Exhibit 10.13


 


Execution Version


 


 


[***]
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. ASTERISKS DENOTE SUCH OMISSIONS.


 



 


 


Royalty
Purchase Agreement


By
and Among



InSite Vision Incorporated

and 

SWK Funding LLC


and


Bess
Royalty, L.P.


Dated
as of April 2, 2013


 






    	 



    	 



    


	Table OF Contents
	 	 	 
	 	 	Page
	 	 	 
	 	 	 
	ARTICLE I
    Definitions; Interpretation	1
	 	 
	Section 1.1	Definitions	1
	Section 1.2	Certain Interpretations	6
	 	 	 
	ARTICLE II
    Purchase and Sale of Purchased Receivables	7
	 	 
	Section 2.1	Purchase and Sale of Purchased Receivables	7
	Section 2.2	No Purchase or Sale of Excluded Assets	7
	Section 2.3	No Obligations Transferred	7
	Section 2.4	Sale	8
	Section 2.5	Nonassignable Assets	8
	Section 2.6	Power of Attorney	9
	 	 	 
	ARTICLE III
    Closing	9
	 	 
	Section 3.1	Closing	9
	Section 3.2	Payment of Purchase Price	9
	Section 3.3	Seller’s Secretary Certificate	9
	Section 3.4	Bill of Sale and Assignment	9
	Section 3.5	Tax Forms	10
	Section 3.6	Bausch & Lomb Consent and Instruction
    Letter	10
	Section 3.7	Receipt	10
	 	 	 
	ARTICLE IV
    Seller’s Representations and Warranties	10
	 	 
	Section 4.1	Existence	10
	Section 4.2	Authorization	10
	Section 4.3	Enforceability	10
	Section 4.4	Absence of Conflicts	10
	Section 4.5	Consents	11
	Section 4.6	Litigation	11
	Section 4.7	Brokers Fees	11
	Section 4.8	Product Agreements	11
	Section 4.9	Title to Purchased Receivables	13
	Section 4.10    	Product Related IP.	13
	Section 4.11    	Development of Competitive Products	14
	Section 4.12	Compliance with Laws	14
	Section 4.13	UCC Representations and Warranties	14
	Section 4.14	Solvency	14
	Section 4.15	Disclosure	14
	 	 	 
	ARTICLE V
    Purchasers’ Representations and Warranties	15
	 	 
	Section 5.1	Existence	15
	Section 5.2	Authorization	15
	Section 5.3	Enforceability	15
	Section 5.4	Absence of Conflicts	15





    	 



    	 



    


	Section 5.5	Consents	15
	Section 5.6	Litigation	15
	Section 5.7	Brokers Fees	15
	 	 	 
	ARTICLE VI
    Covenants	16
	 	 
	Section 6.1	Performance of Product Agreements	16
	Section 6.2	Misdirected Payments; Offsets by Bausch
    & Lomb	16
	Section 6.3	Royalty Reports; Notices; Correspondence	17
	Section 6.4	Inspections and Audits of Bausch &
    Lomb	17
	Section 6.5	Amendment of Product Agreements	18
	Section 6.6	Enforcement of Product Agreements	18
	Section 6.7	Termination of Product Agreements	19
	Section 6.8	Approval of Assignments of Product Agreements	19
	Section 6.9	Bausch & Lomb Agreements	19
	Section 6.10	Public Announcements; Use of Names	19
	Section 6.11   	Taxes	20
	Section 6.12	Remittance of Previously Received Purchased
    Receivables; Further Actions	20
	Section 6.13	Intellectual Property Matters	20
	Section 6.14	Abandonment and Sale Notices	21
	Section 6.15	Additional Payment Conditions	21
	 	 	 
	ARTICLE VII
    Indemnification	21
	 	 
	Section 7.1	Obligation of Parties to Indemnify	21
	Section 7.2	Procedures Relating to Indemnification
    for Third Party Claims	22
	Section 7.3	Procedures Relating to Indemnification
    for Other Claims	23
	Section 7.4	Limitations on Indemnification	24
	Section 7.5	Survival of Representations and Warranties	24
	Section 7.6	Exclusive Remedy	24
	Section 7.7	Limitations on Damages	24
	Section 7.8	Termination	25
	 	 	 
	ARTICLE VIII
    MISCELLANEOUS	25
	 	 
	Section 8.1	Headings	25
	Section 8.2	Notices	25
	Section 8.3	Expenses	26
	Section 8.4	Assignment	26
	Section 8.5	Successors and Assigns	26
	Section 8.6	Amendment and Waiver	26
	Section 8.7	Entire Agreement	27
	Section 8.8	Independent Contractors	27
	Section 8.9	No Third Party Beneficiaries	27
	Section 8.10	Governing Law	27
	Section 8.11	Jurisdiction; Venue: Service Of Process	27
	Section 8.12	Severability	28
	Section 8.13	Counterparts	28





    	ii



    	 



    
List of Exhibits


A          Seller’s
Wire Transfer Instructions


B          Purchasers’
Wire Transfer Instructions


C          Schedule
of Exceptions to Seller’s Representations and Warranties


D          Product
Agreements


E          Form
of Press Release 



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Index
of Defined Terms


 





	2013 Royalty Year	1	 	Permitted Adverse Claim	3
	Additional Payment	7	 	Person	3
	Additional Payment Conditions	1	 	Post-Closing Incentive Consideration	3
	Adverse Claim	1	 	Post-Closing Incentive Period	3
	Affiliate	1	 	Pro Rata Portion	4
	Agreement	1	 	Proceeds	4
	Bausch & Lomb	1	 	Product	4
	Bausch & Lomb Agreements	2	 	Product Agreements	4
	Bausch & Lomb Consent and Instruction
    Letter	10	 	Product Related IP	4
	Bill of Sale	9	 	Purchase Agreement	1
	Business Day	2	 	Purchase Price	4
	Closing	9	 	Purchased Receivables	4
	Closing Date	9	 	Purchased Royalty Period	4
	Closing Payment	7	 	Purchaser	1
	Consent	2	 	Purchaser Indemnified Party	21
	Contract	2	 	Purchaser Material Adverse Effect	4
	Control	2	 	Purchasers	1
	Counterparties	2	 	Receivables	4
	Counterparty	2	 	Royalty Payment	4
	Defense Conditions	22	 	Royalty Reports	4
	Excess Annual Royalty Payments	2	 	Royalty Sharing Threshold Amount	4
	Excluded Assets	2	 	Royalty Sharing Threshold Date	4
	Final 2013 Royalty Report	2	 	Royalty Year	5
	Governmental Entity	2	 	Seller	1
	Indemnified Party	22	 	Seller Indemnified Party	21
	Indemnifying Party	22	 	Seller Material Adverse Effect	4
	Intellectual Property	3	 	Sharing Payment	7
	Judgment	3	 	SSP Agreements	5
	Knowledge of Seller	3	 	SSP Co., Ltd.	5
	Known to Seller	3	 	SWK Purchaser	1
	Law	3	 	Third Party Claim	22
	License Agreement	1	 	Threshold Amount	5
	Losses	21	 	Threshold Date	5
	Modification	18	 	Total Net Amount	5
	Net Sales	4	 	TPG Purchaser	1
	Nonassignable	8	 	Transaction Documents	5
	Outstanding Litigation	3	 	UCC	6





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This
Royalty Purchase Agreement dated as of April 2, 2013 (this “Agreement”), by and among InSite
Vision Incorporated, a Delaware corporation as Seller (“Seller”), and SWK
Funding LLC, a Delaware limited liability company (“SWK Purchaser”), and Bess
Royalty, L.P., a Delaware limited partnership (“Bess Purchaser”) (SWK Purchaser and Bess Purchaser each
individually a “Purchaser” and collectively, the “Purchasers”).


Introduction


Seller
is a party to that certain ISV-403 Asset Purchase Agreement, dated as of December 19, 2003 (as the same may be amended, modified
or supplemented hereafter, the “Purchase Agreement”), by and between Bausch & Lomb Incorporated, a New
York corporation (“Bausch & Lomb”) and Seller, and that certain License Agreement, dated as of December
19, 2003 (as the same may be amended, modified or supplemented hereafter, the “License Agreement”), between
Seller and Bausch & Lomb.


Seller
desires to sell, transfer, assign and convey to Purchasers, and Purchasers desire to purchase, acquire and accept from Seller,
all of Seller’s right, title and interest in and to the Purchased Receivables (as defined below), for the consideration
and on the terms and subject to the conditions set forth in this Agreement.


In
consideration of the representations, warranties, covenants and agreements set forth herein and for good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, Seller and Purchasers hereby agree as follows:


Article
I



Definitions; Interpretation


Section 1.1          Definitions.
For purposes of this Agreement, the following capitalized terms have the meanings specified below:


“2013
Royalty Year” means the Royalty Year ending in December 2013.


“Additional
Payment Conditions” means the achievement by Bausch & Lomb of (i) Net Sales for the 2013 Royalty Year of at least
$***, and (ii) Net Sales for the last two Royalty Quarters of the 2013 Royalty Year of at least $***.


“Adverse
Claim” means a lien, title defect, pledge, security interest, charge or encumbrance, or other right or claim in or on
any Person’s assets or properties in favor of any other Person.


“Affiliate”
means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, Controls,
or is Controlled by, or is under common Control with, such Person.


“Bausch
& Lomb Agreements” means the Purchase Agreement, License Agreement and other related agreements by and between Seller
and Bausch & Lomb that are listed on Exhibit D.



    	 



    	 



    



“Business
Day” means any day other than (a) a Saturday or Sunday or (b) a day on which banking institutions located in New York,
New York are permitted or required by applicable Law to remain closed.


“Consent”
means any consent, approval, license, permit, order, authorization, registration, filing or notice.


“Contract”
means any contract, lease, license, indenture, instrument or other agreement.


“Control”
and its derivatives mean the possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities or other voting interests, by contract or otherwise.


“Counterparties”
and “Counterparty” means Bausch & Lomb and SSP Co., Ltd. or either of them.


“Excess
Annual Royalty Payments” means, following the Royalty Sharing Threshold Date, the excess, if any, of (x) the aggregate
Royalty Payments received by Purchasers during any Royalty Year over (y) $***; provided, however, that in
no event shall Seller be entitled to any portion of the Royalty Payments received by Purchasers until the Total Net Amount exceeds
the Royalty Sharing Threshold Amount in the aggregate. As an example, if Purchasers have received Royalty Payments in the aggregate
through the third Royalty Year equal to $***, and receives Royalty Payments equal to $*** in Royalty Year four, the
Excess Annual Royalty Payments for year four shall be $***.


