EXHIBIT
      10.1

     

    


    AMENDMENTS
      TO SENIOR SECURED NOTES

    OF
      INSITE VISION INCORPORATED

    


    December
      22, 2006

    


    This
      Amendment Agreement (this “Agreement”)
      is
      made as of December 22, 2006 by and among InSite Vision Incorporated, a Delaware
      corporation (the “Company”),
      and
      each of the holders (the “Holders”)
      of the
      Company’s senior secured notes, dated as of December 30, 2005 and January 11,
      2006 (the “Notes”).

    


    Reference
      is also made to the Amended and Restated Security Agreement, dated as of
      December 30, 2005, by and among the Company, The Bank of New York, N.A. (the
      “Collateral
      Agent”)
      and S.
      Kumar Chandrasekaran, Ph.D (the “Security
      Agreement”)
      and
      the Collateral Agency and Intercreditor Agreement, dated as of December 30,
      2005, by and among the Company, the Collateral Agent and the Holders (the
“Intercreditor
      Agreement,”
and
      together with the Notes and the Security Agreement, the “Loan
      Documents”).
      Capitalized terms not defined herein shall have the meanings ascribed to them
      in
      the Loan Documents. 

    


    The
      undersigned Holders, constituting the Requisite Holders under the Loan
      Documents, hereby amend the Notes as follows: 

    


    (i)
      The
      term “Extended Maturity Date” shall mean February 15, 2007 or, in the event
      consented to in writing by the Requisite Holders in their sole discretion prior
      to February 15, 2007 and consented to by the Company, March 31, 2007;


     

    (ii)
      The
      clause “as reflected in the Company’s 2006 budget, a copy of which has been
      provided to Paramount BioCapital, Inc.” at the end of Section 6(C)(ii) shall be
      amended and restated to state “consistent with such payments made or approved by
      the Company in 2006, which payments were based on the Company’s 2006 budget, a
      copy of which was previously provided to Paramount BioCapital, Inc.”;
      and

     

    (iii)
      The
      following paragraph shall be added to the end of Section 10: “The Company shall
      not sell or issue any equity securities in any transaction or series of
      transactions without the prior written consent of the Requisite Holders, other
      than under employee stock option plans, stock purchase plans and pursuant to
      the
      exercise of warrants,
      in each case,
      in
      effect as of the date hereof or under other existing commitments to issue equity
      securities outstanding as of the date hereof.” 

     

    The
      Holders confirm that the above amendments to the Notes, the effect thereof
      and
      the Maker’s actions consistent herewith, shall not constitute an Event of
      Default or an Event of Acceleration. Except as specifically set forth herein,
      nothing in this Agreement shall be deemed to prejudice any right or remedy
      that
      a Holder may have in the future under the Notes or the Loan Documents. Except
      as
      expressly set forth herein, the terms, provisions and conditions of the Notes
      and the other Loan Documents shall remain in full force and effect and in all
      other respects are hereby ratified and confirmed.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    In
      order
      to induce the Holders to enter into this Agreement, the Company, by its
      execution of a counterpart of this Agreement, represents and warrants that
      after
      giving effect to the amendments contemplated by this Agreement, no Event of
      Acceleration exists under the Notes. Promptly following the date hereof, the
      Company shall reimburse the Holders for the reasonable fees and expenses of
      one
      special counsel to the Requisite Holders actually incurred in an amount not
      to
      exceed $8,000.

    


    This
      Agreement may be executed in any number of counterparts and by different parties
      hereto in separate counterparts, each of which when so executed and delivered
      shall be deemed an original, but all such counterparts together shall constitute
      but one and the same instrument. The Amendment set forth herein shall become
      effective as of the date hereof upon the execution of counterparts hereof by
      Company and the Holders constituting the Requisite Holders. 

    


    THIS
      AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
      ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
      LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
      YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

    


    [Signature
      Page Follows]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	 	 	 
	 	
              INSITE
                VISION INCORPORATED,

              a
                Delaware corporation

            
	 
 	 
 	 

	 	 	By: 
	 	
              

              Name:

            
	 	
              

              Title:

            
	 	
              

            


    

    
      	 	 	 
	 	 	 
	 	
              HOLDERS
                OF NOTES:

            
	 	 
	 
 	 
 	 
NICOLE
              BERG
	 	 	 
	 	 	 
	 	 	By:  
	 	
              
Name:
              Nicole Berg
	 	 
	 	 


    

    
      	 	 	S.
              KUMAR CHANDRASEKARAN, PH.D
	 
 	 
 	 
 
	 	 	By: 
	 	
              
Name:
              S. Kumar Chandrasekaran, Ph.D
	 	 
	 	 


    

    
      	 	 	CLEARWATER
              FUND I, LP
	 
 	 
 	
               

            
	 	 	By: 
	 	
              

              Name:

            
	 	
              
                
Title:

            


    

    
      	 	 	
              

            
	 	 	 
	 	 
	 
 	 
 	CLEARWATER
              OFFSHORE FUND, LTD. 
	 	 	 
	 	  	By:
	 	
              

              Name:

            
	 	
              
Title:


    

    
      	 	 	
              

            
	 	 	 
	 	 	 
	 	 	SHEA VENTURES
              LLC
	 
 	 
 	 
 
	 	 	By: 
	 	
              
Name:
	 	
              
Title:
              

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	 	 	 
	 
 	 
 	 
	 	 	VALESCO HEALTHCARE OVERSEAS  FUND
              LTD.
	 	 	
               

            
	 	 	 
	 	 	By: 
	 	
              
Name: 
	 	
              
Title:
	 	
              

            


    

    
      	 	 	 
	 	 	 
	 	 	VALESCO HEALTHCARE PARTNERS
              I,
              LP
	 
 	 
 	 
 
	 	 	By: 
	 	
              
Name: 
	 	
              
Title:
	 	
              

            


    

    
      	 	 	 
	 	 	 
	 	 	VALESCO HEALTHCARE PARTNERS
              II,
              LP
	 
 	 
 	 
 
	 	 	By: 
	 	
              
Name: 
	 	
              
Title:
	 	
              

            


    

    
      	 	 	 
	 	 	 
	 	 	PINTO TECHNOLOGY VENTURES,
              LP
	 
 	 
 	 
 
	 	 	By: 
	 	
              
Name: 
	 	
              
Title: