Exhibit 10.1

INSITE VISION INCORPORATED

SECURED NOTE

 

USD$11,914,194.52

September 15, 2015

FOR VALUE RECEIVED, InSite Vision Incorporated, a Delaware corporation (the
“Maker”), promises to pay to the order of Ranbaxy, Inc. (the “Holder”), at Acme
Plaza, Andheri Kurla Road, Andheri (East), Mumbai, Maharashtra, India, 400059,
the principal sum of $11,914,194.52 (or such lesser outstanding amount advanced
to the Maker by the Holder in accordance with the terms hereof) together with
all accrued interest thereon, upon the terms and conditions specified below.
This Secured Note (this “Note”) is secured pursuant to the Security Agreement
dated as the date hereof (as amended, restated, supplemented or otherwise
modified from time to time, the “Security Agreement”), between the Maker and the
Holder.

1. Advances. Upon five business days’ prior written notice (other than in
relation to the funding of the initial advance hereunder), the Maker may
request, and the Holder shall advance within three business days of such request
(each an “Advance”) amounts under this Note prior to the Maturity Date (as
defined below) subject to satisfaction of the conditions precedent set forth in
Section 10 (each funding date, a “Funding Date”) and the limitations on use of
proceeds described in Section 6(F); provided, that in no event shall the total
aggregate principal amount of all Advances made hereunder exceed (a) $1,100,000
in any calendar month, except for the Advances described in Section 6(F)(i) and
(ii) and (b) $11,914,194.52 in the aggregate. Advances subsequently repaid or
prepaid may not be reborrowed.

2. Maturity Date. This Note matures and the outstanding principal balance of
this Note together with all accrued and unpaid interest hereunder becomes due
and payable in a lump sum on the earliest to occur of (i) the Closing Date (as
defined in Section 21), (ii) the one-year anniversary of the date on which the
Merger Agreement (as defined in Section 21) is terminated and (iii) the
acceleration of this Note pursuant to Section 7 (the earliest to occur of such
dates, the “Maturity Date”); provided, that if the Closing Date (as defined in
Section 21) does not occur as a result of an uncured material breach of any
Merger Agreement Covenants (as defined in Section 21) by the Maker or an uncured
intentional breach of any Merger Agreement Representation (as defined in
Section 21) by the Maker, the Maturity Date shall be the earliest to occur of
30 calendar days following the date on which the Merger Agreement (as defined in
Section 21) is terminated and the acceleration of this Note pursuant to
Section 7; provided, further, that to the extent that the Closing Date (as
defined in Section 21) occurs, at the election of the Holder, this Note will not
be payable on the Closing Date (as defined in Section 21) and will instead be
payable on demand of the Holder, which date of demand shall be the Maturity
Date.

3. Interest. Interest accrues on the unpaid balance outstanding from time to
time under this Note at the rate of 12% per annum until the Maturity Date;
provided, that upon an Event of Acceleration (as defined below), at the written
election of the Holder, any outstanding principal amount and accrued but unpaid
interest bears interest at the rate of 14% per

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annum from the date of such Event of Acceleration (as defined below). All
computations of interest are made on the basis of a year of 365 days for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest is payable. Accrued and unpaid
interest is due and payable on the Maturity Date. In no event will the interest
rate payable under this Note exceed the maximum rate of interest permitted to be
charged under applicable law. If the rate of interest payable under this Note is
ever reduced as a result of the preceding sentence and at any time thereafter
the maximum rate permitted by applicable law exceeds such reduced rate of
interest then provided for hereunder, then the rate provided for hereunder will
be increased to a rate not to exceed the maximum rate permitted by applicable
law at such time, such that the total amount of interest received by the Holder
is equal to or as nearly equal to the amount provided for in the first sentence
of this Section 3 as applicable law permits.

4. Payment. Payment shall be made in lawful tender of the United States and
shall be applied first to the payment of all accrued and unpaid interest and
then to the payment of principal. Prepayment of the principal balance of this
Note, together with all accrued and unpaid interest on the portion of principal
so prepaid, may be made in whole or in part at any time without penalty.