“Excluded
Assets” means any and all other rights of Seller to payment, compensation or consideration under or in respect of the
Bausch & Lomb Agreements other than the Purchased Receivables.


“Final
2013 Royalty Report” means the first Royalty Report which, when combined with all prior Royalty Reports received by
Purchasers, includes the full amount of Net Sales by Bausch & Lomb and Post-Closing Incentive Consideration paid or payable
by Bausch & Lomb for each Royalty Quarter for the 2013 Royalty Year.


“Governmental
Entity” means any United States or foreign (i) federal, state, local, municipal or other government, (ii) governmental
or quasi-governmental entity of any nature (including any governmental agency, branch, department, official, or entity and any
court or other tribunal) or (iii) body exercising or entitled to exercise any administrative, executive, judicial, legislative,
police, regulatory, or taxing authority, or power of any nature, including any arbitral tribunal.



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“Intellectual
Property” means, with respect to any Person, all intellectual property owned or licensed (as licensor or licensee) by
such Person and in which such Person has a pecuniary interest, including (i) all patents, patent applications, and inventions
and discoveries that may be patentable, (ii) all know-how, trade secrets, software, technical information, data, registrations,
applications for governmental approvals, inventions, processes, devices, improvements, formulations, discoveries, compositions,
ingredients, research, developments, best practices (including clinical pathways), formulae, protocols, standards, methods, techniques,
designs, quality control practices and information, research and test procedures and information, and safety, environmental and
health practices and information, (iii) all confidential or proprietary information, commercial information, management systems,
business processes and practices, trial results and files, procurement practices and information, supplier qualification and approval
practices and information, training materials, sales and marketing materials, advertising and promotional materials and (iv) all
rights in any jurisdiction to limit the use or disclosure of any of the foregoing, and rights to sue and recover damages or obtain
injunctive relief for infringement, dilution, misappropriation, violation or breach of any of the foregoing.


“Judgment”
means any judgment, order, ruling, injunction, assessment, award, writ or decree of any Governmental Entity or arbitrator.


“Knowledge
of Seller” means the knowledge of any executive officer or director. For purposes of this Agreement, any such individual
shall be deemed to have knowledge of a particular fact or other matter if such individual is actually aware of such fact or other
matter or would have discovered such fact in the normal course of his or her duties after due inquiry. “Known to Seller”
has the correlative meaning.


“Law”
means any law, statute, code, rule, regulation or ordinance of any Governmental Entity and all Judgments.


“Net
Sales” means “Net Sales” as defined in the Purchase Agreement.


“Outstanding
Litigation” means the litigation matter described in Exhibit C hereto.


“Permitted
Adverse Claim” means (i) any Adverse Claim in favor of Purchasers created pursuant to this Agreement or (ii) any Adverse
Claim as to which no enforcement collection, execution, levy or foreclosure proceeding shall have been commenced or threatened
that secures the payment of taxes, assessments and governmental charges or levies, if and to the extent the same are either (x)
not yet due and payable or (y) being contested in good faith and as to which adequate reserves have been provided, in any case
with respect to clause (ii) only to the extent such Adverse Claim could not reasonably be expected to have a Seller Material Adverse
Effect.


“Person”
means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, association, unincorporated
organization, Governmental Entity or other entity or organization.


“Post-Closing
Incentive Consideration” means “Post-Closing Incentive Consideration” as defined in the Purchase Agreement.


“Post-Closing
Incentive Period” means “Post-Closing Incentive Period” as defined in the Purchase Agreement.



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“Proceeds”
means any amounts actually recovered by Seller from a Person as a result of any settlement or resolution of any actions, suits,
proceedings, claims or disputes related to the Receivables.


“Product”
means “Product” as defined in the Purchase Agreement.


“Product
Agreements” means the Bausch & Lomb Agreements and the SSP Agreements.


“Product
Related IP” means the Intellectual Property related to a Product that is owned or licensed (as licensor or licensee)
by Seller or either of the Counterparties.


“Pro
Rata Portion” means (i) ***% for the SWK Purchaser and (ii) ***% for the Bess Purchaser.


“Purchase
Price” shall mean the Closing Payment and the Additional Payment if payable pursuant to Section 2.1(b)(ii).


“Purchased
Receivables” means the Receivables, it being understood and agreed that once the Threshold Date has occurred,
Purchasers shall have no further ownership interest or Adverse Claim in or to the Receivables.


“Purchased
Royalty Period” means the period beginning on (and including) January 1, 2013 and ending on the Threshold Date.


“Purchaser
Material Adverse Effect” means any one or more of (i) a material adverse effect on the ability of a Purchaser to consummate
the transactions contemplated by this Agreement and perform its obligations under this Agreement or (ii) a material adverse effect
on the validity or enforceability of this Agreement or the rights of Seller hereunder.


“Receivables”
means all Royalty Payments attributable to Net Sales in respect of Products sold during the Purchased Royalty Period by or for
Bausch & Lomb, and any cost and expense reimbursement amounts payable by or on behalf of Bausch & Lomb to Seller or its
Affiliate under the Purchase Agreement.


“Royalty
Payment” means each payment by Bausch & Lomb of Post-Closing Incentive Consideration pursuant to Section 2.7 of
the Purchase Agreement in respect of Net Sales.


“Royalty
Reports” means the reports delivered by Bausch & Lomb pursuant to the Purchase Agreement in respect of Net Sales.


“Royalty
Sharing Threshold Amount” means an amount equal to the Purchase Price.


“Royalty
Sharing Threshold Date” means the date on which the Total Net Amount first exceeds the Royalty Sharing Threshold Amount.



    	4



    	 



    



“Royalty
Quarter” means each Bausch & Lomb fiscal quarter, currently based on the fifty-two or fifty-three week period ending
on the last Saturday in December, as determined by Bausch & Lomb’s Finance Department annually.


“Royalty
Year” means each Bausch & Lomb fiscal year, currently based on the fifty-two or fifty-three week period ending on
the last Saturday in December, as determined by Bausch & Lomb’s Finance Department annually.


“Seller
Material Adverse Effect” means any one or more of: (i) a material adverse effect on the ability of Seller to consummate
the transactions contemplated by this Agreement and perform its obligations under this Agreement or the Bausch & Lomb Agreements,
(ii) a material adverse effect on the validity or enforceability of this Agreement or the Bausch & Lomb Agreements or the
rights of Purchasers hereunder or (iii) a material adverse effect on the rights of Seller under the Bausch & Lomb Agreements.


“SSP
Agreements” means the Product Development and Cross-License, Assignment, Novation, Amendment and Consent Agreement dated
December 19, 2003, by and among Bausch & Lomb, Seller and SSP Co., Ltd., and any other agreement entered into in connection
therewith that is listed on Exhibit D.


“SSP
Co., Ltd.” means SSP Co., Ltd., a Japanese corporation.


“Subsidiary”
means, with respect to any Person, any other Person of which more than 50% of the outstanding Voting Securities of such other
Person is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more other Subsidiaries
of such Person or by one or more other Subsidiaries of such Person.


“Threshold
Amount” means an amount equal to the Purchase Price multiplied by 2.75.


“Threshold
Date” means the date on which the Total Net Amount first exceeds the Threshold Amount.


“Total
Net Amount” means, as of any date, an amount equal to ***.


“Transaction
Documents” means this Agreement, the Bill of Sale and all of the other agreements, documents, letters and certificates
executed or delivered in connection herewith.



    	5



    	 



    



“UCC”
means the Uniform Commercial Code as in effect in the State of Texas or Delaware, as applicable.


Capitalized
terms used in this Agreement and not otherwise defined herein shall have the respective meanings ascribed to them in the applicable
Bausch & Lomb Agreements. In the event a capitalized term used herein is defined in both this Agreement and the Bausch &
Lomb Agreements, the meaning given to such term in this Agreement shall control.


Section 1.2         
Certain Interpretations. Except where expressly stated otherwise in this Agreement, the following
rules of interpretation apply to this Agreement:


(a)          “include,”
“includes” and “including” shall be deemed to be followed by the words “without limitation”;


(b)          “hereof,”
“hereto,” “herein” and “hereunder” and words of similar import when used in this Agreement
refer to this Agreement as a whole and not to any particular provision of this Agreement;


(c)          references
to a Contract mean such Contract as amended, modified or supplemented and including any annexes, exhibits and schedules attached
thereto, in each case to the extent not prohibited by such Contract or this Agreement;


(d)          references
to a Person are also to its permitted successors and assigns;


(e)          references
to an “Article,” “Section,” “Exhibit” or “Schedule” refer to an Article or Section
of, or an Exhibit or Schedule to, this Agreement;


(f)           references
to “$” or otherwise to dollar amounts refer to the lawful currency of the United States;


(g)          references
to a Law include any amendment or modification to such Law and any rules and regulations issued thereunder, whether such amendment
or modification is made, or issuance of such rules and regulations occurs, before or after the date of this Agreement; and


(h)          references
to this “Agreement” shall include a reference to all Schedules and Exhibits attached to this Agreement (including
the Schedule of Exceptions attached hereto as Exhibit C), all of which constitute a part of this Agreement and are incorporated
herein for all purposes.



    	6



    	 



    



Article
II



Purchase and Sale of Purchased Receivables


Section
2.1           Purchase and Sale of Purchased Receivables.


(a)          Purchase
and Sale. Upon the terms and subject to the conditions of this Agreement, on the Closing Date, Seller shall sell, transfer,
assign and convey to Purchasers, and each Purchaser shall purchase, acquire and accept from Seller, free and clear of all Adverse
Claims (other than Permitted Adverse Claims or Adverse Claims arising through Purchaser), such Purchaser’s Pro Rata Portion
of Seller’s right, title and interest in and to the Purchased Receivables.


(b)          Purchase
Price. The Purchase Price for the Purchased Receivables shall be payable by Purchasers to Seller as follows:


(i)          Closing
Payment. A payment of $15,000,000 (the “Closing Payment”) for the Purchased Receivables shall be payable
by Purchasers to Seller on the Closing Date. The SWK Purchaser shall pay $*** of the Closing Payment and the Bess Purchaser
shall pay $*** of the Closing Payment.


(ii)          Additional
Payment. An additional payment of $1,000,000 (the “Additional Payment”) for the Purchased Receivables shall
be payable to Seller after receipt by the Purchasers of the Final 2013 Royalty Report in the event the Additional Payment Conditions
are met. If the Additional Payment Conditions are not met, no Additional Payment shall be due or payable. The Additional Payment,
if due, shall be paid by the Bess Purchaser. If the Additional Payment Conditions have been met, the Bess Purchaser shall pay
the Additional Payment to Seller within 20 days of its receipt of the Final 2013 Royalty Report.


(c)          Excess
Annual Royalty Payments. After the Royalty Sharing Threshold Date, Purchasers shall remit to Seller an amount equal to twenty-five
percent (25%) of any Excess Annual Royalty Payments (each, a “Sharing Payment”). Any such Sharing Payments
shall be paid to Seller by wire transfer of immediately available funds to the account set forth in Exhibit A within five
(5) Business Days of actual receipt of any Excess Annual Royalty Payments by Purchasers.


Section
2.2           No Purchase or Sale of Excluded Assets. Notwithstanding
anything to the contrary contained in this Agreement, Seller shall retain all of its right, title and interest in and to, and
there shall be excluded from the sale, transfer, assignment and conveyance to Purchasers under this Agreement, all Excluded Assets.


Section 2.3           No
Obligations Transferred. Notwithstanding anything to the contrary contained in this Agreement, (a) the sale, transfer,
assignment and conveyance to Purchasers of the Purchased Receivables pursuant to this Agreement shall not in any way subject Purchasers
to, or transfer, affect or modify, any obligation or liability of Seller under any Product Agreement and (b) Purchasers expressly
do not assume or agree to become responsible for any obligation or liability of Seller under any Product Agreement or otherwise.



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Section 2.4            Sale.
It is the intention of the parties hereto that the sale, transfer, assignment and conveyance contemplated by this Agreement shall
constitute a sale of the Purchased Receivables from Seller to Purchasers and not a financing transaction, borrowing or loan; and
accordingly, Seller and Purchasers will treat the sale, transfer, assignment and conveyance of the Purchased Receivables as sales
of “accounts” in accordance with the UCC for accounting purposes, and Seller hereby authorizes Purchasers or their
designee, from and after the Closing Date, to execute, record and file such financing statements (and continuation statements
with respect to such financing statements when applicable) naming Seller as the seller/debtor and each Purchaser as the purchaser/secured
party of its Pro Rata Portion of the Purchased Receivables as may be necessary to perfect such sale. If, notwithstanding the intent
of the Parties hereto in this regard, the sale, transfer, assignment and conveyance contemplated hereby is held not to be a sale,
this Agreement shall constitute a security agreement and Seller does hereby grant to each Purchaser a security interest in and
to each Purchaser’s Pro Rata Portion of the Purchased Receivables, whether now owned or hereafter acquired or arising, and
wherever located, and any proceeds (as such term is defined in the UCC), to secure payment to such Purchasers of amounts equal
to such Purchaser’s Pro Rata Percentage of the Purchased Receivables as they are paid under the Purchase Agreement, and
Seller does hereby authorize each Purchaser to file such financing statements (and continuation statements with respect to such
financing statements when applicable) as may be necessary to perfect its security interest. Seller waives, to the maximum extent
permitted by law, any right to contest or otherwise assert that this Agreement is other than a true, complete, absolute and irrevocable
sale by Seller to Purchasers of the Purchased Receivables under applicable Law, which waiver shall be enforceable, to the maximum
extent permitted by law, against Seller in any bankruptcy or insolvency proceeding relating to Seller. The sale, transfer, assignment
and conveyance of the Purchased Receivables shall be reflected on Seller’s financial statements and other records as a sale
of assets to Purchasers. Seller agrees that in any consolidated financial statements of Seller it shall indicate that the Purchased
Receivables are the assets of Purchasers.


Section
2.5           Nonassignable Assets. Nothing in this Agreement
nor the consummation of the transactions contemplated hereby shall be construed as an attempt or agreement to assign any asset
included in the Purchased Receivables, including any Contract, approval, authorization or other right, which by its terms or by
Law is nonassignable without the consent of a third party or is cancelable by a third party in the event of an assignment (“Nonassignable
Assets”) unless and until such consent shall have been obtained or to the extent any such assignment restriction is
removed or expires by its term. Seller shall use commercially reasonable efforts to cooperate with Purchasers at their request
in endeavoring to obtain such consents promptly. To the extent permitted by applicable Law, in the event consents to the assignment
thereof cannot be obtained, such Nonassignable Assets shall be held, as of and from the Closing Date until the date this Agreement
terminates in accordance with Section 7.8, by Seller in trust for Purchasers and the covenants and obligations thereunder shall
be performed by Purchasers in Seller’s name and all benefits and obligations existing thereunder shall be for Purchasers’
accounts. Seller shall take such actions as Purchasers may reasonably request so as to provide Purchasers with the benefits of
the Nonassignable Assets and to effect collection of money or other consideration that becomes due and payable under the Nonassignable
Assets, and Seller shall promptly pay over to Purchasers all money or other consideration received by it in respect of all Nonassignable
Assets.



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Section 2.6            Power
of Attorney. As of and from the Closing Date through the date this Agreement terminates in accordance with Section 7.8, Seller
on behalf of itself and its Affiliates hereby irrevocably constitutes and appoints each Purchaser, to the extent permitted by
applicable Law and the terms of the Nonassignable Assets, with full power of substitution, as Seller’s true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of Seller and in the name of Seller or in its own name, from
time to time in the Purchasers’ discretion, to take any and all appropriate action and to execute and deliver any and all
documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement and the Bill of Sale
and, without limiting the generality of the foregoing, to the extent that the Seller has the right under applicable Law and any
applicable Contract, Seller hereby grants to each Purchaser the power and right, on behalf of Seller, to the extent Seller has
the legal power or right to do such act for its own benefit without notice to or assent by Seller, and at any time, to do the
following: (a) pay or discharge any taxes, liens, security interests, or other encumbrances or other Adverse Claims levied
or placed on or threatened against the Purchased Receivables (other than Adverse Claims arising through Purchaser); (b) communicate
in its own name with any party to any Contract with regard to the assignment of the right, title and interest of Seller in and
under the Purchased Receivables and other matters relating thereto; (c) execute, in connection with the transfer of title,
any endorsements, assignments or other instruments of conveyance or transfer with respect to the Purchased Receivables, (d) to
perform all the obligations and receive all the benefits of Seller under the Nonassignable Assets, and (e) defend, exercise
or enforce Seller’s rights under the Product Agreements in any manner reasonably necessary or advisable to protect the Purchasers’
rights under this Agreement and appoint Purchasers their attorneys-in-fact to act in their name on their behalf. The power of
attorney granted hereby is coupled with an interest, and may not be revoked or canceled by Seller without Purchasers’ written
consent other than upon termination of this Agreement in accordance with Section 7.8. If reasonably requested by the Purchasers,
Seller shall execute a stand-alone power of attorney with consistent with the terms of this Section 2.6 to enable to the Purchasers
to present such power of attorney to other parties without disclosing this Agreement.


Article
III



Closing


Section 3.1            Closing.
The closing of the purchase and sale of the Purchased Receivables (the “Closing”) shall take place at the offices
of Patton Boggs LLP, 2000 McKinney, Suite 1700, Dallas, Texas 75201, at 10:00 a.m. Dallas time on the date hereof, or at such
other place, time and date as the parties hereto may mutually agree. The date on which the Closing occurs is referred to in this
Agreement as the “Closing Date.”


Section
3.2            Payment of
Purchase Price. On the Closing Date, each Purchaser shall deliver to Seller payment of its respective portion of the
Closing Payment in accordance with Section 2.1(b)(i) by wire transfer of immediately available funds to the account set forth
in Exhibit A.


Section 3.3            Seller’s
Secretary Certificate. On the Closing Date, Seller shall deliver to Purchasers a certificate of the Secretary of Seller, dated
the Closing Date, certifying as to (i) the incumbency of the officer of Seller executing this Agreement and (ii) the attached
copies of Seller’s organizational documents and resolutions adopted by Seller’s Board of Directors authorizing the
entry into this Agreement by Seller and the consummation by Seller of the transactions contemplated hereby.


Section 3.4            Bill
of Sale and Assignment. On the Closing Date, Seller and Purchasers shall each deliver to the other party hereto a duly executed
bill of sale and assignment in form and substance acceptable to Purchasers in their sole discretion and evidencing the sale and
assignment to Purchasers of the Purchased Receivables (the “Bill of Sale”).



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Section 3.5            Tax
Forms. Prior to the Closing Date, each Purchaser shall deliver to Seller a valid and properly executed IRS Form W-9, certifying
that such Purchaser is exempt from United States federal withholding tax with respect to all payments with respect to the Purchased
Receivables.


Section 3.6            Bausch
& Lomb Consent and Instruction Letter. On or before the Closing Date, Seller shall deliver to Purchasers a duly executed
consent and instruction letter in form and substance reasonably acceptable to Purchasers (the “Bausch & Lomb Consent
and Instruction Letter”).


Section 3.7            Receipt.
On the Closing Date, Seller shall deliver to Purchasers a duly executed receipt for payment of the Closing Payment.


Article
IV



Seller’s Representations and Warranties


Except
as set forth on Exhibit C, Seller hereby represents and warrants to Purchasers as of the date hereof:


Section 4.1            Existence.
Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Seller
has all power and authority, and all Consents of all Governmental Entities, required to own its property and conduct its business
as now conducted and to exercise its rights and to perform its obligations under this Agreement and the Product Agreements except
where the failure to have such Consents could not reasonably be expected to have a Seller Material Adverse Effect. Seller is duly
qualified to transact business and is in good standing in every jurisdiction in which such qualification or good standing is required
by applicable Law except where the failure to be so qualified or in good standing could not reasonably be expected to have a Seller
Material Adverse Effect.


Section 4.2            Authorization.
Seller has the corporate power to enter into the Transaction Documents and to consummate the transactions contemplated thereby.
The entry into the Transaction Documents, and the consummation of the transactions contemplated thereby, have been duly authorized
by Seller. Each of the Transaction Documents to which Seller is a party has been duly executed and delivered by Seller.


Section 4.3            Enforceability.
Each of the Transaction Documents to which Seller is a party constitutes a valid, binding and enforceable obligation of Seller,
except as may be limited by general principles of equity (regardless of whether considered in a proceeding at law or in equity)
and by applicable bankruptcy, insolvency, and other laws of general application relating to or affecting creditors’ rights
generally.


Section 4.4            Absence
of Conflicts. The execution, delivery and performance by Seller of the Transaction Documents to which it is a party and the
consummation of the transactions contemplated therein do not and will not (a) contravene any provision of Seller’s certificate
of incorporation or by-laws, (b) constitute a breach of, or result in a default under or cause the acceleration of any payments
pursuant to, any Contract to which Seller or any of its Subsidiaries is a party or by which any of their respective assets or
properties are bound, (c) violate any provision of Law applicable to Seller or any of its Subsidiaries or (d) result in or
require the creation or imposition of any Adverse Claim on any assets of Seller or its Subsidiaries (except as created by this
Agreement), except in the cases of clause (c) to the extent any such breach, default or violation could not reasonably be expected
to have a Seller Material Adverse Effect.



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Section 4.5           Consents.
Other than the Bausch & Lomb Consent and Instruction Letter and the UCC financing statements required to be filed under this
Agreement, the execution and delivery by Seller of the Transaction Documents to which Seller is party, the performance by Seller
of its obligations hereunder and thereunder and the consummation of any of the transactions contemplated hereunder and thereunder
(including the sale, assignment, transfer and conveyance of the Purchased Receivables to Purchasers and the granting of the security
interest therein) do not require any Consent from, notice to, action or registration by or filing with any Governmental Entity
or any other Person.


Section 4.6           Litigation.
Except as disclosed on Exhibit C, there is no (a) action, suit, arbitration proceeding, claim, demand, citation, summons,
subpoena, investigation or other proceeding (whether civil, criminal, administrative, regulatory, investigative or informal) pending
or, to the Knowledge of Seller, threatened in respect of the Purchased Receivables, the Products or otherwise, at law or in equity,
or (b) inquiry or investigation (whether civil, criminal, administrative, regulatory, investigative or informal) by or before
a Governmental Entity pending or, to the Knowledge of Seller, threatened against Seller or any of its Subsidiaries in respect
of the Products, the Purchased Receivables or otherwise, that, in either case, (i) if adversely determined, could reasonably be
expected to result in a Seller Material Adverse Effect, or (ii) challenges or seeks to prevent or delay the consummation
of any of the transactions contemplated by any of the Transaction Documents to which Seller is party. To the Knowledge of Seller,
no event has occurred or circumstance exists that may give rise to or serve as a basis for the commencement of any such action,
suit, arbitration, claim, investigation, proceeding or inquiry.


Section 4.7           Brokers
Fees. There is no investment banker, broker, finder, financial advisor or other intermediary who has been retained by or is
authorized to act on behalf of Seller who is entitled to any fee or commission in connection with the transactions contemplated
by this Agreement.


Section
4.8           Product Agreements.


(a)          Product
Agreements. Attached hereto as Exhibit F is a true, correct and complete copy of each of the Product Agreements, along
with all exhibits, schedules and other attachments thereto.


(b)          Validity
and Enforceability of Product Agreements. Each of the Product Agreements is a valid, binding and enforceable obligation of
Seller, and to the Knowledge of Seller, of the Counterparties, as applicable, except as may be limited by general principles of
equity (regardless of whether considered in a proceeding at law or in equity) and by applicable bankruptcy, insolvency, and other
laws of general application relating to or affecting creditors’ rights generally. Seller has not received any written notice
from either Counterparty challenging the validity or enforceability of the Product Agreements or any obligation of such parties
to pay the Royalty Payments or perform their respective obligations thereunder, nor, to the Knowledge of Seller, has either Counterparty
delivered any such written notice to the other Counterparty.



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(c)          No
Waivers, Releases. Seller has not granted any material waiver under the Product Agreements and has not released either Counterparty
in whole or in part, from any of its material obligations under the Product Agreements, except, in each case, to the extent set
forth in the Product Agreements. To the Knowledge of Seller, neither Counterparty has granted any material waiver under the Product
Agreements to the other Counterparty, nor has either Counterparty released the other Counterparty in whole or in part, from any
of its material obligations under the Product Agreements.


(d)          No
Termination, Force Majeure, etc. Seller has not (i) given either Counterparty any notice of termination of any of the applicable
Product Agreements or of Force Majeure thereunder or (ii) received from either Counterparty any written notice of termination
of any of the Product Agreements or of Force Majeure thereunder, nor, to the Knowledge of Seller, has either Counterparty given
or received any such notice. To the Knowledge of Seller, no event has occurred and is continuing that would give any party to
the Product Agreements a right to terminate any of the Product Agreements. Seller has not received any notice from either Counterparty
expressing any intention or desire to terminate any of the Product Agreements, nor, to the Knowledge of Seller, has either Counterparty
given or received any such notice. Seller has not received any Abandonment Notices under Section 2.7.10(b) of the Purchase Agreement.


(e)          No
Breaches. Seller has not breached any provision of the Product Agreements in any material respect, and, to the Knowledge of
Seller, neither Counterparty has breached any provision of the applicable Product Agreements in any material respect.


(f)          Royalty
Reports. Seller has made available to Purchasers copies of the Royalty Reports covering the period from (and including) December
2009 to (and including) January 2013 that, in each case, have been delivered by Bausch & Lomb to, and received by, Seller
prior to the date hereof. The Royalty Payments from Bausch & Lomb began in December 2009 and were initially paid quarterly.
Beginning in January 2010, Bausch & Lomb began making the Royalty Payments monthly.


(g)          Payments
Made. To the Knowledge of Seller, Seller has received from Bausch & Lomb the full amount of the payments referred to in
Section 2.7 of the Purchase Agreement. Seller has received all amounts specified as “Total Royalty” in the Royalty
Reports referred to in ‎Section 4.8(f). Except as set forth on Exhibit C, none of the Royalty Payments listed in the Royalty
Reports were received from Bausch & Lomb more than ten (10) calendar days after the due date therefor.


(h)          No
Royalty Deductions. The Royalty Payments have not been, and to the Knowledge of Seller are not, as of the date hereof, subject
to any deductions or offsets.



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(i)           Sublicenses.
Seller has not received any written notice from Bausch & Lomb of, and, to the Knowledge of Seller, Bausch & Lomb has not
granted, any sublicense of Bausch & Lomb’s rights under the License Agreement.


(j)           No
Assignments. Seller has not consented to any assignment by either Counterparty of, and, to the Knowledge of Seller, neither
Counterparty has assigned any of, the Product Agreements or any part thereof. Except as contemplated by this Agreement, Seller
has not assigned, in whole or in part, and has not granted any liens upon or security interests with respect to, the Product Agreements
or the Receivables.


(k)          Audits.
Seller has not initiated, pursuant to Section 2.7.7 of the Purchase Agreement, any audit or examination of the books and records
of Bausch & Lomb by an independent auditor in order to verify the Royalty Reports.


(l)           Receivables.
Except as set forth on Exhibit C, to the Knowledge of Seller, no event has occurred or fact exists that is likely to lead
to a material reduction of the amount or frequency of the Royalty Payments to be received from Bausch & Lomb.


(m)         No
Other Agreements. Other than the Product Agreements, there are no other Contracts between Seller and the Counterparties related
to the Products.


Section
4.9           Title to Purchased Receivables. Seller is the exclusive
owner of the entire right, title (legal and equitable) and interest in and to the Purchased Receivables and has good, valid and
indefeasible title thereto, free and clear of all Adverse Claims (other than Permitted Adverse Claims). The Purchased Receivables
sold, assigned, transferred and conveyed to Purchasers on the Closing Date have not been pledged, sold, contributed, assigned,
transferred or conveyed by Seller to any other Person. Seller has full right to sell, assign, transfer and convey the Purchased
Receivables (and grant a security interest therein) to Purchasers. Upon the sale, assignment, transfer and conveyance by Seller
of the Purchased Receivables to Purchasers, Purchasers shall acquire good, valid and indefeasible title to the Purchased Receivables
free and clear of all Adverse Claims arising through the Seller, and shall be the exclusive owners of the Purchased Receivables.


Section
4.10         Product Related IP.


(a)          Seller
has not received any written notice of, and, to the Knowledge of Seller, there are not, any pending or threatened litigations,
interferences, reexaminations, oppositions or like proceedings involving any Product Related IP.


(b)          To
the Knowledge of Seller, all of the Product Related IP is valid and enforceable.


(c)          Seller
has not, and, to the Knowledge of Seller, neither Counterparty has, received any written notice of any claim by any Person challenging
the ownership of the rights of Seller or the Counterparties in and to, or the validity or enforceability of, the Product Related
IP, or asserting that the manufacture, sale, offer for sale or use of the Product infringes such Person’s patents or other
Intellectual Property rights.



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(d)           To
the Knowledge of Seller, (i) no third party Intellectual Property rights have been, or are or will be infringed by the manufacture,
sale, offer for sale or use of the Products, and (ii) no Person is infringing any of the Product Related IP.


Section 4.11          Development
of Competitive Products. None of Seller or any of its Subsidiaries is involved in the development of any products reasonably
likely to lead to a reduction or termination of Post-Closing Incentive Consideration payments under the Product Agreements, nor,
to the Knowledge of Seller, is any Counterparty.


Section 4.12          Compliance
with Laws. None of Seller or any of its Subsidiaries (a) has violated or is in violation of, or, to the Knowledge of Seller,
is under investigation with respect to or has been threatened to be charged with or been given notice of any violation of, any
applicable Law or any Judgment, or (b) is subject to any Judgment except, in each case, to the extent any such violation,
investigation, threat or Judgment could not reasonably be expected to have a Seller Material Adverse Effect. Each of Seller and
its Subsidiaries is in compliance with the requirements of all Laws except to the extent any such failure to be in compliance
could not reasonably be expected to have a Seller Material Adverse Effect.


Section 4.13          UCC
Representations and Warranties. Seller’s exact legal name is, and since its formation has been, “InSite Vision
Incorporated.” Seller’s location, for purposes of Section 9-307 of the UCC is, and since its formation has been, Delaware.


Section 4.14          Solvency.
Upon consummation of the transactions contemplated hereby and the application of the Closing Payment received by Seller on the
Closing Date, (i) the present fair saleable value of Seller’s assets is not less than the amount that will be required to
pay its probable liabilities on its existing debts and other obligations, including contingent liabilities, as they become absolute
and matured, (ii) Seller will not have unreasonably small capital with which to engage in its business, and (iii) Seller has not
incurred, and does not have present plans or intentions to incur, debts or other liabilities beyond its ability to pay such debts
or other liabilities as they become absolute and matured. The amount of contingent liabilities at any time shall be computed as
the amount that, in light of all the facts and circumstances existing at such time, would reasonably be expected to become an
actual or matured liability.


