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                                                                   EXHIBIT 10.23
                          SECURITIES PURCHASE AGREEMENT

         This Securities Purchase Agreement (the "Agreement") is made as of the
13th day of December, 2001, by and between ISTA Pharmaceuticals, Inc. (the
"Company"), a Delaware corporation, with its principal place of business at
15279 Alton Parkway #100, Irvine, California 92618, and Otsuka Pharmaceutical
Co., Ltd., a corporation organized under the laws of Japan, with a principal
place of business at 2-9, Kanka Tsukasa-cho, Chiyoda-ku, Tokyo 101-8535, Japan
(the "Purchaser").

                                    RECITALS

         A. The Purchaser and the Company have of even date herewith entered
into a License Agreement and a Supply Agreement (collectively, the "License
Agreements") and the obligations in the License Agreements are conditioned upon
the execution and delivery of this Agreement.

         B. The Company has authorized the issuance and sale to the Purchaser,
pursuant to this Agreement, of an aggregate of up to $4,000,000 of shares of the
Company's Common Stock, par value $.001 per share (the "Common Stock").

         B. The Purchaser desire to purchase and the Company desires to issue
and sell shares of Common Stock on the terms and subject to the conditions set
forth herein.

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants herein contained and other good and valuable consideration the receipt
and sufficiency of which is hereby acknowledged, the parties hereto, intending
to be legally bound, hereby agree as follows:

         SECTION 1. Commitment to Purchase.

                  1.01 Number of Shares. Upon the basis of the representations
and warranties, and subject to the terms and conditions contained herein, the
Company agrees to issue and sell to the Purchaser and the Purchaser agrees to
purchase from the Company, at the Closing Date (as defined below), 845,665
shares of Common Stock (the "Shares") at an aggregate purchase price of USD
$3,999,995.45.

                  1.02 Purchase Price. The Shares will be sold to the Purchaser
at a price of $4.73 per share.

         SECTION 2. The Closing.

                  2.01 Closing Date. The closing of the purchase and sale of the
Shares (the "Closing") shall take place at the offices of Wilson Sonsini
Goodrich & Rosati, 650 Page Mill Road, Palo Alto, California ten days after the
date hereof, or at such other location and on such other date
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as the Company and the Purchaser shall mutually agree. The date and time of the
Closing are referred to herein as the "Closing Date."

                  2.02 Payment. At the Closing, Purchaser shall deliver to the
Company (i) the purchase price for the Shares being purchased by the Purchaser
by check or by wire transfer of immediately available funds to an account
designated by the Company at the Closing and (ii) the documents set forth in
Section 6.02 of this Agreement.

                  2.03 Certificate. At the Closing, the Company shall deliver or
cause to be delivered to the Purchaser (i) a certificate representing the Shares
purchased by the Purchaser, in definitive form and registered in the Purchaser's
name or such other name as such Purchaser shall request at least two business
days prior to the Closing Date and (ii) the documents set forth in Section 6.01
of this Agreement.

         SECTION 3. Representations and Warranties of the Company. Except as set
forth on a Schedule of Exceptions annexed hereto as Exhibit B, the Company
hereby represents and warrants to the Purchaser on the date hereof and as of the
Closing Date as follows:

                  3.01 Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company does not own, directly or indirectly, any
shares of stock or any other equity or long-term debt securities of any
corporation or have any equity interest in any firm, partnership, joint venture,
association or other entity, except for the Company's interest in Visonex Pte.
Ltd., a wholly-owned subsidiary incorporated in Singapore. The Company has the
power and authority, corporate or otherwise, as appropriate, to own, lease and
operate its properties and to conduct its business as now conducted and to enter
into and perform its obligations under this Agreement and the Registration
Rights Agreement, in the form annexed hereto as Exhibit A (the "Registration
Rights Agreement"). The Company is duly qualified as a foreign corporation and
is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not
individually or in the aggregate have a material adverse effect on the condition
(financial or otherwise), earnings, properties, business, prospects or results
of operations of the Company (a "Material Adverse Effect").