5. Representations and Warranties. The Maker has all requisite corporate right,
power and authority to enter into the Note Documents (as defined in Section 21)
and to consummate the transactions contemplated hereby and thereby. All
corporate action on the part of the Maker, its directors and stockholders
necessary for the authorization, execution, delivery and performance of its
obligations under the Note Documents (as defined in Section 21) by the Maker,
have been taken. The Note Documents (as defined in Section 21) have been duly
executed and delivered by the Maker and constitute legal, valid and binding
obligations of the Maker, enforceable against the Maker in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to limitations of public policy or general
principals of equity (regardless of whether such enforceability is considered at
law or equity). The execution, delivery and performance by the Maker of the Note
Documents (as defined in Section 21) and the consummation by the Maker of the
transactions contemplated hereby and thereby will not (i) conflict with or
result in the violation of any law, statute, rule, regulation, order, writ,
injunction, judgment or decree of any court or governmental authority by which
the Maker is bound, (ii) conflict with or violate any provision of the
Certificate of Incorporation or By-laws of the Maker, or (iii) materially
conflict with, or result in a material breach or violation of, any of the terms
or provisions of, or constitute (with due notice or lapse of time or both) a
default under, any material lease, loan agreement, mortgage, security agreement,
trust indenture or other agreement or instrument to which the Maker is a party
or by which it is bound or to which any of its properties or assets is subject,
nor result in the creation or imposition of any lien upon any of the properties
or assets of the Maker (other than the liens granted under the Security
Agreement). No consent, approval, authorization or other order of, or any filing
or registration with, any governmental authority or other third-party is
required to be made or obtained by the Maker in connection with the
authorization, execution, delivery and performance of the Note Documents (as
defined in Section 21).

 

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6. Covenants. The Maker covenants and agrees that until this Note is paid in
full it shall:

(A) promptly after the occurrence of an Event of Acceleration (as defined below)
or an event, act or condition that, with notice or lapse of time or both, would
constitute an Event of Acceleration (as defined below), provide the Holder with
a certificate of the chief executive officer or chief financial officer of the
Maker specifying the nature of such event, act or condition and the Maker’s
proposed cure thereto;

(B) not (nor permit any of its subsidiaries to), without the written consent of
the Holder (i) incur any indebtedness for money borrowed, other than
indebtedness (a) in an aggregate amount not to exceed $100,000, (b) owing to a
seller incurred solely for the purpose of financing the purchase price of an
asset of a type customarily purchased by the Maker acquired from such seller,
(c) that is subordinated to this Note in a manner reasonably satisfactory to the
Holder or (d) under the 12% Secured Notes (as defined in Section 21) in an
aggregate principal amount not to exceed the amount outstanding on the date
hereof or (ii) grant, or permit to be created, any lien other than the security
interests created under the Security Agreement and any security interest which
would constitute a Permitted Lien (as defined in the Security Agreement);

(C) not (nor permit any of its subsidiaries to), without the prior written
consent of the Holder, directly or indirectly (i) purchase, redeem, retire or
otherwise acquire for value any of its capital stock or other securities now or
hereafter outstanding (other than the acceptance of shares of the Maker’s common
stock as payment for the exercise of options or warrants to purchase the Maker’s
common stock or the acceptance of the Maker’s common stock for the payment of
withholding taxes in connection with the exercise of options to purchase the
Maker’s common stock or vesting of restricted shares of the Maker), return any
capital to its stockholders (other than the repurchase at fair market value of
shares of unvested or restricted stock as permitted under the Maker’s stock
option or stock purchase plan upon termination of employment or service), or
distribute any of its assets to its stockholders or (ii) make any payment or
declare any dividend on any of its capital stock or other securities;

(D) not (nor permit any of its subsidiaries to), without the prior written
consent of the Holder, change its primary line of business from that conducted
by it as of the date hereof;

(E) not (nor permit any of its subsidiaries to) make any payment to, or sell,
lease, transfer or otherwise dispose of any of its properties or assets to, or
purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guaranty with,
or for the benefit of, any Affiliate (as defined in the Securities Purchase
Agreement (as defined in Section 21)) of the Maker, other than on terms and
conditions at least as favorable to the Maker, as applicable, as would
reasonably be obtained by the Maker at that time in a comparable arm’s-length
transaction with a Person (as defined in the Securities Purchase Agreement (as
defined in Section 21)) other than an Affiliate (as defined in the Securities
Purchase Agreement (as defined in Section 21));

 