Section 4.15          Disclosure.
All information heretofore furnished by Seller or any of its Affiliates to Purchasers for purposes of or in connection with this
Agreement, any of the other Transaction Documents or any transaction contemplated hereby or thereby is, and all such information
hereafter furnished by Seller to Purchasers will be, when taken as a whole, true and accurate in all material respects on the
date such information is furnished and does not and will not, taken as a whole, contain any material misstatement of fact or omit
to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they were
made, not misleading.



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Article
V



Purchasers’ Representations and Warranties


Each
Purchaser hereby severally, and not jointly, represents and warrants to Seller that as of the date hereof:


Section
5.1           Existence. Such Purchaser is duly organized,
validly existing and in good standing under the laws of its state of formation. Such Purchaser has all power and authority, and
all Consents of all Governmental Entities, required to own its property and conduct its business as now conducted and to exercise
its rights and to perform its obligations under this Agreement except where the failure to have such Consents could not reasonably
be expected to have a Purchaser Material Adverse Effect. Such Purchaser is duly qualified to transact business and is in good
standing in every jurisdiction in which such qualification or good standing is required by applicable Law except where the failure
to be so qualified or in good standing could not reasonably be expected to have a Purchaser Material Adverse Effect.


Section 5.2          Authorization.
Such Purchaser has the requisite power to enter into this Agreement and to consummate the transactions contemplated hereby. The
entry into the Transaction Documents, and the consummation of the transactions contemplated thereby, have been duly authorized
by such Purchaser. Each of the Transaction Documents to which such Purchaser is a party has been duly executed and delivered by
such Purchaser.


Section 5.3           Enforceability.
Each of the Transaction Documents to which such Purchaser is a party constitutes a valid, binding and enforceable obligation of
such Purchaser, except as may be limited by general principles of equity (regardless of whether considered in a proceeding at
law or in equity) and by applicable bankruptcy, insolvency, and other laws of general application relating to or affecting creditors’
rights generally.


Section 5.4           Absence
of Conflicts. The execution, delivery and performance of the Transaction Documents by such Purchaser and the consummation
of the transactions contemplated therein do not and will not (a) contravene any provision of such Purchaser’s certificate
of formation, by-laws, or similar formation documents, (b) constitute a breach by such Purchaser of, or result in a default under
or cause the acceleration of any payments pursuant to any Contract to which such Purchaser is a party or by which any of its assets
are bound or (c) violate any provision of Law applicable to such Purchaser, except in the case of clause (c) to the extent
any such breach, default or violation could not reasonably be expected to have a Purchaser Material Adverse Effect.


Section 5.5            Consents.
Other than the UCC financing statements required to be filed under this Agreement, the execution and delivery by such Purchaser
of the Transaction Documents to which such Purchaser is party, the performance by such Purchaser of its obligations hereunder
and thereunder and the consummation of any of the transactions contemplated hereunder and thereunder do not require any Consent
from, notice to, action or registration by or filing with any Governmental Entity or any other Person.



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Section 5.6           Litigation.
There is no (a) action, suit, arbitration proceeding, claim, demand, citation, summons, subpoena, investigation or other
proceeding (whether civil, criminal, administrative, regulatory, investigative or informal) pending or, to the knowledge of such
Purchaser, threatened at law or in equity, or (b) inquiry or investigation (whether civil, criminal, administrative, regulatory,
investigative or informal) by or before a Governmental Entity pending or, to the knowledge of such Purchaser, threatened against
such Purchaser, that, in either case, (i) if adversely determined, could reasonably be expected to result in a Purchaser Material
Adverse Effect, or (ii) challenges or seeks to prevent or delay the consummation of any of the transactions contemplated by any
of the Transaction Documents to which such Purchaser is party. To the knowledge of such Purchaser, no event has occurred or circumstance
exists that may give rise to or serve as a basis for the commencement of any such action, suit, arbitration, claim, investigation,
proceeding or inquiry.


Section 5.7           Brokers
Fees. There is no investment banker, broker, finder, financial advisor or other intermediary who has been retained by or is
authorized to act on behalf of such Purchaser who is entitled to any fee or commission in connection with the transactions contemplated
by this Agreement.


Article
VI



Covenants


Section 6.1            Performance
of Product Agreements. Seller agrees that it shall perform all of its obligations under the Product Agreements in all material
respects relevant to the interests of Purchasers.


Section
6.2            Misdirected Payments; Offsets by Bausch & Lomb.


(a)          Payments
to Purchasers. If Seller or its Affiliate shall, notwithstanding the provisions of the Bausch & Lomb Consent and Instruction
Letter, receive from, or on behalf of, Bausch & Lomb any Purchased Receivables, Seller shall promptly, and in any event no
later than five (5) Business Days, following the receipt by Seller or its Affiliate of such Purchased Receivables, remit to each
Purchaser its Pro Rata Portion of the Purchased Receivables.


(b)          Payments
to Seller. If either Purchaser shall receive (i) any Royalty Payment that does not consist entirely of Purchased Receivables
or (ii) any Excluded Asset, such Purchaser shall promptly, and in any event no later than five (5) Business Days, following the
receipt of such Royalty Payment or Excluded Asset, remit to Seller (i) the portion, if any, of such Royalty Payment that does
not constitute Purchased Receivables or (ii) such Excluded Asset, as the case may be.


(c)          Offsets
by Bausch & Lomb. If Bausch & Lomb sets off against the Purchased Receivables any amount owing from Seller to Bausch
& Lomb in respect of any right of Bausch & Lomb against Seller arising from or in connection with any matter other than
the Purchased Receivables, then Seller shall promptly, and in any event no later than twenty (20) Business Days, following the
date on which Seller becomes aware of such set-off, pay to each Purchaser a sum equal to its Pro Rata Portion of such set-off
amount. After Seller makes the payment referred to in the first sentence of this Section 6.2(c), Seller shall be entitled to,
and Purchasers shall not be entitled to, any amounts recovered from Bausch & Lomb in respect of such set-off.



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(d)          Remittances.
All remittances pursuant to this ‎Section 6.2 shall be made (i) without set-off or deduction of any kind (except as required
by applicable Law) and (ii) by wire transfer of immediately available funds to the account set forth in Exhibit A
(if the payee is Seller) or Exhibit B (if the payees are Purchasers) or to such other account as the relevant payee(s)
may designate in writing (such designation to be made at least five (5) Business Days prior to any such payment).


(e)          Payments
Held In Trust. Each party hereto agrees that it shall hold any amounts received by it to which the other party hereto is entitled
under Section 6.2(a) or Section 6.2(b) in trust for the sole benefit of the other party and agrees that it shall have no
right, title or interest whatsoever in such amounts.


Section
6.3           Royalty Reports; Notices; Correspondence.


(a)          Royalty
Reports. Promptly, and in any event no later than five (5) Business Days, following the receipt by Seller of a written notice
from Purchasers certifying that Bausch & Lomb has not furnished Purchasers with a Royalty Report delivered in respect of the
Purchase Agreement prior to the date of such written notice from Purchasers (and covering a period that falls within the Purchased
Royalty Period), Seller shall furnish a copy of such Royalty Report (if Seller shall have received such Royalty Report) to Purchasers.


(b)          Notices;
Correspondence. Promptly, and in any event no later than five (5) Business Days, following the receipt by Seller of any material
written notice or material written correspondence relating to, or involving, the Purchased Receivables pursuant to the Bausch
& Lomb Agreements, Seller shall furnish a copy of such notice or correspondence to Purchasers. Seller shall not send any material
written notice or correspondence to Bausch & Lomb relating to, or involving, the Purchased Receivables, in each case, without
the prior written consent of Purchasers (such consent not to be unreasonably withheld or delayed), unless the sending of such
notice or correspondence could not reasonably be expected to adversely affect in any material respect the value of the Purchased
Receivables, and Seller shall promptly provide to Purchasers a copy of any such notice or correspondence sent by Seller to Bausch
& Lomb.


Section
6.4           Inspections and Audits of Bausch & Lomb.


(a)          Consultation.
Purchasers shall control, but Seller and Purchasers shall consult and cooperate with each other regarding, the timing, manner
and conduct of any examination of Bausch & Lomb’s books and records with respect to Net Sales pursuant to Section 2.7.7
of the Purchase Agreement.


(b)          Examinations
and Audits. If requested by Purchasers, Seller shall, (i) cause an examination to be made of Bausch & Lomb’s
books and records with respect to Net Sales used to prepare the Royalty Reports with respect to sales of Product pursuant to Section 2.7.7
of the Purchase Agreement; provided, however, that Purchasers shall not be entitled to request such an examination more
frequently than once every calendar year. With respect to any such examination, Purchasers shall select such independent auditor
for such purpose (as long as such independent auditor is reasonably acceptable to Bausch & Lomb). All of the expenses of any
such examination (including the fees and expenses of any independent auditor) that would otherwise be borne by Seller pursuant
to the Bausch & Lomb Agreements shall instead be borne (as such expenses are incurred) by Purchasers, provided that any reimbursement
by Bausch & Lomb of the audit expenses shall belong to Purchasers.



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Section 6.5          Amendment
of Product Agreements. Seller shall provide Purchasers a copy of any proposed amendment, supplement, modification or waiver
(a “Modification”) of any provision of the Product Agreements as soon as practicable and in any event not less
than ten (10) Business Days prior to the date Seller proposes to execute such Modification. Seller shall not, without the prior
written consent of Purchasers, execute or agree to execute any proposed Modification if such Modification could reasonably be
expected to adversely affect in a material respect the Purchased Receivables or the value thereof (it being understood and agreed
that any proposed Modification to the provisions of the Bausch & Lomb Agreements governing the amount or calculation of the
Receivables or the procedures for payment of the Receivables shall be deemed, for purposes of this ‎Section 6.5, to have such
an effect). Promptly, and in any event within five (5) Business Days, following receipt by Seller of a fully executed Modification
of the Product Agreements, Seller shall furnish a copy of such Modification to Purchasers.


Section
6.6           Enforcement of Product Agreements.