                  3.02 Authorized Capital Stock. As of the date hereof, the
authorized capital stock of the Company consists of 100,000,000 shares of Common
Stock, $0.001 par value, and 5,000,000 shares of Preferred Stock, $0.001 par
value. As of the date hereof, approximately 15,600,259 shares of Common Stock
and no shares of Preferred Stock will be validly issued and outstanding, and
each outstanding share of Common Stock is fully paid and nonassessable. The
Company has reserved approximately 77,741 shares of Common Stock for issuance
pursuant to the Company's 2000 Stock Plan and has unexercised options to
purchase 2,563,900 shares of Common Stock outstanding as of the date hereof. The
designations, powers, preferences, rights, qualifications, limitations and
restrictions in respect of each class and series of authorized capital stock of
the Company are as set forth in the Company's certificate of incorporation, a
true and correct copy of which, as amended to date, has previously been provided
to the Purchaser, and there are no additional agreements specifying any rights
with respect thereto. The issued and outstanding shares of Common Stock


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were not issued in violation of or are not otherwise subject to any preemptive
or other similar rights or other rights to subscribe for or purchase securities,
and conform to the description thereof contained in the reports (the "`34 Act
Reports") filed by the Company with the Securities and Exchange Commission (the
"Commission") since January 1, 2001 pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Except for options issued under the
Company's stock plans, the Company does not have outstanding any options or
warrants to purchase, or any preemptive rights or other rights to subscribe for
or to purchase, any securities or obligations convertible into, or any contracts
or commitments to issue or sell, shares of its capital stock or any shares of
capital stock of any subsidiary and there is no commitment, plan or arrangement
to issue, any securities or obligations convertible into any shares of capital
stock of the Company or any such options, rights convertible securities or
obligations. The description of the Company's capital stock, stock bonus and
other stock plans or arrangements and the options or other rights granted and
exercised thereunder, contained in the `34 Act Reports accurately and fairly
presents the information required to be shown with respect to such capital
stock, plans, arrangements, options and rights.

                  3.03 Issuance, Sale and Delivery of the Shares. The Shares
have been duly authorized and, when issued, delivered and paid for in the manner
set forth in this Agreement, will be duly authorized, validly issued, fully paid
and nonassessable. No preemptive rights or other rights (which have not been
waived) to subscribe for or purchase exist with respect to the issuance and sale
of the Shares by the Company pursuant to this Agreement. No stockholder of the
Company has any right to request or require the Company to register the sale of
any shares owned by such stockholder under the Securities Act of 1933, as
amended (the "Securities Act"), except for certain stockholders who have
registration rights pursuant to the Company's March 29, 2000 Amended and
Restated Investors Right Agreement (the "Investor Rights Agreement"). Subject to
the satisfaction of the conditions set forth in Section 6.02, no further
approval or authority of the stockholders or the Board of Directors of the
Company will be required for the issuance and sale of the Shares as contemplated
herein, or registration of the Shares under the Registration Rights Agreement.
Without limiting the foregoing, no holders of outstanding shares of capital
stock of the Company has any right, including, but not limited to, those rights
set forth in the Investor Rights Agreement, which has not been waived to require
the Company to register the offer or sale of any securities owned by such holder
in the registration contemplated by the Registration Rights Agreement.

                  3.04 Due Execution, Delivery and Performance of this
Agreement. The Company has full legal right, corporate power and authority to
enter into this Agreement and the Registration Rights Agreement and to perform
the transactions contemplated hereby and thereby. Each of this Agreement and the
Registration Rights Agreement has been duly authorized, executed and delivered
by the Company. The execution, delivery and performance of this Agreement and
the Registration Rights Agreement by the Company and the consummation of the
transactions contemplated hereby and thereby will not violate any provision of
the organizational documents of the Company and will not result in the creation
of any lien, charge, security interest or encumbrance upon any assets or
property of the Company pursuant to the terms or provisions of, or will not
conflict with, result in the breach or violation of, or constitute, either by
itself or upon notice or the passage of time or both, a default under any
agreement, mortgage, deed of trust, lease, franchise, license, indenture, permit
or other instrument to which the Company is a party or by which the Company or
any of its assets or properties may be bound or affected or, to the Company's
knowledge, and subject to satisfaction of


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the conditions set forth in Section 6.02, any statute or any authorization,
judgment, decree, order, rule or regulation of any court or any regulatory body,
administrative agency or other governmental body applicable to the Company or
any of its properties. No consent, approval, authorization or other order of any
court, regulatory body, administrative agency or other governmental body is
required for the execution, delivery and performance of this Agreement or the
Registration Rights Agreement or the consummation of the transactions
contemplated hereby or thereby, except for compliance with Blue Sky laws and
federal securities laws applicable to the offering and registration for resale
of the Shares and compliance with the rules and regulations of the securities
exchange or trading market on which the Common Stock is listed. Upon the
execution and delivery, and assuming the valid execution of this Agreement and
the Registration Rights Agreement by the Purchaser, each of this Agreement and
the Registration Rights Agreement will constitute valid and binding obligations
of the Company, enforceable against the Company in accordance with their
respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally and except as enforceability may be subject to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