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(F) use proceeds of the Advances only as follows: (i) in an aggregate amount
needed to repay all principal, interest, fees and expenses outstanding under the
Secured Note dated as of June 8, 2015 (the “QLT Secured Note”), made by the
Maker in favor of QLT Inc. (“QLT”), (ii) in an aggregate amount not to exceed
$600,000, to complete the manufacture of registration lots in respect of
DexaSite™ and (iii) with respect to each calendar month set forth on Annex I,
the amount set forth on Annex for such month may be borrowed once during such
month to fund the Maker’s operating expenses for such month; provided, that the
Maker shall use all such proceeds in compliance in all material respects with
all applicable laws, rules, regulations and orders, including the USA PATRIOT
Act, the Foreign Corrupt Practices Act of 1977, as amended and the rules and
regulations of the U.S. Department of the Treasury’s Office of Foreign Assets
Control; or

(G) not, after the date hereof, without the prior written consent of the Holder,
transfer or otherwise dispose of assets with a fair market value in excess of
$50,000 in the aggregate to any subsidiary or other entity affiliated with the
Maker.

7. Events of Acceleration. The obligation of the Holder to make any additional
Advances shall terminate and the entire unpaid principal balance of this Note,
together with all accrued and unpaid interest, becomes immediately due and
payable prior to the specified due date of this Note upon notice from the Holder
to the Maker given at any time following the occurrence of one or more of the
following events (each an “Event of Acceleration”); provided, that in the case
of the occurrence of any Event of Acceleration pursuant to clauses (D) or
(E) below, all such amounts shall become immediately due and payable by the
Maker (without any requirement for notice from the Holder):

(A) the Maker fails to make any payment of principal or interest due under this
Note; provided, that such occurrence is not an Event of Acceleration unless such
condition remains uncured at the end of the third business day after such
payment is due, other than payments due upon maturity which is an Event of
Acceleration immediately upon such failure;

(B) the Maker fails to observe or perform, in any material respects, any term or
provision of the Note Documents (as defined in Section 21); provided, that
(other than with respect to a breach of Section 6(F) which shall be an immediate
Event of Acceleration) such occurrence is not an Event of Acceleration unless
such condition remains uncured at the end of the 10th day after the earlier of
(i) written notice from the Holder of the occurrence of such failure and
(ii) the Holder’s receipt of written notice from the Maker of the occurrence of
such event in accordance with Section 7(H); provided, that if such failure
cannot by its nature be cured within the ten day period or cannot after diligent
attempts by the Maker be cured within such ten day period, and such failure is
likely to be cured within a reasonable time, then the Maker will have an
additional period (not in any case to exceed 30 days) to attempt to cure such
failure, and within such reasonable time period the failure to cure such failure
is not an Event of Acceleration;

(C) any representations or warranties of the Maker in the Note Documents (as
defined in Section 21) or in any certificate or other document delivered
hereunder or

 

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thereunder is found to be untrue or incorrect and the effect of which has a
material adverse effect on the business or operations of the Maker or impairs
the ability of the Maker to repay this Note on the Maturity Date;

(D) pursuant to or within the meaning of the United States Bankruptcy Code or
any other federal or state law relating to insolvency or relief of debtors (a
“Bankruptcy Law”), the Maker (i) commences voluntary case or proceeding,
(ii) consents to the entry of an order for relief against it in an involuntary
case, (iii) consents to the appointment of a trustee, receiver, assignee,
liquidator or similar official, (iv) makes an assignment for the benefit of its
creditors or (v) admits in writing its inability generally to pay its debts as
they become due;

(E) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that (i) is for relief against the Maker in an involuntary case,
(ii) appoints a trustee, receiver, assignee, liquidator or similar official for
the Maker or substantially all of the Maker’s properties or (iii) orders the
liquidation of the Maker, and in each case the order or decree is not dismissed
or stayed within 60 days;

(F) any order, judgment or decree (other than in connection with any amounts
payable to Chandler Dawson or his heirs or assigns as disclosed in
Section 4.4(c) of the Company Disclosure Schedule to the Merger Agreement (as
defined in Section 21)) is entered against the Maker decreeing the dissolution
or split-up of the Maker or any money judgment in excess of $500,000 (exclusive
of amounts covered by insurance or subject to indemnification by a person
capable of fulfilling its indemnification obligations, for which the insurer or
person providing indemnity has acknowledged responsibility) and, in each case,
the order, judgment or decree is not paid, dismissed or stayed within 60 days;

(G) the occurrence of any event of acceleration or default under any other note
issued or obligation for borrowed money with a principal amount in excess of
$100,000 owed by Maker (including the 12% Secured Notes (as defined in
Section 21));

(H) the Maker fails to provide written notice to the Holder of the occurrence of
any event set forth in this Section 7 within ten days of an officer of the Maker
having knowledge of the occurrence of such event; or