(a)          Notice
of Counterparty Breaches. Promptly, and in any event within five (5) Business Days, following a breach of any of the Product
Agreements by either Counterparty becoming Known to Seller that, in Seller’s good faith judgment, could reasonably be expected
to adversely affect in any material respect the Purchased Receivables or the value thereof, Seller shall provide notice of such
breach to Purchasers. In addition, Seller shall provide to Purchasers a copy of any written notice of breach of the Product Agreements
delivered or received by Seller as soon as practicable and in any event no later than five (5) Business Days following such delivery
or receipt.


(b)          Enforcement
of Product Agreements. Seller and Purchasers shall consult and cooperate with each other, regarding any breach referred to
in Section 6.6(a), but Purchasers shall control the timing, manner and conduct of any enforcement of either Counterparty’s
obligations under the Product Agreements relating thereto. If requested by Purchasers within twenty (20) Business Days after receipt
of notice of such breach pursuant to ‎Section 6.6(a), Seller shall proceed to enforce compliance by the Counterparty with
the relevant provisions of the Product Agreements and to exercise such rights and remedies relating to such breach as shall be
available to Seller, whether under the Product Agreements or by operation of applicable Law.


(c)          Allocation
of Proceeds and Costs of Enforcement. The Proceeds of any enforcement of a Counterparty’s obligations under the Product
Agreements pursuant to this Section 6.6, after deduction of all costs and expenses (including attorneys’ fees and expenses)
incurred by Seller in connection with such enforcement, shall belong to Purchasers to the extent constituting Purchased Receivables
and not constituting an Excluded Asset. All costs and expenses (including attorneys’ fees and expenses) of any enforcement
pursuant to this ‎Section 6.6 (other than any costs and expenses of Seller to the extent such amounts are specifically
satisfied out of the Proceeds of such enforcement) shall be borne by Purchasers, provided that any reimbursement by Bausch &
Lomb of these expenses shall belong to Purchasers.



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Section
6.7           Termination of Product Agreements. In no event
shall Seller exercise any right to terminate any of the Product Agreements, or agree with either Counterparty to terminate any
of the Product Agreements, except with the prior written consent of Purchasers (which consent may be withheld or delayed in either
Purchaser’s sole discretion).


Section
6.8           Approval of Assignments of Product Agreements.


(a)          Promptly,
and in any event within five (5) Business Days, following receipt by Seller of a request from a Counterparty for consent to assign
its rights, or delegate its duties, under any of the Product Agreements, Seller shall provide notice of such request to Purchasers.
Seller and Purchasers shall consult with each other regarding whether to grant such consent. In any event, Seller shall not grant
such consent without the prior written consent of Purchasers (which consent may be withheld or delayed in either Purchaser’s
sole discretion).


(b)          Seller
may not assign its rights, or delegate its duties, under any of the Bausch & Lomb Agreements without the prior written consent
of Purchasers (which consent may be withheld or delayed in either Purchaser’s sole discretion); provided, that Seller may,
without the prior written consent of Purchasers, assign the Bausch & Lomb Agreements to any Person that acquires all or substantially
all of Seller’s business or assets (whether through an asset purchase agreement, stock purchase agreement, merger agreement
or otherwise) if Seller also assigns this Agreement to such Person and such Person agrees in writing to be bound by the terms
of this Agreement.


(c)          Promptly,
and in any event no later than five (5) Business Days, following receipt of any executed assignment of rights, or delegation of
duties, under any of the Product Agreements by a Counterparty or Seller, Seller shall furnish a copy of such assignment or delegation
to Purchasers.


Section 6.9           Bausch
& Lomb Agreements. Prior to the Threshold Date, Seller shall not, without each Purchaser’s prior written consent,
deliver any inconsistent directions to Bausch & Lomb regarding the payment of the Purchased Receivables or the delivery of
Royalty Reports to Purchasers of the type referred to in the Bausch & Lomb Consent and Instruction Letter.


Section 6.10         Public
Announcements; Use of Names. Except for a press release substantially in the form attached hereto as Exhibit E, neither
party shall, and each party shall instruct its Affiliates not to, issue a press release or other public announcement or otherwise
make any public disclosure with respect to this Agreement or the subject matter hereof without the prior consent of the other
party (which consent shall not be unreasonably withheld or delayed), except as may be required by applicable Law (in which case
the party required to make the release or statement shall allow the other party reasonable time to comment on such release or
statement in advance of such issuance).



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Section 6.11         Taxes.
Seller and Purchasers agree that for United States federal income tax purposes, (i) any and all Purchased Receivables remitted
by Seller to Purchasers pursuant to ‎Section 6.2(a) or otherwise under this Agreement shall be treated as received by Seller
as agent for Purchasers, and (ii) any and all amounts remitted by Seller to Purchasers pursuant to ‎Section 6.2(a) of
this Agreement shall be treated as remittances of amounts collected by Seller on behalf of Purchasers. Each party hereto agrees
to provide (to the extent it is legally eligible to do so) any tax forms that any other party hereto or Bausch & Lomb may
reasonably request in order to comply with applicable tax Law.


Section 6.12        Remittance
of Previously Received Purchased Receivables; Further Actions. From and after the Closing Date, each Purchaser and Seller
shall, at the expense of the requesting party, execute and deliver such additional documents, certificates and instruments, and
perform such additional acts, as may be reasonably requested and necessary or appropriate to carry out all of the provisions of
this Agreement and to give full effect to and consummate the transactions contemplated by this Agreement. Seller shall promptly,
but in any event no later than two (2) Business Days after the Closing Date, remit to each Purchaser such Purchaser’s Pro
Rata Portion of any payments made by or on behalf of Bausch & Lomb on or before the Closing Date that constitute or otherwise
relate to the Purchased Receivables.


Section
6.13         Intellectual Property Matters.


(a)          Administration.
Seller shall administer the prosecution, maintenance, defense and enforcement of any Product Related IP owned by Seller (including
any Outstanding Litigation) in accordance with, and subject to, the Product Agreements and in consultation with each Counterparty
(to the extent required or deemed appropriate by Seller).


(b)          Costs.
All costs and expenses (including attorneys’ fees and expenses) incurred by Seller in connection with the prosecution, maintenance,
defense or enforcement of the Product Related IP (including any Outstanding Litigation) shall, to the extent not reimbursed to
Seller by a Counterparty pursuant to the applicable Product Agreement, be borne by Seller.


(c)          Allocation
of Proceeds. The Proceeds (if any) of any enforcement or defense of the Product Related IP, without deduction for any costs
and expenses (including attorneys’ fees and expenses) incurred by Seller in connection therewith, shall belong to Purchasers
to the extent constituting Purchased Receivables and not constituting an Excluded Asset. In the event the Proceeds include payment
in respect of the Purchased Receivables and any other amounts, the parties agree to allocate the Proceeds between the Purchasers
and Seller in the proportion following the nature of the Proceeds and the rights under this Agreement.


(d)          Monitoring.
To the extent Seller has any rights under the Purchase Agreement with respect to the prosecution, maintenance, enforcement and
defense of the Product Related IP (including the Outstanding Litigation), Purchasers shall have the right to retain, at their
sole expense, outside counsel, who shall be permitted (together with Purchasers), where and when reasonably practical, to consult
with Seller and its counsel regarding any such rights and any actions taken or proposed to be taken by Seller in respect thereof.
Seller and its counsel shall (i) give reasonable consideration to the views of Purchasers and their counsel(s) with respect thereto
and (ii) provide Purchasers with such information with respect to any such rights as Purchasers may, from time to time, reasonably
request.



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Section
6.14         Abandonment and Sale Notices.


(a)          Receipt
of Abandonment and Sale Notices. Promptly, and in any event within five (5) Business Days, following receipt by Seller of
an Abandonment Notice or Sale Notice from Bausch & Lomb under Section 2.7.10(b) or (d) of the Purchase Agreement, Seller shall
provide a copy of such notice to Purchasers. In the event Seller receives such a notice from Bausch & Lomb or otherwise has
rights under Section 2.7.10(b) or (d) of the Purchase Agreement, Seller and Purchasers shall consult with each other regarding
whether to negotiate with Bausch & Lomb with respect to such notice. In the event (i) Seller and Purchasers are able to agree
on economic terms as among them with respect to the repurchase of such Abandoned Development Rights or Purchased Assets (as each
are defined in the Purchase Agreement) or (ii) Purchasers agree to bear any costs (including purchase price) of Seller with
respect to such items, Seller shall negotiate with Bausch & Lomb with respect to such items. While any such negotiations shall
be undertaken by Seller, Purchasers shall control such negotiations. Seller agrees to exercise its rights under Section 2.7.10(b)
or (d) of the Purchase Agreement if directed by Purchasers.


(b)          Allocation
of Proceeds. The profit (if any) of any ultimate sales generated by the rights or assets purchased by Seller pursuant to Section 2.7.10(b)
or (d) of the Purchase Agreement received by Seller in connection therewith or otherwise, shall belong to Purchasers, unless the
parties have agreed otherwise pursuant to Section 6.14(a).


Section 6.15         Additional
Payment Conditions. From and after the Closing Date, Seller agrees that it shall not in any way cause or request Bausch &
Lomb to alter its Royalty Reports for the 2013 Royalty Year without the written consent of the Purchasers.


Article
VII



Indemnification


Section
7.1           Obligation of Parties to Indemnify.


(a)          Indemnification
by Seller. Subject to the limitations set forth in this ‎Article VII, Seller shall indemnify, defend and hold harmless,
each Purchaser, its Affiliates and their respective employees, officers, directors and agents (each, a “Purchaser Indemnified
Party”) against any and all losses, liabilities, expenses (including reasonable attorneys’ fees and expenses in
connection with any third party action, suit or proceeding) and damages (collectively, “Losses”) incurred by
any of them, to the extent arising or resulting from any of the following:


(i)          any
breach of any representation or warranty made by Seller in this Agreement or any other Transaction Document delivered to Purchasers
in connection herewith;


(ii)          any
breach of any covenant of Seller contained in this Agreement or any other Transaction Document delivered to Purchasers in connection
herewith; and


(iii)         any
obligations of Seller in accordance with Section 2.3 hereof.



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(b)          Indemnification
by Purchasers. Subject to the limitations set forth in this ‎Article VII, each Purchaser shall severally, but not jointly,
indemnify Seller, its Affiliates and their respective employees, officers, directors and agents (each a “Seller Indemnified
Party”) against any and all Losses incurred by any of them, to the extent arising or resulting from any of the following:


(i)          any
breach of any representation or warranty made by such Purchaser in this Agreement or any other Transaction Document delivered
to Seller in connection herewith; and


(ii)          any
breach of any covenant of such Purchaser contained in this Agreement or any other Transaction Document delivered to Seller in
connection herewith.


