**EXHIBIT10.1**

**CONFIDENTIALSETTLEMENT AGREEMENT**

This Settlement Agreement (“Agreement”) is enteredinto between Advanced Medical Optics, Inc., and all of its Affiliates andsuccessors-in-interest, on the one hand (“AMO”) and Alcon, Inc., AlconLaboratories, Inc., Alcon Manufacturing, Ltd., and all of their Affiliates andsuccessors in-interest, on the other hand (“Alcon”) (collectively with AMO, “theParties”) as of June 30, 2006 (“Effective Date”).

WHEREAS, certain of the Parties are presently engaged in litigationinvolving patent infringement and other claims in *Advanced Medical Optics, Inc. v. Alcon Laboratories, Inc., et al.*,No. 03-1095-KAJ (D. Del.), on appeal as *AdvancedMedical Optics, Inc. v. Alcon Laboratories, Inc., et al.*, Nos. 06-1212and 06-1248 (Fed. Cir.) (“the Delaware Litigation”); *Alcon Laboratories, Inc. v. Advanced Medical Optics, Inc.*,No. 4-04-CV-080Y (D.C. Tex.) (“the Ft. Worth I Litigation”); *Alcon Laboratories, Inc. v. Advanced Medical Optics,Inc.*, No. 4-05CV-496-A (N.D. Tex.) (“the Ft. Worth II Litigation”);and *Alcon Laboratories, Inc. v. AdvancedMedical Optics, Inc.*, No. 3-05-CV-1823-L (N.D. Tex.) (“the DallasLitigation”) (collectively “the Litigation”); and

WHEREAS, a non-final judgment in favor of AMO was entered in the DelawareLitigation, but a motion for new trial remains pending and the appeals fromsaid judgment are presently deactivated; and

WHEREAS, the other Litigation actions are still involved in pre-trialproceedings; and

**CONFIDENTIAL SETTLEMENT AGREEMENT**

**ALCON MFG. LTD. /ALCON LAB., INC. & ADVANCEDMEDICAL OPTICS, INC.**

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WHEREAS, recognizing the expense, time, and risk associated withcontinued litigation, the Parties have agreed to settle the Litigation, withoutany party admitting liability to any other party, on the terms and conditionsset forth in this Agreement; and

WHEREAS, the Parties intend to resolve all patent infringement or otherlawsuits between them that have been or could have been brought, based upontheir phacoemulsification products as made, used and sold on or before theEffective Date of this Agreement;

NOW, THEREFORE, in consideration of the recitals stated above, and the agreementsand promises set forth below and other good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, the Parties agree asfollows:

**I.****              Definitions**

**1.0.        **Thefollowing capitalized terms used in this Agreement shall have the meanings setforth below:

**1.1.         “AlconProducts”**shall mean any phacoemulsification surgicalequipment as made, used, sold, offered for sale, leased, licensed, imported, orotherwise disposed of by or on behalf of Alcon or any of its predecessors ininterest, and commercially available to end users on or before the EffectiveDate (including units of such equipment actually made, used, sold, offered forsale, leased, licensed, imported or otherwise disposed of after the EffectiveDate), whether under a trademark or service mark owned or licensed by Alcon orotherwise, including without limitation: phacoemulsification or multifunctionalconsoles and carts; IV poles, pole extenders and hangers; hand pieces;accessories and consumables (including without limitation cassettes, tubingsets, hand piece tips, and infusion sleeves, but not including intraocularlenses,

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irrigation fluids or viscoelastic materials).  Alcon Products specifically include the Universal,Universal II, Series 10,000, Legacy, Legacy Advantec, Legacy Everest, andInfiniti phacoemulsification systems as commercially available to end users onor before the Effective Date.

**1.2.         *“*AMO Products”**shallmean any phacoemulsification surgical equipment as made, used, sold, offeredfor sale, leased, licensed, imported, or otherwise disposed of by or on behalf ofAMO or any of its predecessors in interest, and commercially available to endusers on or before the Effective Date (including units of such equipmentactually made, used, sold, offered for sale, leased, licensed, imported, orotherwise disposed of after the Effective Date), whether under a trademark orservice mark owned or licensed by AMO or otherwise, including withoutlimitation: phacoemulsification or multifunctional consoles and carts; IVpoles, pole extenders and hangers; hand pieces; accessories and consumables(including without limitation cassettes, tubing sets, hand piece tips, andinfusion sleeves, but not including intraocular lenses, irrigation fluids orviscoelastic materials).  AMO Productsspecifically include the Prestige, Sovereign, Sovereign Compact, Diplomate,Diplomax, and Diplomax II phacoemulsification systems as commercially availableto end users on or before the Effective Date.

