AMENDMENT NO. 3 TO MARINA VILLAGE OFFICE TECH LEASE

THIS AMENDMENT NO. 3 TO MARINA VILLAGE OFFICE TECH LEASE (this " Third Amendment ") is made and entered into as of November 21, 2006, by and between LEGACY PARTNERS I ALAMEDA, a Delaware limited liability company (" Landlord "), and INSITE VISION INCORPORATED, a Delaware corporation (" Tenant ").

A.   Alameda Real Estate Investments, a California limited partnership (" Alameda "), and Tenant entered into that certain Marina Village Industrial Gross Office Tech Lease dated as of September 1, 1996 (the " Original Lease "), pursuant to which Alameda leased to Tenant and Tenant leased from Alameda (i) certain premises (the " Atlantic Premises ") commonly known as Suite 100, containing approximately 18,869 rentable square feet of space located within that certain building located at 965 Atlantic Avenue (the " Atlantic Building "), and (ii) certain premises (the " Existing Challenger Premises ") commonly known as Suites 103 and 104, containing approximately 10,533 rentable square feet of space located within that certain building located at 2020 Challenger Drive (the " Challenger Building "), all as more particularly described in the Original Lease. The Atlantic Premises and the Existing Challenger Premises are collectively referred to herein as the " Existing Premises ". The Existing Premises are part of a multi-building commercial project known as "Marina Village" and located on an approximately 200-acre site on the estuary side of the island of Alameda (the " Project ").

B.   Alameda and Tenant entered into that certain Amendment No. 1 to Marina Village Office Tech Lease dated as of July 20, 2001 (the " First Amendment "), pursuant to which the parties, among other things, modified Tenant's payment of Operating Expenses and Property Taxes.

C.   Alameda and Tenant entered into that certain Amendment No. 2 to Marina Village Office Tech Lease dated as of August 1, 2003 (the " Second Amendment "), pursuant to which Tenant was provided with a rent credit. The Original Lease, the First Amendment and the Second Amendment are collectively referred to herein as the " Lease ".

D.   Landlord has succeeded to the interests of Alameda as landlord under the Lease.

E.   Landlord and Tenant now desire to amend the Lease to (i) extend the term of the Lease for the Existing Premises, (ii) expand the Existing Premises to include the certain premises (the " Expansion Space ") commonly known as Suite 100, containing approximately 9,721 rentable square feet of space within the Challenger Building and comprising the balance of the rentable area of the Challenger Building, as depicted on the floor plan attached hereto as Exhibit A , and (iii) modify various terms and provisions of the Lease, all as hereinafter provided.

F.   All capitalized terms when used herein shall have the same meanings given such terms in the Lease unless expressly superseded by the terms of this Third Amendment.

NOW THEREFORE, in consideration of the foregoing recitals and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.   Extension of Term . The term of the Lease for the Existing Premises, which is currently scheduled to expire on December 31, 2006, is hereby extended for a period of seven (7) years (the " Extended Term ") commencing as of January 1, 2007 and continuing until December 31, 2013 (the " Extended Term Expiration Date "), unless sooner terminated in accordance with the terms of the Lease, as hereby amended.

2.   Existing Premises Base Rent .

2.1.   Atlantic Premises Base Rent . Notwithstanding anything in the Lease, as hereby amended, to the contrary, commencing on November 1, 2006 and ending on the Extended Term Expiration Date, the Base Rent payable by Tenant for the Atlantic Premises shall be paid separate and apart from the Base Rent payable for the Existing Challenger Premises and the Expansion Space, and shall be as set forth in the following schedule:

2.2.   Existing Challenger Premises Base Rent . Notwithstanding anything in the Lease, as hereby amended, to the contrary, commencing on November 1, 2006 and ending on the Extended Term Expiration Date, the Base Rent payable by Tenant for the Existing Challenger Premises shall be paid separate and apart from the Base Rent payable for the Atlantic Premises and the Expansion Space, and shall be as set forth in the following schedule:

3.   Addition of Expansion Space . Commencing upon the Expansion Space Commencement Date (as defined in Section 4 below), the Existing Premises shall be expanded to include the Expansion Space, thereby increasing the size of the Existing Premises to 39,123 rentable square feet ( i.e. , 18,869 rentable square feet in the Atlantic Premises + 10,533 rentable square feet in the Existing Challenger Premises + 9,721 rentable square feet in the Expansion Space). The Expansion Space shall be leased on the same terms and conditions set forth in the Lease, subject to the modifications set forth in this Third Amendment. Effective from and after the Expansion Space Commencement Date, the " Premises " shall mean the Existing Premises and the Expansion Space.

