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                                                                     EXHIBIT 4.2



                                    AMENDMENT

                                     to the

                        PREFERRED STOCK RIGHTS AGREEMENT

                                     between

                           ISTA PHARMACEUTICALS, INC.

                                       And

                          MELLON INVESTOR SERVICES LLC



        This first Amendment (the "Amendment") to the Preferred Stock Rights
Agreement is made and entered into as of November 18, 2002 between ISTA
PHARMACEUTICALS, INC., a Delaware corporation (the "Company"), and MELLON
INVESTOR SERVICES LLC, as Rights Agent (the "Rights Agent").



                                 R E C I T A L S



        WHEREAS, the Company and Mellon Investor Services LLC entered into the
Preferred Stock Rights Agreement dated as of December 31, 2001(the "Rights
Agreement").

        WHEREAS, Section 27 of the Rights Agreement provides that prior to the
Distribution Date (as defined in the Rights Agreement), the Company may
supplement or amend the Rights Agreement in any respect without the approval of
any holders of Rights (as defined in the Rights Agreement).

        WHEREAS, the Company has entered into a Note and Warrant Purchase
Agreement by and among the Company and certain investors listed on Schedule I
thereto, dated as of September 19, 2002 (the "Bridge Loan Agreement"), pursuant
to which, among other things, the Company issued convertible secured promissory
notes and warrants. In addition, the Company has entered into a Common Stock and
Warrant Purchase Agreement by and among the Company and certain investors listed
on Exhibit A thereto, dated as of September 19, 2002 (the "PIPE Agreement"),
pursuant to which, among other things, the Company will sell and issue Common
Shares and warrants.

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        WHEREAS, on September 11, 2002, the Board of Directors of the Company
resolved to amend the Rights Agreement to render the Rights inapplicable to the
transactions contemplated by the Bridge Loan Agreement and PIPE Agreement.

        WHEREAS, the Company intends to modify the terms of the Rights Agreement
in certain respects as set forth herein, and in connection therewith, is
entering into this Amendment and directing the Rights Agent to enter into this
Amendment.

        NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:

        1. Effect of Amendment. Except as expressly provided herein, the Rights
Agreement shall be and remain in full force and effect.

        2. Capitalized Terms. All capitalized, undefined terms used in this
Amendment shall have the meanings assigned thereto in the Rights Agreement.

        3. Section 1(a) of the Rights Agreement is hereby deleted and replaced
in its entirety with the following new language:

        "(a) "ACQUIRING PERSON" shall mean any Person, other than: (i)
        Sanderling Venture Partners IV, L.P., Sanderling Venture Partners V,
        L.P., Sanderling Venture Partners V Co-Investment Fund, L.P., Sanderling
        V Biomedical Co-Investment Fund, L.P., Sanderling V Limited Partnership,
        Sanderling V Beteiligungs GmbH & Co. KG, and Sanderling V Ventures
        Management, (ii) Donaldson, Lufkin & Jenrette Securities Corp., Sprout
        Entrepreneurs' Fund, L.P., and Sprout Capital IX, L.P., (iii) Investor
        Growth Capital Limited and Investor Group L.P., (iv) Dionis Trust, Grant
        Gund 1978 Trust, G. Zachary Gund 1978 Trust, and Gund Investment
        Corporation, (v) KBL Healthcare, LP and KBL Partnership, LP, (vi)
        Ontario Teachers' Pension Plan, (vii) CDP Capital, and (viii) MDS Life
        Sciences Technology Fund II NC Limited Partnership and MLII
        Co-Investment Fund NC Limited Partnership, and the Affiliates and
        Associates of such Persons, but shall not include the Company, any
        Subsidiary of the Company or any employee benefit plan of the Company or
        of any Subsidiary of the Company, or any entity holding Common Shares
        for or pursuant to the terms of any such plan. Furthermore, none of the
        Distribution Date, Shares Acquisition Date or Triggering Event shall be
        deemed to occur, in each such case, by: (x) the approval, execution,
        delivery or performance of the Note and Warrant Purchase Agreement by
        and among the Company and certain investors listed on Schedule I
        thereto, dated as of September 19, 2002 (the "Bridge Loan Agreement"),
        or the Common Stock and Warrant Purchase Agreement by and among the
        Company and certain investors listed on Exhibit A thereto, dated as of
        September 19, 2002 (the "PIPE Agreement"); or (y) the announcement,
        commencement or consummation of any of the transactions contemplated by
        the Bridge Loan Agreement or the PIPE Agreement. In the event any of the
        transactions contemplated by the Bridge Loan Agreement or PIPE Agreement
        occurs, Common Shares issued or issuable upon conversion or exercise of
        securities issued pursuant to such transactions shall not entitle or
        permit the holders of the Rights to exercise the Rights or otherwise
        affect the rights of the holders of Rights, including giving the holders
        of the Rights the right to acquire