**1.3.         “AlconPatents”**shall mean (i) all issued United States patents ownedby Alcon as of the Effective Date or for which Alcon has the right, without theconsent of third parties, to grant sublicenses as of the Effective Date, (ii)all United States patent applications owned by Alcon as of the Effective Dateor for which Alcon has the right, without the consent of third parties, togrant sublicenses as of the Effective Date, and all United States patents thatmay issue therefrom after the Effective Date, (iii) all divisionals,continuations, continuations-in-part,

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reissues or reexaminations of any of the foregoingUnited States patents or United States patent applications, even if filed,requested and/or issued after the Effective Date, and (iv) any foreigncounterpart of any of the foregoing United States patents or United Statespatent applications, including divisionals, continuations,continuations-in-part, reissues or reexaminations thereof.

**1.4.         “AMOPatents”**shall mean (i) all issued United States patentsowned by AMO as of the Effective Date or for which AMO has the right, withoutthe consent of third parties, to grant sublicenses as of the Effective Date, (ii)all United States patent applications owned by AMO as of the Effective Date orfor which AMO has the right, without the consent of third parties, to grantsublicenses as of the Effective Date, and all United States patents that mayissue therefrom after the Effective Date, (iii) all divisionals, continuations,continuations-in-part, reissues or reexaminations of any of the foregoingUnited States patents or United States patent applications, even if filed,requested and/or issued after the Effective Date, and (iv) any foreigncounterpart of any of the foregoing United States patents or United Statespatent applications, including divisionals, continuations,continuations-in-part, reissues or reexaminations thereof.

**1.5          “Affiliate”**shall mean, when used in conjunction with the name of a party to thisAgreement, all entities, now or hereafter, controlling, controlled by, or undercommon control with, the party and for these purposes, “control” (and itscorrelative meaning, “controlling,” “controlled by,” and “under common controlwith”) means possession, directly or indirectly, of the power to direct orcause the direction of the management or policies of the entity in question(whether through majority ownership of voting securities or other ownershipinterests or by agreement, including without limitation partnership ormanagement agreements).

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**1.6          “Commerciallyavailable to end users”**, even though not capitalized, shallmean that a consumer of phacoemulsification surgical equipment could have ordered andobtained delivery of a product and/or the Feature in question, subjectonly to normal inventory and installation limitations.  Productsand/or Features that are only available to endusers in proto-types, for clinical testing or evaluation, or forproduct development purposes and products and/or Features that are availableonly under confidentiality agreements or pursuant to a consulting relationshipbetween the consumer and the supplier are not “commercially availableto end users.”

**II.****           Release and Dismissal of the Litigation**

**2.1.         Dismissal**. Within five (5) business days of the executionof this Agreement by all Parties, the Parties shall file, in the respectivedistrict courts in each of the Ft. Worth I Litigation, the Ft. Worth IILitigation, and the Dallas Litigation, a mutually agreed upon stipulation ofdismissal of all of Alcon’s claims and all of AMO’s counterclaims, withprejudice and without costs.  Within ten(10) days of the entry of an order granting the motion to vacate described inparagraph 2.2 below, the Parties shall file a mutually agreed upon stipulationof dismissal with prejudice and without costs in the district court in theDelaware Litigation and in Appeal Nos. 06-1212 and 06-1248 in the U.S. Court ofAppeals for the Federal Circuit.

**2.2.         VacatingDelaware Judgment**.  Withinfive (5) business days of AMO’s receipt of the payment specified in paragraph4.1 below, AMO shall file a mutually agreed upon motion to vacate and declaremoot the judgment and injunction in the Delaware Litigation.  AMO agrees that it shall not thereafter seekto collect from Alcon at any time any amounts due AMO as a

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result of the judgment entered in the DelawareLitigation, whether damages, interest, enhanced damages, costs, attorney’sfees, or otherwise, and shall not seek any further temporary or permanentinjunctive relief as a result of the Delaware Litigation.  In the event that the court in the DelawareLitigation denies the motion to vacate or, within thirty (30) days of filingthe court fails to decide said motion, the Parties shall file a mutually agreedupon stipulation of dismissal with prejudice and without costs and asatisfaction of judgment in the district court in the Delaware Litigation, anda stipulation of dismissal with prejudice and without costs in Appeal Nos.06-1212 and 06-1248 in the U.S. Court of Appeals for the Federal Circuit.  AMO further agrees that any claims againstAlcon based on the judgment entered in the Delaware Litigation are foreverreleased and waived.

