Document:

Exhibit 10.4

 

Execution Version

 

 

ELEVENTH AMENDMENT

 

TO

 

SENIOR REVOLVING CREDIT AGREEMENT

 

DATED AS OF SEPTEMBER 10, 2015

 

AMONG

 

HALCÓN RESOURCES CORPORATION,
  AS BORROWER,

 

THE GUARANTORS,

 

JPMORGAN CHASE BANK, N.A.,
  AS ADMINISTRATIVE AGENT,

 

AND

 

THE LENDERS PARTY HERETO

 

 

J. P. MORGAN SECURITIES LLC,

AS SOLE LEAD ARRANGER

 

J. P. MORGAN SECURITIES LLC AND WELLS FARGO SECURITIES, LLC,

AS JOINT BOOKRUNNERS

 

 

ELEVENTH AMENDMENT
 TO SENIOR REVOLVING CREDIT AGREEMENT

 

THIS ELEVENTH AMENDMENT TO SENIOR REVOLVING CREDIT AGREEMENT (this “Amendment”) dated as of September 10, 2015 is among HALCÓN RESOURCES CORPORATION, a corporation duly formed and existing under the laws of the State of Delaware (the “Borrower”), each of the undersigned guarantors (the “Guarantors”, and together with the Borrower, the “Obligors”), each of the undersigned Lenders party to the Credit Agreement, and JPMORGAN CHASE BANK, N.A., as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”).

 

R E C I T A L S

 

A.            Reference is made to that certain Senior Revolving Credit Agreement dated as of February 8, 2012 (as amended, restated, modified or otherwise supplemented prior to the date hereof, the “Credit Agreement”; and as amended by this Amendment, and as may be further amended, restated, modified or supplemented the “Amended Credit Agreement”) among the Borrower, each of the Lenders party thereto and the Administrative Agent, pursuant to which the Lenders have made certain credit and other financial accommodations available to and on behalf of the Borrower and its Subsidiaries.

 

B.            The Borrower has requested and the Administrative Agent and the Lenders party hereto have agreed to amend certain provisions of the Credit Agreement.

 

C.            NOW, THEREFORE, to induce the Administrative Agent and the Lenders party hereto to enter into this Amendment and in consideration of the premises and the mutual covenants herein contained, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

Section 1.              Defined Terms.  Each capitalized term used herein but not otherwise defined herein has the meaning given such term in the Amended Credit Agreement.  Unless otherwise indicated, all section references in this Amendment refer to sections of the Amended Credit Agreement.

 

Section 2.                      Amendments to Credit Agreement.

 

2.1          Amendments to Section 1.02.  Section 1.02 is hereby amended by deleting and replacing, or adding, as applicable, the following terms in the appropriate alphabetical order:

 

“Additional Third Lien Notes” means additional senior secured notes permitted pursuant to Section 9.02(l) which may be issued from time to time.

 

“Consolidated Net Income” means with respect to the Borrower and its Consolidated Restricted Subsidiaries for any period, the aggregate of the net income (or loss) of the Borrower and the Consolidated Restricted Subsidiaries after allowances for taxes for such period determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from such net income (to the extent otherwise included therein) the following: (a) the net income of any Person in which the Borrower or any Consolidated Restricted Subsidiary has

 

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an interest (which interest does not cause the net income of such other Person to be consolidated with the net income of the Borrower and the Consolidated Restricted Subsidiaries in accordance with GAAP), except to the extent of the amount of dividends or distributions actually paid in cash during such period by such other Person to the Borrower or to a Consolidated Restricted Subsidiary; (b) the net income (but not loss) during such period of any Consolidated Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions or transfers or loans by that Consolidated Restricted Subsidiary is not at the time permitted by operation of the terms of its charter or any agreement, instrument or Governmental Requirement applicable to such Consolidated Restricted Subsidiary or is otherwise restricted or prohibited, in each case determined in accordance with GAAP; (c) any extraordinary non-cash gains or losses during such period; (d) any gains or losses attributable to writeups or writedowns of assets, including ceiling test writedowns; (e) any gain or loss, together with any provision for taxes on such gain or loss, realized in connection with any sale, transfer, or other disposition of any assets or business, which is not made in the ordinary course of business; (f) any unrealized non-cash gains, losses or adjustments as a result of changes in the fair market value of derivatives; and (g) any income attributable to cancellation or early extinguishment of any Debt of Borrower or a Consolidated Restricted Subsidiary; and provided further that if the Borrower or any Consolidated Restricted Subsidiary shall acquire or dispose of any Property during such period or a Subsidiary shall be redesignated as either an Unrestricted Subsidiary or a Restricted Subsidiary, then Consolidated Net Income shall be calculated after giving pro forma effect to such acquisition, merger, disposition or redesignation, as if such acquisition, merger, disposition or redesignation had occurred on the first day of such period.

 

“Eleventh Amendment Effective Date” means September 10, 2015.

 

“Initial Third Lien Indenture” means that certain Indenture dated as of September 10, 2015 among the Borrower, the Guarantors (as defined therein) and the Third Lien Trustee, pursuant to which the Initial Third Lien Notes are issued.

 

“Initial Third Lien Notes” means the 13.0% senior secured notes due 2022 issued pursuant to the Initial Third Lien Indenture.

