Document:

CHANGE
      IN CONTROL
      AGREEMENT

     

    THIS
      CHANGE IN CONTROL AGREEMENT (this “Agreement”) is made and entered into as of
      ___________ __, 2007 (the “Effective Date”) by and between INSITE VISION
      INCORPORATED, a Delaware corporation (together with its successors and assigns,
      the “Company”), and S. Kumar Chandrasekaran, Ph.D. (the “Executive”)
      (collectively, Company and Executive are referred to herein as the “Parties”).

     

    RECITALS

     

    A. The
      Company desires to promote the success of the Company by rewarding the Executive
      for dedicated service and providing incentives for the Executive to remain
      in
      the employ of the Company or an affiliate through a Change in Control of the
      Company; and

     

    B. The
      Company and the Executive desire to enter into an agreement providing for the
      payment of certain benefits to the Executive in the event that Executive’s
      employment with the Company is terminated under certain circumstances following
      a Change in Control upon the terms and conditions set forth herein.

     

    NOW,
      THEREFORE, in consideration of the mutual covenants contained herein and other
      good and valuable consideration, receipt of which is hereby acknowledged, the
      Parties agree as follows:

     

    AGREEMENT

     

    1.  Termination
      of Employment Prior to a Change in Control.
      If the
      Executive’s employment with the Company terminates under any circumstances prior
      to the 60-day period preceding a Change in Control of the Company or after
      the
      12 month period following a Change in Control, Executive shall not be (and
      shall
      not in the future become) entitled to any payments or benefits under or with
      respect to this Agreement. Nothing contained in this Agreement shall confer
      upon
      the Executive any right to continue in the employ or other service of the
      Company or any affiliate of the Company, constitute any contract or agreement
      of
      employment or other service or affect the Executive’s status as an employee at
      will, nor shall anything in this Agreement interfere in any way with the right
      of the Company or any affiliate to change the Executive’s compensation or other
      benefits, or to terminate the Executive’s employment or other service, with or
      without cause at any time.

     

    2.  Benefits
      Upon Certain Terminations of Employment Following a Change in
      Control.
      In the
      event that Executive’s employment is terminated on, within sixty (60) days
      before, or within 12 months following, a Change in Control, due to (i) a
      termination by the Company without Cause, (ii) a resignation by Executive within
      45 days after the occurrence of an event constituting Good Reason, or (iii)
      a
      termination due to Executive’s death or Disability, the Company shall, subject
      to Executive signing and not revoking a Separation and General Release Agreement
      in a form satisfactory to the Company, provide Executive the following severance
      benefits (the “Severance Benefits”), subject to tax withholding and other
      authorized deductions:

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (a)  The
      Company shall pay the Executive, no later than thirty (30) days after the date
      on which Executive signs and does not revoke a Separation and General Release
      Agreement, a lump sum payment equal to the sum of (i) two (2) times the
      Executive’s annual base salary as in effect immediately prior to the date
      Executive’s employment with the Company is terminated (such date of termination
      is hereby referred to as the “Severance Date”) and (ii) two (2) times the
      Executive’s annual target bonus opportunity for the fiscal year in which the
      Severance Date occurs (or, if no annual target bonus opportunity has been
      established for the fiscal year in which the Severance Date occurs, the average
      annual bonus received by the Executive in the three (3) fiscal years immediately
      preceding the fiscal year in which the Severance Date occurs).

     

    (b)  Notwithstanding
      any provisions of the Company’s stock option plans, stock purchase plans, stock
      option agreements or addenda thereto, incentive plans, or other similar plans,
      all equity-based awards granted by the Company to the Executive that are
      outstanding and unvested as of the Severance Date, shall immediately become
      fully vested, any repurchase right in favor of the Company shall lapse, and
      the
      restricted period with respect to any such awards shall lapse, immediately
      prior
      to the Severance Date. Notwithstanding the foregoing, the exercisability of
      any
      stock options held by the Executive shall continue to be governed by the stock
      option plan and stock option agreement applicable to such award. The parties
      hereby agree that this Agreement supersedes and replaces the respective Addenda
      to each of the Stock Option Agreements entered into by the Company and the
      Executive, including those entered into on or about February 1, 2006, June
      1,
      2005, June 1, 2004, March 30, 2004, December 12, 2003, September 23, 2003,
      February 14, 2003, September 20, 2002, June 18, 2001, February 23, 1999, and
      October 27, 1997, with respect to the Executive’s outstanding stock options and
      that each such Addendum shall be of no further force and effect as of the
      Effective Date.

     

    (c) For
      a
      period of twenty-four (24) months following the Severance Date, the Company,
      through COBRA or otherwise, shall continue to make available to the Executive
      and the Executive’s spouse and dependents covered under any group health plans
      or life insurance plans of the Company on the Severance Date, all group health,
      life and other similar insurance plans in which Executive or such spouse or
      dependents participate on the Severance Date at the same cost to the Executive
      as the Executive paid for such benefits prior to such date. To the extent that
      the Company cannot continue to provide such Severance Benefits, it will pay
      the
      Executive an amount that would be sufficient to enable the Executive to purchase
      equivalent benefits from a third party at the same cost to the Executive as
      the
      Executive paid for such benefits immediately prior to the Severance Date.
      Notwithstanding the foregoing, if the Executive becomes re-employed with another
      employer and the Executive is eligible to receive equivalent benefits under
      the
      employer’s welfare benefit plans, at the same or a lesser cost to Executive, the
      Company’s obligations to provide Severance Benefits under this Section 2 shall
      terminate immediately.

     

    For
      purposes of clarity, subject to Section 1, benefits shall be payable to the
      Executive under this Agreement only with respect to a single Change in Control
      of the Company. Accordingly, no Change in Control of the Company after the
      first
      Change in Control shall result in Executive receiving any benefits under this
      Agreement. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    3.  Definitions.
      For
      purposes of this Agreement the following terms shall have the following
      meanings:

     

    (a)  “Cause”
      shall mean, as reasonably determined by the Board of Directors of the Company
      or
      its successor, as applicable, (the “Board”) (excluding the Executive, if he is
      then a member of the Board), (i) any act of personal dishonesty taken by the
      Executive in connection with his responsibilities as an employee of the Company
      which is intended to result in substantial personal enrichment of the Executive
      and is reasonably likely to result in material harm to the Company, (ii) the
      Executive’s conviction of a felony or any other crime, which the Board
      reasonably believes has had or will have a material detrimental effect on the
      Company’s reputation or business, (iii) a willful act by the Executive which
      constitutes misconduct and is materially injurious to the Company, or (iv)
      continued acts of gross negligence or willful violations by the Executive of
      the
      Executive’s obligations to the Company after there has been delivered to the
      Executive a written demand for performance from the Company which describes
      the
      basis for the Company’s belief that the Executive has committed gross negligence
      or wilfully violated his obligations to the Company, and Executive has failed
      to
      cure such activities within 30 days of receipt of such notice. 

