Document:

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                                                                     EXHIBIT 4.1

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                          Advanced Medical Optics, Inc.

                                       and

                          Mellon Investor Services LLC,
                                 as Rights Agent

                                Rights Agreement

                            Dated as of June 24, 2002

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                                RIGHTS AGREEMENT

                  Rights Agreement, dated as of June 24, 2002, (this
"Agreement"), between Advanced Medical Optics, Inc., a Delaware corporation (the
"Company"), and Mellon Investor Services LLC, a New Jersey limited liability
company, as Rights Agent (the "Rights Agent").

                                    RECITALS

                  WHEREAS, on June 24, 2002, the Board of Directors of the
Company adopted this Agreement, and has authorized and declared a dividend of
one preferred share purchase right (a "Right") for each Common Share (as defined
in Section 1.6) of the Company outstanding at the Close of Business on June 25,
2002 (the "Record Date") and has authorized and directed the issuance of one
Right (subject to adjustment as provided herein) with respect to each Common
Share that shall become outstanding between the Record Date and the earliest of
the Distribution Date and the Expiration Date (as such terms are defined in
Sections 3.1 and 7.1), each Right initially representing the right to purchase
one one-hundredth (subject to adjustment) of a share of Series A Junior
Participating Preferred Stock (the "Preferred Shares") of the Company having the
rights, powers and preferences set forth in the form of Certificate of
Designation attached hereto as Exhibit A, upon the terms and subject to the
conditions hereinafter set forth PROVIDED, HOWEVER, that Rights may be issued
with respect to Common Shares that shall become outstanding after the
Distribution Date and prior to the Expiration Date in accordance with Section
22.

                  NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:

                  Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:

                  1.1 "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 15% or more of the Common Shares
of the Company then outstanding but shall not include an Exempt Person (as such
term is hereinafter defined). Notwithstanding the foregoing, no Person shall
become 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 solely by reason of share purchases by the
Company and shall, after such share purchases by the Company, become the
Beneficial Owner of one or more 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
shares of Common Stock such Person does not beneficially own 15% or more of the
shares of Common Stock then outstanding. Notwithstanding the foregoing, if the
Board of Directors of the Company determines in good

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faith that a Person who would otherwise be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this Section 1.1, has become such
inadvertently (including, without limitation, because (A) such Person was
unaware that it beneficially owned a percentage of Common Stock that would
otherwise cause such Person to be an "Acquiring Person" or (B) such Person was
aware of the extent of its Beneficial Ownership of Common Stock 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 such Person 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 Section 1.1, then such
Person shall not be deemed to be or have become an "Acquiring Person" at any
time for any purposes of this Agreement. For all purposes of this Agreement, any
calculation of the number of Common Shares outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding Common Shares of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.

                  1.2 "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations, under the Exchange Act, as in effect on the date of this Agreement.

                  1.3 A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:

                           (i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly (as
determined pursuant to Rule 13d-3 of the General Rules and Regulations under the
Exchange Act as in effect on the date of this Agreement);

                           (ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has (A) the right to acquire
(whether such right is exercisable immediately, or only after the passage of
time, compliance with regulatory requirements, fulfillment of a condition or
otherwise) pursuant to any agreement, arrangement or understanding, whether or
not in writing (other than customary agreements with and between underwriters
and selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights,
warrants or options, or otherwise; PROVIDED, HOWEVER, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, (w) securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person or
any of such Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange, (x) securities which such Person has a right
to acquire upon the exercise of Rights at any time prior to the time that any
Person becomes an Acquiring Person, (y) securities issuable upon the exercise of
Rights from and after the time that any Person becomes an Acquiring Person if
such Rights were acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3.1 or Section
22 ("Original Rights") or pursuant to Section 11.9 or Section 11.15 with respect
to an adjustment to Original Rights or (z) securities which such Person or any
of such Person's Affiliates or Associates may acquire, does or do acquire or may
be deemed to acquire or may be deemed to have the right to acquire, pursuant to
any merger or other acquisition agreement

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between the Company and such Person (or one or more of such Person's Affiliates
or Associates) if prior to such Person becoming an Acquiring Person the Board of
Directors of the Company has approved such agreement and determined that such
Person shall not be or be deemed to be the beneficial owner of such securities
within the meaning of this Section 1.3; or (B) the right to vote pursuant to any
agreement, arrangement or understanding (whether or not in writing); PROVIDED,
HOWEVER, that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security under this clause (B) if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations of the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor report); or

                           (iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof) and with
respect to which such Person or any of such Person's Affiliates or Associates
has any agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a bona
fide public offering of securities), whether or not in writing, for the purpose
of acquiring, holding, voting (except pursuant to a revocable proxy or consent
as described in the proviso to Section 1.3(ii)(B)) or disposing of any
securities of the Company; PROVIDED, HOWEVER, that no Person who is an officer,
director or employee of an Exempt Person shall be deemed, solely by reason of
such Person's status or authority as such, to be the "Beneficial Owner" of, to
have "Beneficial Ownership" of or to "beneficially own" any securities that are
"beneficially owned" (as defined in this Section 1.3), including, without
limitation, in a fiduciary capacity, by an Exempt Person or by any other such
officer, director or employee of an Exempt Person.