 

“Permitted Refinancing Debt” means Debt (for purposes of this definition, “new Debt”) incurred in exchange for, or proceeds of which are used to refinance, all or any Senior Notes, Second Lien Notes or Third Lien Notes (the “Refinanced Debt”); provided that (a) such new Debt is in an aggregate principal amount not in excess of the (i) aggregate principal amount then outstanding of the applicable Refinanced Debt (or, if the applicable Refinanced Debt is exchanged or acquired for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration thereof, such lesser amount) plus (ii) an amount necessary to pay any fees and expenses, including premiums, related to such exchange or refinancing; (b) such new Debt has a stated maturity no earlier than the stated maturity of the Refinanced Debt and an average life no shorter than the

 

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average life of the Refinanced Debt; (c) such new Debt does not contain any covenants which are materially more onerous to the Borrower and its Restricted Subsidiaries than those imposed by the Refinanced Debt, (d) such new Debt (and any guarantees thereof) is subordinated in right of payment to the Secured Obligations (or, if applicable, the Guaranty Agreement) to at least the same extent as the Refinanced Debt and (e) if such new Debt replaces any Second Lien Notes or Third Lien Notes the agent for such executes a Priority Confirmation Joinder to the Intercreditor Agreement subjecting such new Debt to the terms of the Intercreditor Agreement.  For the avoidance of doubt, if any Senior Notes are exchanged for Second Lien Notes or Third Lien Notes, the sum of such Refinanced Debt and any outstanding Second Lien Notes or Third Lien Notes, as applicable, at such time may not exceed the aggregate principal amount of Second Lien Notes or Third Lien Notes permitted pursuant to Section 9.02(k) or Section 9.02(l), as applicable.

 

“Priority Confirmation Joinder” has the meaning assigned such term in the Intercreditor Agreement.

 

“Third Lien Indenture” means (a) the Initial Third Lien Indenture, (b) any indenture or supplemental indenture pursuant to which Additional Third Lien Notes are issued, and (c) any indenture, note purchase agreement or other agreement pursuant to which any Permitted Refinancing Debt is issued in exchange for, or the proceeds of which are used to refinance, all or any Third Lien Notes, in each case, and as amended from time to time, in compliance with this Agreement and the Intercreditor Agreement.

 

“Third Lien Notes” means (a) the Initial Third Lien Notes and (b) the Additional Third Lien Notes.

 

“Third Lien Trustee” means U.S. Bank National Association.

 

“Total Secured Debt” means (a) debt described in clause (a) of the definition of Secured Obligations and all renewals, extensions and/or rearrangements thereof, (b) the Second Lien Notes, and (c) without duplication of clauses (a) and (b), (i) all funded Debt of the Borrower and the Restricted Subsidiaries of the type described in clause (a) of the definition of Debt, (ii) all Debt of the Borrower and the Restricted Subsidiaries of the types described in clauses (b) (net of any cash collateral securing Letters of Credit), and (l) of the definition of Debt, and (iii) all Debt of others that is funded of the type described in clause (f) of the definition of Debt, in each case that is secured by a Lien on any Property of the Borrower and the Restricted Subsidiaries; provided that the Third Lien Notes shall be excluded from Total Secured Debt.

 

2.2          Amendment to Section 8.01(q).  Section 8.01(q) is hereby amended by deleting such Section in its entirety and replacing it with the following:

 

“(q)         Issuance of Additional Second Lien Notes, Additional Third Lien

 

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Notes and Permitted Refinancing.  In the event the Borrower intends to issue Additional Second Lien Notes, Additional Third Lien Notes or refinance any of the Second Lien Notes or the Third Lien Notes with the proceeds of Permitted Refinancing Debt as contemplated by Section 9.02(k) or Section 9.02(l), as applicable, three (3) Business Days prior written notice of such intended offering therefor, the amount thereof and the anticipated date of closing and the Borrower will furnish a copy of the preliminary offering memorandum (if any) and the final offering memorandum (if any).”

 

2.3          Amendment to Section 8.12(c)(vi). Section 8.12(c)(vi) is hereby amended by replacing the reference to “Section 8.14(a)” with a reference to “Section 8.20”.

 

2.4          Amendment to Sections 8.13(a) and (c).  Sections 8.13(a) and (c) are hereby amended by deleting such Sections in their entirety and replacing them with the following:

 

“(a)         On or before the delivery to the Administrative Agent and the Lenders of each Reserve Report required by Section 8.12(a), to the extent requested by Administrative Agent, the Borrower will deliver title information in form and substance acceptable to the Administrative Agent covering enough of the Oil and Gas Properties evaluated by such Reserve Report that were not included in the immediately preceding Reserve Report, so that the Administrative Agent shall have received, together with title information previously delivered to the Administrative Agent, reasonably satisfactory title information on at least (i) 85% or (ii) after the later of (A) April 1, 2016 or (B) the date of the delivery of a Reserve Report on which the ratio of Total Secured Debt as of such date to EBITDA for the four fiscal quarters most recently ended for which financial statements have been delivered is equal to or less than 1.0 to 1.0, 75% of the total value of the Oil and Gas Properties evaluated by such Reserve Report.

 

(c)           If the Borrower is unable to cure any title defect requested by the Administrative Agent or the Lenders to be cured within the required period of time or the Borrower does not comply with the requirements to provide acceptable title information covering 85% or 75%, as applicable, of the Oil and Gas Properties evaluated in the most recent Reserve Report, such default shall not be a Default, but instead the Administrative Agent and/or the Super Majority Lenders shall have the right to exercise the following remedy in their sole discretion from time to time, and any failure to so exercise this remedy at any time shall not be a waiver as to future exercise of the remedy by the Administrative Agent or the Lenders.  To the extent that the Administrative Agent or the Super Majority Lenders are not satisfied with title to any Mortgaged Property after the required period of time has elapsed, such unacceptable Mortgaged Property shall not count towards the 85% or 75%, as applicable, requirement, and the Administrative Agent may send a notice to the Borrower and the Lenders that the then outstanding Borrowing Base shall be reduced by an amount as determined by the Super Majority Lenders to cause the Borrower to be in compliance with the requirement to provide acceptable title information on 85% or 75%, as applicable, of the value of the Oil and Gas

 

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Properties.  This new Borrowing Base shall become effective immediately after receipt of such notice.”