     

    (b)  “Change
      in Control” shall mean the occurrence of any of the following:

     

    (i)  The
      acquisition by any individual, entity or group (within the meaning of Section
      13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
      “Exchange Act”)) (a “Person”) of beneficial ownership (within the meaning of
      Rule 13d-3 promulgated under the Exchange Act) of more than 40% of either (1)
      the then-outstanding shares of common stock of the Company (the “Outstanding
      Company Common Stock”) or (2) the combined voting power of the then-outstanding
      voting securities of the Company entitled to vote generally in the election
      of
      directors (the “Outstanding Company Voting Securities”); provided, however,
      that, for purposes of this clause (i), the following acquisitions shall not
      constitute a Change in Control; (A) any acquisition directly from the Company,
      unless the acquirer or the securityholders and/or creditors of an entity as
      a
      group acquire 50% or more of the Outstanding Company Common Stock or the
      Outstanding Voting Securities in such transaction in which case it shall
      constitute a Change in Control, (B) any acquisition by the Company, (C) any
      acquisition by any employee benefit plan (or related trust) sponsored or
      maintained by the Company or any affiliate of the Company or a successor, (D)
      any acquisition by any entity pursuant to a transaction that complies with
      clauses (iii)(1), (2) and (3) below, and (E) any acquisition by a Person who
      owned more than 40% of either the Outstanding Company Common Stock or the
      Outstanding Company Voting Securities as of the Effective Date or an affiliate
      of any such Person; 

     

    (ii)  A
      change
      in the Board or its members such that individuals who, as of the later of the
      Effective Date or the date that is two years prior to such change (the later
      of
      such two dates is referred to as the “Measurement Date”), constitute the Board
      (the “Incumbent Board”) cease for any reason to constitute at least a majority
      of the Board; provided, however, that any individual becoming a director
      subsequent to the Measurement Date whose election, or nomination for election
      by
      the Corporation’s stockholders, was approved by a vote of at least three fourths
      of the directors then comprising the Incumbent Board (including for these
      purposes, the new members whose election or nomination was so approved, without
      counting the member and his predecessor twice) shall be considered as though
      such individual were a member of the Incumbent Board, but excluding, for this
      purpose, any such individual whose initial assumption of office occurs as a
      result of an actual or threatened election contest with respect to the election
      or removal of directors or other actual or threatened solicitation of proxies
      or
      consents by or on behalf of a Person other than the Board; or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iii)  The
      consummation of a reorganization, merger, statutory share exchange or
      consolidation or similar corporate transaction involving the Company or any
      of
      its subsidiaries, a sale or other disposition of all or substantially all of
      the
      assets of the Company, or the acquisition of assets or stock of another entity
      by the Company or any of its subsidiaries (each, a “Business Combination”), in
      each case unless, following such Business Combination, (1) all or substantially
      all of the individuals and entities that were the beneficial owners of the
      Outstanding Company Common Stock and the Outstanding Company Voting Securities
      immediately prior to such Business Combination beneficially own, directly or
      indirectly, more than 50% of the then-outstanding shares of common stock and
      the
      combined voting power of the then-outstanding voting securities entitled to
      vote
      generally in the election of directors, as the case may be, of the entity
      resulting from such Business Combination (including, without limitation, an
      entity that, as a result of such transaction, owns the Company or all or
      substantially all of the Company’s assets directly or through one or more
      subsidiaries (a “Parent”)) in substantially the same proportions as their
      ownership immediately prior to such Business Combination of the Outstanding
      Company Common Stock and the Outstanding Company Voting Securities, as the
      case
      may be, (2) no Person (excluding any entity resulting from such Business
      Combination or a Parent or any employee benefit plan (or related trust) of
      the
      Corporation or such entity resulting from such Business Combination or Parent)
      beneficially owns, directly or indirectly, more than 40% of, respectively,
      the
      then-outstanding shares of common stock of the entity resulting from such
      Business Combination or the combined voting power of the then-outstanding voting
      securities of such entity, except to the extent that the ownership in excess
      of
      40% existed prior to the Business Combination, and (3) at least a majority
      of
      the members of the board of directors or trustees of the entity resulting from
      such Business Combination or a Parent were members of the Incumbent Board
      (determined pursuant to clause (ii) above using the date that is the
later
      of the
      Effective Date or the date that is two years prior to the Business Combination
      as the Measurement Date) at the time of the execution of the initial agreement
      or of the action of the Board providing for such Business
      Combination.

     

    (c)  “Disability”
      shall mean a physical or mental impairment which, as reasonably determined
      by a
      mutually agreed upon physician (with requisite and applicable expertise),
      renders the Executive unable to perform the essential functions of his
      employment with the Company, even with reasonable accommodation that does not
      impose an undue hardship on the Company, for more than 120 days in any 12-month
      period.

     

    (d)  “Good
      Reason” shall mean the occurrence of any of the following: (i) without the
      Executive’s express written consent, a material reduction of the Executive’s
      duties, position or responsibilities relative to the Executive’s duties, title,
      position or responsibilities in effect immediately prior to such reduction,
      or
      the removal of the Executive from such duties, title, position and
      responsibilities; (ii) without the Executive’s express written consent, a
      material reduction of the facilities and perquisites (including without
      limitation office space, location and administrative support) available to
      the
      Executive immediately prior to such reduction; (iii) a reduction by the Company
      of the Executive’s base salary or annual target bonus opportunity as in effect
      immediately prior to such reduction; (iv) a material reduction by the Company
      in
      the kind or level of employee benefits to which the Executive is entitled
      immediately prior to such reduction with the result that the Executive’s overall
      benefits package is materially reduced; or (v) without the Executive’s express
      written consent, the relocation of the Executive to a facility or a location
      more than thirty (30) miles from his current location.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    4.  Section
      280G.
      The
      Executive shall be covered by the tax gross-up provisions set forth in
Exhibit
      A
      hereto,
      incorporated herein by this reference. 