**2.3.         Releaseby Alcon**.  Inconsideration of the value provided by AMO hereunder, Alcon, on behalf ofitself, its shareholders, officers, directors, employees, predecessors,successors, and assigns, hereby irrevocably releases AMO and its shareholders,officers, directors, employees, customers, licensees, distributors, third partymanufacturers and the end users of any AMO Products, from any and all claims,counterclaims, actions, causes of action (derivative or direct), known orunknown, accrued or unaccrued, suspected or unsuspected, whether at law, inequity, or both, and whether for infringement of a patent identified inparagraph 1.3, above, or otherwise, which have been, could have been, or couldin the future be asserted with respect to any AMO Products made, sold, on sale,offered for sale, leased, or otherwise distributed or offered for distribution fromthe beginning of time up to and including the Effective Date, and from anyclaims or rights to compensation, damages, costs, expenses or fees (includingattorneys’ fees) of any kind or description relating thereto, except as specifically

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set forth in this Agreement.  The releases of this paragraph 2.3 also applyto Allergan, Inc. but only to the extent a claim or cause of action would bereleased under this paragraph 2.3 if made against AMO, and such claim or causeof action arises from the Phacoemulsification Equipment (as defined inparagraph 3.5.6 below) business of Allergan, Inc. prior to the spin-off of AMOfrom Allergan, Inc.

**2.4.         Releaseby AMO**.  Upon receiptof the payment by Alcon provided herein, and in consideration of this and theother value provided by Alcon hereunder, AMO, on behalf of itself, itsshareholders, officers, directors, employees, predecessors, successors, andassigns, hereby irrevocably releases Alcon, its predecessors, and their shareholders,officers, directors, employees, customers, licensees, distributors, third partymanufacturers and the end users of any Alcon Products, from any and all claims,counterclaims, actions, causes of action (derivative or direct), known orunknown, accrued or unaccrued, suspected or unsuspected, whether at law, inequity, or both, and whether for infringement of a patent identified inparagraph 1.4, above, or otherwise, which have been, could have been, or couldin the future be asserted with respect to any Alcon Products made, sold, onsale, offered for sale, leased, or otherwise distributed or offered fordistribution from the beginning of time up to and including the Effective Date,and from any claims or rights to compensation, damages, costs, expenses or fees(including attorneys’ fees) of any kind or description relating thereto, exceptas specifically set forth in this Agreement.

**2.5.         GlobalScope**.  The releasesset forth in paragraphs 2.3 and 2.4, above, are global in scope and shall beapplied and enforced beyond the territorial boundaries of the United States tothe Parties’ activities anywhere in the world.

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**2.6          ExpressReservation of Rights**. Notwithstanding any of the other provisions of this Agreement, includingthe releases set forth in paragraphs 2.3 and 2.4 above, each party expresslyreserves the right, in the event that such party is accused of patentinfringement in any future litigation, to challenge, on any basis, thevalidity, enforceability or claimed infringement of the patent or patents assertedagainst such party, including without limitation the Alcon Patents, the AMOPatents, and any patents the Parties may own in the future.

**2.7          ExpressWaiver of Laws Limiting General Releases**.  The Parties understand the significance ofand, as further consideration for this Agreement, expressly waive any right orbenefit that may be available under Section 1542 of the California Civil Codeor any similar laws.  Section 1542 of the California Civil Code provides:

**“A general release does not extend to claims whichthe creditor does not know or suspect to exist in his favor at the time ofexecuting the release, which if known by him must have materially affected hissettlement with the debtor.”**

**III.****          Covenants Not to Sue, Cross-Licenses,Enforcement and Additional Licenses**

**3.1.         Alcon’sCovenants Not to Sue**.  Alconhereby covenants not to sue AMO under any of the patents asserted by Alcon inthe Ft. Worth I Litigation, the Ft. Worth II Litigation and the DallasLitigation at any time after the Effective Date.  Alcon further covenants not to sue AMO’scustomers, licensees, distributors, resellers, or the end users of any AMOProducts under any of the patents asserted by Alcon in the Ft. Worth ILitigation, the Ft. Worth II Litigation and the Dallas Litigation at any timeafter the Effective Date.  Alcon furthercovenants not to sue AMO on any claim of patent infringement, breach ormisappropriation of any trade secret, or any

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other intellectual property rights (excludingcopyright and trademark) based upon the manufacture, use, sale, offer for sale,lease, license, importation, or other disposal of the AMO Products, whether theintellectual property rights to support such a claim are now owned or hereafteracquired by Alcon.

**3.2.         AMO’sCovenants Not to Sue**.  AMOhereby covenants not to sue Alcon under any of the patents asserted by AMO inthe Delaware Litigation at any time after the Effective Date.  AMO further covenants not to sue Alcon’scustomers, licensees, distributors, resellers, or the end users of any AlconProducts under any of the patents asserted by AMO in the Delaware Litigation atany time after the Effective Date.  AMOfurther covenants not to sue Alcon on any claim of patent infringement, breachor misappropriation of any trade secret, or any other intellectual propertyrights (excluding copyright and trademark) based upon the manufacture, use,sale, offer for sale, lease, license, importation, or other disposal of theAlcon Products, whether the intellectual property rights to support such aclaim are now owned or hereafter acquired by AMO.