Section
7.2           Procedures Relating to Indemnification for Third Party Claims.


(a)          Notice
of Third Party Claim. In order for a party (an “Indemnified Party”) to be entitled to any indemnification
under this ‎Article VII in respect of Losses arising out of or involving a claim or demand made by any Person other than either
or both Purchasers or Seller against a Purchaser Indemnified Party or a Seller Indemnified Party, as applicable (a “Third
Party Claim”), the Indemnified Party must notify the party from whom indemnification is sought under this ‎Article
VII (the “Indemnifying Party”) promptly in writing (including in such notice a brief description of the Third
Party Claim, including damages sought or estimated, to the extent actually known or reasonably capable of estimation by the Indemnified
Party); provided, however, that the failure to promptly provide such notice shall not affect the indemnification
provided under this ‎Article VII except to the extent that the Indemnifying Party has been actually prejudiced as a result
of such failure. Thereafter, the Indemnified Party shall deliver to the Indemnifying Party, promptly after the Indemnified Party’s
receipt thereof, copies of all documents (including court papers) received by the Indemnified Party relating to the Third Party
Claim.


(b)          Defense
of Third Party Claims. The Indemnifying Party shall be entitled to participate in the defense of the Third Party Claim and,
if it so chooses, to assume the defense thereof, at its own expense, with counsel selected by the Indemnifying Party (so long
as such counsel is not reasonably objected to by the Indemnified Party) if: (i) the Indemnifying Party acknowledges its obligation
to indemnify the Indemnified Party for any indemnifiable Losses resulting from such Third Party Claim; (ii) such Third Party
Claim involves (and continues to involve) solely monetary damages which are not reasonably likely to exceed the applicable amount
in Section 7.4(a) or (b), as applicable; (iii) such Third Party Claim does not relate to or arise in connection with
any criminal action; (iv) the Indemnifying Party makes reasonably adequate provision to satisfy the Indemnified Party of
the Indemnifying Party’s ability to defend, satisfy and discharge such Third-Party Claim; (v) no defense exists for
the Indemnified Party which is not available to the Indemnifying Party; and (vi) if the named parties to such Third Party
Claim (including impleaded parties) include both the Indemnifying Party and the Indemnified Party, representation of both parties
by the same counsel would not be inappropriate due to actual or potential differing interests between them (as determined by the
Indemnified Party in its reasonable discretion) (collectively, the “Defense Conditions”). If the Indemnifying
Party elects to assume the defense of any Third Party Claim, the Indemnifying Party shall not be liable to the Indemnified Party
for legal expenses subsequently incurred by the Indemnified Party in connection with the defense thereof; provided, however,
that if (i) the Indemnifying Party fails to take reasonable steps necessary to defend diligently such Third Party Claim within
five (5) Business Days after receiving written notice from the Indemnified Party that the Indemnified Party believes the Indemnifying
Party has failed to take such steps, (ii) the Indemnifying Party has not undertaken fully to indemnify the Indemnified Party
in respect of all indemnifiable Losses relating to the matter, or (iii) if any of the Defense Conditions cease to be satisfied
for any reason, the Indemnified Party may assume its own defense, and the Indemnifying Party will be liable for all costs or expenses
paid or incurred in connection therewith, and the Indemnified Party shall have the right to compromise or settle such Third Party
Claim with the consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed) and, if settled
with such consent, or if there is a final judgment against the Indemnified Party, the Indemnifying Party agrees to indemnify the
Indemnified Party from and against any loss or liability by reason of such settlement or judgment. In the event the Indemnifying
Party has assumed control of the defense of the Third Party Claim, the Indemnifying Party shall permit the Indemnified Party to
participate in, but not control, the defense of any such action or suit through counsel chosen by the Indemnified Party; provided
that such counsel is not reasonably objected to by the Indemnifying Party and the fees and expenses of such counsel shall
be borne by the Indemnified Party. The Indemnifying Party shall be liable for the fees and expenses of counsel employed by the
Indemnified Party in the defense of a Third Party Claim for any period during which the Indemnifying Party has not assumed the
defense thereof (other than during the period prior to the time the Indemnified Party shall have notified the Indemnifying Party
of such Third Party Claim).



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(c)          Cooperation.
The parties hereto shall cooperate in the defense or prosecution of any Third Party Claim, with such cooperation to include (i)
the retention of and the provision to the Indemnifying Party of records and information that are reasonably relevant to such Third
Party Claim and (ii) the making available of employees on a mutually convenient basis for providing additional information and
explanation of any material provided hereunder. If the Indemnifying Party shall have assumed the defense of a Third Party Claim,
the Indemnified Party shall agree to any settlement, compromise or discharge of such Third Party Claim that the Indemnifying Party
may recommend and that by its terms obligates the Indemnifying Party to pay the full amount of the liability (if any) in connection
with such Third Party Claim and which (i) does not include a statement as to or admission of, fault, culpability or a failure
to act by or on behalf of any such Indemnified Party, (ii) includes an unconditional release of such Indemnified Party from all
liability on claims that are the subject matter of such Third Party Claim and (iii) does not provide for injunctive relief or
other relief relating to such Indemnified Party other than monetary damages.


Section
7.3           Procedures Relating to Indemnification for Other
Claims. In order for an Indemnified Party to be entitled to any indemnification under this ‎Article VII in respect of
Losses that do not arise out of or involve a Third Party Claim, the Indemnified Party must notify the Indemnifying Party promptly
in writing (including in such notice a brief description of the claim for indemnification and the Loss, including damages sought
or estimated, to the extent actually known or reasonably capable of estimation by the Indemnified Party); provided, however,
that the failure to promptly provide such notice shall not affect the indemnification provided under this ‎Article VII except
to the extent that the Indemnifying Party has been actually prejudiced as a result of such failure.



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Section
7.4           Limitations on Indemnification.


(a)          Seller.
Notwithstanding anything in this Agreement to the contrary, Seller shall not have any liability under any clause of Section 7.1(a)
(i) in excess of the amount by which (x) two times the amount of the Purchase Price exceeds (y) the Total Net Amount, (ii)
to the extent any Losses are in respect of Purchased Receivables that are uncollectible on account of the insolvency, bankruptcy
or lack of creditworthiness of Bausch & Lomb or (iii) to the extent any Losses were suffered or incurred by a Purchaser Indemnified
Party as a result of such Purchaser Indemnified Party’s willful misconduct or fraud.


(b)          Purchasers.
Notwithstanding anything in this Agreement to the contrary, neither Purchaser shall have any liability under any clause of Section 7.1(b)
(i) in excess of such Purchaser’s Pro Rata Portion of the Purchase Price, in the aggregate, or (ii) to the extent any Losses
were suffered or incurred by a Seller Indemnified Party as a result of such Seller Indemnified Party’s willful misconduct
or fraud. Notwithstanding the foregoing sentence, in the event the claim against the Purchasers is for the non-payment of any
portion of the Purchase Price, neither Purchaser shall have liability for the failure of the other Purchaser to make such payment
of Purchase Price.


Section
7.5           Survival of Representations and Warranties.
The representations and warranties contained in this Agreement shall survive the Closing Date solely for purposes of ‎this
Article VII and shall terminate on the earlier to occur of (x) the Threshold Date and (y) the date that is ninety (90) days following
the end of the Royalty Quarter during which the Post-Closing Incentive Period expires pursuant to the terms of the Purchase Agreement.
No party hereto shall have any liability or obligation of any nature with respect to any representation or warranty after the
termination thereof, unless the other party hereto shall have delivered a notice to such party, pursuant to Section 7.2(a) or
Section 7.3, claiming such a liability or obligation under Section 7.1, prior to such date of termination.


Section
7.6           Exclusive Remedy. Other than for claims for
equitable relief or as otherwise specifically set forth in this Agreement, the parties hereto acknowledge and agree that, from
and after the Closing Date, this ‎Article VII (including Section 7.4 and Section 7.5) shall provide such parties’ sole
and exclusive remedy with respect to any matter or claim arising out of, relating to, or in connection with, this Agreement and
the transactions contemplated hereby, except that any such claim or matter based upon fraud or willful misrepresentation shall
not be subject to or limited by this Article VII and each of Purchaser and Seller accordingly preserves all remedies available
with respect to any such claim or matter based thereon under applicable Law.


Section
7.7           Limitations on Damages. Notwithstanding anything
to the contrary in this Agreement, in no event shall either party hereto be liable for any consequential, exemplary or punitive
damages unless such damages are payable to a third party in connection with a Third Party Claim or are based upon fraud or willful
misrepresentation.



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Section
7.8           Termination. The parties agree that this Agreement
shall terminate on the earlier to occur of (x) the Threshold Date and (y) the date that is ninety (90) days following the end
of the Royalty Quarter during which the Post-Closing Incentive Period expires pursuant to the terms of the Purchase Agreement.
Upon such termination, (i) all ownership interests or other Adverse Claims arising through Purchasers in the Purchased Receivables
and any other property in respect of which an ownership interest or Adverse Claim was granted by Seller, or otherwise arose, in
favor of Purchasers pursuant to the Transaction Documents, shall be automatically, and without the need for any further action,
terminated and released, (ii) Purchasers shall, at the Seller’s sole cost and expense, deliver and, where applicable, execute
and endorse such agreements, documents and instruments evidencing or effecting the release of the security interests, liens and
other Adverse Claims in the Purchased Receivables and any other property in respect of which an Adverse Claim was granted by Seller,
or otherwise arose, in favor of Purchasers pursuant to any Transaction Documents as may be reasonably requested and prepared from
time to time by Seller and reasonably acceptable to Purchasers and (iii) the Seller may amend, terminate or otherwise modify any
financing statements filed against Seller without the consent of Purchasers. In addition, following the Threshold Date, at the
written request of Seller, Purchasers shall deliver an instruction letter, in form and substance reasonably satisfactory to Seller,
to Bausch & Lomb directing them to remit all Royalty Payments and related reports directly to Seller and otherwise terminating
and revoking all instructions and powers of attorney set forth or referred to in the Bausch & Lomb Consent and Instruction
Letter, and, if Purchasers fail to deliver such a letter to Bausch & Lomb within ten (10) Business Days of such request, Purchasers
hereby authorize Seller to deliver such a letter to Bausch & Lomb on behalf of Purchasers.