     

    5.  Miscellaneous.
      

     

    (a)  Construction;
      Section 409A.
      Notwithstanding any provision of this Agreement to the contrary, if the
      Executive is a “specified employee” as defined in Section 409A of the U.S.
      Internal Revenue Code of 1986, as amended (“Code
      Section 409A”),
      the
      Executive shall be entitled to payments during the period beginning with a
      termination of his employment and continuing until the earlier of (i) the date
      which is six (6) months after his termination of employment for any reason
      other
      than death or (ii) the date of the Executive’s death, only if and to the extent
      such payments would not trigger any tax, penalty or interest pursuant to Code
      Section 409A. Furthermore, with regard to any benefit to be provided upon a
      termination of employment, to the extent required to avoid the imputation of
      any
      tax, penalty or interest pursuant to Code Section 409A, the Executive shall
      pay
      the premium for such benefit during the aforesaid period and be reimbursed
      by
      the Company therefor promptly after the end of such period. Any amounts
      otherwise payable to the Executive following a termination of his employment
      that are not so paid by reason of this Section 5(a) shall be paid as soon as
      practicable after the date that is six (6) months after the termination of
      the
      Executive’s employment (or, if earlier, the date of the Executive’s death). This
      Agreement shall otherwise be construed and interpreted to avoid the imputation
      of any tax, penalty or interest pursuant to Code Section 409A. 

     

    (b)  Payment
      Obligations.
      Except
      as expressly provided herein, the Company’s obligation to pay the Executive the
      compensation and to make the arrangements provided herein shall be
      unconditional, and the Executive shall have no obligation whatsoever to mitigate
      damages hereunder.

     

    (c)  Waiver.
      Neither
      the failure nor any delay on the part of a party to exercise any right, remedy,
      power or privilege under this Agreement shall operate as a waiver thereof,
      nor
      shall any single or partial exercise of any right, remedy, power or privilege
      preclude any other or further exercise of the same or of any right, remedy,
      power or privilege, nor shall any waiver of any right, remedy, power or
      privilege with respect to any occurrence be construed as a waiver of such right,
      remedy, power or privilege with respect to any other occurrence. No waiver
      shall
      be effective unless it is in writing and is signed by the party asserted to
      have
      granted such waiver.

     

    (d)  Entire
      Agreement; Modifications.
      Except
      as otherwise provided herein, this Agreement, together with any written
      agreement evidencing any stock option or other equity-based incentive award
      previously granted by the Company to the Executive (but excluding the addenda
      to
      the Executive’s stock option agreements superseded hereby as contemplated by
      Section 2(b) above), represents the entire understanding among the parties
      with
      respect to the subject matter hereof, and this Agreement supersedes any and
      all
      prior understandings, agreements, plans and negotiations, whether written or
      oral, with respect to the subject matter hereof, including without limitation,
      any understandings, agreements or obligations respecting any past or future
      compensation, bonuses, reimbursements or other payments to the Executive from
      the Company. All modifications to the Agreement must be in writing and signed
      by
      the party against whom enforcement of such modification is sought. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (e)  Notices.
      All
      notices and other communications under this Agreement shall be in writing and
      shall be given by telegraph or first class mail, certified or registered with
      return receipt requested; and shall be deemed to have been duly given three
      days
      after mailing or 12 hours after transmission of a telegram to the respective
      persons named below:

    

      
        	
                If
                  to the Company:

              	 	
                Insite
                  Vision Incorporated

              
	 	 	
                965
                  Atlantic Avenue 

              
	 	 	
                Alameda,
                  California 94501

              
	 	 	
                Attention:
                  Chairman of the Board

              
	 	 	 
	
                copy
                  to:

              	 	
                O’Melveny
                  & Myers LLP

              
	 	 	
                2765
                  Sand Hill Road

              
	 	 	
                Menlo
                  Park, California 94010

              
	 	 	
                Attention:
                  Tim Curry, Esq.

              
	 	 	 
	
                If
                  to the Executive:

              	 	
                S.
                  Kumar Chandrasekaran, Ph.D.

              
	 	 	
                [__________]

              
	 	 	
                [__________]

              

      

    

     

    Any
      party
      may change such party’s address for notices by notice duly given pursuant to
      this Section 5(e).

     

    (f)  Headings.
      The
      Section headings herein are intended for reference and shall not by themselves
      determine the construction or interpretation of this Agreement.

     

    (g)  Governing
      Law.
      This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of California applicable to contracts entered into and wholly to be
      performed within the State of California by California residents, irrespective
      of California’s conflict of laws rule.

     

    (h)  Arbitration;
      Dispute Resolution, Etc.
      Any
      controversy arising out of or relating to this Agreement, its enforcement or
      interpretation, or because of an alleged breach, default, or misrepresentation
      in connection with any of its provisions, or any other controversy arising
      out
      of or related to this Agreement, including, but not limited to, any state or
      federal statutory claims, shall be submitted to arbitration in Alameda County
      County, California, before a sole arbitrator selected from Judicial Arbitration
      and Mediation Services, Inc., San Francisco, California, or its successor
      (“JAMS”),
      or if
      JAMS is no longer able to supply the arbitrator, such arbitrator shall be
      selected from the American Arbitration Association, and shall be conducted
      in
      accordance with the provisions of California Code of Civil Procedure §§ 1280 et
      seq. as the exclusive forum for the resolution of such dispute; provided,
      however, that provisional injunctive relief may, but need not, be sought by
      either party to this Agreement in a court of law while arbitration proceedings
      are pending, and any provisional injunctive relief granted by such court shall
      remain effective until the matter is finally determined by the arbitrator.
      Final
      resolution of any dispute through arbitration may include any remedy or relief
      which the arbitrator deems just and equitable, including any and all remedies
      provided by applicable state or federal statutes. At the conclusion of the
      arbitration, the arbitrator shall issue a written decision that sets forth
      the
      essential findings and conclusions upon which the arbitrator’s award or decision
      is based. Any award or relief granted by the arbitrator hereunder shall be
      final
      and binding on the parties hereto and may be enforced by any court of competent
      jurisdiction. The parties acknowledge and agree that they are hereby waiving
      any
      rights to trial by jury in any action, proceeding or counterclaim brought by
      either of the parties against the other in connection with any matter whatsoever
      arising out of or in any way connected with any of the matters referenced in
      the
      first sentence above. The parties agree that the Company shall be responsible
      for payment of the forum costs of any arbitration hereunder, including the
      arbitrator’s fee. The parties further agree that in any proceeding with respect
      to such matters, each party shall bear its own attorney’s fees and costs (other
      than forum costs associated with the arbitration) incurred by it or him or
      her
      in connection with the resolution of the dispute.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i)  Severability.
      Should
      a court or other body of competent jurisdiction determine that any provision
      of
      this Agreement is excessive in scope or otherwise invalid or unenforceable,
      such
      provision shall be adjusted rather than voided, if possible, and all other
      provisions of this Agreement shall be deemed valid and enforceable to the extent
      possible.

     

    (j)  Survival
      of the Company’s Obligations.
      The
      Company’s obligations hereunder shall not be terminated by reason of any
      liquidation, dissolution, bankruptcy, cessation of business, or similar event
      relating to the Company. Except as provided in Section 1, this Agreement shall
      not be terminated by any Change in Control, merger or consolidation or other
      reorganization of the Company. In the event any such Change in Control, merger,
      consolidation or reorganization shall be accomplished by transfer of stock
      or by
      transfer of assets or otherwise, the provisions of this Agreement shall be
      binding upon and inure to the benefit of the surviving or resulting corporation
      or person. This Agreement shall be binding upon and inure to the benefit of
      the
      executors, administrators, heirs, successors and assigns of the parties;
      provided, however, that except as herein expressly provided, this Agreement
      shall not be assignable either by the Company (except to an affiliate of the
      Company in which event the Company shall remain liable if the affiliate fails
      to
      meet any obligations to make payments or provide benefits or otherwise) or
      by
      the Executive.

     

    (k)  Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed an original as against any party whose signature appears thereon, and
      all
      of which together shall constitute one and the same instrument. This Agreement
      shall become binding when one or more counterparts hereof, individually or
      taken
      together, shall bear the signatures of all of the parties reflected hereon
      as
      the signatories. Photographic copies of such signed counterparts may be used
      in
      lieu of the originals for any purpose.

     

    (l)  Withholdings.
      Notwithstanding anything else herein to the contrary, the Company may withhold
      (or cause there to be withheld, as the case may be) from any amounts otherwise
      due or payable under or pursuant to this Agreement such federal, state and
      local
      income, employment, or other taxes as may be required to be withheld pursuant
      to
      any applicable law or regulation.

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (m)  Legal
      Counsel; Mutual Drafting.
      Each
      party recognizes that this is a legally binding contract and acknowledges and
      agrees that they have had the opportunity to consult with legal counsel of
      their
      choice. Each party has cooperated in the drafting, negotiation and preparation
      of this Agreement. Hence, in any construction to be made of this Agreement,
      the
      same shall not be construed against either party on the basis of that party
      being the drafter of such language. The Executive agrees and acknowledges that
      he has read and understands this Agreement, is entering into it freely and
      voluntarily, and has been advised to seek counsel prior to entering into this
      Agreement and has had ample opportunity to do so.

    
 

    IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
      day
      and year first above written.

     

    

      
        	 	INSITE
                VISION INCORPORATED
	 	 	 
	 	 	 
	 	By  	
                 

              
	 	 	
                Anders
                  P. Wiklund

              
	 	 	
                Member
                  of the Compensation Committee

                of
                  the Board of Directors

              
	 	 	 
	 	 	 
	 	S.
                KUMAR CHANDRASEKARAN, Ph.D.
	 	 	 
	 	 	 
	 	 	 
	 	 	
                 

              
	 	S.
                Kumar Chandrasekaran, Ph.D.
	 	 	 

      

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    EXHIBIT
      A

     

    TAX
      GROSS-UP PROVISIONS

     

    
      	1.1	 	
              Gross-Up
                Payment.
                In
                the event it is determined (pursuant to Section 1.2) or finally determined
                (as defined in Section 1.3(c)) that any payment, distribution, transfer,
                or benefit by the Company, or a direct or indirect subsidiary or
                affiliate
                of the Company, to or for the benefit of the Executive or the Executive’s
                dependents, heirs or beneficiaries (whether such payment, distribution,
                transfer, benefit or other event occurs pursuant to the terms of
                this
                Agreement or otherwise, but determined without regard to any additional
                payments required under this Exhibit
                A)
                (each a “Payment” and collectively the “Payments”) is subject to the
                excise tax imposed by Section 4999 of the U.S. Internal Revenue Code
                of
                1986, as amended (the “Code”), and any successor provision or any
                comparable provision of state or local income tax law (collectively,
                “Section 4999”), or any interest, penalty or addition to tax is incurred
                by the Executive with respect to such excise tax (such excise tax,
                together with any such interest, penalty, and addition to tax, hereinafter
                collectively referred to as the “Excise Tax”), then, within 10 days after
                such determination or final determination, as the case may be, the
                Company
                shall pay to the Executive (or to the applicable taxing authority
                on the
                Executive’s behalf) an additional cash payment (hereinafter referred to as
                the “Gross-Up Payment”) equal to an amount such that after payment by the
                Executive of all taxes, interest, penalties, additions to tax and
                costs
                imposed or incurred with respect to the Gross-Up Payment (including,
                without limitation, any income and excise taxes imposed upon the
                Gross-Up
                Payment), the Executive retains an amount of the Gross-Up Payment
                equal to
                the Excise Tax imposed upon such Payment or Payments. This provision
                is
                intended to put the Executive in the same position as the Executive
                would
                have been had no Excise Tax been imposed upon or incurred as a result
                of
                any Payment.

            

    

     

    
      	1.2	 	
              Determination
                of Gross-Up.

            

    

     

    
      	
            	(a)	
              Except
                as provided in Section 1.3, the determination that a Payment is subject
                to
                an Excise Tax shall be made in writing by the principal certified
                public
                accounting firm then retained by the Company to audit its annual
                financial
                statements (the “Accounting Firm”). Such determination shall include the
                amount of the Gross-Up Payment and detailed computations thereof,
                including any assumptions used in such computations. Any determination
                by
                the Accounting Firm will be binding on the Company and the
                Executive.

            

    

     

    
      	
            	(b)	
              For
                purposes of determining the amount of the Gross-Up Payment, the Executive
                shall be deemed to pay Federal income taxes at the highest marginal
                rate
                of Federal individual income taxation in the calendar year in which
                the
                Gross-Up Payment is to be made. Such highest marginal rate shall
                take into
                account the loss of itemized deductions by the Executive and shall
                also
                include the Executive’s share of the hospital insurance portion of FICA
                and state and local income taxes at the highest marginal rate of
                individual income taxation in the state and locality of the Executive’s
                residence on the date that the Payment is made, net of the maximum
                reduction in Federal income taxes that could be obtained from the
                deduction of such state and local
                taxes.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	1.3	 	
              Notification.

