Exhibit 10.1

 

COMMON STOCK PURCHASE AGREEMENT

 

InSite Vision Incorporated

965 Atlantic Avenue

Alameda, California 94501

 

Ladies & Gentlemen:

 

The undersigned purchaser (the “Purchaser”) hereby confirms its agreement with
you as follows:

 

1. This Stock Purchase Agreement (the “Purchase Agreement”) is made by and
between InSite Vision Incorporated, a Delaware corporation (the “Company”), and
the Purchaser as of the date this Purchase Agreement is accepted by the Company
below (the “Effective Date”).

 

2. This Purchase Agreement is one of a series of stock purchase agreements of
the Company relating to the offering (the “Offering”) of securities of the
Company. In connection with the Offering, the Company has authorized the
issuance and sale of up to a maximum aggregate amount of Two Hundred Ten
Thousand (210,000) shares of the Company’s Common Stock, par value $.01 per
share (the “Common Stock”).

 

3. The Company and the Purchaser agree that the Purchaser will purchase from the
Company, and the Company, conditioned upon acceptance in whole or in part, will
sell to the Purchaser              (            ) shares of Common Stock at a
purchase price per share of Common Stock sold (the “Purchase Price”) equal to
$0.40 and pursuant to the Terms and Conditions for Purchase of Common Stock
attached hereto as Annex I and incorporated herein by reference as if fully set
forth herein.

 

4. The Company makes no representation that this Purchase Agreement will be
accepted by the Company and is under no obligation to accept this Purchase
Agreement.

 

5. The Purchaser hereby agrees not to engage, directly or indirectly, in any
short sale or third party short sales or hold a “put equivalent position” with
respect to the Common Stock (as defined in Rule 16a-1 of the 1934 Act) of the
Company’s Common Stock for a thirty (30) day period prior to and for a one
hundred eighty (180) day period following the Closing Date.

 

[Signature Page Follows]

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Please confirm that the foregoing correctly sets forth the agreement between us
by signing in the space provided below for that purpose.

 

PURCHASER

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Print Name

By:

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Title:

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Address:

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ACCEPTED as of October 20, 2003

INSITE VISION INCORPORATED

By:

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Name: Kumar Chandrasekaran

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Title: President and Chief Executive Officer

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Annex I

 

TERMS AND CONDITIONS FOR PURCHASE OF COMMON STOCK

 

1. Authorization and Sale of the Common Stock.

 

1.1 Authorization of the Common Stock. The Company has authorized the issuance
and sale of up to Two Hundred Ten Thousand (210,000) shares of the Company’s
Common Stock, par value $.01 per share (the “Common Stock”).

 

1.2 Sale of Common Stock. Subject to the terms and conditions hereof, the
Purchaser will purchase the number of shares of Common Stock agreed upon by the
Purchaser and accepted by the Company at the Purchase Price, as set forth in the
Common Stock Purchase Agreement by and between the Company and the Purchaser
(the “Purchase Agreement”). The shares of Common Stock sold to Purchaser
pursuant to the Purchase Agreement are hereinafter referred to as the “Shares”.

 

2. Closings.

 

2.1 Closing Date. One or more closings of the purchase and sale of the Common
Stock in the Offering hereunder (the “Closing”) shall be held at such place and
such times as the Company may select. Each date of a Closing of the purchase or
sale of Common Stock in connection with the Offering is hereinafter referred to
as a “Closing Date.” As of the Closing Date for a specific purchase of Common
Stock, the Company shall prepare a certificate or certificates registered in the
name of the Purchaser representing the Shares to be purchased by such Purchaser
under the Purchase Agreement, and the Purchaser shall send to the Company a wire
transfer (in accordance with the instructions set forth on Exhibit 2.1(a)
hereto) in the amount of the purchase price of the Common Stock to be purchased
by such Purchaser, payable to the Company’s order. Funds received prior to the
Closing Date will not bear interest.

 

3. Representations and Warranties of the Company. The Company represents and
warrants to the Purchaser as of the Closing Date as follows, except as set forth
in the SEC Documents (as defined below):

 

3.1 Organization and Standing. Each of the Company and its subsidiaries has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation with full corporate power
and corporate authority to own, lease and operate its properties and conduct its
businesses as described in the SEC Documents (as defined below). Each of the
Company and its subsidiaries is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the ownership
or leasing of properties or the conduct of its business as presently conducted
require such qualification, except where the failure to be so qualified would
not have a material adverse effect on the condition (financial or otherwise),
earnings, operations, or business of the Company and its subsidiaries taken as a
whole.

 

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3.2 Corporate Power; Authorization. The Company has all requisite legal and
corporate power and has taken all requisite corporate action to execute and
deliver the Purchase Agreement, to sell and issue the Shares and to carry out
and perform all of its obligations hereunder. The Purchase Agreement has been
duly authorized, executed and delivered on behalf of the Company and constitutes
the valid and binding agreement of the Company, enforceable in accordance with
its terms, except (1) as limited by applicable bankruptcy, insolvency,
reorganization or similar laws relating to or affecting the enforcement of
creditors’ rights generally, (ii) as limited by equitable principles generally
and (iii) rights to indemnification hereunder may be limited by applicable law.