 

2.5          Amendment to Article VIII.  Article VIII of the Credit Agreement is hereby amended to add the following two additional sections at the end thereof to read as follows:

 

“Section 8.20 Additional Collateral — Eleventh Amendment Effective Date. From and after the Eleventh Amendment Effective Date, in connection with each redetermination of the Borrowing Base, the Borrower shall review the Reserve Report and the list of current Mortgaged Properties (as described in Section 8.12(c)(vi)) to ascertain whether the Mortgaged Properties represent at least (i) 90% or (ii) after the later of (A) April 1, 2016 or (B) the date of the delivery of a Reserve Report on which the ratio of Total Secured Debt as of such date to EBITDA for the four fiscal quarters most recently ended for which financial statements have been delivered is equal to or less than 1.0 to 1.0, 80% of the total value of the Oil and Gas Properties evaluated in the most recently completed Reserve Report after giving effect to exploration and production activities, acquisitions, dispositions and production.  In the event that the Mortgaged Properties do not represent at least 90% or 80%, as applicable, of such total value, then the Borrower shall, and shall cause its Restricted Subsidiaries to, grant, within thirty (30) days of delivery of the certificate required under Section 8.12(c), to the Administrative Agent as security for the Secured Obligations a first-priority Lien interest (subject only to Excepted Liens of the type described in clauses (a) to (d) and (f) of the definition thereof, but subject to the provisos at the end of such definition) on additional Oil and Gas Properties not already subject to a Lien of the Security Instruments such that after giving effect thereto, the Mortgaged Properties will represent at least 90% or 80%, as applicable, of such total value.  All such Liens will be created and perfected by and in accordance with the provisions of deeds of trust, security agreements and financing statements or other Security Instruments, all in form and substance reasonably satisfactory to the Administrative Agent and in sufficient executed (and acknowledged where necessary or appropriate) counterparts for recording purposes.  In order to comply with the foregoing, if any Restricted Subsidiary places a Lien on its Oil and Gas Properties and such Restricted Subsidiary is not a Guarantor, then it shall become a Guarantor and comply with Section 8.14(b).”

 

“Section 8.21        Granting of Liens to Secure Third Lien Notes. The Borrower will not, and will not permit any Restricted Subsidiary to, grant a Lien on any Property to secure the Third Lien Notes without first (i) giving ten (10) days’ prior written notice to the Administrative Agent thereof and (ii) granting to the Administrative Agent to secure the Secured Obligations a first-priority, perfected Lien on the same Property pursuant to Security Instruments in form and substance satisfactory to the Administrative Agent (provided that Excepted Liens identified in clauses (a) to (f) of the definition thereof, but subject to the provisions at the end of such definition, may exist).  In connection therewith, the Borrower shall, or shall cause its Restricted Subsidiaries to, execute and deliver such other additional

 

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closing documents, certificates and legal opinions of the type typically given with regard to such matters as shall reasonably be requested by the Administrative Agent.”

 

2.6          Amendment to Section 9.02(d).  Section 9.02(d) is hereby amended by replacing the reference to “Sections 9.02(j) and (k)” with “Sections 9.02(j) and (m)”.

 

2.7          Amendment to Section 9.02(j).  Section 9.02(j) is hereby amended by replacing the reference to “Sections 9.02(d) and (k)” with “Sections 9.02(d) and (m)”.

 

2.8          Amendment to Section 9.02.  Section 9.02 is hereby amended by renumbering Section 9.02(l) as Section 9.02(m) and adding the following as Section 9.02(l):

 

“(l)          Debt under the Third Lien Notes and any guarantees thereof, the principal amount of which does not exceed $1,020,000,000 in the aggregate; provided that (i) at the time of incurring such Debt (A) no Default has occurred and is then continuing and (B) no Default would result from the incurrence of such Debt after giving effect to the incurrence of such Debt (and any concurrent repayment of Debt with the proceeds of such incurrence), (ii) such Debt is incurred in exchange for Senior Notes at a discount to par of at least 20%, (iii) such Debt does not have any scheduled amortization prior to six months after the Maturity Date, (iv) such Debt does not mature sooner than six months after the Maturity Date, (v) the terms of such Debt are not materially more onerous, taken as a whole, than the terms of this Agreement and the other Loan Documents, and (vi) such Debt and any guarantees thereof are on prevailing market terms for similarly situated companies; and any Permitted Refinancing Debt with respect to any such Third Lien Notes.”

 

2.9          Amendment to Section 9.03.  Section 9.03 is hereby amended by adding the following as Section 9.03(g):

 

“(g)         Liens securing the Third Lien Notes permitted by Section 9.02(l).”

 

2.10        Amendment to Section 9.04(c).  Section 9.04(c) is hereby amended by deleting such Section in its entirety and replacing it with the following:

 

“(c)         Redemption of Senior Notes; Amendment of Senior Indentures.  The Borrower will not, and will not permit any Restricted Subsidiary to, prior to the date that is ninety-one (91) days after the Maturity Date: (i) call, make or offer to make any optional or voluntary Redemption of or otherwise optionally or voluntarily Redeem (whether in whole or in part) the Senior Notes; provided that the Borrower may Redeem any Senior Notes in a principal amount not exceeding the Net Cash Proceeds of any sale of Equity Interests (other than Disqualified Capital Stock) of the Borrower, in exchange for the Third Lien Notes or with the aggregate principal amount of Permitted Refinancing Debt, (ii) amend, modify, waive or otherwise change, consent or agree to any amendment, supplement, modification, waiver or other change to, any of the terms of the Senior Notes or any Senior Indenture if the effect thereof would be to (A) (I) shorten its maturity or

 

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average life if the existing maturity is prior to the Maturity Date or (II) shorten its maturity to a date earlier than the date that is ninety-one (91) days after the Maturity Date if its existing maturity is after the Maturity Date or (B) increase the amount of any payment of principal thereof or (C) increase the rate or shorten any period for payment of interest thereon, provided that the foregoing shall not prohibit the execution of supplemental indentures to add guarantors if required by the terms of any Senior Indenture provided such Person complies with Section 8.14(b).”