Article
VIII



Miscellaneous


Section
8.1          Headings. The captions to the Articles, Sections
and subsections hereof are not a part of this Agreement but are for convenience only and shall not be deemed to limit or otherwise
affect the construction thereof.


Section
8.2           Notices. Except where expressly provided otherwise
in this Agreement, whenever it is provided in this Agreement that notice, demand, request, consent or other communication shall
be given to or served upon one of the Purchasers by the other, any such notice demand, request, consent or other communication
shall be in writing and personally delivered, sent by certified or registered mail, return receipt requested, by overnight delivery
service with confirmation of delivery or by electronic (notices and other communications sent to an e-mail address shall also
be sent by overnight delivery service or personal delivery) to the address or addresses as may be designated from time to time
by a party hereto in accordance with this Section 8.2.


Notice
in each of the above cases shall be deemed effective for all purposes (i) upon hand delivery if hand delivered, (ii) three (3)
Business Days after posting in the United States Mail if sent by certified mail, or (iii) on the day of confirmed delivery by
overnight delivery service, facsimile or email (return receipt requested).



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Section
8.3           Expenses. All reasonable out-of-pocket fees,
costs and expenses (including any legal fees) incurred by Seller in connection with the preparation and negotiation of, and entry
into, this Agreement and to consummate the transactions contemplated hereby shall be paid by Seller. All reasonable out-of-pocket
fees, costs and expenses (including any legal fees) incurred by Purchasers in connection with the preparation and negotiation
of, and entry into, this Agreement and to consummate the transactions contemplated hereby shall be paid by Seller.


Section
8.4           Assignment. Neither this Agreement nor any of
Seller’s rights, interests or obligations hereunder may be assigned, delegated or otherwise transferred, in whole or in
part, by operation of Law or otherwise by Seller without the prior written consent of Purchasers, and any such purported assignment,
delegation or transfer without such consent shall be void ab initio and of no effect; provided, however, that Seller may, without
the prior written consent of Purchasers, assign this Agreement to any Person that acquires all or substantially all of Seller’s
business or assets (whether through an asset purchase agreement, stock purchase agreement, merger agreement or otherwise) if Seller
also assigns the Bausch & Lomb Agreements to such Person and such Person agrees in writing to be bound by the terms of this
Agreement. Neither this Agreement nor any of either Purchaser’s rights, interests or obligations hereunder may be assigned,
delegated or otherwise transferred, in whole or in part, by operation of Law or otherwise by Purchasers without the prior written
consent of Seller, which shall not be unreasonably withheld, and any such purported assignment, delegation or transfer without
such consent shall be void ab initio and of no effect; provided, however, that either Purchaser may, without the prior written
consent of Seller, assign this Agreement to (i) the other Purchaser or any Affiliate of any Purchaser, (ii) any Person in connection
with a bona fide pledge or financing transaction entered into by such Purchaser (or its Affiliate), including a securitization
transaction, or (iii) any Person that acquires all or substantially all of such Purchaser’s business or assets (whether
through an asset purchase agreement, stock purchase agreement, merger agreement or otherwise), in any case, if such Person agrees
in writing to be bound by the terms of this Agreement.


Section
8.5           Successors and Assigns. Subject to the provisions
of ‎Section 8.4, this Agreement shall be binding upon, inure to the benefit of and be enforceable by, the parties hereto and
their respective permitted successors and assigns.


Section
8.6           Amendment and Waiver.


(a)          This
Agreement may be amended, modified or supplemented, or any provision hereof waived, only in a writing signed by Seller and each
Purchaser.


(b)          No
failure or delay on the part of either party hereto in exercising any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof
or the exercise of any other right, power or remedy. No course of dealing between the parties hereto shall be effective to amend,
modify, supplement or waive any provision of this Agreement.



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Section
8.7           Entire Agreement. This Agreement, including
the Exhibits and Schedules attached to this Agreement, sets forth the entire agreement and understanding between the parties hereto
as to the subject matter hereof. All express or implied agreements, arrangements, representations and understandings as to the
subject matter hereof, whether oral or written, heretofore made are superseded by this Agreement.


Section
8.8            Independent Contractors. The parties hereto
recognize and agree that each is operating as an independent contractor and not as a partner, joint venturer, agent or fiduciary
of the other.


Section
8.9            No Third Party Beneficiaries. This Agreement
is for the sole benefit of Seller and Purchasers and their permitted successors and assigns, and nothing herein expressed or implied
shall give or be construed to give to any Person, other than the parties hereto and such successors and assigns, any legal or
equitable rights hereunder.


Section
8.10          Governing Law. This Agreement shall be governed exclusively
by the laws of the State of Texas, without giving effect to any conflict of law provisions.


Section
8.11          Jurisdiction; Venue; Service Of Process. Each party hereto
irrevocably submits to the exclusive jurisdiction of (a) the United States District Court for the Northern District of Texas,
and (b) any District Courts of the State of Texas located in Dallas County, Texas, for the purposes of any suit, action or other
proceeding arising out of this Agreement or any transaction contemplated hereby. Each party hereto agrees to commence any action,
suit or other proceeding relating hereto in the courts of United States District Court for the Northern District of Texas or,
if such suit, action or other proceeding may not be brought in such court for jurisdictional reasons, in the District Courts of
the State of Texas located in Dallas County, Texas. Each party hereto further agrees that service of any process, summons, notice
or document in any of the manners set forth in Section 8.2 shall be effective service of process for any action, suit or proceeding
in Texas with respect to any matters to which it has submitted to jurisdiction in this Section 8.11. Each party hereto irrevocably
and unconditionally waives any objection to the laying of venue of any action, suit or other proceeding arising out of this Agreement
and the transactions contemplated hereby in (a) the United States District Court for the Northern District of Texas, or (b) any
District Courts of the State of Texas located in Dallas County, Texas, and hereby further irrevocably and unconditionally waives,
and shall not assert by way of motion, defense, or otherwise, in any such suit, action or proceeding, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution,
that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper,
or that this Agreement and the transactions contemplated hereby and thereby may not be enforced in or by any of the above-named
courts.



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Section
8.12         Severability. If any term or provision of this Agreement
is held to be invalid, illegal or unenforceable by a court or other Governmental Entity of competent jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other term or provision of this Agreement, which shall remain in full force
and effect, and the parties hereto shall replace such term or provision with a new term or provision permitted by applicable Law
and having an economic effect as close as possible to the invalid, illegal or unenforceable term or provision. The holding of
a term or provision to be invalid, illegal or unenforceable in a jurisdiction shall not have any effect on the application of
the term or provision in any other jurisdiction.


Section
8.13          Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement. Copies of executed counterparts transmitted by email
with PDF attachment shall be considered original executed counterparts.


[The
remainder of this page is left intentionally blank]



    	28



    	 



    

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective representatives thereunto duly
authorized as of the date first above written.


	 	Seller:
	 	 
	 	InSite Vision Incorporated
	 	 
	 	/s/
    Louis Drapeau 
	 	Name: Louis Drapeau
	 	Title:   Vice President
    and Chief Financial Officer




 


[Signature
Page to Royalty Purchase Agreement]



    	 



    	 



    




	 	Purchasers:
	 	 
	 	SWK Funding, LLC
	 	 
	 	/s/ Winston Black 
	 	Name: Winston Black
	 	Title:    Managing Director
	 	 
	[Signature
Page to Royalty Purchase Agreement]




    	 



    	 



    




	 	Bess
Royalty, L.P.
	 	 
	 	By:
TPG Opportunities, II Advisors, Inc.
 
	 	Its: General Partner
	 	 
	 	/s/ Ronald Cami
	 	Ronald Cami, Vice President
	 	 
	[Signature
Page to Royalty Purchase Agreement]




    	 



    	 



    

Exhibit
A

To Royalty Purchase Agreement


Seller’s
Wire Transfer Instructions


	 	Bank
    Name:	***
	 	 	 
	 	ABA#:	***
	 	 	 
	 	Beneficiary:	***
	 	 	 
	 	Beneficiary
    Account Number:	***
	 	 	 
	 	Ultimate 
    Beneficiary:	***
	 	 	 
	 	Ultimate 
    Beneficiary Account Number:	***




    	A-1



    	 



    

Exhibit
B

To Royalty Purchase Agreement


Purchaser’s
Wire Transfer Instructions


	***	 
	ABA
    # ***	 
	Account
    Number: ***	 
	Account
    Name: ***	 


 



    	B-1



    	 



    

Exhibit
C

to Royalty Purchase Agreement


 


Schedule
of Exceptions to Seller’s Representations and Warranties


 


This
Schedule of Exceptions to the representations and warranties of Seller has been prepared in connection with the Royalty Purchase
Agreement, dated as of April 2, 2013 (the “Agreement”), by and among InSite
Vision Incorporated, a Delaware corporation as Seller (“Seller”), and SWK
Funding LLC, a Delaware limited liability company (“SWK Purchaser”), and Bess
Royalty, L.P., a Delaware limited partnership (“Bess Purchaser”) (SWK Purchaser and Bess Purchaser each
individually “Purchaser” and collectively, the “Purchasers”).


Unless
otherwise defined in this Schedule of Exceptions, terms defined in the Agreement shall have the same meanings when used herein.


On
January 3, 2013, Janel Joseph and Mitchell Joseph III filed a complaint in circuit court in Fayette County, Kentucky against Bausch
& Lomb and us alleging that Janel Joseph was injured when her physician treated her with the Bausch & Lomb product Besivance
following a photorefractive keratectomy. The plaintiffs allege that the use was off-label but nonetheless marketed by the defendants.
Ms. Joseph alleges loss of vision and Mr. Joseph, her husband, alleges loss of consortium. On February 1, 2013, Bausch & Lomb
removed the case to the United States District Court for the Eastern District of Kentucky. On February 8. 2013, the defendants
filed answers denying the allegations. There have been no further proceedings. The plaintiffs to date have not made a specific
claim for damages.


 


In
February 2012, the ASCRS Cornea and Refractive Surgery Clinical Committees jointly issued an alert regarding the use of topical
ophthalmic medications that contain advanced vehicles (such vehicles are designed to deliver consistent dosage, increase contact
time, stabilize the ocular surface and reduce dosing frequency) immediately prior to or intraoperatively during LASIK and PRK. 




    	C-1



    	 



    

Exhibit
D

To Royalty Purchase Agreement


Product Agreements


See attached.


 




    	D-1



    	 



    

Exhibit
E

To Royalty Purchase Agreement


Form
of Press Release



 



    	E-1