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        securities of any party to the Bridge Loan Agreement or PIPE Agreement.
        Notwithstanding the foregoing, no Person shall be deemed to be an
        Acquiring Person as the result of an acquisition of Common Shares by the
        Company which, by reducing the number of shares outstanding, increases
        the proportionate number of shares beneficially owned by such Person to
        15% or more of the Common Shares of the Company then outstanding;
        provided, however, that if a Person shall become the Beneficial Owner of
        15% or more of the Common Shares of the Company then outstanding by
        reason of share purchases by the Company and shall, after such share
        purchases by the Company, become the Beneficial Owner of any additional
        Common Shares of the Company (other than pursuant to a dividend or
        distribution paid or made by the Company on the outstanding Common
        Shares in Common Shares or pursuant to a split or subdivision of the
        outstanding Common Shares), then such Person shall be deemed to be an
        Acquiring Person unless upon becoming the Beneficial Owner of such
        additional Common Shares of the Company such Person does not
        beneficially own 15% or more of the Common Shares of the Company then
        outstanding. Notwithstanding the foregoing, (A) if the Company's Board
        of Directors determines in good faith that a Person who would otherwise
        be an "Acquiring Person," as defined pursuant to the foregoing
        provisions of this paragraph (a), has become such inadvertently
        (including, without limitation, because (1) such Person was unaware that
        it beneficially owned a percentage of the Common Shares that would
        otherwise cause such Person to be an "Acquiring Person," as defined
        pursuant to the foregoing provisions of this paragraph (a), or (2) such
        Person was aware of the extent of the Common Shares it beneficially
        owned but had no actual knowledge of the consequences of such beneficial
        ownership under this Agreement) and without any intention of changing or
        influencing control of the Company, and if such Person divested or
        divests as promptly as practicable a sufficient number of Common Shares
        so that such Person would no longer be an "Acquiring Person," as defined
        pursuant to the foregoing provisions of this paragraph (a), then such
        Person shall not be deemed to be or to have become an "Acquiring Person"
        for any purposes of this Agreement; and (B) if, as of the date hereof,
        any Person is the Beneficial Owner of 15% or more of the Common Shares
        outstanding, such Person shall not be or become an "Acquiring Person,"
        as defined pursuant to the foregoing provisions of this paragraph (a),
        unless and until such time as such Person shall become the Beneficial
        Owner of additional Common Shares (other than pursuant to a dividend or
        distribution paid or made by the Company on the outstanding Common
        Shares in Common Shares or pursuant to a split or subdivision of the
        outstanding Common Shares), unless, upon becoming the Beneficial Owner
        of such additional Common Shares, such Person is not then the Beneficial
        Owner of 15% or more of the Common Shares then outstanding."

        4. Effective Date. This Amendment shall become effective as of the date
first above written but such effectiveness is contingent upon (a) the execution
of this Amendment by the Company and authorization by the Board of Directors of
the Company approving the Amendment; (b) delivery of a certificate from an
appropriate officer of the Company stating that this Amendment is in compliance
with Section 27 of the Rights Agreement; and (c) the execution and delivery of
this Amendment by the Rights Agent.

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        5. Governing Law. This Amendment shall be governed by, construed and
enforced in accordance with the laws of the State of Delaware without reference
to the conflicts or choice of law principles thereof; provided, however, that
all provisions regarding the rights, duties and obligations of the Rights Agent
shall be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be performed entirely within such
State.

        6. Counterparts. This Amendment may be executed in separate
counterparts, each of which when executed and delivered is an original but all
of which taken together constitute one and the same instrument.

        7. Fax Transmission. A facsimile, telecopy or other reproduction of this
Amendment may be executed by one or more parties hereto, and an executed copy of
this Amendment may be delivered by one or more parties hereto by facsimile or
similar instantaneous electronic transmission device pursuant to which the
signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes. At
the request of any party hereto, all parties hereto agree to execute an original
of the Amendment as well as any facsimile, telecopy or other reproduction
thereof.



                            [Signature page follows]

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        IN WITNESS WHEREOF, the Company and the Rights Agent have caused this
Amendment to be duly executed as of the day first above written.



                                    ISTA PHARMACEUTICALS, INC.



                                    By: /s/ Vicente Anido, Jr., Ph.D.
                                        ----------------------------------------
                                    Name:  Vicente Anido, Jr., Ph.D.
                                    Title: President and Chief Executive Officer



                                    MELLON INVESTOR SERVICES LLC,
                                    as Rights Agent



                                    By: /s/ Michael E. Dzieciolowski
                                        ----------------------------------------
                                    Name:  Michael E. Dzieciolowski
                                    Title: Assistant Vice President