 

2.11        Amendment to Section 9.04.  Section 9.04 is hereby amended by deleting the title thereto and replacing it with “Dividends, Distributions and Redemptions; Repayment of Senior Notes, Second Lien Notes and Third Lien Notes”, and adding a new Section 9.04(e) as follows:

 

“(e)         Redemption of Third Lien Notes; Amendment of Third Lien Indenture.  The Borrower will not, and will not permit any Restricted Subsidiary to, prior to the date that is ninety-one (91) days after the Maturity Date: (i) call, make or offer to make any optional or voluntary Redemption of or otherwise optionally or voluntarily Redeem (whether in whole or in part) the Third Lien Notes; provided that the Borrower may Redeem any Third Lien Notes in a principal amount not exceeding the Net Cash Proceeds of any sale of Equity Interests (other than Disqualified Capital Stock) of the Borrower or with the aggregate principal amount of Permitted Refinancing Debt or (ii) amend, modify, waive or otherwise change, consent or agree to any amendment, supplement, modification, waiver or other change to, any of the terms of the Third Lien Notes or the Third Lien Indenture if the effect thereof would be to shorten its maturity to a date that is less than ninety-one (91) days after the Maturity Date or increase the amount of any payment of principal thereof or increase the rate or shorten any period for payment of interest thereon, provided that the foregoing shall not prohibit the execution of supplemental indentures to add guarantors if required by the terms of the Third Lien Indenture provided such Person complies with Section 8.14(d).”

 

2.12        Amendment to Section 9.17(h).  Section 9.17(h) is hereby amended by adding the phrase “or Third Lien Notes permitted by Section 9.02(l)” after the reference to Section 9.02(k) therein.

 

2.13        Amendment to Section 10.01(n).  Section 10.01(n) is hereby amended by deleting such Section in its entirety and replacing it with the following:

 

“(n)         the Intercreditor Agreement shall for any reason, except to the extent permitted by the terms thereof, cease to be in full force and effect and valid, binding and enforceable in accordance with its terms against Borrower or any party thereto or any holder of any Second Lien Notes or Third Lien Notes or shall be repudiated by any of them, or cause the Liens of the Second Lien Notes or the Third Lien Notes to be senior or pari passu in right to the Liens of this Agreement, or any payment by Borrower or any Guarantor in violation of the terms of the Intercreditor Agreement.”

 

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Section 3.                      Borrowing Base.  As of the Amendment Effective Date (as defined below), and after giving effect to Section 9.02(l) with respect to a reduction of the Borrowing Base attributable to the exchange of Senior Notes for the Third Lien Notes, Lenders constituting the Super Majority Lenders and the Borrower agree that the amount of the Borrowing Base shall be $850,000,000 and such Borrowing Base shall remain in effect until the Borrowing Base is otherwise redetermined or adjusted in accordance with the Credit Agreement.  This provision does not limit the right of the parties to initiate interim redeterminations of the Borrowing Base in accordance with Section 2.07(b) or further adjustments pursuant to Section 2.07(e), Section 2.07(f), Section 8.13(c) or Section 9.13.  This Section 3 constitutes the New Borrowing Base Notice in accordance with Section 2.07(d).

 

Section 4.                      Conditions Precedent.  This Amendment shall become effective on the date when each of the following conditions is satisfied (or waived in accordance with Section 12.02 of the Credit Agreement) (such date, the “Amendment Effective Date”):

 

4.1          Amendment.  The Administrative Agent shall have received a counterpart of this Amendment signed by the Borrower, the Guarantors, and Lenders constituting the Super Majority Lenders.

 

4.2          Priority Confirmation Joinder to Intercreditor Agreement.  The Administrative Agent shall have received a counterpart of the Priority Confirmation Joinder to the Intercreditor Agreement signed by the Borrower, the Trustee and the Third Lien Collateral Trustee.

 

4.3          Initial Third Lien Notes.  The Third Lien Indenture shall be in form and substance reasonably satisfactory to the Administrative Agent and the Administrative Agent shall be reasonably satisfied that (a) the Borrower has, or will contemporaneously exchange Senior Notes for the Third Lien Notes pursuant to the Third Lien Indenture and (b) all Property constituting security for the Third Lien Notes is subject to a first-priority perfected Lien in favor of Administrative Agent under the Security Instruments.

 

4.4          Fees.  The Administrative Agent, the Arranger and the Lenders shall have received all fees and other amounts due and payable on or prior to the Amendment Effective Date, including, to the extent invoiced, reimbursement or payment in full of all out of pocket expenses required to be reimbursed or paid by the Borrower under the Amended Credit Agreement.

 

4.5          No Default; No Material Adverse Effect.  At the time of and immediately after giving effect to this Amendment, (a) no Default or Event of Default shall have occurred and be continuing and (b) no event or events shall have occurred which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.

 

4.6          The Administrative Agent shall have received a legal opinion addressed to the Administrative Agent and the Lenders in form and substance reasonably acceptable to the Administrative Agent from Mayer Brown stating that the exchange of the Senior Notes for the Third Lien Notes and incurrence of the Liens to secure the Third Lien Notes does not violate the terms of the Senior Notes Indentures or the Second Lien Indentures.

 

The Administrative Agent is hereby authorized and directed to declare this Amendment to be effective when it has received documents confirming or certifying, to the satisfaction of the

 

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Administrative Agent, compliance with the conditions set forth in this Section 4 or the waiver of such conditions as permitted in Section 12.02 of the Credit Agreement.  Such declaration shall be final, conclusive and binding upon all parties to the Credit Agreement for all purposes.

 

Section 5.              Miscellaneous.

 

5.1          Confirmation.  The provisions of the Amended Credit Agreement shall remain in full force and effect following the effectiveness of this Amendment.

 

5.2          Ratification and Affirmation; Representations and Warranties.  Each Obligor hereby (a) acknowledges the terms of this Amendment; (b) ratifies and affirms its obligations under, and acknowledges, renews and extends its continued liability under, each Loan Document to which it is a party and agrees that each Loan Document to which it is a party remains in full force and effect, except as expressly amended hereby, and (c) represents and warrants to the Lenders that on and as of the date hereof, and immediately after giving effect to the terms of this Amendment: (i) all of the representations and warranties contained in each Loan Document to which it is a party are true and correct in all material respects (except those which have a materiality qualifier, which shall be true and correct as so qualified), except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, such representations and warranties shall continue to be true and correct as of such specified earlier date; (ii) no Default or Event of Default has occurred and is continuing and (iii) no event or events have occurred which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.