            

    

     

    
      	
            	(a)	
              The
                Executive shall notify the Company in writing of any claim by the
                Internal
                Revenue Service (or any successor thereof) or any state or local
                taxing
                authority (individually or collectively, the “Taxing Authority”) that, if
                successful, would require the payment by the Company of a Gross-Up
                Payment. Such notification shall be given as soon as practicable
                but no
                later than 30 days after the Executive receives written notice of
                such
                claim and shall apprise the Company of the nature of such claim and
                the
                date on which such claim is requested to be paid; provided, however,
                that
                failure by the Executive to give such notice within such 30-day period
                shall not result in a waiver or forfeiture of any of the Executive’s
                rights under this Exhibit
                A
                except to the extent of actual damages suffered by the Company as
                a result
                of such failure. The Executive shall not pay such claim prior to
                the
                expiration of the 15-day period following the date on which the Executive
                gives such notice to the Company (or such shorter period ending on
                the
                date that any payment of taxes, interest, penalties or additions
                to tax
                with respect to such claim is due). If the Company notifies the Executive
                in writing prior to the expiration of such 15-day period (regardless
                of
                whether such claim was earlier paid as contemplated by the preceding
                parenthetical) that it desires to contest such claim, the Executive
                shall:

            

    

     

    
      	 	
              (1)

            	
              give
                the Company any information reasonably requested by the Company relating
                to such claim;

            

    

     

    
      	 	
              (2)

            	
              take
                such action in connection with contesting such claim as the Company
                shall
                reasonably request in writing from time to time, including, without
                limitation, accepting legal representation with respect to such claim
                by
                an attorney selected by the
                Company;

            

    

     

    
      	 	
              (3)

            	
              cooperate
                with the Company in good faith in order effectively to contest such
                claim;
                and

            

    

     

    
      	 	
              (4)

            	
              permit
                the Company to participate in any proceedings relating to such claim;
                

            

    

     

    provided,
      however, that the Company shall bear and pay directly all attorneys fees, costs
      and expenses (including additional interest, penalties and additions to tax)
      incurred in connection with such contest and shall indemnify and hold the
      Executive harmless, on an after-tax basis, for all taxes (including, without
      limitation, income and excise taxes), interest, penalties and additions to
      tax
      imposed in relation to such claim and in relation to the payment of such costs
      and expenses or indemnification.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
            	(b)	
              Without
                limitation on the foregoing provisions of this Section 1.3, and to
                the
                extent its actions do not unreasonably interfere with or prejudice
                the
                Executive’s disputes with the Taxing Authority as to other issues, the
                Company shall control all proceedings taken in connection with such
                contest and, in its reasonable discretion, may pursue or forego any
                and
                all administrative appeals, proceedings, hearings and conferences
                with the
                Taxing Authority in respect of such claim and may, at its or in their
                sole
                option, either direct the Executive to pay the tax, interest or penalties
                claimed and sue for a refund or contest the claim in any permissible
                manner, and the Executive agrees to prosecute such contest to a
                determination before any administrative tribunal, in a court of initial
                jurisdiction and in one or more appellate courts, as the Company
                shall
                determine; provided, however, that if the Company directs the Executive
                to
                pay such claim and sue for a refund, the Company shall advance an
                amount
                equal to such payment to the Executive, on an interest-free basis,
                and
                shall indemnify and hold the Executive harmless, on an after-tax
                basis,
                from all taxes (including, without limitation, income and excise
                taxes),
                interest, penalties and additions to tax imposed with respect to
                such
                advance or with respect to any imputed income with respect to such
                advance, as any such amounts are incurred; and, further, provided,
                that
                any extension of the statute of limitations relating to payment of
                taxes,
                interest, penalties or additions to tax for the taxable year of the
                Executive with respect to which such contested amount is claimed
                to be due
                is limited solely to such contested amount; and, provided, further,
                that
                any settlement of any claim shall be reasonably acceptable to the
                Executive, and the Company’s control of the contest shall be limited to
                issues with respect to which a Gross-Up Payment would be payable
                hereunder, and the Executive shall be entitled to settle or contest,
                as
                the case may be, any other issue. 

            

    

     

    
      	
            	(c)	
              If,
                after receipt by the Executive of an amount advanced by the Company
                pursuant to Section 1.3(a), the Executive receives any refund with
                respect
                to such claim, the Executive shall (subject to the Company’s compliance
                with the requirements of this Exhibit
                A)
                promptly pay to the Company an amount equal to such refund (together
                with
                any interest paid or credited thereof after taxes applicable thereto),
                net
                of any taxes (including, without limitation, any income or excise
                taxes),
                interest, penalties or additions to tax and any other costs incurred
                by
                the Executive in connection with such advance, after giving effect
                to such
                repayment. If, after the receipt by the Executive of an amount advanced
                by
                the Company pursuant to Section 1.3(a), it is finally determined
                that the
                Executive is not entitled to any refund with respect to such claim,
                then
                such advance shall be forgiven and shall not be required to be repaid
                and
                the amount of such advance shall be treated as a Gross-Up Payment
                and
                shall offset, to the extent thereof, the amount of any Gross-Up Payment
                otherwise required to be paid.

            

    

     

    
      	
            	(d)	
              For
                purposes of this Exhibit
                A,
                whether the Excise Tax is applicable to a Payment shall be deemed
                to be
                “finally determined” upon the earliest of: (1) the expiration of the
                15-day period referred to in Section 1.3(a) if the Company or the
                Executive’s employer has not notified the Executive that it intends to
                contest the underlying claim, (2) the expiration of any period following
                which no right of appeal exists, (3) the date upon which a closing
                agreement or similar agreement with respect to the claim is executed
                by
                the Executive and the Taxing Authority (which agreement may be executed
                only in compliance with this section), or (4) the receipt by the
                Executive
                of notice from the Company that it no longer seeks to pursue a contest
                (which shall be deemed received if the Company does not, within 15
                days
                following receipt of a written inquiry from the Executive, affirmatively
                indicate in writing to the Executive that the Company intends to
                continue
                to pursue such contest).

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	1.4	 	
              Underpayment
                and Overpayment.
                It
                is possible that no Gross-Up Payment will initially be made but that
                a
                Gross-Up Payment should have been made, or that a Gross-Up Payment
                will
                initially be made in an amount that is less than what should have
                been
                made (either of such events is referred to as an “Underpayment”). It is
                also possible that a Gross-Up Payment will initially be made in an
                amount
                that is greater than what should have been made (an “Overpayment”). The
                determination of any Underpayment or Overpayment shall be made by
                the
                Accounting Firm in accordance with Section 1.2. In the event of an
                Underpayment, the amount of any such Underpayment shall be paid to
                the
                Executive as an additional Gross-Up Payment. In the event of an
                Overpayment, the Executive shall promptly pay to the Company the
                amount of
                such Overpayment together with interest on such amount at the applicable
                Federal rate provided for in Section 1274(d) of the Code for the
                period
                commencing on the date of the Overpayment to the date of such payment
                by
                the Executive to the Company. The Executive shall make such payment
                to the
                Company as soon as administratively practicable after the Company
                notifies
                the Executive of (a) the Accounting Firm’s determination that an
                Overpayment was made and (b) the amount to be
                repaid.Unassociated Document

    TRADEMARK
      LICENSE
      AGREEMENT

     

    This
      TRADEMARK LICENSE AGREEMENT (this “Agreement”),
      dated
      as of February 15, 2007 (the “Effective
      Date”),
      is
      made by and between Inspire Pharmaceuticals, Inc., a Delaware corporation having
      its principal office at 4222 Emperor Blvd., Suite 200, Durham, NC 27703
      (“Inspire”),
      and
      InSite Vision Incorporated, a Delaware corporation having its principal office
      at 965 Atlantic Ave., Alameda, CA 94501 (“InSite”).
      Inspire and InSite are each sometimes referred to individually as a
“Party”
and
      together as the “Parties.”