**3.3          Licenseto AMO**.  Alcon herebygrants to AMO a nonexclusive, fully paid up, global license, with no right tosublicense, under all Alcon Patents, to make, have made, use, sell, offer forsale and import: 1) any AMO Product, and 2) any Phacoemulsification Equipmentsold by or on behalf of AMO after the Effective Date to the extent that suchequipment includes one or more Existing Features of AMO Products and/or one or moreAdditional Features other than Non-Licensed Additional AMO Features.

**3.4          Licenseto Alcon**.  AMO grantsto Alcon a nonexclusive, fully paid up, global license, with no right tosublicense, under all AMO Patents, to make, have made, use, sell, offer

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for sale and import: 1) any Alcon Product, and 2) anyPhacoemulsification Equipment sold by or on behalf of Alcon after the EffectiveDate to the extent that such equipment includes one or more Existing Features ofAlcon Products and/or one or more Additional Features other than Non-LicensedAdditional Alcon Features.

**3.5          DefinitionsSpecific to Licensing Provisions**.  As used in this Agreement,the following capitalized terms shall have the meanings set forth below:

**3.5.1****                  “Feature”**meansany function or structural design/configuration; any mechanism; anyinformational, operational or performance capability; and/or any software orfirmware.

**3.5.2****                  “ExistingFeature”**means any Feature that is or was commercially available to endusers on or before the Effective Date.

**3.5.3****                  “AdditionalFeature”**means any Feature, including a modified Existing Feature, that isnot an Existing Feature.

**3.5.4****                  “Non-LicensedAdditional AMO Feature”**means an Additional Feature on AMO PhacoemulsificationEquipment that can in good faith be asserted to infringe a claim of an issued AlconPatent or a claim of any other issued patent owned or exclusively licensed byAlcon, where such patent claim cannot reasonably be or could not reasonablyhave been asserted against any of the Existing Features or any combination ofthe Existing Features of the AMO Products.

**3.5.5****                  “Non-LicensedAdditional Alcon Feature”**means an Additional Feature on Alcon PhacoemulsificationEquipment that can in good faith be 

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asserted to infringe a claim of an issued AMO Patentor a claim of any other issued patent owned or exclusively licensed by AMO,where such patent claim cannot reasonably be or could not reasonably have beenasserted against any of the Existing Features or any combination of the ExistingFeatures of the Alcon Products.

**3.5.6****                  “PhacoemulsificationEquipment”**means surgical equipment for use in performingphacoemulsification surgery including without limitation: phacoemulsification ormultifunctional consoles and carts, IV poles and pole extenders, handpieces,accessories and consumables including without limitation cassettes, tubingsets, tips, and sleeves; but not including intraocular lenses, irrigationfluids or viscoelastic materials.

**3.6****          Burden of Proof**.  In any dispute between the Parties, the partyasserting that its product had an Existing Feature****asdefined in paragraph 3.5.2 above shall bear the burden of proving by apreponderance of the evidence that the Feature qualifies as an ExistingFeature, and the party asserting infringement shall have the burden of provingby a preponderance of the evidence that a Feature qualifies as a Non-LicensedAdditional Feature as defined in paragraph 3.5.4 or 3.5.5 above.

**3.7          NoPatent Assignment**.  Nothingin this Agreement is intended to nor shall it constitute an assignment of anyownership rights in the Alcon Patents to AMO, or assignment of any ownershiprights in the AMO Patents to Alcon.  Alconshall not have any right to sue third parties for infringement of the AMOPatents, nor shall AMO have any right to sue third parties for infringement ofthe Alcon Patents.  The Partiesunderstand and agree that they are not

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required to record the licenses granted under paragraphs3.3 or 3.4 in any public or governmental register in the United States or anyforeign country, and shall not do so.

**3.8          Enforcement**. Each party shall make its ownindependent judgment whether or not to enforce against any third party any ofits patents licensed under this Agreement in court, by license, or otherwise,and no party has any obligation to the other party to cooperate in such effortof another party.  Any request for suchcooperation shall be made to the General Counsel (or other in-house attorneydesignated to receive notices under this Agreement) of the party to whom therequest is made.

**3.9          AdditionalLicenses**.  Each partyretains full discretion to grant additional licenses under its own patents tothird parties without consultation with the other party.  Nothing in this Agreement shall preclude aparty from granting such licenses under its own patents.

**IV.           Payment**

**4.1.         Alcon’sPayment**.  Alcon shallpay AMO one hundred and twenty-one million dollars ($121,000,000.00) in UnitedStates currency within ten (10) business days of the execution of thisAgreement by all Parties.  Payment shallbe made by wire transfer to the following account and in accordance with thefollowing instructions:

Bank Name:

ABA:

SWIFT:

Account Name:

Acct. No.:

The payment specified inthis paragraph 4.1 shall be in full satisfaction of the rights surrendered byAMO in vacating the judgment and in junction entered in the Delaware Litigationand in

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consideration of the dismissals of the claims andcounterclaims set forth in paragraphs 2.1 and 2.2 above.  No other payment will be made by either partyto the other party at any time hereafter in connection with the Litigation.

**4.2          Other Consideration**.  Alcon shall grant AMO the rights andcovenants conveyed in this Agreement in consideration for those rights andcovenants AMO conveys to Alcon in this Agreement.  The Parties acknowledge the sufficiency ofthe consideration exchanged under this Agreement.

**V.            Representationsand Warranties**

**5.1.         AMORepresentations and Warranties**.  AMO represents and warrants to Alcon that (a)it has all requisite legal right, power and authority to execute, deliver andperform this Agreement; (b) it owns, or owns the exclusive right to assert, theAMO Patents applicable to Alcon Products, and that no other party owns anyright to recover for infringement of the AMO Patents applicable to AlconProducts; (c) all named inventors of any of the AMO Patents applicable to AlconProducts have retained no rights (including without limitation rights to sueand rights of reversion) in such patents that would permit them to make a claimagainst Alcon; (d) it has not granted and will not grant any licenses or otherrights, under the AMO Patents or otherwise, that would conflict with thelicenses and rights granted to Alcon hereunder or prevent Alcon’s exercise ofthese licenses and rights; and (e) from March 21, 2006 to the date of executionof this Agreement by all Parties, AMO has not added to or modified the AMOProducts to make new functions or performance capabilities commerciallyavailable to end users.  AMO representsand warrants that there are no liens, conveyances, mortgages, assignments,

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encumbrances, or other agreements that would preventor impair the full and complete exercise of the terms of this Agreement.

**5.2.         AlconRepresentations and Warranties**.  Alcon represents and warrants to AMO that (a)it has all requisite legal right, power and authority to execute, deliver and performthis Agreement; (b) it owns, or owns the exclusive right to assert, the AlconPatents applicable to AMO Products, and that no other party owns any right torecover for infringement of the Alcon Patents applicable to AMO Products; (c)all named inventors of any of the Alcon Patents applicable to AMO Products haveretained no rights (including without limitation rights to sue and rights ofreversion) in such patents that would permit them to make a claim against AMO;(d) it has not granted and will not grant any licenses or other rights, underthe Alcon Patents or otherwise, that would conflict with the licenses andrights granted to AMO hereunder or prevent AMO’s exercise of these licenses andrights; and (e) from March 21, 2006 to the date of execution of this Agreementby all Parties, Alcon has not added to or modified the Alcon Products to makenew functions or performance capabilities commercially available to end users.  Alcon represents and warrants that there areno liens, conveyances, mortgages, assignments, encumbrances, or otheragreements that would prevent or impair the full and complete exercise of theterms of this Agreement.

**5.3          Indemnificationfor Breach of Representations and Warranties**.  In the event of a material breach of any ofthe representations and warranties under this Section V, the party harmed bysuch breach shall be indemnified and held harmless by the party giving therepresentations or warranties from and against all claims, costs, attorneys’fees and other expenses brought against or incurred by said harmed party as aconsequence of such breach.  If

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any party becomes aware that it is in breach ofparagraph 5.1 (b) or (c) or 5.2 (b) or (c) that is not material to the licensesand other rights granted under this Agreement (e.g. failure to perfect title inor an assignment of a patent that is not relevant to any Existing Feature ofthe products of the licensed party), the party making the representation orwarranty causing said technical breach shall promptly cure said breach.  A party that becomes aware of such anon-material breach by the other shall give notice in accordance with paragraph8.2 and a reasonable opportunity to cure before initiating dispute resolutionunder Section VII of this Agreement.  Anydemand for indemnification under this paragraph 5.3 shall be subject to theprovisions of Section VII (Future Dispute Resolution) of this Agreement.

**5.4          Assuranceof Cooperation to Implement Agreement**.  AMO and Alcon each agree to promptly executeand deliver at no additional cost to the other such additional releases, agreements,instruments or other documents as may be required to ensure that neither partyhas any past, current or future liability satisfied or released by thisAgreement and as otherwise reasonably necessary to give effect to thisAgreement.

**VI.           Termand Termination**

**6.1.         EffectiveDate**.  This Agreementshall remain in effect until the expiration of the last of the AMO Patents andAlcon Patents or the expiration of any claims within the scope of paragraphs3.3 and 3.4, above, whichever is later, unless earlier terminated pursuant toparagraph 6.2 below.

**6.2.         Termination**. This Agreement may only be terminatedupon the mutual written agreement of the Parties.

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**6.3.         Survival**. The provisions of paragraphs 2.3, 2.4,2.5, 2.6 and 2.7 of Section II, paragraphs 3.1, 3.2, 3.6, 3.7, 3.8 and 3.9 ofSection III, Section V, paragraph 6.3 of Section VI, and Section VIII shallsurvive any termination of this Agreement.

**VII.         FutureDispute Resolution**

**7.1.         CEODiscussions**.  Before initiatingany litigation, the Parties shall endeavor to amicably resolve any dispute arisingout of this Agreement or any other dispute pertaining to the respectivebusinesses of the Parties.  Beforeinitiating any litigation arising out of or related in any way to thisAgreement, to the AMO Patents or the Alcon Patents, to the AMO Products or theAlcon Products, or otherwise arising out of the business activities of theParties, the Parties agree that the Chief Executive Officer of the party thatproposes to initiate litigation (the “Initiating Party”) shall contact theChief Executive Officer of the other party to attempt to resolve any disputeinformally without resort to litigation, contemporaneously with or beforegiving any written notice of the existence of a dispute.  The Chief Executive Officers may resolve thedispute themselves, or may designate other representatives to discuss andattempt in good faith to resolve the dispute.  Each party shall work diligently to addressthe concerns raised by the other, and in any event shall attempt to resolve thedispute within twenty-one (21) days of being notified in writing of theexistence of a dispute, or such other length of time as the Parties may bothagree upon in writing.

**7.2.         Mediation**. In the event that the Parties are notable to resolve their dispute pursuant to and within the time provided byparagraph 7.1 above, the Parties agree that before initiating any litigationagainst each other, the Parties shall submit any disputes to non-binding 

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mediation in Chicago, Illinois with a mutuallyacceptable mediator; provided, however, that the Parties’ obligations tomediate shall not prejudice any party’s right to seek injunctive relief from anappropriate court following the mediation.  After the expiration of the time period providedin paragraph 7.1 above, the Parties shall have ten (10) business days to pick amediator to hear the dispute.  If theParties are unable within ten (10) business days to agree upon a mediator, theParties shall utilize a mediator selected by JAMS from among its panel offormer jurists.  The Parties agree not toinitiate any action before any court with respect to such dispute until theearlier of the completion of the mediation or ninety (90) days after the InitiatingParty has given written notice of the dispute to the other party.  In the event that mediation is unsuccessful, untilthe end of a period of sixty (60) days following completion of the mediation orone hundred fifty (150) days following written notice of the dispute, whicheveris earlier, no party other than the Initiating Party may bring litigation toresolve the dispute.  The InitiatingParty’s choice of forum for such litigation shall be subject to the rights ofthe other party to challenge the forum for any reason contemplated by theapplicable procedural rules and case law.

**7.3.         InjunctiveRelief**.  The Parties agree that nothing in thisAgreement shall be construed as precluding injunctive relief following themediation or otherwise altering the legal standard for the imposition of suchrelief under the appropriate legal standards. The Parties further agree that a Party’s participation in, or delaysresulting from, the dispute resolution procedures described herein shall not beused either in support of or in opposition to any claim or defense, whetherequitable or at law, in any subsequent litigation.

**7.4.**         **Response to RegulatoryAgencies**.  Nothing in thisSection VII precludes any party from complying with any regulatory or legalreporting requirement or otherwise complying 

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with requests of regulatory or administrative agenciesthat might affect the other party, or objecting to regulatory or administrativeagency decisions (e.g. patent opposition proceedings) that might involve anyother party.

**VIII.        Miscellaneous Provisions**

**8.1.         EntireAgreement, Modification, Waiver**.  This agreement constitutes and contains theentire agreement between the Parties regarding the Litigation and any futuredisputes subject to provisions of Section VII above, and supersedes any and allprior agreements, representations, negotiations, conversations, correspondence,understanding, and letters, whether oral or written, of any kind or nature,respecting the subject matter hereof.  ThisAgreement may be amended or modified or one or more provisions hereof waived,only by a written instrument signed by the Parties.  No failure or delay of either party to requireperformance by the other party of any provision of this Agreement shall in anyway adversely affect such party’s right to require full performance of the sameor different provisions of this Agreement.  No waiver by one party of a breach of anyprovision of this Agreement shall constitute a waiver of such party of anysucceeding breach of the same or different provisions.

**8.2.         Notices**. All notices required or permitted to begiven hereunder shall be in writing and shall be deemed delivered (i) uponreceipt if delivered by hand, (ii) the next business day after being sent byprepaid, nationally-recognized, overnight air courier, (iii) five (5) businessdays after being sent by registered or certified airmail, return receiptrequired, postage prepaid, and (iv) upon transmittal when transmitted byconfirmed telecopy (provided that such

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notice is followed by notice pursuant to any of (i) -(iii) above).  All notices shall beaddressed as follows:

If to AMO:

James V. Mazzo

Chairman, President &CEO

Advanced Medical Optics,Inc.

1700 E. St. Andrew Place

Santa Ana, California92705

Phone:

Facsimile:

with a copy to:

Aimee Weisner

Corporate Vice President, General Counsel andSecretary

Advanced Medical Optics, Inc.

1700 E. St. Andrew Place

Santa Ana, California 92705

Phone:

Facsimile:

If to Alcon:

Cary Rayment

Chairman, CEO & President

Alcon Laboratories, Inc.

6201 South Freeway

Forth Worth, Texas 76134-2099

Phone:

Facsimile:

with a copy to:

Elaine Whitbeck

Senior Vice President& General Counsel

Alcon Laboratories, Inc.

6201 South Freeway

Forth Worth, Texas76134-2099

Phone:

Facsimile:

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**8.3.         Confidentiality**.  Neither this Agreement, nor any of its terms,shall be disclosed to any person or entity without the prior written consent ofall Parties, except that this Agreement and its terms may be disclosed (i) toany insurer, reinsurer, attorney or auditor of the Parties after such person orentity is first advised that the disclosure is subject to the confidentialityprovisions of this Agreement; (ii) to any of the Parties’ attorneys,accountants or tax preparers after such person is first advised that thedisclosure is subject to the confidentiality provisions of this Agreement; and(iii) to any other person or entity if and to the extent required by any law,court order, rule, regulation, or other public disclosure requirement(including exchange requirements or the NASD’s requirements, as applicable), inthe opinion of counsel for the disclosing party.  Any party that makes a disclosure ofinformation about this Agreement under subparagraph (iii) above shall takereasonable measures to maintain the confidentiality of such information.  This Agreement and its terms may also bedisclosed by either party in any action or proceeding to enforce the terms ofthis Agreement or in any other legal action or proceeding in which the terms ofthis Agreement are relevant, provided that a protective order is sought inadvance to prevent any further dissemination and disclosure of this Agreementand its terms.  Notwithstanding theabove, the Parties shall formulate mutually acceptable press releases regardingtheir settlement herein, which the Parties shall be entitled to use freelythereafter.

 

**8.4.         NoAdmissions By The Parties**.

a.             ThisAgreement is the result of a compromised settlement of disputed claims betweenthe Parties. The Parties agree that this Agreement shall not be construed as an

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admission or concession of liability, non-liability,responsibility or wrongdoing by any party to this Agreement.

b.             TheParties further agree that this Agreement is not, and shall not be construed as,reflective or adoptive of any particular position, analysis or interpretationas to the facts or nature of any claim.

c.             Allactions taken and statements made, whether orally or in writing, by the Parties,or by their respective representatives, relating to this Agreement or participationin this Agreement, including its development and implementation, shall not benot used as evidence for any purpose in any other disputed matter.

**8.5.         NoConstruction Against Any Party**.  The wording of this Agreement was reviewed andaccepted by legal counsel for each Party before being signed by them, and no partyshall be entitled to have any wording of this Agreement construed against anyother party in the event of any dispute arising between them in connection withit, whether based on the identity of the drafter or on any other basis.

**8.6.         NoAssignment of Agreement**.  No Party hereto shall assign this Agreement withoutfirst obtaining the written consent of the other Parties hereto; provided,however, that consent shall not be required for any assignment of this Agreementby the Parties to an Affiliate, nor shall consent be required for assignment bya Party hereto by merger, sale or transfer of all or substantially all of theassets of its phacoemulsification business, consolidation, or operation of law. Notwithstanding the foregoing, theprovisions of this Agreement that are not yet fully performed at the time ofthe assignment shall extend to and be binding upon the Parties hereto and theirsuccessors and assigns; provided however, that after any assignment under this

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paragraph 8.6, the obligation to engage in disputeresolution in accordance with Section VII shall only apply between any combinationof original Parties and any Affiliates of the Parties with continuingobligations under the Agreement.

**8.7.         NoGeneral Indemnification**.  Except as specifically set forth in paragraph5.3, the Parties shall not indemnify one another against any acts, deeds,omissions, claims, causes of action or disputes that may arise from thisAgreement or from the relationship of the Parties.  Without limiting the foregoing in any manner,neither party warrants any designs, products or methods disclosed by or claimedin their patents licensed to the other party under this Agreement.  In the event that a party patent holder isjoined in any action or claim for any physical or economic injury to a thirdparty as a result of a particular licensed patent or design employed by theother party (including without limitation claims alleging a design defect,manufacturing defect, infringement, act of negligence, violation of law, orother wrong), then that party patent holder shall defend itself and pay its owncosts, attorneys fees and other expense incurred or brought against the partypatent holder.  Nothing in this Agreementshall prevent the party patent holder from seeking a voluntary agreement for indemnityfrom the licensed party on such terms and conditions as the Parties maymutually agree, however the licensed party is not obligated to undertake anysuch indemnification.

**8.8.         ApplicableLaw**. This Agreement shall be governed by and construed in accordancewith the federal laws of the United States and the laws of the State of Delawarewithout regard to principles of conflicts of law.  This provision is a choice of law provisiononly and not a choice of forum provision.  The Parties shall notassert in any future litigation that their choice of law makes any forum moreor less appropriate than any other forum.