 

3.3 Validity of Shares. The Company has full corporate power and lawful
authority to sell the Shares on the terms and conditions contemplated herein,
and when so sold against payment therefor as provided herein, the Shares will be
validly authorized and issued, fully paid and nonassessable. The issuance and
delivery of each of the Shares is not subject to preemptive or any similar
rights of the stockholders of the Company or any liens or encumbrances arising
through the Company.

 

3.4 SEC Documents; Financial Statements. The Company’s Annual Report on Form
10-K (as amended on Form 10-K/A) for the fiscal year ended December 31, 2002 and
the Company’s Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, 2003 and June 30, 2003 (as amended on Form 10-Q/A) (collectively, the
“SEC Documents”), in each case, as filed by the Company with the Securities and
Exchange Commission (the “Commission”) have been made available to the
Purchaser. The SEC Documents conform in all material respects to the
requirements of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), as applicable, and the rules and regulations of the Commission
thereunder. The SEC Documents did not as of their dates contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances in which they were made, not misleading. The financial statements
of the Company included in the SEC Documents (the “Financial Statements”) comply
as to form in all material respects with applicable accounting requirements and
with the published rules and regulations of the Commission with respect thereto.
Except as may be indicated in the notes to the Financial Statements, the
Financial Statements have been prepared in accordance with generally accepted
accounting principles consistently applied and fairly present, in all material
respects, the consolidated financial position of the Company and its
subsidiaries at the dates thereof and the consolidated results of their
operations, stockholders’ equity and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal, recurring
adjustments).

 

3.5 Subsequent Events. Other than as reported on the Form 8-K filed by the
Company with the Commission on September 23, 2003, since June 30, 2003, (i)
neither the Company nor any of its subsidiaries has incurred any liabilities or
obligations, contingent or otherwise, that are material in the aggregate to the
Company and its subsidiaries, taken as a whole, except in the ordinary course of
business, and (ii) there has been no change in the financial condition or
operating results of the Company and its subsidiaries, taken as a whole from
that reflected in the Financial Statements, except changes that occurred in the
ordinary course of business or that have not had a material adverse effect on
the Company and its subsidiaries, taken as a whole.

 

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3.6 Legal Proceedings. There are no legal proceedings pending or, to the
knowledge of the Company, threatened, to which the Company or any subsidiary is
a party or to which property of the Company or any subsidiary is subject that
the Company believes is reasonably likely to have a material adverse effect on
the Company and its subsidiaries, taken as a whole.

 

3.7 Government Approval. Subject to compliance with the provisions of applicable
securities laws of state or foreign jurisdictions, no other approval of any
public body (state or federal) is or will, on the Closing Date be necessary in
connection with the offer, issue and sale of the Shares as contemplated herein.

 

3.8 No Breach. The consummation of the transactions contemplated in the Purchase
Agreement and the fulfillment of the terms thereof will not result in (i) a
violation of the Company’s Certificate of Incorporation or Bylaws, (ii) a breach
of any of the material terms or provisions of, or constitute a default under,
any material indenture, mortgage, deed of trust or other agreement or instrument
to which the Company is a party or by which it is bound or (iii) a violation of
any law, rule, regulation, order, judgment or decree applicable to the Company
or by which any property or asset of the Company is bound.

 

3.9 Licenses and Consents. To the knowledge of the Company, each of the Company
and its subsidiaries is in possession of and operating in compliance with all
authorizations, licenses, certificates, consents, orders and permits from state,
federal and other governmental authorities that are material to the conduct of
its business, all of which are valid and in full force and effect, except to the
extent that the failure to have or be in compliance with such is not reasonably
likely to have a material adverse effect on the Company and its subsidiaries,
taken as a whole.

 

3.10 Outstanding Stock. All outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable; all issued and outstanding shares of capital stock of each
subsidiary of the Company have been duly authorized and validly issued and are
fully paid and nonassessable.

 

3.11 Common Stock Registration. The Common Stock is registered pursuant to
Section 12(g) of the Exchange Act and is traded on the American Stock Exchange
(the “AMEX”) and the Company has taken no action designed to, or, to the
Company’s knowledge, likely to, have the effect of terminating the registration
of the Common Stock under the Exchange Act or delisting the Common Stock from
the AMEX without relisting on another national securities exchange or the NASDAQ
National Market.

 

3.12 Private Placement. The Company has not taken any action inconsistent with
the treatment of the sale of the Common Stock pursuant to the Purchase Agreement
as a private placement exempt from the registration requirements of the
Securities Act of 1933, as amended (the “Securities Act”), pursuant to the
provisions of Section 4(2) thereof. Assuming the accuracy of the Purchasers’
representations and warranties in the Purchase Agreement and the compliance by
each Purchaser with all of its covenants and agreements, the offer, sale, and
issuance by the Company of the Common Stock to the Purchasers as contemplated
herein constitute transactions exempt from the registration requirements of
Section 5 of the Securities Act.

 

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4. Representations and Warranties of the Purchaser; Access to Information;
Independent Investigation. The Purchaser hereby represents and warrants to the
Company as follows:

 

4.1 Investment Intent. The Purchaser is purchasing the Common Stock for
investment for its own account only, not as a nominee or agent, and not with a
view to, or for resale in connection with, any “distribution” of any part
thereof within the meaning of the Securities Act. The Purchaser has no present
intention of selling, granting any participation in, or otherwise distributing
the same. The Purchaser does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant any participation to such
person or to any third person with respect to any of the Shares. The Purchaser
understands that the Shares have not been registered under the Securities Act or
registered or qualified under any state securities law in reliance on specific
exemptions therefrom, which exemptions may depend upon, among other things, the
bona fide nature of Purchaser’s investment intent as expressed herein. The
Purchaser further understands that neither the Company nor any of its officers
or directors has any obligation to register the Shares under any federal or
state securities act or law, except as otherwise expressly set forth in Section
5 hereof.

 

4.2 Investment Experience. The Purchaser is an “accredited investor” within the
meaning of Commission Rule 501 promulgated under the Securities Act, and was not
organized for the specific purpose of acquiring the Shares. The Purchaser had
access to the SEC Documents and has carefully reviewed the information contained
therein, including, but not limited to, the section entitled “Risk Factors”
contained in such SEC Documents. The Purchaser is aware of the Company’s
business affairs and financial condition and has acquired sufficient information
about the Company to reach an informed and knowledgeable decision to acquire the
Shares.

 

4.3 Authorization. The Purchaser has full right, power and authority to enter
into this Agreement and perform its obligations hereunder. This Purchase
Agreement has been duly and validly authorized, executed and delivered on behalf
of the Purchaser and is a valid and legally binding agreement of the Purchaser
enforceable in accordance with its terms, subject as to enforceability to
general principles of equity and to bankruptcy, insolvency, moratorium and other
similar laws affecting the enforcement of creditors’ rights generally.

 

4.4 Compliance with Securities Laws and Regulations. All subsequent offers and
sales of the Shares by the Purchaser shall be made pursuant to registration
under the Securities Act and qualification under the applicable state securities
laws or pursuant to exemptions from registration and qualification as well as
compliance with the provisions of Section 5.1 below.

 

4.5 Reliance by Company. The Purchaser understands that the Shares are being
offered and sold to it in reliance on specific exemptions from the registration
and qualification requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and the
Purchaser’s compliance with the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth herein in order to
determine the availability of such exemptions and the eligibility of the
Purchaser to acquire the Shares.

 

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4.6 No Government Approval. The Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed on or made any recommendation or endorsement of the Shares.

 

4.7 No Legal, Tax or Investment Advice. The Purchaser understands that nothing
in the Purchase Agreement or any other materials presented to the Purchaser in
connection with the purchase and sale of the Shares constitutes legal, tax or
investment advice. The Purchaser has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of the Shares.

 

4.8 Access to Information. The Purchaser acknowledges that it has had the
opportunity to ask questions, to receive answers concerning the Company and the
terms and conditions of the Offering from the Company and to obtain any
additional information from the Company that it considers necessary or
appropriate regarding the Offering, for deciding whether to purchase in the
Offering. In addition, the Purchaser acknowledges that no private placement
memorandum or similar document has been prepared in connection with the Offering
and the Company has not made, and the Purchaser is not relying on, any
representations or warranties other than as specifically set forth herein.

 

4.9 Accredited Investor. The Purchaser makes the additional representations and
warranties set forth on Exhibit 4.9 attached hereto.

 

4.10 Risk and Suitability. The Purchaser acknowledges and realizes that
Purchaser’s purchase of the Shares involves a high degree of risk and the
Purchaser could lose a substantial portion or all of its investment in the
Shares. In addition, the Purchaser has such knowledge and experience in business
and financial matters, including, without limitation, investment in technology
and biotechnology companies, as will enable the Purchaser to fend for itself,
bear the economic risk of its investment and evaluate the merits and risks of an
investment in the Shares and to make an informed investment decision.

 

4.11 Use of Proceeds. Purchaser acknowledges and understands that the Company’s
current intention is to use the proceeds of the Offering for (i) payment of
liabilities, (ii) working capital, (iii) acquisitions, joint ventures and
projects that the Company may have determined or may from time to time determine
to undertake and (iv) other purposes as the Company’s Board of Directors may
determine from time to time. The allocation of proceeds shall be at the
discretion of the Company and may vary depending on changes in the Company’s
business plans and circumstances. Such business plans and circumstances may
cause the Company to seek further financing in addition to the Offering.