     

    RECITALS

     

    WHEREAS,
      InSite and Inspire are entering into a license agreement (the “License
      Agreement”)
      contemporaneously with this Agreement, under which InSite is granting to Inspire
      the exclusive rights in the Territory to certain patents, know-how and
      regulatory filings for the commercialization of Subject Products; 

     

    WHEREAS,
      InSite owns and has the right to grant a license to the InSite Trademarks and
      the Domain Names described on Schedule
      1
      attached
      hereto; and

     

    WHEREAS,
      Inspire desires to obtain from InSite, and InSite desires to grant to Inspire,
      rights and licenses to use the InSite Trademarks and the Domain Names in
      connection with the marketing, commercialization and sale of Subject Products
      in
      the Territory under the License Agreement. 

     

    NOW,
      THEREFORE, in consideration of the foregoing premises, the rights and benefits
      that they will each receive in connection with the License Agreement, and the
      mutual representations, covenants and agreements contained herein, Inspire
      and
      InSite, intending to be legally bound, hereby agree as follows: 

     

    ARTICLE
      1

    DEFINITIONS

     

    1.1  Incorporated
      Definitions.
      Capitalized terms that are used in this Agreement but are not otherwise defined
      in this Agreement will have the respective meaning ascribed to such terms in
      the
      License Agreement.

     

    1.2  Additional
      Definitions.
      When
      used in this Agreement, whether in the singular or plural, each of the following
      capitalized terms shall have the meanings set forth in this Section
      1

     

    (a)  “AzaSite
      Trademark”
means
      the trademark AzaSiteTM.

     

    (b)  “Domain
      Names”
means
      the internet domain names set forth in Schedule
      1,
      such
      domain names being owned and registered by InSite.

     

    (c)  “Independent
      Sublicensee”
has
      the
      meaning set forth in Section 4.4.

     

    (d)  “InSite
      Trademarks”
means
      the trademarks set forth in Schedule
      1,
      such
      marks being owned and registered by InSite.
      From and
      after the effective date of the assignment of the AzaSite Trademark by InSite
      to
      Inspire pursuant to Section 2.3(b) of the License Agreement, the term “InSite
      Trademarks” shall not include the AzaSite Trademark for any purpose under this
      Agreement.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    (e)  “Term”
has
      the
      meaning set forth in Section 4.1.

     

    ARTICLE
      2

    LICENSES
      AND EXCLUSIVITY

     

    2.1  Licenses. 

     

    (a)  Subject
      to the terms and conditions of this Agreement, InSite hereby grants to Inspire
      a
      royalty-free, exclusive (even as to InSite and its Affiliates) right and
      license, with the right to grant sublicenses, to use the AzaSite Trademark
      and
      the Domain Names in connection with the marketing, commercialization and sale
      of
      Subject Products in the Field in the Territory under the License Agreement.
      In
      connection with such license, InSite agrees immediately to cease any and all
      use
      of the Domain Names
      and to
      execute and deliver such further and other documents and to perform such actions
      as may be necessary to enable Inspire to access and use the Domain Names under
      such license. 

     

    (b)  Subject
      to the terms and conditions of this Agreement, InSite hereby grants to Inspire
      a
      royalty-free, non-exclusive right and license, with the right to grant
      sublicenses, to use the InSite Trademarks (other than the AzaSite Trademark)
      in
      connection with the marketing, commercialization and sale of Subject Products
      in
      the Field in the Territory under the License Agreement. Notwithstanding the
      non-exclusive nature of the foregoing grant, InSite hereby expressly covenants
      that it shall not, and shall cause its Affiliates and licensees not to, directly
      or indirectly: (x) use the InSite Trademarks in connection with the marketing,
      commercialization or sale of Subject Products in the Field in the Territory;
      or
      (y) grant to any Third Party any right or license under the InSite Trademarks
      to
      conduct any of the activities set forth in the foregoing clause (x). 

     

    2.2  Sublicenses.
      Inspire
      may sublicense the rights granted under Section 2.1 only to sublicensees who
      will use the InSite Trademarks and the Domain Names in connection with the
      marketing, commercialization and sale of Subject Products in the Field in the
      Territory under the License Agreement. All sublicenses granted hereunder must
      be
      in writing and must contain provisions that are not inconsistent with the terms
      and conditions of this Agreement.
      All
      sublicenses shall include quality control standards at least as protective
      as
      those referenced under Section 3.1. 

     

    2.3  Use
      of
      Affiliates and Third Party Contractors.
      The
      licenses granted under Section 2.1
      include
      the right of Inspire to engage its Affiliates and Third Party contractors in
      exercising such rights and in carrying out its activities and obligations under
      this Agreement, provided that (i) all such agreements with Third Party
      contractors must be in writing and must contain provisions that are not
      inconsistent with the terms and conditions of this Agreement and
      (ii) Inspire remains responsible for the compliance with this Agreement by
      such Affiliates or Third Party contractors. 

     

    2.4  No
      Implied Grants.
      Except
      as expressly licensed hereunder, neither Party grants any rights to the other
      Party under this Agreement, by implication or estoppel, under any of its
      intellectual property rights.  

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    2.5  Registration
      of License.
      Notwithstanding anything to the contrary in Section 5.1, Inspire, at its
      expense, may register the licenses granted under this Agreement in any country
      of the Territory. Upon request by Inspire, InSite agrees promptly to execute
      any
“short form” licenses consistent with the terms and conditions of this Agreement
      submitted to it by Inspire reasonably necessary to effect the foregoing
      registration in such country. 

     

    2.6  Notice.
      In
      connection with the use of the InSite Trademarks, Licensee will mark the first
      prominent use of the InSite Trademark with the appropriate trademark symbol
      (“TM” or “®”, as set forth in Schedule
      1
      or as
      otherwise reasonably instructed by InSite in writing) and will include the
      following legend in connection with such use: “[InSite Trademark] is the
      trademark of InSite Vision Incorporated and is being used by permission.”

     

    ARTICLE
      3

    QUALITY
      CONTROL AND RELATED MATTERS

     

    3.1  Quality
      Control and Standards.
      Inspire
      shall adhere to such reasonable quality control standards that InSite may from
      time to time promulgate and communicate to Inspire in writing with respect
      to
      the InSite Trademarks, and shall comply materially with all federal, state
      and
      local laws and regulations governing the use of the InSite Trademarks in
      connection with the provision of Inspire Licensed Products. In order to confirm
      that Inspire’s use of the InSite Trademarks complies with this Section 3.1,
      InSite shall have the right upon written notice to require that Inspire submit
      to InSite a reasonable number of representative samples of any Inspire Licensed
      Products or related materials bearing the InSite Trademarks.

