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                                                                     EXHIBIT 4.5


                          CERTIFICATE OF DESIGNATIONS,

                             PREFERENCES AND RIGHTS

                                       OF

                           SERIES A-1 PREFERRED STOCK

                                       OF

                           INSITE VISION INCORPORATED

                         (Pursuant to Section 151 of the
                        Delaware General Corporation Law)


        InSite Vision Incorporated, a corporation organized and existing under
the laws of the State of Delaware (the "CORPORATION"), hereby certifies that the
following resolutions were adopted by the Board of Directors of the Corporation
pursuant to authority of the Board of Directors as required by Section 151 of
the Delaware General Corporation Law.

        RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (the "BOARD OF DIRECTORS" or the "BOARD")
in accordance with the provisions of its Certificate of Incorporation and
Bylaws, each as amended and restated through the date hereof, the Board of
Directors hereby authorizes a series of the Corporation's previously authorized
Preferred Stock, par value $0.01 per share (the "PREFERRED STOCK"), and hereby
states the designation and number of shares, and fixes the relative rights,
preferences, privileges, powers and restrictions thereof as follows:

                            I. DESIGNATION AND AMOUNT

        The designation of this series, which consists of 15,000 shares of
Preferred Stock, is the Series A-1 Preferred Stock (the "SERIES A-1 PREFERRED
STOCK") and the face amount shall be One Thousand U.S. Dollars ($1,000.00) per
share (the "FACE AMOUNT").

                                  II. DIVIDENDS

        The holders of the Series A-1 Preferred Stock shall be entitled to
receive dividends at the rate of $60.00 per share (as adjusted for any stock
dividends, combinations, splits or the like with respect to such shares) per
annum, respectively, payable out of funds legally available therefor. Such
dividends shall be cumulative but shall be payable only when, if and as declared
by the Board of Directors.
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                                 III. CONVERSION

        A.     Conversion at the Option of the Holder. Solely upon the
determination by Bausch & Lomb Incorporated or its successors or assigns
(collectively, "B&L") to terminate the license agreement (the "LICENSE
AGREEMENT") between the Corporation and Bausch & Lomb Incorporated (i) pursuant
to Section 19.3 thereof at anytime or (ii) pursuant to Section 19.4 thereof on
or prior to the later to occur of January 1, 2004 or completion of the
initiation of enrollment for Phase II/III clinical trials for the Corporation's
ISV-403 product ((i) or (ii), a "TERMINATION"), holder, at holder's sole option,
may convert shares of Series A-1 Preferred Stock into shares of the
Corporation's Common Stock (the "COMMON STOCK") upon two (2) business days'
written notice (the "NOTICE") within sixty (60) days following the Termination
in accordance with the following provisions (an "OPTIONAL CONVERSION"):

               (i)    if holder elects to convert the Series A-1 Preferred Stock
into Common Stock, all shares of Series A-1 Preferred Stock that may be
converted pursuant to subsection (ii) below must be converted into shares of
Common Stock so that after one such conversion (and the redemption provided for
herein under Article V.A(ii)) no shares of Series A-1 Preferred Stock will
remain outstanding.

               (ii)   shares of Series A-1 Preferred Stock shall be converted
into the aggregate number of shares of Common Stock of the Corporation that is
equal to (A) the aggregate Value of all shares of Series A-1 Preferred Stock
divided by (B) the then current Fair Market Value of the Common Stock; provided,
that in no event shall the total number of shares of Common Stock issued upon
conversion of shares of Series A-1 Preferred Stock exceed 4,300,000 (as adjusted
for any stock dividends, combinations, splits or the like with respect to such
shares) (the "CAP AMOUNT").

               (iii)  The "VALUE" of a share of Series A-1 Preferred Stock for
purposes of a conversion hereunder shall be the purchase price of such share of
Series A-1 Preferred Stock, plus accumulated and unpaid dividends (without any
interest thereon) on such share of Series A-1 Preferred Stock.

               (iv)   The "FAIR MARKET VALUE" of the Corporation's Common Stock
is equal to the average of the closing sales prices for the five trading days
immediately preceding the date of the Notice of conversion of the Corporation's
Common Stock on any national securities exchange, or on the National Association
of Securities Dealers Automated Quotation System (NASDAQ), or if the Common
Stock is not traded on any such market, Fair Market Value Shall mean the per
share value of the Common Stock in the reasonable opinion of an independent
investment banker of national reputation reasonably acceptable to holder and the
Corporation.

        B.     Mechanics of Conversion. In order to effect an Optional
Conversion, the holder of Series A-1 Preferred Stock shall surrender the
certificate or certificates therefor, duly endorsed, at the office of the
Corporation or of any transfer agent for such stock, and shall give written
notice to the Corporation at such office that holder elects to convert the same
and shall state therein the name or names in which holder wishes the certificate
or certificates for shares of Common Stock to be issued. The Corporation shall,
as soon as practicable thereafter, issue and deliver at such office to such
holder of Series A-1 Preferred Stock, a certificate or certificates for


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the number of shares of Common Stock to which holder shall be entitled as
aforesaid. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of surrender of the shares of Series A-1
Preferred Stock to be converted, and the person or persons entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock on
such date.

