EXHIBIT
      10.53

     

    INSITE
      VISION INCORPORATED

     

    AMENDED
      AND RESTATED SENIOR SECURED NOTE

     

    
      	
              $231,000

            	
              December
                30, 2005

            
	 	
              Alameda,
                California

            


    

     

    WHEREAS,
      InSite
      Vision Incorporated, a Delaware corporation (the “Maker” or the “Company”) and
      S. Kumar Chandrasekaran, Ph.D., (“Holder”) desire to amend and restate that
      certain Senior Secured Note dated as of July 15, 2003 in the manner set forth
      below;

     

    NOW
      THEREFORE,
      the
      Maker and the Holder agree as follows:

     

    FOR
      VALUE RECEIVED,
      Maker
      promises to pay to the order of Holder, at 14 Magee Court, Moraga, CA 94556,
      the
      principal sum of Two Hundred And Thirty One Thousand Dollars ($231,000.00),
      together with all accrued interest thereon from July 15, 2003, the date of
      the
      original issuance, upon the terms and conditions specified below.

     

    1. Loan
      Proceeds.
      The
      proceeds of this Note shall be used for general corporate purposes of the
      Maker.

     

    2. Interest.
      Interest
      shall accrue on the unpaid balance outstanding from time to time under this
      Note
      at the rate of five and one-half percent (5.5%) per annum. All computations
      of
      interest shall be 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 shall become due and payable at the maturity of the Note.
      

     

    3. Due
      Date.
      Unless
      earlier accelerated pursuant to the terms hereof, this Note shall mature and
      the
      outstanding principal balance of this Note together with all accrued interest
      hereunder shall become due and payable in a lump sum on the
      earlier to occur of: (a) March 31, 2007 and (b) within
      ten (10) days after the consummation of a Qualified Financing, a Sale of the
      Company or a Corporate Collaboration. 

     

    For
      purposes hereof, (i) “Qualified Financing” shall mean the closing of an equity
      financing or series of equity financings by the Company resulting in aggregate
      gross cash proceeds (before commissions or other expenses) to the Company of
      at
      least $12,500,000; and (ii) “Sale of the Company” shall mean a transaction (or
      series of related transactions) between the Company and one or more
      non-affiliates, pursuant to which such party or parties acquire (A) capital
      stock of the Company possessing the voting power to elect a majority of the
      board of directors of the Company (whether by merger, consolidation, sale or
      transfer of the Company’s capital stock or otherwise); or (B) all or
      substantially all of the Company’s assets determined on a consolidated basis;
      provided, however, that a transaction (or series of related transactions)
      pursuant to which the then-existing holders of the Company’s capital stock
      immediately prior to such transaction (or series of related transactions)
      continue to own, directly or indirectly, a majority of the outstanding shares
      of
      the capital stock of the Company or such other resulting, surviving or combined
      company resulting from such transaction (or series of related transactions)
      shall not be deemed to be a Sale of the Company and (iii) a “Corporate
      Collaboration” shall mean the closing by the Company of a transaction in which
      any rights to AzaSite are licensed to a third party.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    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. Events
      of Acceleration.
      The
      entire unpaid principal balance of this Note, together with all accrued and
      unpaid interest, shall become immediately due and payable prior to the specified
      due date of this Note upon the occurrence of one or more of the following events
      (each an “Event of Acceleration”): 

     

    (a) 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”), Maker shall (i) commence a voluntary case or proceeding; (ii) consent to
      the entry of an order for relief against it in an involuntary case; (iii)
      consent to the appointment of a trustee, receiver, assignee, liquidator or
      similar official; (iv) make an assignment for the benefit of its creditors;
      or
      (v) admit in writing its inability to pay its debts as they become due;


     

    (b) A
      court
      of competent jurisdiction enters an order or decree under any Bankruptcy Law
      that (i) is for relief against Maker in an involuntary case; (ii) appoints
      a
      trustee, receiver, assignee, liquidator or similar official for Maker or
      substantially all of Maker's properties; or (iii) orders the liquidation of
      Maker, and in each case the order or decree is not dismissed or stayed within
      30
      daysor; or

     

    (c) any
      "Event of Acceleration" or similar event of default under the 2005 Senior
      Secured Notes due June 30, 2006.

     

    6. Security.
      Payment
      of this Note shall be secured by a lien on substantially all of the Maker’s
      assets in accordance with that certain Amended and Restated Security Agreement
      (the “Security Agreement”) dated as of December 30, 2005 by and among the
      Collateral Agent an the other parties thereto. The Maker, however, shall remain
      liable for payment of this Note, and assets of the Maker, in addition to the
      collateral under the Security Agreement, may be applied to the satisfaction
      of
      the Maker’s obligations hereunder. In the case of any Event of Acceleration,
      Holder shall have the rights set forth herein and as set forth in the Security
      Agreement.

     

    7. Collection.
      If
      action
      is instituted to collect this Note, the Maker promises to pay all costs and
      expenses (including reasonable attorney fees) incurred in connection with such
      action.

     

    
      
         

      

      
        2.

        
          

        

      

      
         

      

    

     

    8. Waiver.
      A waiver
      of any term of this Note or of any of the obligations secured thereby must
      be
      made in writing and signed by Holder and any such waiver shall be limited to
      its
      express terms.

     

    No
      delay
      by Holder in acting with respect to the terms of this Note shall constitute
      a
      waiver of any breach, default, or failure of a condition under this Note or
      the
      obligations secured thereby. 

     

    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.

     

    9. Entire
      Agreement.
      In the
      event of any inconsistencies between the terms of this Note and the terms of
      any
      other document related to the loan evidenced by the Note, the terms of this
      Note
      shall prevail.

     

    10. Separate
      Counsel.
      In
      making the loan evidenced by this Note and by Holder’s acceptance of this Note,
      Holder hereby acknowledges that the law firm of O’Melveny & Myers LLP
      (“OMM”) has represented the Maker in the transaction contemplated by this Note
      and has not represented Holder or any of the other Holders in such transaction.
      Holder further acknowledges that Holder has had an adequate and meaningful
      opportunity to review and interpret this Note with separate legal counsel of
      Holder’s own choosing, other than lawyers at OMM, and
      to
      obtain appropriate tax and legal advice with respect of the implications and
      consequences of entering into such transactions.

     

    11. Governing
      Law.
      This
      Note shall be construed in accordance with the laws of the State of California
      without resort to that State’s conflict-of-laws rules.

     

    
      	 	
              INSITE
                VISION INCORPORATED

            
	 	
              __________________________________________

            
	 	
              By:
                _______________________________________

            
	 	
              Its:
                _______________________________________

            


    

    


     

    
      
         

      

      
        3.