     

    3.2  Protection
      of the InSite Trademarks.
      Inspire
      hereby acknowledges InSite’s rights in the InSite Trademarks and shall not at
      any time do or authorize to be done any action that would prejudice the validity
      or registration of the InSite Trademarks or the good will associated therewith,
      including filing for, using or authorizing the use of any trademark
      (i) likely to cause consumer confusion with respect to the InSite
      Trademarks or (ii) containing “SITE” as a part. It is understood that
      neither Inspire nor any of its Affiliates shall acquire or claim any independent
      right, title or interest in or to the InSite Trademarks by virtue of Inspire’s
      use of the InSite Trademarks as provided in this Agreement, it being the
      intention of the Parties that all use of the InSite Trademarks by Inspire,
      and
      all goodwill associated therewith, shall at all times inure to the exclusive
      benefit of InSite. 

     

    ARTICLE
      4

    TERM
      AND TERMINATION

     

    4.1  Term.
      Except
      as set forth in Section 5.13, unless earlier terminated by mutual agreement
      of the Parties in writing or pursuant to the provisions of this Article 4,
      this
      Agreement will become effective as of the Effective Date and continue in full
      force and effect until the expiration or termination of the License Agreement
      in
      its entirety (the “Term”). 

     

    4.2  Bankruptcy
      or Insolvency.
      Either
      Party may, subject to the provisions set forth herein, terminate this Agreement
      by giving the other Party written termination notice if, at any time, the other
      Party shall: (a) file in any court pursuant to any statute a petition for
      bankruptcy or insolvency, or for reorganization in bankruptcy, or for an
      arrangement or for the appointment of a receiver, trustee or administrator
      of
      such Party or of its assets; (b) be served with an involuntary petition against
      it, filed in any insolvency proceeding, and such petition shall not be dismissed
      within sixty (60) days after the filing thereof; (c) propose or be a party
      to
      any dissolution; or (d) make an assignment for the benefit of its
      creditors. 

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    4.3  Termination
      of License Agreement.
      If
      either
      Party terminates the License Agreement in
      its
      entirety pursuant to Section 10.2 or 10.3 thereof,
      then
      either such terminating Party or the other Party may terminate this Agreement
      in
      its
      entirety concurrently
      with such termination by providing written notice thereof to the other
      Party.
      If
      either Party terminates the License Agreement with
      respect to a particular country pursuant to Section 10.2 or 10.3
      thereof,
      then
      either such terminating Party or the other Party may terminate this Agreement,
      solely with
      respect to such country, concurrently
      with such termination by providing written notice thereof to the other
      Party.

     

    4.4  Continuing
      Rights of Sublicensees.
      Upon
      any termination of any license rights granted to Inspire under this Agreement,
      each sublicense previously granted by Inspire or any of its Affiliates under
      such license rights to any Person that is not an Affiliate of Inspire (each,
      an
“Independent
      Sublicensee”)
      shall
      remain in effect and shall become a direct license or sublicense, as the case
      may be, of such rights by InSite to such Independent Sublicensee, subject to
      (i)
      the Independent Sublicensee agreeing in writing to assume Inspire’s terms,
      conditions and obligations to InSite under this Agreement as they pertain to
      the
      sublicensed rights, and (ii) Inspire remaining liable for any liability to
      the
      Independent Sublicensee incurred by Inspire prior to such
      termination.

     

    4.5  Effect
      of Expiration or Termination. 

     

    (a)  Expiration
      or termination of this Agreement in its entirety pursuant to this Article 4
      shall not (i) relieve a Party hereto of any obligation accruing to such Party
      prior to such termination, or (ii) result in the waiver of any right or remedy
      by a Party hereto accruing to such Party prior to such termination. Upon
      termination of this Agreement in its entirety, all licenses granted to Inspire
      by InSite under this Agreement will terminate, and all rights therein will
      revert to InSite. Inspire promptly shall cease, and cause its Affiliates and
      sublicensees (subject to Section 4.4) promptly to cease, any use of any InSite
      Trademarks and Domain Names in the Territory. 

     

    (b)  Termination
      of this Agreement with respect to a particular country pursuant to this Article
      4 shall not (i) relieve a Party hereto of any obligation accruing to such Party
      prior to such termination, (ii) result in the waiver of any right or remedy
      by a
      Party hereto accruing to such Party prior to such termination, or (iii) result
      in the termination or modification of any rights or obligations of a Party
      under
      the Agreement not involved in such termination. Upon termination of this
      Agreement with respect to a particular country, the licenses granted to Inspire
      by InSite under this Agreement solely with respect to such country will
      terminate, and all such rights will revert to InSite. Inspire promptly shall
      cease, and cause its Affiliates and sublicensees (subject to Section 4.4)
      promptly to cease, any use of any InSite Trademarks in such
      country.

     

    (c)  Notwithstanding
      anything to the contrary in this Agreement, the licenses granted to Inspire
      by
      InSite under this Agreement shall continue during any period in which Inspire
      continues to have the right to sell Inspire Licensed Products under Sections
      10.6(c) or 10.7(c) of the License Agreement solely in connection with Inspire’s
      exercise of its rights as set forth in the License Agreement during such period.
      

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    ARTICLE
      5

    MISCELLANEOUS

     

    5.1  Confidentiality.
      All
      secret, confidential or proprietary information or data, whether provided in
      written, oral, graphic, video, computer or other form, provided by a Party
      to
      the other Party in connection with the activities contemplated by this Agreement
      is and will be deemed under the License Agreement to be Confidential Information
      of the Party providing such information or data, subject to the limitations
      set
      forth in Section 1.15 thereof, and will be held in accordance with and subject
      to the terms of Article 8 thereof. The terms of this Agreement shall also be
      deemed Confidential Information of each Party under the License Agreement,
      except to the extent disclosed pursuant to Section 8.4 thereof.

     

    5.2  Assignment.
      This
      Agreement may not be assigned or otherwise transferred (in whole or in part,
      whether voluntarily, by operation of law or otherwise) by either Party without
      the prior written consent of the other Party (which consent shall not be
      unreasonably withheld); provided, however, that such consent shall not be
      required for assignment or transfer of this Agreement in connection with an
      assignment or transfer of the License Agreement as permitted under
      Section 12.2 thereof. Notwithstanding the foregoing, any such assignment or
      transfer to an Affiliate shall not relieve the assigning Party of its
      responsibilities for performance of its obligations under this Agreement. The
      rights and obligations of the Parties under this Agreement shall be binding
      upon
      and inure to the benefit of the successors and permitted assigns of the Parties.
      Any attempted assignment not in accordance with this Agreement shall be
      void.