4.   Expansion Space Commencement Date . For purposes of this Third Amendment, the term " Expansion Space Commencement Date " shall mean the earlier of: (i) the date Tenant commences business operations in substantially all of the Challenger Building; and (ii) the date of Substantial Completion of the Challenger Tenant Improvements (as defined in Exhibit B attached hereto), subject to acceleration for Tenant Delays as defined and provided in Exhibit B . The Expansion Space Commencement Date is anticipated to be April 1, 2007. The term of the Expansion Space (the " Expansion Space Term ") shall commence on the Expansion Space Commencement Date and expire coterminously with the Extended Term with respect to the Existing Premises on December 31, 2013. Notwithstanding the foregoing, if Landlord is unable to Substantially Complete the Challenger Tenant Improvements on or before July 1, 2007 (the “ Delivery Outside Date ”), as such date may be extended as a result of any Tenant Delays and/or any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts of God, inability to obtain services, labor, or materials or reasonable substitutes therefore, governmental actions or inactions, civil commotions, fire or other casualty, and other causes beyond the reasonable control of Landlord (collectively, the “ Force Majeure ”), then Tenant shall receive one-half (1/2) of a day of abated Base Rent for the Expansion Space for each day during the period commencing upon the Delivery Outside Date (as the same may be extended by Tenant Delays and Force Majeure delays) and expiring on the date upon which Landlord Substantially Completes the Challenger Tenant Improvements (which abated Base Rent shall be applied toward the Base Rent first due and payable for the Expansion Space following the Expansion Space Commencement Date pursuant to Section 6 below). The date that the Expansion Space Commencement Date actually occurs shall be confirmed by the parties in writing in an Amendment No. 4 to Marina Village Office Tech Lease (" Amendment No. 4 "), which Amendment No. 4 shall be in substantially the form of Exhibit C attached hereto. Amendment No. 4 shall be delivered by Landlord to Tenant after the Expansion Space Commencement Date occurs, and Tenant shall execute and return such Amendment No. 4 to Landlord within five (5) days after Tenant's receipt thereof.

6.   Expansion Space Base Rent . During the Expansion Space Term, the Base Rent payable by Tenant for the Expansion Space shall be calculated separate and apart from the Base Rent payable for the Existing Premises ( i.e. , the Atlantic Premises and the Existing Challenger Premises), and shall be as set forth in the following schedule:

* Not applicable if the Expansion Space Commencement Date occurs after December 31, 2006.

** If the Expansion Space Commencement Date occurs after January 1, 2007, payment of Base Rent at such rental rate shall commence on the Expansion Space Commencement Date and not January 1, 2007.

7.   Tenant's Percentage Share . Due to the revised number of rentable square feet contained within the Premises ( i.e. , the Existing Premises and the Expansion Space) as compared to the Existing Premises, from and after the Expansion Space Commencement Date, the "Tenant's Percentage Share" Section of the Basic Lease Information attached to the Original Lease of the First Amendment shall be deleted in its entirety and replaced with the following:

8.   Tenant Improvements . Landlord shall construct certain Tenant Improvements (as defined in the Tenant Work Letter attached hereto as Exhibit B ) for the Premises pursuant to and in accordance with the Tenant Work Letter attached to this Third Amendment as Exhibit B .

9.   Cap on Controllable Expenses . Notwithstanding anything to the contrary contained in the Lease, as hereby amended, during the Extended Term, the aggregate Controllable Expenses (as hereinafter defined) included in Operating Expenses in any calendar year during the Extended Term, shall not increase by more than ten percent (10%) on an annual basis, over the actual aggregate Controllable Expenses included in Operating Expenses for any preceding calendar year. The foregoing cap on Controllable Expenses shall not apply to any renewal of the Extended Term and shall not apply to Property Taxes. For purposes of this Section 9, " Controllable Expenses " shall mean all Operating Expenses except: (i) insurance carried by Landlord with respect to the Project and/or the operation thereof; and (ii) the cost of utilities.

10.   Option to Extend Extended Term . Landlord hereby grants to Tenant one (1) option to extend the Extended Term for the entire Premises ( i.e. , the Existing Premises and the Expansion Space) for a period of five (5) years (" Option Term "), which option shall be exercisable only by written Exercise Notice (as defined below) delivered by Tenant to Landlord as provided below.