                  1.4 "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of New York or City
of Los Angeles are authorized or obligated by law or executive order to close.

                  1.5 "Close of Business" on any given date shall mean 5:00
p.m., Los Angeles time, on such date; PROVIDED, HOWEVER, that if such date is
not a Business Day it shall mean 5:00 p.m., Los Angeles time, on the next
succeeding Business Day.

                  1.6 "Common Shares" when used with reference to the Company
shall mean the shares of common stock, par value $.01 per share, of the Company.
"Common Shares" when used with reference to any Person other than the Company
shall mean the capital stock with the greatest voting power, or the equity
securities or other equity interest having power to control or direct the
management, of such other Person or, if such Person is a Subsidiary (as such
term is hereinafter defined) of another Person, the Person or Persons which
ultimately control such first-mentioned Person, and which has issued and
outstanding such capital stock, equity securities or equity interest.

                  1.7 "Exempt Person" shall mean (a) Allergan, Inc.
("Allergan"), which, as of the date hereof, beneficially owns all of the Common
Stock of the Company outstanding as of the date hereof; provided, however, that
Allergan shall cease to be an Exempt Person for all purposes hereunder on the
first Business Day after the date on which Allergan distributes to its
stockholders all of the shares of the Company's Common Stock (together with the
Rights

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associated therewith) then held by Allergan; and (b) the Company, any Subsidiary
of the Company, in each case including, without limitation, its fiduciary
capacity, or any employee benefit plan of the Company or of any Subsidiary of
the Company or any entity or trustee holding shares of capital stock of the
Company for or pursuant to the terms of any such plan, or for the purpose of
funding other employee benefits for employees of the Company or any Subsidiary
of the Company.

                  1.8 "Person" shall mean any individual, partnership, joint
venture, limited liability company, firm, corporation, unincorporated
association, trust or other entity, and shall include any successor (by merger
or otherwise) of such entity.

                  1.9 "Shares Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, the filing of a report pursuant to Section 13(d) of the
Exchange Act or pursuant to a comparable successor statute) by the Company or an
Acquiring Person that an Acquiring Person has become such or that discloses
information which reveals the existence of an Acquiring Person or such earlier
date as a majority of the Board of Directors shall become aware of the existence
of an Acquiring Person.

                  1.10 "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting equity
securities or equity interests is owned, of record or beneficially, directly or
indirectly, by such Person.

                  1.11 A "Trigger Event" shall be deemed to have occurred upon
any Person becoming an Acquiring Person.

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                  1.12 The following terms shall have the meanings defined for
such terms in the Sections set forth below:

          Term                                                 Section
          ----                                                 -------
Adjustment Shares                                              11.1.2
common stock equivalent                                        11.1.3
Company                                                        Recitals
current per share market price                                 11.4.1
Current Value                                                  11.1.3
Distribution Date                                              3.1
equivalent preferred stock                                     11.2
Exchange Act                                                   1.1
Exchange Consideration                                         27.1
Expiration Date                                                7.1
Final Expiration Date                                          7.1
Nasdaq                                                         9
Original Rights                                                1.3
Preferred Shares                                               Recitals
Principal Party                                                13.2
Purchase Price                                                 4
Record Date                                                    Recitals
Redemption Date                                                7.1
Redemption Price                                               23.1
Right                                                          Recitals
Right Certificate                                              3.1
Rights Agent                                                   Recitals
Security                                                       11.4.1
Spread                                                         11.1.3
Substitution Period                                            11.1.3
Summary of Rights                                              3.2
Trading Day                                                    11.4.1

                  Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint such co-Rights Agents as
it may deem necessary or desirable. The Rights Agent shall have no duty to
supervise, and shall in no event be liable for, the acts or omissions of any
such co-Rights Agent. In the event the Company appoints one or more co-Rights
Agents, the respective duties of the Rights Agent and any co-Rights Agent shall
be as the Company shall determine. Contemporaneously with such appointment, if
any, the Company shall notify the Rights Agent thereof.

                  Section 3. Issuance of Right Certificates.