               (i)    Taxes. The holder shall pay any and all taxes which may be
imposed upon it with respect to the issuance and delivery of the shares of
Common Stock upon the conversion of the Series A-1 Preferred Stock.

               (ii)   No Fractional Share. If any conversion of Series A-1
Preferred Stock would result in the issuance of a fractional share of Common
Stock, such fractional share shall be disregarded and the number of shares of
Common Stock issuable upon conversion of the Series A-1 Preferred Stock shall be
rounded down to the nearest whole number of shares.

                    IV. RESERVATION OF SHARES OF COMMON STOCK

        Upon the initial issuance of the shares of Series A-1 Preferred Stock,
Corporation shall reserve Four Million Three Hundred Thousand (4,300,000) shares
of the authorized but unissued shares of Common Stock (as adjusted for any stock
dividends, combinations, splits or the like with respect to such shares) for
issuance upon conversion of the Series A-1 Preferred Stock and thereafter the
number of authorized but unissued shares of Common Stock so reserved (the
"RESERVED AMOUNT") shall not be decreased and shall at all times be sufficient
to provide for the conversion of the Series A-1 Preferred Stock (as adjusted for
any stock dividends, combinations, splits or the like with respect to such
shares).

               V.     REDEMPTION UPON THE HAPPENING OF CERTAIN EVENTS

        A.     Redemption Events. In the event (each of the events described in
clauses (i)-(iv) being a "REDEMPTION EVENT"):

        (i) of the First Commercial Sale of the Product pursuant to the terms of
        the License Agreement, assuming B&L exercises reasonable efforts to
        commercialize the Product following New Drug Application approval (but
        in any event no later than six (6) months after New Drug Application
        approval);

        (ii) shares of Series A-1 Preferred Stock convert into Common Stock
        pursuant to Article III hereof upon a Termination;

        (iii) that the Corporation, in its sole discretion, elects to repurchase
        and redeem all then outstanding shares of Series A-1 Preferred stock
        upon any (a) acquisition of the Corporation by means of merger, stock
        sale or other form of corporate reorganization in which outstanding
        shares of the Corporation are exchanged for securities, cash or other
        consideration issued, or caused to be issued, by the acquiring
        corporation or its subsidiary (other than a mere reincorporation
        transaction) and pursuant to which the holders of the outstanding voting
        securities of the Corporation immediately prior to such merger or


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        other form of corporate reorganization fail to hold equity securities
        representing a majority of the voting power of the Corporation or
        surviving entity immediately following such merger or other form of
        corporate reorganization or (b) sale of all or substantially all of the
        assets of the Corporation ((a) or (b), a "CORPORATE Change"); or

        (iv) upon termination of the License Agreement upon (a) the
        determination by the Corporation to terminate the License Agreement
        pursuant to Section 19.3 thereof at anytime or (b) the determination by
        B&L to terminate the License Agreement pursuant to Section 19.4 thereof
        after the later to occur of January 1, 2004 or completion of the
        initiation of enrollment of Phase II/III clinical trials for the
        Corporation's ISV-403 product;

then, (x) with respect to the Redemption Events set forth in Article V.A(i),
(ii) and (iv) above, two business days after the applicable Redemption Event and
(y) with respect to the Redemption Event set forth in (iii) above,
contemporaneous with the closing of the Corporate Change (each, a "REDEMPTION
DATE") from any source of funds legally available therefor, the Corporation
shall redeem the Series A-1 Preferred Stock as follows: (a) upon the Redemption
Event set forth in Article V.A(i) above, the Corporation shall redeem (i) for
one dollar ($1.00), two-thirds (66.667%) of the Series A Preferred Stock then
outstanding (including accumulated and unpaid dividends on such shares of Series
A-1 Preferred Stock) and (ii) in exchange for a pre-paid royalty having a value
equal to the aggregate Value of the remaining one-third (33.333%) of the Series
A-1 Preferred Stock then outstanding (the "REMAINING PREFERRED STOCK"), the
Remaining Preferred Stock; (b) upon the Redemption Event set forth in Article
V.A(ii) above, the Corporation shall redeem all then outstanding shares of
Series A-1 Preferred Stock which cannot be converted to Common Stock pursuant to
Article III because of the Cap (the "AVAILABLE SHARES") in exchange for a
promissory note with a principal balance equal to the aggregate Value of the
Available Shares and a rate per annum equal to the Available Shares Interest
Rate (expressed as a percentage) without compounding; (c) upon the Redemption
Event set forth in Article V.A(iii) above, the Corporation shall redeem all then
outstanding shares of Series A-1 Preferred Stock in exchange for a promissory
note with a principal balance equal to the aggregate Value of the Series A-1
Preferred Stock being redeemed and a rate per annum equal to the Corporate
Change Interest Rate (expressed as a percentage) without compounding; and (d)
upon either Redemption Event set forth in Article V.A(iv)(a) or (b) above, the
Corporation shall redeem, at no cost, all then outstanding shares of Series A-1
Preferred Stock (including accumulated and unpaid dividends on such shares of
Series A-1 Preferred Stock). For purposes hereof, the "AVAILABLE SHARES INTEREST
RATE" shall be equal to the "prime" rate of interest published by Citibank N.A.
on the applicable Redemption Date for loans to its commercial customers, plus
two percent (2.00%) per annum. For purposes hereof, the "CORPORATE CHANGE
INTEREST RATE" shall be equal to the quotient of: (i) the product of (a) the
aggregate purchase price paid for the Series A-1 Preferred Stock being redeemed
in exchange for a promissory note and (b) 0.06 over (ii) the aggregate Value of
the Series A-1 Preferred Stock being redeemed in exchange for a promissory note.
In the event of a redemption in connection with a Corporate Change, the
Corporation shall provide holder with at least 5 days advance written notice of
its election to redeem the Series A-1 Preferred Stock.