 

4.12 Restricted Securities. The Purchaser understands that the Shares it is
purchasing are characterized as “restricted securities” under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act only in certain limited circumstances. In this connection,

 

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the Purchaser represents that it is familiar with Rule 144 promulgated by the
Commission under the Securities Act, as presently in effect, and understands the
resale limitations imposed thereby and by the Securities Act.

 

5. Restrictions on Transfer, Information and Registration Rights.

 

5.1 Restrictions on Transferability. The Shares shall not be transferable in the
absence of registration under the Securities Act or an exemption therefrom, or
in the absence of compliance with any term of the Purchase Agreement. Without
limiting the foregoing, (i) the Shares may be offered, resold, pledged or
otherwise transferred only (A) in a transaction meeting the requirements of Rule
144 of the Commission (“Rule 144”), or in accordance with another exemption from
the registration requirements of the Securities Act (and based upon an opinion
of counsel if the Company so requests) or (B) pursuant to an effective
registration statement under the Securities Act, in each case in accordance with
the applicable securities laws of any state of the United States or any other
applicable jurisdiction and (ii) the Purchaser will be required to notify any
transferee of the Purchaser of any applicable resale restrictions set forth
above. The Company shall be entitled to give stop transfer instructions to the
transfer agent, and the transfer agent shall be entitled to rely thereon, with
respect to the Shares in order to enforce the foregoing restrictions.

 

5.2 Restrictive Legends. Each certificate or document representing any of the
Shares shall bear substantially the following legends (in addition to any
legends required under applicable securities laws):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT
AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY
NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED (I) UNLESS REGISTERED UNDER
THE SECURITIES ACT AND QUALIFIED UNDER APPLICABLE STATE SECURITIES LAWS OR (II)
UNLESS SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND THE QUALIFICATION
REQUIREMENTS OF APPLICABLE STATE SECURITIES LAWS AND THE COMPANY RECEIVES AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND
QUALIFICATION ARE NOT REQUIRED. THE SECURITIES REPRESENTED BY THIS CERTIFICATE
AND THE RIGHTS OF HOLDERS THEREOF ARE SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER AND OTHER RESTRICTIONS, AND THE HOLDER OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE (INCLUDING ANY FUTURE HOLDERS) IS BOUND BY THE TERMS OF A STOCK
PURCHASE AGREEMENT BETWEEN THE ORIGINAL PURCHASER AND THE COMPANY (COPIES OF
WHICH MAY BE OBTAINED FROM THE COMPANY).

 

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5.3 California Purchaser. If Purchaser is a resident of California, Purchaser
acknowledges the following disclosure, which is set forth herein as required
pursuant to Section 25102(a) of the California Corporate Securities Law of 1968:

 

“THE SALE OF THE SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND
THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102, OR 25105
OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE
IS SO EXEMPT.”

 

5.4 Piggyback Registration Rights.

 

5.4.1 Filing of Registration Statement. If (but without any obligation to do
so), at any time between the Closing Date and the two year anniversary of the
Closing Date, the Company proposes to register (including for this purpose a
registration effected by the Company for stockholders other than the Purchaser)
any of its stock or other securities under the Securities Act in connection with
the public offering of such securities solely for cash (other than a
registration relating solely to the sale of securities to participants in a
Company stock plan, a registration relating solely to an SEC Rule 145
transaction, a registration on any registration form which does not permit
secondary sales or a registration on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities (as
defined below) (a “Registration Statement”) or a registration in which the only
Common Stock being registered is Common Stock issuable upon conversion of debt
securities which are also being registered), the Company shall, at such time,
promptly give the holders of the Registrable Securities (the “Holders”) written
notice of its intent to file such a Registration Statement. Upon the written
request of each Holder given within fifteen (15) days after mailing of such
notice by the Company in accordance with Section 6.6, the Company shall, subject
to the provisions of Section 5.4, cause to be registered under the Securities
Act all of the Shares then held by Purchaser that the Purchaser has requested to
be registered (together, “Registrable Securities”). Notwithstanding the
foregoing, (i) the Company shall only be obligated under Section 5.4 to register
Registrable Securities for the Holder if the Holder registers at least
twenty-five thousand (25,000) shares (as adjusted to reflect stock splits,
reverse stock splits and similar actions affecting the Common Stock after the
date hereof) as part of that registration, (ii) if the Holder has registered any
shares pursuant to this Section 5.4 in each of three registrations, the Company
shall not be obligated to provide notice pursuant to this Section 5.4.1 or
register any additional shares pursuant to Section 5.4, and (iii) if the Holder
may immediately sell all shares of Registrable Securities held by such Holder
under Rule 144 during any 90-day period, the Company shall not be obligated to
provide notice pursuant to this Section 5.4.1 or register any shares pursuant to
Section 5.4.