                  3.05 Financials. The Company's financial statements (including
all notes and schedules thereto) included in the `34 Act Reports present fairly
the financial position, the results of operations, the statements of cash flows
and the statements of stockholders' equity and the other information purported
to be shown therein of the Company at the respective dates and for the
respective periods to which they apply (subject, in the case of unaudited
statements, to normal year end audit adjustments and the absence of footnotes)
and such financial statements have been prepared in conformity with generally
accepted accounting principles, consistently applied throughout the periods
involved (except as may be indicated in the notes thereto). Since the date of
the most recent financial statements included in the "34 Act Reports, there has
not been: (i) any event or condition of any character that, either individually
or cumatively, has or would have a Material Adverse Effect or (ii) any sale,
assignment or transfer of any patents, trademarks, trade secrets or other
intangible assets of the Company.

                  3.06 Contracts. The contracts described in the `34 Act Reports
as being in effect on the date hereof, are in full force and effect on the date
hereof, and the Company is not, nor to the Company's knowledge, is any other
party in breach of or default under any written agreement which would have a
Material Adverse Effect.

                  3.07 Compliance With Laws; No Actions. To its knowledge, the
Company is not in violation of any applicable statute, rule, regulation, order
or restriction of any domestic or foreign government or any instrumentality or
agency thereof in respect of the conduct of its business or the ownership of its
properties which violation would result in a Material Adverse Change. There are
no legal or governmental actions, suits or proceedings pending or, to the
Company's knowledge, threatened to which the Company is or may be a party or of
which property owned or leased by the Company is or may be the subject. The
Company is not a party to or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body
administrative agency or other governmental body.


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                  3.08 Finders' Fees. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of the Company who might be entitled to any fee or commission from the
Company or any of its affiliates upon consummation of the transactions
contemplated by this Agreement.

                  3.09 Commission Reports. The Company has filed in a timely
manner all documents that the Company was required to file with the Commission
under the `34 Act and all rules and regulations thereunder since the date on
which the Company became subject to such reporting requirements. As of their
respective filing dates, all documents filed by the Company with the Commission
complied in all material respects with the requirements of the `34 Act or the
Securities Act, as applicable and all rules and regulations thereunder.

                  3.10 Taxes. The Company and its subsidiaries have filed all
required federal, state and foreign income and franchise tax returns and have
paid or accrued all taxes shown as due thereon, and the Company has no knowledge
of any tax deficiency which has been or might be asserted or threatened against
the Company or its subsidiaries which would have a Material Adverse Effect.

                  3.11 Insurance. Each of the Company and its subsidiaries
maintains insurance of the types and in the amounts generally deemed adequate
for its business, including, but not limited to, insurance covering all real and
personal property owned or leased by the Company and its subsidiaries against
theft, damage, destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and effect.

                  3.12 Intellectual Property. There are no claims pending or, to
the Company's knowledge, threatened that the Company or any of its subsidiaries
is infringing (including with respect to the manufacture, use or sale by the
Company or any of its subsidiaries of their respective products) upon any
patent, patent application, trademark, trademark rights, trade names, trade name
rights, copyrights, technical know-how and other proprietary intellectual
property rights (the "Intellectual Property Rights") of a third party, and the
Company has no reason to believe that the past or current business activities of
the Company or its subsidiaries are reasonably likely to give rise to any such
claim(s). To the Company's knowledge, no third party is infringing upon any
material Intellectual Property Right of the Company.

                  3.13 Offering Valid. Assuming the accuracy of the
representations and warranties of the Purchaser contained in Section 4 hereof,
the offer, sale and issuance of the Shares will be exempt from the registration
requirements of the Securities Act, and will have been registered or qualified
(or are exempt from registration and qualification) under the registration,
permit or qualification requirements of all applicable state securities laws.

                  3.14 Disclosure. Neither this Agreement nor any exhibit or
other document delivered in connection herewith contains an untrue statement of
a material fact or omits a material fact necessary to make the statements
contained herein or therein, in the light of the circumstances under which they
were made, not misleading. None of the statements, documents, certificates or
other items supplied by the Company at the Closing shall contain an untrue
statement of a material fact or omit a material fact necessary to make the
statements contained therein, in light of the


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circumstances under which they are made, not misleading. There is no fact which
the Company has not disclosed to the Purchaser and which is known to the Company
(other than facts known to the general public or generally known in the
Company's industry) which would cause a Material Adverse Effect. The Company has
supplied the Purchaser with all written information previously requested by it
in writing.

         SECTION 4. Representations and Warranties of the Purchaser. The
Purchaser hereby represents and warrants to the Company on the date hereof and
as of the Closing Date as follows:

                  4.01 Private Placement.

                           (a) Purchaser understands that the offering and sale
of the Shares is intended to be exempt from registration under the Securities
Act.

                           (b) Purchaser represents and warrants that it is
acquiring the Shares to be purchased by it pursuant to this Agreement for
investment for Purchaser's own account and not with a view to the resale or
distribution of such Shares or any interest therein other than in a transaction
that is registered or exempt from registration under the Securities Act.

                           (c) Purchaser represents and warrants that it is an
"accredited investor" as such term is defined in Regulation D under the
Securities Act.

                           (d) Purchaser represents and warrants that it (either
alone or together with its advisors) has sufficient knowledge and experience in
financial and business matters so as to be capable of evaluating the merits and
risks of its investment in the Shares, and is capable of bearing the economic
risks of such investment, including a complete loss of its investment in the
Shares to be purchased by it hereunder.

                           (e) Purchaser has been given the opportunity to ask
questions of, and receive answers from, the Company regarding the Company, the
terms and conditions of the Shares and related matters, and has been furnished
with the information it deems necessary or desirable to evaluate the merits and
risks of its acquisition of the Shares.

                           (f) Purchaser understands that the Shares that it is
purchasing are characterized as "restricted securities" under the Securities Act
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under the Securities Act and applicable
regulations, such Shares may be resold without registration under the Securities
Act only in certain limited circumstances. It is understood that the
certificates delivered at Closing evidencing the Shares will bear a restrictive
legend.

                           (g) Purchaser has, in connection with its decision to
purchase the Shares, relied solely upon the `34 Act Reports and the
representations and warranties of the Company contained in this Agreement, the
Registration Rights Agreement and the License Agreements.

                  4.02 Additional Representations of Foreign Purchaser If the
Purchaser does not reside in and is not a citizen of the United States, for the
purpose of this Section 4, the Purchaser shall be deemed a "Foreign Purchaser"
and the Purchaser represents, warrants and covenants to the


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Company, in addition to the other representations, warranties and covenants set
forth in this Section 4, to the following, but only in the event, and to the
extent, that the Purchaser seeks to rely upon the provisions of Regulation S for
the resale of the Shares:

                           (a) Neither the Foreign Purchaser nor any person for
the account of whom such Foreign Purchaser is acting, including the estate of
any such person, a trust of which any such person is a beneficiary, or a
corporation, partnership, trust or other entity organized under the laws of the
United States of America, is a citizen or resident of the United States of
America (a "U.S. Person").

                           (b) Such Foreign Purchaser will not sell, transfer or
otherwise dispose of the Shares for the applicable restricted period as set
forth in Regulation S, and such Foreign Purchaser will not thereafter sell or
otherwise transfer the Shares and any securities issued upon conversion or
exercise thereof to a U.S. Person unless the Company has received an opinion of
counsel, satisfactory to the Company, that such transfer will not be in
violation of the Securities Act or any applicable state securities laws.

                           (c) The Foreign Purchaser understands that the
Company will not allow any transfer or other disposition of the Shares and any
securities issued upon conversion or exercise thereof unless the proposed
transferee shall have executed an instrument containing the representations set
forth in the foregoing paragraphs (a) and (b) of this section or the Company
shall have received an opinion of counsel satisfactory to the Company to the
effect that such proposed transfer would not be in violation of the Securities
Act or any applicable state securities law.

                  4.03 Finders' Fees. There is no investment banker, broker,
finder or other intermediary which has been retained by or is authorized to act
on behalf of the Company or Purchaser who might be entitled to any fee or
commission from the Company or any of its affiliates upon consummation of the
transactions contemplated by this Agreement.

         SECTION 5. Additional Agreements and Covenants of the Company and the
Purchaser.

                  5.01 Further Assurances. The Company and the Purchaser agree
to execute and deliver such documents, certificates, agreements and other
writings and to take such other actions as may be reasonably necessary or
desirable in order to consummate or implement expeditiously the transactions
contemplated by this Agreement and the Registration Rights Agreement.