     

    5.3  Further
      Actions.
      Each
      Party agrees to execute, acknowledge and deliver such further instruments,
      and
      to do all such other acts, as may be necessary or appropriate in order to carry
      out the purposes and intent of this Agreement.

     

    5.4  Notices.
      All
      notices under this Agreement by one Party to
      the
      other Party shall be given in
      accordance with Section 12.4 of the License Agreement.

     

    5.5  Amendment.
      No
      amendment, modification or supplement of any provision of this Agreement shall
      be valid or effective unless made in writing and signed by a duly authorized
      representative of each Party.

     

    5.6  Waiver.
      No
      provision of this Agreement shall be waived by any act, omission or knowledge
      of
      a Party or its agents or employees except by an instrument in writing expressly
      waiving such provision and signed by a duly authorized officer of the waiving
      Party.

     

    5.7  Counterparts;
      Facsimile Signatures.
      This
      Agreement may be executed in counterparts and such counterparts taken together
      shall constitute one and the same agreement. This Agreement may be executed
      by
      facsimile signatures, which signatures shall have the same force and effect
      as
      original signatures.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    5.8  Descriptive
      Headings.
      The
      descriptive headings of this Agreement are for convenience only, and shall
      be of
      no force or effect in construing or interpreting any of the provisions of this
      Agreement.

     

    5.9  Governing
      Law; Dispute Resolution.
      This
      Agreement shall be governed and construed in accordance with the laws of the
      State of New York, without giving effect to any choice of law provisions
      thereof. Prior to bringing any legal action against the other Party, the Parties
      shall comply with the dispute resolution procedures required under Section
      12.9
      of the License Agreement with respect to such dispute. 

     

    5.10  Severability.
      If any
      provision hereof should be held invalid, illegal or unenforceable in any respect
      in any jurisdiction, the Parties hereto shall use reasonable efforts to
      substitute, by mutual written consent, valid provisions for such invalid,
      illegal or unenforceable provisions which valid provisions in their economic
      effect are sufficiently similar to the invalid, illegal or unenforceable
      provisions that it can be reasonably assumed that the Parties would have entered
      into this Agreement with such valid provisions. In case such valid provisions
      cannot be agreed upon, the invalid, illegal or unenforceable provisions of
      this
      Agreement shall not affect the validity of this Agreement as a whole, unless
      the
      invalid, illegal or unenforceable provisions are of such essential importance
      to
      this Agreement that it is to be reasonably assumed that the Parties would not
      have entered into this Agreement without the invalid, illegal or unenforceable
      provisions.

     

    5.11  Entire
      Agreement of the Parties.
      This
      Agreement hereby, together with the License Agreement and the Schedules and
      Exhibits hereto and thereto, constitutes and contains the complete, final and
      exclusive understanding and agreement of the Parties and cancels and supersedes
      any and all prior negotiations, correspondence, understandings and agreements
      whether oral or written, between the Parties respecting the subject matter
      hereof. 

     

    5.12  Independent
      Parties.
      The
      relationship between the Parties created by this Agreement is one of independent
      contractors and is not a joint venture, partnership or any similar arrangement.
      Neither Party shall have the power or authority to bind or obligate the other
      except as expressly set forth in this Agreement.

     

    5.13  Accrued
      Rights; Surviving Obligations.
      Unless
      explicitly provided otherwise in this Agreement, termination, relinquishment
      or
      expiration of this Agreement for any reason shall be without prejudice to any
      rights that shall have accrued to the benefit to any Party prior to such
      termination, relinquishment or expiration, including damages arising from any
      breach hereunder. Such termination, relinquishment or expiration shall not
      relieve any Party from obligations which are expressly indicated to survive
      termination or expiration of the Agreement, including, without limitation,
      those
      obligations set forth in Sections 4.4 and 4.5 and Article
      1
      (to the extent required to enforce other surviving rights and/or obligations)
      and Article 5
      hereof. 

     

    5.14  Injunctive
      Relief.
      Inspire
      acknowledges and agrees that InSite would be irreparably damaged if any of
      the
      provisions of this Agreement are not performed by Inspire in accordance with
      their specific terms, and that any breach of, threatened breach of, or failure
      to perform or comply with, this Agreement by Inspire could not be adequately
      compensated in all cases by monetary damages alone. Accordingly, in addition
      to
      any other right or remedy to which InSite may be entitled at law or in equity,
      InSite shall be entitled to temporary, preliminary and permanent injunctive
      relief to prevent breaches or threatened breaches of any of the provisions
      of
      this Agreement, without posting any bond or other undertaking. 

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    5.15  Expenses.
      Unless
      otherwise provided herein, all costs and expenses incurred in connection with
      this Agreement and the transactions contemplated hereby shall be paid by the
      Party that shall have incurred the same and the other Party shall have no
      liability relating thereto.

     

    5.16  No
      Third Party Beneficiaries.
      No
      person or entity other than the Parties hereto and their respective Affiliates,
      successors and permitted assigns shall be deemed an intended beneficiary
      hereunder or have any right to enforce any obligation of this
      Agreement.

     

    5.17  No
      Strict Construction.
      This
      Agreement has been prepared jointly and shall not be strictly construed against
      either Party.

     

    

     

    [Signature
      Page Immediately Follows]

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, duly authorized representatives of the Parties have duly
      executed this Agreement as of the Effective Date.

     

    

     

    
      	
               

            	
               

            	
               

            
	
              INSITE
                VISION INCORPORATED

            
	
               

            	
               

            
	
              By:

            	
               

            	
              _______________________________

            
	
              Name:

            	
               

            	 
	
              Title:

            	
               

            	 
	
               

            
	
              INSPIRE
                PHARMACEUTICALS, INC.

            
	
               

            	
               

            
	
              By:

            	
               

            	
              _______________________________

            
	
              Name:

            	
               

            	 
	
              Title:

            	
               

            	 

    

    

     

    

     

    SIGNATURE
      PAGE TO TRADEMARK LICENSE AGREEMENT

     

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    Schedule
      1

     

    InSite
      Trademarks

     

    

     

    Trademarks

     

    U.S.:

    

    DuraSite

    DuraSite®
      US
      Trademark Number: 1769077

    

    AzaSite

    AzaSiteTM
      US Trademark Application Number: 78/426,374

    

    Canada:

    

    DuraSite

    DuraSite®
      Canadian
      Registration Number 432299

    

    AzaSite

    AzaSiteTM
      Canadian Trademark Application Number 1325128

    

    

    Domain
      Name

     

    www.AzaSite.com

     

    

     

    
      
         

      

      
        9

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