(I) the Maker is obligated to pay to the Holder the Termination Fee (as defined
in the Merger Agreement (as defined in Section 21)) pursuant to any of the
following Sections of the Merger Agreement (as defined in Section 21):

1. Section 8.2(b), by reason of a termination of the Merger Agreement (as
defined in Section 21) pursuant to Section 8.1(d)(i) (but only in the
circumstance where the Adverse Recommendation Change by the Company Board is
pursuant to Section 6.4(g)) or Section 8.1(d)(ii);

2. Section 8.2(c); or

3. Section 8.2(d).

 

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8. Security. Payment of this Note is secured by a lien on the Collateral (as
defined in Section 21) in accordance with the Security Agreement. The Maker
remains liable for payment of this Note, and assets of the Maker, in addition to
the Collateral (as defined in Section 21) under the Security Agreement, may be
applied to the satisfaction of the Maker’s obligations hereunder. In the case of
any Event of Acceleration, the Holder has the rights set forth herein and as set
forth in the Security Agreement.

9. Post-Closing Covenant.

(A) The Maker shall use commercially reasonable efforts to (i) enter into, and
cause the applicable bank or other financial institution to enter into, Account
Control Agreements (as defined in the Security Agreement), in form and substance
reasonably satisfactory to the Holder, granting the Holder control over each
deposit account and securities account of the Maker to the Holder and
(ii) deliver copies of certificates of insurance (to the extent not delivered to
the Holder on the date hereof) and its insurance policies containing customary
endorsements, reasonably satisfactory to the Holder, naming the Secured Party
(as defined in the Security Agreement) as an additional insured and loss payee,
in each case of (i) and (ii) above, within 30 days after the date hereof (or
such later period agreed to by the Holder).

(B) The Maker and the Holder each shall use commercially reasonable efforts to
cause U.S. Bank National Association to enter into the Intercreditor Agreement,
including making such amendments or modifications to the Intercreditor Agreement
as U.S. Bank National Association may reasonably request.

10. Conditions Precedent.

(A) The Holder’s obligations under this Note are subject to the satisfaction (or
waiver by the Holder) of the following conditions precedent:

1. The Holder shall have received signed counterparts to this (i) Note, (ii) the
Security Agreement, (iii) the Intercreditor Agreement (as defined in Section 21)
and (iv) the Grant (as defined in the Security Agreement), in each case, in form
and substance reasonably satisfactory to the Holder.

2. The Merger Agreement (as defined in Section 21) shall have been executed by
all parties thereto and shall not have been validly terminated in accordance
with its terms.

3. The Maker shall have obtained the written consent, in form and substance
reasonably satisfactory to the Holder, of the Majority Holders (as defined in
the Securities Purchase Agreement (as defined in Section 21)) to permit the
incurrence of indebtedness contemplated by this Note and the related liens
granted pursuant to the Security Agreement and the priority contemplated by the
Intercreditor Agreement (as defined in Section 21).

4. UCC financing statements, in form and substance reasonably satisfactory to
the Holder, have been or will be filed with the relevant filing registry

 

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necessary to perfect such security interest and the Maker has taken all other
actions reasonably requested by the Holder to grant liens on the Collateral (as
defined in Section 21) with the priority contemplated by the Note Documents (as
defined in Section 21) and perfect its security interest in such Collateral (as
defined in Section 21) (including, without limitation, the delivery of
(x) insurance certificates and endorsements naming the Secured Party (as defined
in the Security Agreement) as an additional insured and loss payee and (y) stock
certificates (including those currently held by U.S. Bank National Association
as collateral agent for the holders of the 12% Secured Notes (as defined in
Section 21)) constituting Collateral (as defined in Section 21), together with
stock powers endorsed in blank).

5. The Maker shall have delivered a customary secretary’s certificate, in form
and substance reasonably satisfactory to the Maker, attaching its
(i) certificate of incorporation, (ii) bylaws, (iii) board minutes or unanimous
written consent approving its entry into the Note Documents (as defined in
Section 21) and the transactions contemplated thereby and (iv) incumbency
certificate and, in each case, certifying that such documents are true, complete
and correct and in full force in effect on the date hereof.

6. The Holder shall have received evidence that all other actions, recording and
filings that the Holder may deem necessary or desirable in order to perfect the
lien on Collateral created under the Security Agreement, including, without
limiation, (i) a termination and release agreement with respect to the QLT
Secured Note and all related documents, duly executed by the Maker and QLT,
(ii) a termination of security interest in intellectual property for each
assignment for secured recorded by QLT at the United States Patent and Trademark
Office or the United States Copyright Office and covering any intellectual
property of the Maker and (iii) UCC-3 termination statements for all UCC-1
financing statements filed by QLT covering any portion of the Collateral, in
each case in form and substance satisfactory to the Holder.