                  5.02 Public Announcements. The Company and the Purchaser shall
consult with each other before issuing any press release or making any public
statement with respect to this Agreement or the transactions contemplated hereby
and, except as may be required by applicable law or any listing agreement with
any national securities exchange or trading market, will not issue any such
press release or make any such public statement prior to such consultation.

         SECTION 6. Closing Deliveries.

                  6.01 Conditions to the Purchaser's Obligations. The obligation
of the Purchaser to consummate the transactions contemplated by this Agreement
shall be subject to the delivery of the fulfillment prior to or at the Closing
of the following conditions:


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                           (a) The representations and warranties of the Company
contained in Section 3 shall be true on and as of the Closing in all material
respects with the same effect as though such representations and warranties had
been made on and as of the date of such Closing, except for those
representations and warranties which address matters only as of a particular
date, which shall remain true and correct as of such particular date and except
where the failure to be true and correct will not have a Material Adverse Effect
on the Company.

                           (b) The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing.

                           (c) The Company shall have obtained any and all
consents, permits and waivers necessary or appropriate for consummation of the
transactions contemplated by this Agreement and the Registration Rights
Agreement (except for such as may be properly obtained subsequent to the
Closing).

                           (d) The Company shall have executed and delivered the
License Agreements.

                           (e) The Company shall have executed and delivered the
Registration Rights Agreement.

                           (f) The Company shall have delivered the following
closing documents in form and substance reasonably acceptable to the Purchaser's
counsel:

                                    (i) a copy of the resolutions of the
Company's Board of Directors authorizing (A) the execution, delivery and
consummation of this Agreement, the Registration Rights Agreement, and the
License Agreements and (B) transactions contemplated hereby and thereby; and

                                    (ii) a certificate of the President of the
Company, dated the Closing Date, certifying that the conditions specified in
this Section 6.01 have been fulfilled and that as of the Closing Date, there has
not been no Material Adverse Effect.

                           (g) All corporate and other proceedings in connection
with the transactions contemplated at the Closing and all documents incident
thereto shall be reasonably satisfactory in form and substance to Purchaser's
counsel, and Purchaser's counsel shall have received all such counterpart
originals or certified or other copies of such documents as they may reasonably
request.

                  6.02 Conditions to the Obligations of the Company. The
obligation of the Company to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment at or prior to the Closing of the
following conditions:

                           (a) The representations and warranties of the
Purchaser contained in Section 4 shall be true on and as of the Closing in all
material respects with the same effect as though such representations and
warranties had been made on and as of the Closing.


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                           (b) All authorizations, approvals or permits, if any,
of any governmental authority or regulatory body of the United States or of any
state or of any securities exchange or trading market on which the Common Stock
is listed that are required in connection with the lawful issuance and sale of
Shares pursuant to this Agreement shall have been duly obtained and effective as
of the Closing and all filings with such authorities or regulatory bodies shall
have been made and accepted.

                           (c) The Purchaser shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing.

                           (d) The Purchaser shall have paid the purchase price
as set forth in Section 1 above.

                           (e) The Purchaser shall have executed and delivered
the Registration Rights Agreement.

                           (f) The Purchaser shall have executed and delivered
the License Agreements.

                           (g) The Purchaser shall have delivered the first
milestone payment of USD $5,000,000 pursuant to the License Agreement.

                           (h) All corporate and other proceedings in connection
with the transactions contemplated at the Closing and all documents incident
thereto shall be reasonably satisfactory in form and substance to Company's
counsel.

         SECTION 7. Survival of Representations and Warranties. The
representations and warranties provided for in this Agreement shall survive for
one year from the Closing Date, except for those representations and warranties
which address matters only as of a particular date, which shall remain true and
correct as of such particular date.

         SECTION 8. Miscellaneous.

                  8.01 Notices. All notices, requests and other communications
to any party hereunder shall be in writing (including telecopier or similar
writing) and shall be given to such party at its address or telecopier number as
set forth below, or such other address or telecopier number as such party may
hereinafter specify for the purpose of giving notice hereunder to the party
giving such notice. Each such notice, request or other communication shall be
effective: (i) if given by telecopier, when such telecopier is transmitted to
the telecopier number specified pursuant to this Section 8.01 and the
appropriate confirmation is received or; (ii) if given by mail, 72 hours after
such communication is deposited in the mails, certified mail, return receipt
requested, postage prepaid, addressed as aforesaid or; (iii) if given by any
other means, when delivered at the address as follows:


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         If to the Company, to:

                 ISTA Pharmaceuticals, Inc.