 

5.3          Loan Document.  This Amendment is a Loan Document.

 

5.4          Counterparts.  This Amendment may be executed by one or more of the parties hereto in any number of separate counterparts, and all of such counterparts taken together shall be deemed to constitute one and the same instrument.  Delivery of this Amendment by facsimile or electronic transmission in portable document format (.pdf) shall be effective as delivery of a manually executed counterpart hereof.

 

5.5          NO ORAL AGREEMENT.  THIS AMENDMENT, THE CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS EXECUTED IN CONNECTION HEREWITH AND THEREWITH REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR UNWRITTEN ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.

 

5.6          GOVERNING LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.

 

5.7          Severability.  Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

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5.8          Successors and Assigns.  This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

[This page intentionally left blank.  Signature pages follow.]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first written above.

 

	
BORROWER:
    	
HALCÓN RESOURCES CORPORATION
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mark J. Mize 
    
	
 
    	
 
    	
Name:
    	
Mark J.   Mize 
    
	
 
    	
 
    	
Title:
    	
Executive   Vice President, Chief 
    
	
 
    	
 
    	
 
    	
Financial   Officer and Treasurer
    
	
 
    	
 
    
	
GUARANTORS:
    	
HALCÓN HOLDINGS, INC.
    
	
 
    	
HALCÓN RESOURCES OPERATING, INC.
    
	
 
    	
HALCÓN ENERGY PROPERTIES, INC.
    
	
 
    	
HALCÓN ENERGY HOLDINGS, LLC
    
	
 
    	
HALCÓN GULF STATES, LLC
    
	
 
    	
HALCÓN OPERATING CO., INC.
    
	
 
    	
HRC ENERGY RESOURCES (WV), INC.
    
	
 
    	
HRC ENERGY LOUISIANA, LLC
    
	
 
    	
HRC PRODUCTION COMPANY
    
	
 
    	
HALCÓN FIELD SERVICES, LLC
    
	
 
    	
HALCÓN LOUISIANA OPERATING, L.P.
    
	
 
    	
HRC ENERGY, LLC
    
	
 
    	
HRC OPERATING, LLC
    
	
 
    	
HK ENERGY, LLC
    
	
 
    	
HK ENERGY OPERATING, LLC
    
	
 
    	
HK LOUISIANA OPERATING, LLC
    
	
 
    	
HK OIL & GAS, LLC
    
	
 
    	
HALCÓN WILLISTON I, LLC
    
	
 
    	
HALCÓN WILLISTON II, LLC

HK RESOURCES, LLC

THE 7711 CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Mark J. Mize 
    
	
 
    	
 
    	
Name:
    	
Mark J.   Mize 
    
	
 
    	
 
    	
Title:
    	
Executive   Vice President, Chief 
    
	
 
    	
 
    	
 
    	
Financial   Officer and Treasurer, for and on behalf of each of the foregoing Guarantors
    

 

SIGNATURE PAGE — ELEVENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

 

	
ADMINISTRATIVE   AGENT AND LENDER:
    	
JPMORGAN CHASE BANK, N.A.,

as   Administrative Agent and Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Darren Vanek 
    
	
 
    	
 
    	
Name:
    	
Darren   Vanek 
    
	
 
    	
 
    	
Title:
    	
Executive   Director
    

 

SIGNATURE PAGE — ELEVENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

 

	
LENDER:
    	
WELLS FARGO BANK, N.A.,

as Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Todd C. Fogle 
    
	
 
    	
 
    	
Name:
    	
Todd C.   Fogle 
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

SIGNATURE PAGE — ELEVENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

 

	
LENDER:
    	
BMO HARRIS FINANCING, INC.,

as Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ James V. Ducote 
    
	
 
    	
 
    	
Name:
    	
James V.   Ducote 
    
	
 
    	
 
    	
Title:
    	
Managing   Director
    

 

SIGNATURE PAGE — ELEVENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

 

	
LENDER:
    	
BARCLAYS BANK PLC,

as Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Luke Syme 
    
	
 
    	
 
    	
Name:
    	
Luke Syme   
    
	
 
    	
 
    	
Title:
    	
Assistant   Vice President
    

 

SIGNATURE PAGE — ELEVENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

 

	
LENDER:
    	
SUNTRUST BANK,

as Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Shannon Juhan
    
	
 
    	
 
    	
Name:
    	
Shannon Juhan
    
	
 
    	
 
    	
Title:
    	
Director
    

 

SIGNATURE PAGE — ELEVENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

 

	
LENDER:
    	
CAPITAL ONE, NATIONAL ASSOCIATION,

as Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Victor Ponce de   León
    
	
 
    	
 
    	
Name:
    	
Victor   Ponce de León
    
	
 
    	
 
    	
Title:
    	
Senior   Vice President
    

 

SIGNATURE PAGE — ELEVENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

 

	
LENDER:
    	
GOLDMAN SACHS BANK USA,

as Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michelle   Latzoni
    
	
 
    	
 
    	
Name:
    	
Michelle   Latzoni
    
	
 
    	
 
    	
Title:
    	
Authorized   Signatory
    

 

SIGNATURE PAGE — ELEVENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

 

	
LENDER:
    	
ROYAL BANK OF CANADA,

as Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jay T. Sartain
    
	
 
    	
 
    	
Name:
    	
Jay T.   Sartain
    
	
 
    	
 
    	
Title:
    	
Authorized   Signatory
    

 

SIGNATURE PAGE — ELEVENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

 

	
LENDER:
    	
BANK OF AMERICA, N.A.,

as Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Bryan Heller
    
	
 
    	
 
    	
Name:
    	
Bryan   Heller
    
	
 
    	
 
    	
Title:
    	
Director
    

 

SIGNATURE PAGE — ELEVENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

 

	
LENDER:
    	
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH,

as Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Doreen Barr
    
	
 
    	
 
    	
Name:
    	
Doreen   Barr
    
	
 
    	
 
    	
Title:
    	
Authorized   Signatory
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Michael Moreno
    
	
 
    	
 
    	
Name:
    	
Michael Moreno
    
	
 
    	
 
    	
Title:
    	
Authorized   Signatory
    

 

SIGNATURE PAGE — ELEVENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

 

	
LENDER:
    	
NATIXIS,

as Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Stuart Murray
    
	
 
    	
 
    	
Name:
    	
Stuart   Murray
    
	
 
    	
 
    	
Title:
    	
Managing   Director
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Vikram Nath
    
	
 
    	
 
    	
Name:
    	
Vikram   Nath
    
	
 
    	
 
    	
Title:
    	
Vice   President
    

 

SIGNATURE PAGE — ELEVENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

 

	
LENDER:
    	
ING CAPITAL LLC,

as Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Josh Strong
    
	
 
    	
 
    	
Name:
    	
Josh   Strong
    
	
 
    	
 
    	
Title:
    	
Director
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Charles Hall
    
	
 
    	
 
    	
Name:
    	
Charles   Hall
    
	
 
    	
 
    	
Title:
    	
Managing   Director
    

 

SIGNATURE PAGE — ELEVENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

 

	
LENDER:
    	
COMERICA BANK,

as Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ William   Robinson
    
	
 
    	
 
    	
Name:
    	
William Robinson
    
	
 
    	
 
    	
Title:
    	
Senior Vice President
    

 

SIGNATURE PAGE — ELEVENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

 

	
LENDER:
    	
BNP PARIBAS

as Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Scott Joyce
    
	
 
    	
 
    	
Name:
    	
Scott   Joyce
    
	
 
    	
 
    	
Title:
    	
Managing   Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Sriram   Chandrasekaran
    
	
 
    	
 
    	
Name:
    	
Sriram   Chandrasekaran
    
	
 
    	
 
    	
Title:
    	
Director
    

 

SIGNATURE PAGE — ELEVENTH AMENDMENT

HALCÓN RESOURCES CORPORATION

 

 

	
LENDER:
    	
CREDIT SUISSE LOAN FUNDING, LLC,

as Lender
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Barry Zamore
    
	
 
    	
 
    	
Name:
    	
Barry Zamore
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Robert Healey
    
	
 
    	
 
    	
Name:
    	
Robert Healey
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    

 

SIGNATURE PAGE — ELEVENTH AMENDMENT

HALCÓN RESOURCES CORPORATIONEX-10.1

 Exhibit 10.1 

INSITE VISION INCORPORATED 

SECURED NOTE 
  

	 USD$11,914,194.52 
	 September 15, 2015 

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

1. Advances. Upon five business days’ prior written notice (other than in relation to the funding of the initial advance
hereunder), the Maker may request, and the Holder shall advance within three business days of such request (each an “Advance”) amounts under this Note prior to the Maturity Date (as defined below) subject to satisfaction
of the conditions precedent set forth in Section 10 (each funding date, a “Funding Date”) and the limitations on use of proceeds described in Section 6(F); provided, that in no event shall the total
aggregate principal amount of all Advances made hereunder exceed (a) $1,100,000 in any calendar month, except for the Advances described in Section 6(F)(i) and (ii) and (b) $11,914,194.52 in the aggregate.
Advances subsequently repaid or prepaid may not be reborrowed. 
 2. Maturity Date. This Note matures and the outstanding principal
balance of this Note together with all accrued and unpaid interest hereunder becomes due and payable in a lump sum on the earliest to occur of (i) the Closing Date (as defined in Section 21), (ii) the one-year anniversary of the date on which the Merger Agreement (as defined in Section 21) is terminated and (iii) the acceleration of this Note pursuant to Section 7 (the earliest to
occur of such dates, the “Maturity Date”); provided, that if the Closing Date (as defined in Section 21) does not occur as a result of an uncured material breach of any Merger Agreement Covenants (as defined in
Section 21) by the Maker or an uncured intentional breach of any Merger Agreement Representation (as defined in Section 21) by the Maker, the Maturity Date shall be the earliest to occur of 30 calendar days
following the date on which the Merger Agreement (as defined in Section 21) is terminated and the acceleration of this Note pursuant to Section 7; provided, further, that to the extent that the Closing Date (as
defined in Section 21) occurs, at the election of the Holder, this Note will not be payable on the Closing Date (as defined in Section 21) and will instead be payable on demand of the Holder, which date of demand shall be the
Maturity Date. 
 3. Interest. Interest accrues on the unpaid balance outstanding from time to time under this Note at the rate of
12% per annum until the Maturity Date; provided, that upon an Event of Acceleration (as defined below), at the written election of the Holder, any outstanding principal amount and accrued but unpaid interest bears interest at the rate of
14% per 

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

4. Payment. Payment shall be made in lawful tender of the United States and shall be applied first to the payment of all accrued and
unpaid interest and then to the payment of principal. Prepayment of the principal balance of this Note, together with all accrued and unpaid interest on the portion of principal so prepaid, may be made in whole or in part at any time without
penalty. 
 5. Representations and Warranties. The Maker has all requisite corporate right, power and authority to enter into the
Note Documents (as defined in Section 21) and to consummate the transactions contemplated hereby and thereby. All corporate action on the part of the Maker, its directors and stockholders necessary for the authorization, execution,
delivery and performance of its obligations under the Note Documents (as defined in Section 21) by the Maker, have been taken. The Note Documents (as defined in Section 21) have been duly executed and delivered by the Maker
and constitute legal, valid and binding obligations of the Maker, enforceable against the Maker in accordance with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ and contracting parties’ rights generally and except as enforceability may be subject to limitations of public policy or general principals of equity (regardless of whether such enforceability is
considered at law or equity). The execution, delivery and performance by the Maker of the Note Documents (as defined in Section 21) and the consummation by the Maker of the transactions contemplated hereby and thereby will not
(i) conflict with or result in the violation of any law, statute, rule, regulation, order, writ, injunction, judgment or decree of any court or governmental authority by which the Maker is bound, (ii) conflict with or violate any provision
of the Certificate of Incorporation or By-laws of the Maker, or (iii) materially conflict with, or result in a material breach or violation of, any of the terms or provisions of, or constitute (with due
notice or lapse of time or both) a default under, any material lease, loan agreement, mortgage, security agreement, trust indenture or other agreement or instrument to which the Maker is a party or by which it is bound or to which any of its
properties or assets is subject, nor result in the creation or imposition of any lien upon any of the properties or assets of the Maker (other than the liens granted under the Security Agreement). No consent, approval, authorization or other order
of, or any filing or registration with, any governmental authority or other third-party is required to be made or obtained by the Maker in connection with the authorization, execution, delivery and performance
of the Note Documents (as defined in Section 21). 

  
 2 

 6. Covenants. The Maker covenants and agrees that until this Note is paid in full it
shall: 
 (A) promptly after the occurrence of an Event of Acceleration (as defined below) or an event, act or condition
that, with notice or lapse of time or both, would constitute an Event of Acceleration (as defined below), provide the Holder with a certificate of the chief executive officer or chief financial officer of the Maker specifying the nature of such
event, act or condition and the Maker’s proposed cure thereto; 
 (B) not (nor permit any of its subsidiaries to),
without the written consent of the Holder (i) incur any indebtedness for money borrowed, other than indebtedness (a) in an aggregate amount not to exceed $100,000, (b) owing to a seller incurred solely for the purpose of financing the
purchase price of an asset of a type customarily purchased by the Maker acquired from such seller, (c) that is subordinated to this Note in a manner reasonably satisfactory to the Holder or (d) under the 12% Secured Notes (as defined in
Section 21) in an aggregate principal amount not to exceed the amount outstanding on the date hereof or (ii) grant, or permit to be created, any lien other than the security interests created under the Security Agreement and any
security interest which would constitute a Permitted Lien (as defined in the Security Agreement); 
 (C) not (nor permit any
of its subsidiaries to), without the prior written consent of the Holder, directly or indirectly (i) purchase, redeem, retire or otherwise acquire for value any of its capital stock or other securities now or hereafter outstanding (other than
the acceptance of shares of the Maker’s common stock as payment for the exercise of options or warrants to purchase the Maker’s common stock or the acceptance of the Maker’s common stock for the payment of withholding taxes in
connection with the exercise of options to purchase the Maker’s common stock or vesting of restricted shares of the Maker), return any capital to its stockholders (other than the repurchase at fair market value of shares of unvested or
restricted stock as permitted under the Maker’s stock option or stock purchase plan upon termination of employment or service), or distribute any of its assets to its stockholders or (ii) make any payment or declare any dividend on any of
its capital stock or other securities; 
 (D) not (nor permit any of its subsidiaries to), without the prior written consent
of the Holder, change its primary line of business from that conducted by it as of the date hereof; 
 (E) not (nor permit
any of its subsidiaries to) make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement,
understanding, loan, advance or guaranty with, or for the benefit of, any Affiliate (as defined in the Securities Purchase Agreement (as defined in Section 21)) of the Maker, other than on terms and conditions at least as favorable to
the Maker, as applicable, as would reasonably be obtained by the Maker at that time in a comparable arm’s-length transaction with a Person (as defined in the Securities Purchase Agreement (as defined in
Section 21)) other than an Affiliate (as defined in the Securities Purchase Agreement (as defined in Section 21)); 

  
 3 

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

(G) not, after the date hereof, without the prior written consent of the Holder, transfer or otherwise dispose of assets with a
fair market value in excess of $50,000 in the aggregate to any subsidiary or other entity affiliated with the Maker. 
 7. Events of
Acceleration. The obligation of the Holder to make any additional Advances shall terminate and the entire unpaid principal balance of this Note, together with all accrued and unpaid interest, becomes immediately due and payable prior to the
specified due date of this Note upon notice from the Holder to the Maker given at any time following the occurrence of one or more of the following events (each an “Event of Acceleration”); provided, that in the case of
the occurrence of any Event of Acceleration pursuant to clauses (D) or (E) below, all such amounts shall become immediately due and payable by the Maker (without any requirement for notice from the Holder): 

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

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

  
 4 

 
thereunder is found to be untrue or incorrect and the effect of which has a material adverse effect on the business or operations of the Maker or impairs the ability of the Maker to repay this
Note on the Maturity Date; 
 (D) pursuant to or within the meaning of the United States Bankruptcy Code or any other federal
or state law relating to insolvency or relief of debtors (a “Bankruptcy Law”), the Maker (i) commences voluntary case or proceeding, (ii) consents to the entry of an order for relief against it in an involuntary case,
(iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official, (iv) makes an assignment for the benefit of its creditors or (v) admits in writing its inability generally to pay its debts as they
become due; 
 (E) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (i) is for
relief against the Maker in an involuntary case, (ii) appoints a trustee, receiver, assignee, liquidator or similar official for the Maker or substantially all of the Maker’s properties or (iii) orders the liquidation of the Maker,
and in each case the order or decree is not dismissed or stayed within 60 days; 
 (F) any order, judgment or decree
(other than in connection with any amounts payable to Chandler Dawson or his heirs or assigns as disclosed in Section 4.4(c) of the Company Disclosure Schedule to the Merger Agreement (as defined in Section 21)) is entered against
the Maker decreeing the dissolution or split-up of the Maker or any money judgment in excess of $500,000 (exclusive of amounts covered by insurance or subject to indemnification by a person capable of
fulfilling its indemnification obligations, for which the insurer or person providing indemnity has acknowledged responsibility) and, in each case, the order, judgment or decree is not paid, dismissed or stayed within 60 days; 

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

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

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

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

2. Section 8.2(c); or 

3. Section 8.2(d). 

  
 5 

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

9. Post-Closing Covenant. 

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

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

10. Conditions Precedent. 

(A) The Holder’s obligations under this Note are subject to the satisfaction (or waiver by the Holder) of the following conditions
precedent: 
 1. The Holder shall have received signed counterparts to this (i) Note, (ii) the Security Agreement,
(iii) the Intercreditor Agreement (as defined in Section 21) and (iv) the Grant (as defined in the Security Agreement), in each case, in form and substance reasonably satisfactory to the Holder. 