(B) The obligation of the Holder to make Advances on each Funding Date is
subject to the satisfaction of the following conditions precedent on each
applicable Funding Date:

1. Each of the conditions set forth in clause (A) above shall have been
satisfied.

2. The Merger Agreement (as defined in Section 21) shall not have been validly
terminated in accordance with its terms.

3. The Maker shall have delivered a written notice of borrowing at least
five business days prior to the requested borrowing date (except for the initial
Advance, which notice of borrowing may be made on the date hereof), specifying
the amount of the requested borrowing and wire transfer information, together
with a certification as to the contemplated use of proceeds in accordance with
Section 6(F).

 

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4. The representations and warranties made by the Maker in the Note Documents
(as defined in Section 21) are true and correct in all material respects as of
the such Funding Date with the same force and effect as if they had been made on
and as of said date (except for such representations and warranties that are
qualified by their terms by a reference to materiality, which representations
and warranties as so qualified shall be true and correct in all respects and for
any representation or warranty that speaks as of a specific date, which shall
have been true and correct as of such date).

5. No Event of Acceleration shall have occurred and be continuing.

Each notice of borrowing for an Advance is deemed to be a representation that
the statements in Sections 10(B)4 and 10(B)5 are true and correct as of the date
of such notice of borrowing.

11. Transfer Restrictions. Upon notice to the Maker, this Note may be
transferred by the Holder subject to the prior written consent of the Maker (not
to be unreasonably conditioned, withheld or delayed); provided, that the Maker
shall not have such consent rights to the extent that (a) an Event of
Acceleration has occurred and is continuing, (y) the Merger Agreement (as
defined in Section 21) has been terminated for any reason or (b) while the
Merger Agreement (as defined in Section 21) is in full force an effect, such
assignment is to a permitted assignee under the Merger Agreement (as defined in
Section 21) so long as, in the case of clause (b), such assignment does not
relieve Ranbaxy, Inc. of any of its obligations hereunder. Nothing contained
herein shall be deemed to limit the ability of the Holder to grant
participations in this Note or to pledge its interest in this Note to any other
party.

12. Collection. If action is instituted to collect this Note, the Maker shall
pay all out-of-pocket costs and expenses (including reasonable attorney fees)
incurred in connection with such action.

13. Amendment; Waiver. Any modification, amendment or waiver of any term of this
Note must be made in writing and signed by the Holder and the Maker. Any such
modification, amendment or waiver shall be limited to its express terms. No
delay by the Holder in acting with respect to the terms of this Note constitutes
a waiver of any breach, default, or failure of a condition under this Note.

14. Maker’s Waivers. The Maker waives presentment, demand, notice of dishonor,
notice of default or delinquency, notice of acceleration, notice of protest and
nonpayment, notice of costs, expenses or losses and interest thereon, notice of
interest on interest and diligence in taking any action to collect any sums
owing under this Note or in proceeding against any of the rights or interests in
or to properties securing payment of this Note.

15. Construction; Section Headings. This Note is the result of negotiations
among, and has been reviewed by the Holder, the Maker and their respective
counsel. Accordingly, this Note is deemed to be the product of all parties
hereto and no ambiguity may be construed in favor of or against the Holder or
the Maker. The headings of Sections in this Note are provided for convenience
only and do not affect its construction or interpretation. All references to
“Section” or “Sections” refer to the corresponding Section or Sections of this
Note unless otherwise specified. All words used in this Note are construed to be
of such gender or

 

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number as the circumstances require. Unless otherwise expressly provided, the
words “hereof and “hereunder” and similar references refer to this Note in its
entirety and not to any specific section or subsection hereof, the words
“including” or “includes” do limit the preceding words or terms and the word
“or” is used in the inclusive sense.

16. Notices. All notices and other communications provided for hereunder must be
delivered as provided in the Security Agreement.

17. Governing Law. This Note is construed in accordance with the laws of the
State of New York (including without limitation Section 5-1401 of the General
Obligations Law of the State of New York). All judicial proceedings brought
against the Maker arising out of this Note may be brought in any state or
federal court of competent jurisdiction in in the County of New York, the State
of New York and by execution and delivery of this Note, the Maker accepts for
itself and in connection with its properties, generally and unconditionally, the
nonexclusive jurisdiction of the aforesaid courts and waives any defense of
forum non conveniens and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Note.