                 15279 Alton Parkway #100

                 Irvine, California  92618

                 Attention:  J.C. MacRae

                 Telecopier: (949) 789-7744

         With a copy to:

                 Wilson Sonsini Goodrich & Rosati

                 650 Page Mill Road

                 Palo Alto, CA 94304

                 Attention: Issac Vaughn

                 Telecopier:  (650) 493-6811

         If to Purchaser, to:

                  Otsuka Pharmaceutical Co., Ltd.

                  3-2-27, Otedori

                  Chuo-ku

                  Osaka, Japan

                  Attn:

                  Tel: (6) 6231-7067

                  Telecopier:

         With a copy to:

                  Heller, Ehrman, White & McAuliffe, LLP

                  701 Fifth Avenue, Suite 6100

                  Seattle, WA 98104

                  Attn:  Kevin F. Kelly

                  Fax:  206-447-0849

                  Tel:  206-447-0900

                  8.02 Amendments and Waivers.

                           (a) Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Purchaser. Any amendment or waiver
effected in accordance with this paragraph shall be binding upon each holder of
any securities purchased under this Agreement at the time outstanding (including
securities into which such securities are convertible), each future holder of
all such securities, and the Company.


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<PAGE>
                           (b) No failure or delay by any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies herein provided shall be cumulative and not exclusive of any
rights or remedies provided by law.

                  8.03 Successors and Assigns. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that no party may assign,
delegate or otherwise transfer any of its rights or obligations under this
Agreement without the consent of the other party.

                  8.04 Governing Law. This Agreement and all matters arising
directly or indirectly herefrom shall be governed by, and construed in
accordance with, the laws of the State of California without regard to the
conflicts of laws principles thereof.

                  8.05 Consent to Jurisdiction. The parties hereto agree that
any suit, action or proceeding relating to or arising out of this Agreement or
the transactions contemplated hereby, shall be brought in the federal and state
courts located in Orange County, California, so long as one of such courts shall
have subject matter jurisdiction over such suit, action or proceeding, and that
any cause of action arising out of this Agreement directly or indirectly shall
be deemed to have arisen from a transaction of business in the State of
California, and each of the parties hereby irrevocably consents to the
jurisdiction of such courts (and of the appropriate appellate courts therefrom)
in any such suit, action or proceeding and irrevocably waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding in any such court or
that any such suit, action or proceeding which is brought in any such court has
been brought in an inconvenient forum. Process in any such suit, action or
proceeding may be served on any party anywhere in the world, whether within or
outside the jurisdiction of any such court. Without limiting the foregoing, each
party agrees that service of process on such party as provided in Section 8.01
shall be deemed effective service of process on such party.

                  8.06 WAIVER OF JURY TRIAL. THE COMPANY AND THE PURCHASER EACH
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

                  8.07 Counterparts; Facsimile Signatures. This Agreement may be
executed in counterparts, each of which shall be deemed an original agreement,
but all of which together shall constitute one and the same instrument.
Execution and delivery of this Agreement by facsimile transmission shall
constitute execution and delivery of this Agreement for all purposes, with the
same force and effect as execution and delivery of an original manually signed
copy hereof.

                  8.08 Entire Agreement. This Agreement, the Registration Rights
Agreement, and the License Agreements constitute the entire agreement and
understanding between the parties hereto and supersedes any and all prior
agreements and understandings, written or oral, relating to the subject matter
of this Agreement, the Registration Rights Agreement, and the License
Agreements.


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                  8.09 Headings. The headings in this Agreement are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.

                  8.10 Attorneys Fees. In the event any suit or action is
instituted to enforce any provision in this Agreement, the substantially
prevailing party in such dispute shall be entitled to recover from the losing
party all fees, costs and expenses of enforcing any right of such prevailing
party under or with respect to this Agreement, including without limitation,
such reasonable fees and expenses of attorneys and accountants, which shall
include, without limitation, all fees, costs and expenses of appeal.

                  8.11 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the parties hereby
waive any provision of law which renders any provisions hereof prohibited or
unenforceable in any respect.


                                      -12-
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.

                                           ISTA PHARMACEUTICALS, INC.



                                           By:      /s/ J.C. MacRae
                                              ----------------------------------
                                              Name:   J.C. MacRae

                                              Title:  Executive Vice President,

                                              Chief Operating Offer and

                                              Chief Financial Officer





                                           OTSUKA PHARMACEUTICAL CO., LTD.



                                           By:      /s/ Ichiro Otsuka
                                              ----------------------------------
                                              Name:   Ichiro Otsuka

                                              Title:  Managing Director