 

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5.4.2 Length of Registration. Subject to the provisions of Section 5.4.8,
whenever required under Section 5.4.1 to effect the registration of any
Registrable Securities, the Company shall (i) upon the request of the holders of
a majority of the securities registered under the applicable registration
statement, keep such registration statement effective for a period equal to the
shorter of up to one hundred twenty (120) days or until the distribution
contemplated in such registration statement has been completed (provided,
however, that such 120-day period shall be extended for a period of time equal
to the period the Holder refrains from selling any securities included in such
registration at the request of an underwriter of Common Stock (or other
securities) of the Company) and (ii) furnish to the Holder such numbers of
copies of a prospectus, including a preliminary prospectus, in conformity with
the requirements of the Securities Act, and such other documents as the Holder
may reasonably request in order to facilitate the disposition of Registrable
Securities included in such registration.

 

5.4.3 Underwritten Offering. In connection with any offering involving an
underwriting of shares of the Company’s Common Stock, the Company shall not be
required under Section 5.4 to include any of the Holder’s securities in such
underwriting unless the Holder accepts the terms of the underwriting as agreed
upon between the Company and the underwriters selected by the Company (or by
other persons entitled to select the underwriters), and then only in such
quantity as the underwriters determine in their sole discretion will not
jeopardize the success of the offering by the Company. If the total amount of
securities, including Registrable Securities, requested by stockholders to be
included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the selling stockholders according to
the total amount of securities entitled to be included therein owned by each
selling stockholder or in such other proportions as shall mutually be agreed to
by such selling stockholders) but in no event shall any securities being sold by
a stockholder exercising a demand registration right be excluded from such
offering prior to or pro rata with the securities of the Holder. For purposes of
the preceding parenthetical concerning apportionment, for any selling
stockholder which is a Holder and which is a partnership or corporation, the
partners, retired partners and shareholders of such Holder, or the estates and
family members of any such partners and retired partners and any trusts for the
benefit of any of the foregoing persons shall be deemed to be a single “selling
stockholder”, and any pro-rata reduction with respect to such “selling
stockholder” shall be based upon the aggregate amount of shares carrying
registration rights owned by all entities and individuals included in such
“selling stockholder”, as defined in this sentence.

 

5.4.4 No Injunction. The Holder shall not have any right to obtain or seek an
injunction restraining or otherwise delaying any such registration as the result
of any controversy that might arise with respect to the interpretation or
implementation of this Section.

 

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5.4.5 Registration Expenses. The Company shall pay all Registration Expenses (as
defined below) in connection with any registration, qualification or compliance
hereunder, and each Holder shall pay all Selling Expenses (as defined below) and
other expenses that are not Registration Expenses relating to the Registrable
Securities resold by such Holder. “Registration Expenses” shall mean all
expenses, except for Selling Expenses, incurred by the Company in complying with
the registration provisions herein described, including, without limitation, all
registration, qualification and filing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration.
“Selling Expenses” shall mean all selling commissions, underwriting fees and
stock transfer taxes applicable to the Registrable Securities and all fees and
disbursements of counsel for any Holder.

 

5.4.6 Additional Company Obligations. In the case of any registration effected
by the Company pursuant to these registration provisions, the Company will use
its reasonable best efforts to: (i) cause all such Registrable Securities
registered as described herein to be listed on each securities exchange and
quoted on each quotation service on which similar securities issued by the
Company are then listed or quoted; (ii) provide a transfer agent and registrar
for all Registrable Securities registered pursuant to the Registration Statement
and a CUSIP number for all such Registrable Securities; (iii) comply with all
applicable rules and regulations of the SEC, and (iv) file the documents
required of the Company and otherwise maintain requisite blue sky clearance in
(A) all jurisdictions in which any of the Registrable Securities are originally
sold and (B) all other states specified in writing by a Holder as may reasonably
be required to sell such Holder’s Registrable Securities, provided as to clause
(B), however, that the Company shall not be required to qualify to do business
or consent to service of process in any state in which it is not now so
qualified or has not so consented.

 

5.4.7 Providing Information. Each Holder of Registrable Securities shall furnish
to the Company such information regarding such Holder and the distribution
proposed by such Holder as the Company may reasonably request in writing and as
shall be reasonably required in connection with any registration, qualification
or compliance described herein. Such Holder shall represent that such
information is true and complete.

 

5.4.8 Limitations on Sale. The Company may at any time refuse to permit the
Holders to resell any Registrable Securities pursuant to the Registration
Statement; provided, however, that in order to exercise this right, the Company
must deliver a certificate in writing to the Holders to the effect that a delay
in such sales is necessary because, in the good faith judgment of the Company,
sales pursuant to the Registration Statement would require the public disclosure
of information that would not otherwise be required to be disclosed (which
disclosure would, in the good faith judgment of the Company, have a significant
adverse effect on the Company) or could in other respects constitute a violation
of the federal securities laws or otherwise materially

 

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adversely affect the Company. In such an event, the Company shall notify the
Holders promptly after it has determined that such circumstances no longer
exist. The Company shall not under any circumstances be entitled to refuse to
permit the Holders to resell any Registrable Securities under Section 5.4 more
than two (2) times in any twelve (12) month period following the Closing Date,
and any individual period during which the Company refuses to permit the Holder
to resell any Registrable Securities in any twelve (12) month period following
the Closing Date shall not exceed sixty (60) days. Each Purchaser hereby
covenants and agrees that it will not sell any Registrable Securities pursuant
to the Registration Statement during the periods the Company refuses to permit
the Holder to resell any Registrable Securities as set forth in this Section
5.4.8.

 

5.4.9 Future Registration Rights. The Company shall not be restricted in any way
in entering into any agreement with any holder or prospective holder of any
securities of the Company which would allow such holder or prospective holder to
include such securities in any registration filed by the Company.

 

5.5 Indemnification and Contribution.

 

5.5.1 Indemnification by the Company. The Company agrees to indemnify and hold
harmless each Holder from and against any losses, claims, damages or liabilities
(or actions or proceedings in respect thereof) to which such Holder may become
subject (under the Securities Act or otherwise) insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon, any untrue statement of a material fact contained in the
Registration Statement, on the effective date thereof; provided, however, that
the Company shall not be liable in any such case to the extent that such loss,
claim, damages or liability arises out of, or is based upon (i) an untrue
statement or alleged untrue statement made in such Registration Statement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Holder specifically for use in preparation of
the Registration Statement or (ii) any untrue statement in any prospectus that
is corrected in any subsequent prospectus or addendum or supplement that was
delivered to the Holder prior to the pertinent sale or sales by the Holder, and
the Company will reimburse the Holders for the expenses of a single legal
counsel and other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim; provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate in the reasonable opinion of such single legal counsel for the
same counsel to represent all of the affected Holders, then each Holder or group
of Holders designated by such counsel shall be entitled to retain its own
counsel at the expense of the Company; provided further, that the indemnity
contained in this subsection shall not apply to amounts paid in settlement of
any such loss, claim, damages or liability if such settlement is effected
without the consent of the Company (which consent shall not be unreasonably
withheld).

 

5.5.2 Indemnification by Holder. Each Holder, severally and not jointly, agrees
to indemnify and hold harmless the Company from and against any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) to which
the Company may become subject (under the Securities Act or otherwise) insofar
as such

 

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losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of, or are based upon an untrue statement made in such
Registration Statement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Holder specifically
for use in preparation of the Registration Statement, provided, however, that no
Holder shall be liable in any such case for any untrue statement included in any
Prospectus which statement has been corrected, in writing, by such Holder and
delivered to the Company at least seven business days before the sale from which
such loss occurred, and each Holder, severally and not jointly, will, as
incurred, reimburse the Company for any legal or other expenses reasonably
incurred in investigating, defending or preparing to defend any such action,
proceeding or claim; provided, however, that no Holder shall be required to pay
an indemnity in any amount in excess of the net amount received by the Holder
from the sale of the Registrable Securities to which such indemnity relates;
provided further, that the indemnity contained in this subsection shall not
apply to amounts paid in settlement of any such loss, claim, damages or
liability if such settlement is effected without the consent of the Holder
(which consent shall not be unreasonably withheld).

 

5.5.3 Indemnification Procedures. Promptly after receipt by any indemnified
person of a notice of a claim or the beginning of any action in respect of which
indemnity is to be sought against an indemnifying person pursuant to this
Section 5.5, such indemnified person shall notify the indemnifying person in
writing of such claim or of the commencement of such action, and, subject to the
provisions hereinafter stated, in case any such action shall be brought against
an indemnified person and the indemnifying person shall have been notified
thereof, the indemnifying person shall be entitled to participate therein, and,
to the extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to the indemnified person; provided, however, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations hereunder unless the failure
to give such notice is materially prejudicial to an indemnifying party’s ability
to defend such action. After notice from the indemnifying person to such
indemnified person of the indemnifying person’s election to assume the defense
thereof, the indemnifying person shall not be liable to such indemnified person
for any legal expenses subsequently incurred by such indemnified person in
connection with the defense thereof; provided, however, that if there exists or
shall exist a conflict of interest that would make it inappropriate in the
reasonable opinion of counsel for the indemnified person for the same counsel to
represent both the indemnified person and such indemnifying person or any
affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person; provided,
however, that in the case of the immediately preceding proviso, and
notwithstanding Section 5.5.1 above, the indemnifying person shall not be
responsible for the legal expenses of more than one counsel for all indemnified
persons.