2. The Merger Agreement (as defined in Section 21) shall have been executed by all parties thereto and shall not
have been validly terminated in accordance with its terms. 
 3. The Maker shall have obtained the written consent, in form
and substance reasonably satisfactory to the Holder, of the Majority Holders (as defined in the Securities Purchase Agreement (as defined in Section 21)) to permit the incurrence of indebtedness contemplated by this Note and the related
liens granted pursuant to the Security Agreement and the priority contemplated by the Intercreditor Agreement (as defined in Section 21). 

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

  
 6 

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

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

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

(B) The obligation of the Holder to make Advances on each Funding Date is subject to the satisfaction of the following conditions precedent on
each applicable Funding Date: 
 1. Each of the conditions set forth in clause (A) above shall have been satisfied. 

2. The Merger Agreement (as defined in Section 21) shall not have been validly terminated in accordance with its
terms. 
 3. The Maker shall have delivered a written notice of borrowing at least five business days prior to the
requested borrowing date (except for the initial Advance, which notice of borrowing may be made on the date hereof), specifying the amount of the requested borrowing and wire transfer information, together with a certification as to the contemplated
use of proceeds in accordance with Section 6(F). 

  
 7 

 4. The representations and warranties made by the Maker in the Note Documents (as
defined in Section 21) are true and correct in all material respects as of the such Funding Date with the same force and effect as if they had been made on and as of said date (except for such representations and warranties that are
qualified by their terms by a reference to materiality, which representations and warranties as so qualified shall be true and correct in all respects and for any representation or warranty that speaks as of a specific date, which shall have been
true and correct as of such date). 
 5. No Event of Acceleration shall have occurred and be continuing. 

Each notice of borrowing for an Advance is deemed to be a representation that the statements in Sections 10(B)4 and 10(B)5 are true and
correct as of the date of such notice of borrowing. 
 11. Transfer Restrictions. Upon notice to the Maker, this Note may be
transferred by the Holder subject to the prior written consent of the Maker (not to be unreasonably conditioned, withheld or delayed); provided, that the Maker shall not have such consent rights to the extent that (a) an Event of
Acceleration has occurred and is continuing, (y) the Merger Agreement (as defined in Section 21) has been terminated for any reason or (b) while the Merger Agreement (as defined in Section 21) is in full force an
effect, such assignment is to a permitted assignee under the Merger Agreement (as defined in Section 21) so long as, in the case of clause (b), such assignment does not relieve Ranbaxy, Inc. of any of its obligations hereunder.
Nothing contained herein shall be deemed to limit the ability of the Holder to grant participations in this Note or to pledge its interest in this Note to any other party. 

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

13. Amendment; Waiver. Any modification, amendment or waiver of any term of this Note must be made in writing and signed by the Holder
and the Maker. Any such modification, amendment or waiver shall be limited to its express terms. No delay by the Holder in acting with respect to the terms of this Note constitutes a waiver of any breach, default, or failure of a condition under
this Note. 
 14. Maker’s Waivers. The Maker waives presentment, demand, notice of dishonor, notice of default or delinquency,
notice of acceleration, notice of protest and nonpayment, notice of costs, expenses or losses and interest thereon, notice of interest on interest and diligence in taking any action to collect any sums owing under this Note or in proceeding against
any of the rights or interests in or to properties securing payment of this Note. 
 15. Construction; Section Headings. This Note is
the result of negotiations among, and has been reviewed by the Holder, the Maker and their respective counsel. Accordingly, this Note is deemed to be the product of all parties hereto and no ambiguity may be construed in favor of or against the
Holder or the Maker. The headings of Sections in this Note are provided for convenience only and do not affect its construction or interpretation. All references to “Section” or “Sections” refer to the corresponding Section or
Sections of this Note unless otherwise specified. All words used in this Note are construed to be of such gender or 

  
 8 

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

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

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

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

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

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

  
 9 

 21. Certain Defined Terms. As used in this Note, the following terms have the following
meanings: 
 (A) “12% Secured Notes” means the notes issued, from time to time, pursuant to the terms of the Securities
Purchase Agreement (as defined in this Section 21). 
 (B) “Closing Date” has the meaning assigned to such term
in the Merger Agreement (as defined in this Section 21). 
 (C) “Collateral” has the meaning assigned to such
term in the Security Agreement. 
 (D) “Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of
the date hereof (as amended, supplemented or otherwise modified from time to time), by and among the Maker, the Holder and U.S. Bank National Association, as collateral agent for certain noteholders. 

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

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

(H) “Note Documents” means, collectively, this Note, the Security Agreement and the Intercreditor Agreement (as defined in
this Section 21). 
 (I) “Securities Purchase Agreement” means that certain Securities Purchase Agreement,
dated as of October 9, 2014 (and as amended on November 21, 2014) by the Maker, Riverbank Capital Securities, Inc., as placement agent and the purchasers party thereto. 

[Signature Pages Follows] 

  
 10 

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

 

			
	INSITE VISION INCORPORATED
		
	By:	 	 /s/ Timothy M. Ruane

		 	 Name: Timothy M. Ruane
 Title: Chief
Executive Officer

 [SIGNATURE PAGE TO NOTE] 

  

 RANBAXY, INC. 
  

			
	By:	 	 /s/ Kal Sundaram

		 	Name: Kal Sundaram
		 	Title: Chief Executive Officer & President

 [SIGNATURE PAGE TO NOTE] 

  

 Annex I 

Operating Expense Borrowings 
  

					
	 Month
	  	Maximum
Borrowing
Amount	 
	 September 2015
	  	$	1,100,000	  
	 October 2015
	  	$	1,100,000	  
	 November 2015
	  	$	1,100,000	  
	 December 2015
	  	$	1,100,000	  
	 January 2016
	  	$	1,100,000

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