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        B.     Redemption Procedures. On the Redemption Date, each holder of
Series A-1 Preferred Stock to be redeemed shall surrender to this Corporation
the certificate or certificates representing such shares, and thereupon the
related redemption price (which may be zero) of such shares shall be payable to
the order of the person whose name appears on such certificate or certificates
as the owner thereof and each surrendered certificate shall be cancelled.

        From and after the Redemption Date, unless there shall have been a
default in payment of the related redemption price (which may be zero), all
rights of the holders of shares of Series A-1 Preferred Stock (except the right
to receive the related redemption price (which may be zero) without interest
upon surrender of their certificate or certificates) shall cease with respect to
such shares, and such shares shall not thereafter be transferred on the books of
the Corporation or be deemed to be outstanding for any purpose whatsoever. If
the funds of the Corporation legally available for redemption of shares of
Series A-1 Preferred Stock on any Redemption Date are insufficient to redeem the
total number of shares of Series A-1 Preferred Stock to be redeemed on such
date, those funds which are legally available will be used to redeem the maximum
possible number of such shares ratably among the holders of such shares to be
redeemed based upon their holdings of Series A-1 Preferred Stock. The shares of
Series A-1 Preferred Stock not redeemed shall remain outstanding and entitled to
all the rights and preferences provided herein. At any time thereafter when
additional funds of the Corporation are legally available for the redemption of
shares of Series A-1 Preferred Stock such funds will immediately be used to
redeem the balance of the shares which the Corporation has become obliged to
redeem on any Redemption Date but which it has not redeemed.

             VI. ADJUSTMENTS FOR RECLASSIFICATION AND REORGANIZATION

        If the Common Stock issuable upon conversion of the Series A-1 Preferred
Stock shall be changed into the same or a different number of shares of any
other class or classes of stock, or into any other property whether by
recapitalization, reclassification, reorganization (including a Corporate
Change) or otherwise (other than a subdivision or combination of shares or a
Corporate Change transaction in which the Corporation exercises its redemption
right under Article V.A(iii) above) in any such event the Series A-1 Preferred
Stock shall thereafter be convertible into the kind and amount of stock and
other securities and property receivable upon such recapitalization,
reclassification, reorganization or other change by holders of the maximum
number of shares of Common Stock into which such shares of Series A-1 Preferred
Stock could have been converted immediately prior to such recapitalization,
reclassification or change.

                               VII. VOTING RIGHTS

        The holders of the Series A-1 Preferred Stock have no voting power
whatsoever, except as otherwise provided by the Delaware General Corporation
Law.

                               VIII. MISCELLANEOUS

        A.     Cancellation of Series A-1 Preferred Stock. If any shares of
Series A-1 Preferred Stock are converted or redeemed as provided hereunder, the
shares so converted or redeemed shall be canceled, shall return to the status of
authorized, but unissued preferred stock of no designated series, and shall not
be issuable by the Corporation as Series A-1 Preferred Stock.


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        B.     Lost or Stolen Certificates. Upon receipt by the Corporation of
(i) evidence of the loss, theft, destruction or mutilation of any Preferred
Stock Certificate(s) and (ii) (y) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to the Corporation, or (z) in the case of
mutilation, upon surrender and cancellation of the Preferred Stock
Certificate(s), the Corporation shall execute and deliver new Preferred Stock
Certificate(s) of like tenor and date. However, the Corporation shall not be
obligated to reissue such lost or stolen Preferred Stock Certificate(s) if the
holder contemporaneously requests the Corporation to convert such Series A-1
Preferred Stock.




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        IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Corporation this 3rd day of July, 2002.

                                      INSITE VISION INCORPORATED


                                      By: /s/ S. Kumar Chandrasekaran
                                          -------------------------------------
                                          S. Kumar Chandrasekaran, Ph.D.
                                          President and Chief Executive Officer




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