	
   

  	
  This Amendment will be
  governed by, and construed under and in accordance with, the internal laws of
  the State of New York, without reference to rules relating to conflicts of
  laws.

  
	
   

  	
   

  	
   

  
	
  Integration:

  	
   

  	
  From and after the date of
  this Amendment, the Original Letter Agreement and this Amendment shall be
  read as one agreement.  Except as set forth in this Amendment, all other
  terms and conditions of the Original Letter Agreement are not being modified
  or amended, and shall remain in full force and effect.

  

 

We hope that you find the foregoing terms and conditions acceptable. You may indicate your agreement with the terms and conditions set forth in this Amendment by signing the enclosed duplicate original of this Amendment.

We
look forward to your continued employment with the Company

	
  

  	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  VISION-SCIENCES, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Ron Hadani

  
	
   

  	
   

  	
  Name:

  	
   

  	
  Ron Hadani

  
	
   

  	
   

  	
  Title:

  	
   

  	
  President and Chief

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Officer

  
							

 

ACCEPTED AND AGREED:

	
  /s/ Yoav M. Cohen

  	
   

  
	
  Yoav M. Cohen

  	
   

  

 

Dated:  April 4, 2007

 

 2

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