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**8.9.         Counterparts**.  This Agreement may be signed in counterparts,each of which shall be deemed an original, and a copy or facsimile of thefully-executed Agreement shall be as valid as the original.  This Agreement shall be amended only inwriting by duly authorized officers of the Parties, which amendment may also besigned in counterparts.  No amendment is requiredto give notice of a change of address, contact information, or othermodifications to the notification provisions of paragraph 8.2; however, anysuch notice shall be given in accordance with the provisions of paragraph 8.2.

 

**8.10.       NoThird-Party Beneficiaries**.  Nothing in this Agreement shall confer any rightsupon any person or entity not a party to this Agreement.  Nevertheless, this Agreement is binding uponthe Parties.

**8.11.       Headings**. The headings and captions are insertedfor convenience of reference only and are not intended to be a part of or toaffect the meaning or interpretation of this Agreement.

**8.12.       Non-Agency**. Nothing in this Agreement is intended orshall be deemed to constitute a partnership, agency, employer-employee, orjoint venture relationship between the Parties.  No party shall incur any debts or make anycommitments for the other.  There is no fiduciaryduty or special relationship of any kind between the Parties to this Agreement. Each party expressly disclaims anyreliance on any act, word, or deed of any other party in entering into thisAgreement.

**8.13.       Severability**. If any provision or portion of aprovision of this Agreement is held by a court of competent jurisdiction to beinvalid under any applicable statute or rule of law, such court is authorizedto modify such provision to the minimum extent necessary to make it valid,

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and the remaining provisions or portions of provisionsof this Agreement shall in no way be affected or impaired thereby.

**8.14.       Costs**. Except as specifically ordered (andalready paid) in the Delaware Litigation relating to marking, each party shallbear its own costs and expenses in connection with the Litigation, thepreparation of this Agreement, and performance hereunder.  However, in the event of litigation betweenthe Parties concerning i) the scope, enforcement or breach of this agreement;or ii) intellectual property litigation concerning any PhacoemulsificationEquipment that either party can in good faith assert is covered by the licensesor covenants of this Agreement, if one party prevails in such litigation byobtaining a Rule 12(b)(6) dismissal, summary judgment, or judgment as a matterof law of all or substantially all claims pleaded, then the prevailing partyshall be entitled to recover, and the other party shall pay, all costs andexpenses (including without limitation reasonable attorneys’ fees) incurred bythe prevailing party in such litigation.

******************************************************************

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**INWITNESS WHEREOF**, the Parties have caused their dulyauthorized officers to execute this Agreement as of the dates below.

 
| ADVANCED MEDICAL OPTICS, INC.     |                                                           |   |
|-----------------------------------|----------------------------------------------------------------|--------|
|                              |                                                           |   |   |
| By:                               | /s/ JAMES V. MAZZO                                             |   |   |   |
| Name:                             | James V. Mazzo                                                 |   |   |
| Title:                            | Chairman, President and Chief Executive Officer                |   |   |
|                              |                                                           |   |   |
| Dated this 6 day of July, 2006.   |                                                           |   |
|                              |                                                           |   |   |
| ALCON, INC.                       |                                                           |   |
|                              |                                                           |   |   |
| By:                               | /s/ JOANNE BECK                                                |   |   |   |
| Name:                             | Joanne Beck                                                    |   |   |
| Title:                            | General Manager                                                |   |   |
|                              |                                                           |   |   |
| Dated this 7 day of July, 2006,   |                                                           |   |
|                              |                                                           |   |   |
| And                               |                                                           |   |   |
|                              |                                                           |   |   |
| By:                               | /s/ STEFAN BASLER                                              |   |   |   |
| Name:                             | Stefan Basler                                                  |   |   |
| Title:                            | Finance Manager                                                |   |   |
|                              |                                                           |   |   |
| Dated this 7 day of July, 2006.   |                                                           |   |
|                              |                                                           |   |   |
| ALCON LABORATORIES, INC.          |                                                           |   |
|                              |                                                           |   |   |
| By:                               | /s/ CARY RAYMENT                                               |   |   |   |
| Name:                             | Cary Rayment                                                   |   |   |
| Title:                            | Chairman of the Board, Chief Executive Officer, and  President |   |   |
|                              |                                                           |   |   |
| Dated this 7th day of July, 2006. |                                                           |   |
|                              |                                                           |   |   |
| ALCON MANUFACTURING, LTD.         |                                                           |   |
|                              |                                                           |   |   |
| By:                               | /s/ CARY RAYMENT                                               |   |   |   |
| Name:                             | Cary Rayment                                                   |   |   |
| Title:                            | Chairman and Chief Executive Officer                           |   |   |
|                              |                                                           |   |   |
| Dated this 7th day of July, 2006. |                                                           |   |

 

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