18. Severability. If any provision in this Note is held invalid or unenforceable
by any court of competent jurisdiction, the other provisions of this Note remain
in full force and effect. Any provision of this Note held invalid or
unenforceable only in part or degree remains in full force and effect to the
extent not held invalid or unenforceable.

19. Replacement of Note. Upon receipt by the Maker of evidence satisfactory to
it of the loss, theft, destruction or mutilation of this Note, and (in case of
loss, theft or destruction) of indemnity reasonably satisfactory to it, and upon
reimbursement to the Maker of all reasonable expenses incidental thereto, and
(if mutilated) upon surrender and cancellation of this Note, the Maker shall
make and deliver to the Holder a new note of like tenor in lieu of this Note.
Any replacement note made and delivered in accordance with this Section 19 will
dated as of the date hereof.

20. Indemnification. The Maker shall indemnify the Holder, its affiliates,
agents, counsel and other advisors (each an “Indemnified Person”) against, and
hold each of them harmless from, any and all liabilities, obligations, losses,
claims, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever, including the reasonable fees
and disbursements of counsel to an Indemnified Person, that may be imposed on or
incurred by or asserted against any Indemnified Person, in any way relating to
or arising out of this Note or the transactions contemplated hereby or any
action taken or omitted to be taken by it hereunder (the “Indemnified
Liabilities”); provided, that the Maker is not liable to any Indemnified Person
for any portion of such Indemnified Liabilities to the extent they are found by
a final, unappealable decision of a court of competent jurisdiction to have
resulted from such Indemnified Person’s gross negligence, willful misconduct or
material breach of its obligations under the Note Documents (as defined in
Section 21). If and to the extent that the foregoing indemnification is for any
reason held unenforceable by a final, unappealable decision of a court of
competent jurisdiction, the Maker shall make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities that is
permissible under applicable law.

 

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21. Certain Defined Terms. As used in this Note, the following terms have the
following meanings:

(A) “12% Secured Notes” means the notes issued, from time to time, pursuant to
the terms of the Securities Purchase Agreement (as defined in this Section 21).

(B) “Closing Date” has the meaning assigned to such term in the Merger Agreement
(as defined in this Section 21).

(C) “Collateral” has the meaning assigned to such term in the Security
Agreement.

(D) “Intercreditor Agreement” means that certain Intercreditor Agreement, dated
as of the date hereof (as amended, supplemented or otherwise modified from time
to time), by and among the Maker, the Holder and U.S. Bank National Association,
as collateral agent for certain noteholders.

(E) “Merger Agreement” means that certain Agreement and Plan of Merger, dated as
of the date hereof (as amended, supplemented or otherwise modified from time to
time) by and among the Maker, the Holder and Merger Sub (under and as defined in
the Merger Agreement).

(F) “Merger Agreement Covenants” means the covenants of the Maker set forth in
Section 6.1, 6.4, 6.5, 6.6, 6.7, 6.11 and 6.15 of the Merger Agreement (as
defined in Section 21).

(G) “Merger Agreement Representations” means the representations and warranties
of the Maker set forth in Article IV of the Merger Agreement (as defined in
Section 21).

(H) “Note Documents” means, collectively, this Note, the Security Agreement and
the Intercreditor Agreement (as defined in this Section 21).

(I) “Securities Purchase Agreement” means that certain Securities Purchase
Agreement, dated as of October 9, 2014 (and as amended on November 21, 2014) by
the Maker, Riverbank Capital Securities, Inc., as placement agent and the
purchasers party thereto.

[Signature Pages Follows]

 

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Executed and delivered as of the day and year first above written.

 

INSITE VISION INCORPORATED By:  

/s/ Timothy M. Ruane

 

Name: Timothy M. Ruane

Title: Chief Executive Officer

[SIGNATURE PAGE TO NOTE]

 

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RANBAXY, INC.

 

By:  

/s/ Kal Sundaram

  Name: Kal Sundaram   Title: Chief Executive Officer & President

[SIGNATURE PAGE TO NOTE]

 

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Annex I

Operating Expense Borrowings

 

Month

   Maximum
Borrowing
Amount  

September 2015

   $ 1,100,000   

October 2015

   $ 1,100,000   

November 2015

   $ 1,100,000   

December 2015

   $ 1,100,000   

January 2016

   $ 1,100,000