10.1.   Option Rent . The annual Base Rent payable by Tenant during the Option Term (the " Option Rent ") shall be equal to the "Fair Market Rental Rate" for the Premises. As used herein, the " Fair Market Rental Rate " shall mean the annual Base Rent at which non-equity tenants, as of the commencement of the Option Term, will be leasing non-sublease space comparable in size, location and quality to the Premises for a comparable term, which comparable space is located in the Atlantic Building and/or the Challenger Building, the other existing buildings in the Project which are office buildings, and in other comparable single story, first-class office buildings in the Alameda Office Market (collectively, " Comparable Buildings "), taking into consideration all free rent and other out-of-pocket concessions generally being granted at such time for such comparable space for the Option Term (including, without limitation, any tenant improvement allowance provided for such comparable space, with the amount of such tenant improvement allowance to be provided for the Premises during the Option Term to be determined after taking into account the age, quality and layout of the tenant improvements in the Premises as of the commencement of the Option Term with consideration given to the fact that the improvements existing in the Premises are specifically suitable to Tenant). All other terms and conditions of the Lease, as hereby amended, shall apply throughout the Option Term; however, Tenant shall, in no event, have the option to extend the Extended Term beyond the Option Term described in this Section 10.

10.2.   Exercise of Option . The option contained in this Section 10 shall be exercised by Tenant, if at all, only in the following manner: (i) Tenant shall deliver written notice (" Interest Notice ") to Landlord not more than twelve (12) months nor less than ten (10) months prior to the expiration of the Extended Term stating that Tenant may be interested in exercising its option; (ii) Landlord, after receipt of Tenant's notice, shall deliver notice (the " Option Rent Notice ") to Tenant not less than nine (9) months prior to the expiration of the initial Lease Term setting forth the Option Rent; and (iii) if Tenant wishes to exercise such option, Tenant shall, on or before the date (the " Exercise Date ") which is eight (8) months prior to the expiration of the Extended Term, exercise the option by delivering written notice (" Exercise Notice ") thereof to Landlord. Concurrently with Tenant's delivery of the Exercise Notice, Tenant may object, in writing, to Landlord's determination of the Fair Market Rental Rate for the Option Term set forth in the Option Rent Notice, in which event such Fair Market Rental Rate shall be determined pursuant to Section 10.3 below. Tenant's failure to deliver the Interest Notice or Exercise Notice on or before the applicable delivery dates therefore specified hereinabove shall be deemed to constitute Tenant's waiver of its extension right hereunder. If Tenant timely delivers the Exercise Notice but fails to timely object in writing to Landlord's determination of the Fair Market Rental Rate set forth in the Option Rent Notice, Tenant shall be deemed to have accepted Landlord's determination thereof and the following provisions of Section 10.3 shall not apply.

(a)   Landlord and Tenant shall each appoint one (1) arbitrator who shall by profession be a real estate leasing broker who shall have (i) been active over the ten (10) year period ending on the date of such appointment in the leasing of Comparable Buildings, (ii) no financial interest in Landlord or Tenant, and (iii) not represented or employed or engaged the appointing party during such 10-year period. The determination of the arbitrators shall be limited solely to the issue of whether Landlord's or Tenant's submitted Fair Market Rental Rate is the closer to the actual Fair Market Rental Rate as determined by the arbitrators, taking into account the requirements with respect thereto set forth in Section 10.1 above. Each such arbitrator shall be appointed within fifteen (15) days after the applicable Outside Agreement Date.

(b)   The two (2) arbitrators so appointed shall, within fifteen (15) days of the date of the appointment of the last appointed arbitrator, agree upon and appoint a third arbitrator who shall be qualified under the same criteria set forth hereinabove for qualification of the initial two (2) arbitrators.

(c)   The three (3) arbitrators shall, within thirty (30) days of the appointment of the third arbitrator, reach a decision as to which of Landlord's or Tenant's submitted Fair Market Rental Rate is closer to the actual Fair Market Rental Rate and shall select such closer determination as the Fair Market Rental Rate and notify Landlord and Tenant thereof.

(d)   The decision of the majority of the three (3) arbitrators shall be binding upon Landlord and Tenant.

(e)   If either Landlord or Tenant fails to appoint an arbitrator within the time period specified in Section 10.1(a) above, the arbitrator appointed by one of them shall reach a decision, notify Landlord and Tenant thereof, and such arbitrator's decision shall be binding