 

5.5.4 Contribution in Lieu of Indemnity. If the indemnification provided for in
this Section 5.5 is unavailable to or insufficient to hold harmless an
indemnified party under Section 5.5.1 or 5.5.2 above in respect of any losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount
paid or payable by such

 

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indemnified party as result of such losses, claims, damages or liabilities (or
actions in respect thereof) based on the relative fault of the indemnifying
party and the indemnified party as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or a Holder on the other and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the Holders
agree that it would not be just and equitable if contribution pursuant to this
Section 5.5.4 were determined by pro rata allocation (even if the Holders were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above in
this Section 5.5.4. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this Section 5.5.4 shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 5.5.4, no Holder shall be
required to contribute any amount in excess of the net amount received by the
Holder from the sale of the Registrable Securities to which such loss relates.
No person or entity guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Holders’
obligations in this Section 5.5.4 to contribute are several in proportion to
their respective sales of Registrable Securities to which such loss relates and
not joint.

 

5.5.5 Underwriting Agreement Indemnification. Notwithstanding the foregoing, to
the extent that the provisions on indemnification and contribution contained in
the underwriting agreement entered into in connection with the underwritten
public offering are in conflict with the foregoing provisions, the provisions in
the underwriting agreement shall control.

 

5.5.6 Survival of Indemnification. The obligations of the Company and the
Holders under this Section shall survive the completion of any offering of
Registrable Securities in a registration statement under this Section, and
otherwise.

 

5.6 Reports Under the Exchange Act. With a view to make available to the
Purchasers or Holders the benefits of Rule 144 promulgated under the Securities
Act and any other rule or regulation of the SEC that may at any time permit a
Purchaser or Holder to sell Shares to the public without registration, the
Company will covenant and agree to use reasonable efforts to: (i) make and keep
public information available, as those terms are understood and defined in Rule
144, for two years after the Closing; (ii) file with the SEC in a timely manner
all reports and other documents required of the Company under the Securities Act
and the Exchange Act; and (iii) furnish to any Purchaser or Holder, so long as
the Purchaser or Holder owns any Shares, forthwith upon request, (A) a written
statement by the Company that it has complied with the reporting requirements of
Rule 144, (B) a copy of the most recent annual or quarterly report of the
Company, and (C) such other information as may be reasonably requested in order
to avail any Purchaser or Holder of any rule or regulation of the SEC that
permits the selling of any such Shares without registration.

 

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6. Miscellaneous.

 

6.1 Waivers and Amendments. With the written consent of the Company and the
record holders of more than fifty percent (50%) of the Shares then outstanding
that have not previously been sold in a public offering, the terms of the
Purchase Agreement may be waived or amended.

 

6.2 Governing Law. This Purchase Agreement shall be governed by and construed in
accordance with the internal laws of the State of California without regard to
its conflicts of laws principles. The Purchaser hereby irrevocably submits to
the jurisdiction of any State or United States Federal court sitting in Alameda
or San Francisco counties in the State of California over any action or
proceeding arising out of or relating to this Purchase Agreement or any
agreement contemplated hereby, and the Purchaser hereby irrevocably agrees that
all claims in respect of such action or proceeding may be heard and determined
in such State or Federal court. The Purchaser further waives any objection to
venue in such State and any objection to an action or proceeding in such State
on the basis of a non-convenient forum. The Purchaser further agrees that any
action or proceeding brought against the Company shall be brought only in the
State or United States Federal courts sitting in Alameda or San Francisco
counties in the State of California. THE PURCHASER AGREES TO WAIVE ITS RIGHTS TO
A JURY TRIAL OR ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
PURCHASE AGREEMENT OR ANY DOCUMENT OR AGREEMENT CONTEMPLATED HEREBY.

 

6.3 Survival. The representations, warranties, covenants and agreements made
herein shall survive any investigation made by the Company or the Purchaser and
the Closing for a period of two years.

 

6.4 Successors and Assigns. Subject to Section 5, the provisions hereof shall
inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors and administrators of the parties hereto (specifically including
successors in interest to the Shares).

 

6.5 Entire Agreement. The Purchase Agreement (including all Exhibits thereto)
constitutes the full and entire understanding and agreement between the parties
with regard to the subject hereof.

 

6.6 Notices, etc. All notices and other communications required or permitted
hereunder shall be effective upon receipt and shall be in writing and may be
delivered in person, by facsimile, or nationally recognized overnight delivery
service, addressed (a) if to the Purchaser, at the address set forth on the
signature page hereof or at such other address as the Purchaser shall have
furnished the Company in writing, or (b) if to the Company, at its address set
forth at the beginning of the Purchase Agreement, or at such other address as
the Company shall have furnished to the Purchaser in writing.

 

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6.7 Severability. If any provision of the Purchase Agreement shall be judicially
determined to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.

 

6.8 Titles and Subtitles. The titles of the paragraphs and subparagraphs of the
Purchase Agreement are for convenience of reference and shall not, by
themselves, determine the construction of the Purchase Agreement.

 

6.9 Counterparts. The Purchase Agreement may be executed in any number of
counterparts, each of which be an original, but all of which together shall
constitute one instrument.

 

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Exhibit 2.1

 

WIRE TRANSFER INSTRUCTIONS

 

Bank:

 

Union Bank of California

   

1600 Harrison Street

   

Oakland, California 94612

Account Number:

 

7150173749

   

ABA Number: 122000496

Name of:

 

InSite Vision Incorporated

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Exhibit 4.9

 

INVESTMENT REPRESENTATION STATEMENT

 

1. Information Concerning the Company. Purchaser represents and warrants that
Purchaser has been provided with such information concerning the Company that
Purchaser deems necessary and appropriate to enable Purchaser to evaluate the
financial risk inherent in making an investment in the Shares. Purchaser further
acknowledges that Purchaser has received satisfactory and complete information
concerning the business and financial condition of the Company in response to
all inquiries in respect thereof.

 

2. Economic Risk and Suitability. Purchaser represents and warrants as follows:

 

2.1 Purchaser realizes that Purchaser’s purchase of the Shares involves a high
degree of risk and will be a highly speculative investment and that Purchaser is
able, without impairing Purchaser’s financial condition, to hold the Shares for
an indefinite period of time and to suffer a complete loss of Purchaser’s
investment.

 

2.2 Purchaser has carefully considered and has, to the extent Purchaser believes
such discussions necessary, discussed with Purchaser’s professional, legal, tax
and financial advisors the suitability of an investment in the Shares for the
particular legal, tax and financial situation of Purchaser and that Purchaser
and/or Purchaser’s advisors have determined that the Shares are a suitable
investment for Purchaser.

 

2.3 Purchaser has such knowledge and experience in business and financial
matters as will enable Purchaser to evaluate the merits and risks of an
investment in the Shares and to make an informed investment decision.

 

2.4 Purchaser has carefully read this Agreement and the Company has made
available to Purchaser or Purchaser’s advisors all information and documents
requested by Purchaser relating to investment in the Shares, and has provided
answers to Purchaser’s satisfaction to all of Purchaser’s questions concerning
the Company and the Shares to be acquired.

 

2.5 Purchaser understands that neither the Company nor any of its
officers/directors, has any obligation to register the Securities under any
federal or state securities act or law except as otherwise expressly set forth
in Section 5 of the Purchase Agreement.

 

2.6 All information that Purchaser has provided concerning himself or herself,
his or her financial position and (each of) his or her representative(s), if
any, is correct and complete as of the date set forth below, and if there should
be any material change in such information, Purchaser will provide such
information to the Company as soon as practicable thereafter.

 

2.7 Purchaser understands that the Company is relying on the truth and accuracy
of the declarations, representations, warranties and agreements made by
Purchaser to the Company herein in transferring the Shares to Purchaser.

 

2.8 Purchaser confirms that Purchaser has received no general solicitation or
general advertisement and has attended no seminar or meeting (whose attendees
have been invited by any general solicitation or general advertisement) and has
received no advertisement, article, notice or other communication published in
any newspaper, magazine, or similar media or broadcast or television or radio
regarding the Offering of the Shares.

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3. Status of Purchaser. Purchaser represents and warrants that Purchaser is an
“Accredited Investor”, as defined in Rule 501 of the Commission because
Purchaser is either:

 

(a) A natural person whose individual net worth, or joint net worth with that
person’s spouse, at the time of his/her purchase, exceeds $1 million;

 

(b) A natural person who had individual income in excess of $200,000 in each of
the two most recent years or joint income with that person’s spouse in excess of
$300,000 in each of those years and has a reasonable expectation of reaching the
same income level in the current year;

 

(c) a bank as defined in Section 3(a)(2) of the Act;

 

(d) a savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act, whether acting in its individual or fiduciary
capacity;

 

(e) a broker or dealer registered pursuant to Section 15 of the Exchange Act;

 

(f) an insurance company as defined in Section 2(13) of the Securities Act;

 

(g) an investment company registered under the Investment Company Act of 1940,
as amended, or a business development company as defined in Section 2(a)(48) of
the Securities Act;

 

(h) a small business investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958;

 

(i) a private business development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940, as amended;

 

(j) a corporation, partnership, an organization described in Section 501(c)(3)
of the Internal Revenue Code of 1986, or a Massachusetts or similar business
trust, not formed for the specific purpose of acquiring the Securities, with
total assets in excess of $5,000,000;

 

(k) a trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Securities, whose purchase of the Securities
is directed by a sophisticated person as described in Rule 506(b)(ii) of
Regulation D promulgated under the Securities Act; or

 

(l) an entity in which all of the equity owners meet one of the requirements of
paragraphs (a) through (k) hereof.

 

4. Residency. Purchaser is a bona fide resident of Washington, D.C.

 

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