                  3.1 Rights Evidenced by Share Certificates. Until the earlier
of (i) the tenth day after the Shares Acquisition Date or (ii) the tenth
Business Day after the date of the

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commencement of, or first public announcement of the intent of any Person (other
than an Exempt Person) to commence, a tender or exchange offer the consummation
of which would result in any Person (other than an Exempt Person) becoming the
Beneficial Owner of Common Shares aggregating 15% or more of the then
outstanding Common Shares of the Company (the earlier of (i) and (ii) being
herein referred to as the "Distribution Date"), (x) the Rights (unless earlier
expired, redeemed or terminated) will be evidenced (subject to the provisions of
Section 3.2) by the certificates for Common Shares registered in the names of
the holders thereof (which certificates for Common Shares shall also be deemed
to be Right Certificates) and not by separate certificates, and (y) the Rights
(and the right to receive certificates therefor) will be transferable only in
connection with the transfer of the underlying Common Shares. The preceding
sentence notwithstanding, prior to the occurrence of a Distribution Date
specified as a result of an event described in clause (ii) (or such later
Distribution Date as the Board of Directors of the Company may select pursuant
to this sentence), the Board of Directors may postpone, one or more times, the
Distribution Date which would occur as a result of an event described in clause
(ii) beyond the date set forth in such clause (ii). Nothing herein shall permit
such a postponement of a Distribution Date after a Person becomes an Acquiring
Person. As soon as practicable after the Distribution Date, the Company will
prepare and execute, the Rights Agent will countersign and the Company (or, if
requested in writing and provided with a list of the shareholders of Common
Stock, the Rights Agent) will send, by first-class, postage-prepaid mail, to
each record holder of Common Shares as of the Close of Business on the
Distribution Date (other than any Acquiring Person or any Associate or Affiliate
of an Acquiring Person), at the address of such holder shown on the records of
the Company, one or more certificates for Rights, in substantially the form of
Exhibit B hereto (a "Right Certificate"), evidencing one Right (subject to
adjustment as provided herein) for each Common Share so held. As of the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.

                  3.2 Summary of Rights. On the Record Date or as soon as
practicable thereafter, the Company will send or cause to be sent a copy of a
Summary of Rights to Purchase Preferred Shares, in substantially the form
attached hereto as Exhibit C (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the Close of
Business on the Record Date at the address of such holder shown on the records
of the Company. With respect to certificates for Common Shares outstanding as of
the Close of Business on the Record Date, until the Distribution Date (or the
earlier Expiration Date), the Rights will be evidenced by such certificates for
Common Shares registered in the names of the holders thereof together with a
copy of the Summary of Rights and the registered holders of the Common Shares
shall also be registered holders of the associated Rights. Until the
Distribution Date (or the earlier Expiration Date), the surrender for transfer
of any certificate for Common Shares outstanding at the Close of Business on the
Record Date, with or without a copy of the Summary of Rights, shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby.

                  3.3 New Certificates After Record Date. Certificates for
Common Shares which become outstanding (whether upon issuance out of authorized
but unissued Common Shares, disposition out of treasury or transfer or exchange
of outstanding Common Shares) after the Record Date but prior to the earliest of
the Distribution Date or the Expiration Date, shall have impressed, printed,
stamped, written or otherwise affixed onto them the following legend:

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         This certificate also evidences and entitles the holder hereof to
         certain Rights as set forth in an Agreement between the Corporation and
         Mellon Investor Services LLC, as Rights Agent, dated as of June 24,
         2002, as the same may be amended from time to time (the "Agreement"),
         the terms of which are hereby incorporated herein by reference and a
         copy of which is on file at the principal executive offices of the
         Corporation. Under certain circumstances, as set forth in the
         Agreement, such Rights will be evidenced by separate certificates and
         will no longer be evidenced by this certificate. The Corporation will
         mail to the holder of this certificate a copy of the Agreement without
         charge after receipt of a written request therefor. AS DESCRIBED IN THE
         AGREEMENT, RIGHTS WHICH ARE OWNED BY, TRANSFERRED TO OR HAVE BEEN OWNED
         BY ACQUIRING PERSONS OR ASSOCIATES OR AFFILIATES THEREOF (AS DEFINED IN
         THE AGREEMENT) SHALL BECOME NULL AND VOID AND WILL NO LONGER BE
         TRANSFERABLE.

With respect to such certificates containing the foregoing legend, until the
Distribution Date (or the earlier Expiration Date), the Rights associated with
the Common Shares represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such certificates,
except as otherwise provided herein, shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby. In the event that
the Company purchases or acquires any Common Shares after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Shares
shall be deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Shares which are no longer
outstanding.

                  Notwithstanding this Section 3.3, the omission of a legend
shall not affect the enforceability of any part of this Agreement or the rights
of any holder of the Rights.

                  Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to purchase shares, certification and assignment to
be printed on the reverse thereof) shall be substantially the same as Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate, as do not affect the rights, duties or responsibilities of the
Rights Agent and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or trading system on which the Rights may from time to time be listed
or quoted, or to conform to usage. Subject to the terms and conditions hereof,
the Right Certificates, whenever issued, shall be dated as of the Record Date,
and shall show the date of countersignature by the Rights Agent, and on their
face shall entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as shall be set forth therein at the price
per one one-hundredth of a Preferred Share set forth therein (the "Purchase
Price"), but the number of such one one-hundredths of a Preferred Share and the
Purchase Price shall be subject to adjustment as provided herein.

                  Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board of Directors, the Chief Executive Officer, President or any Vice
President, either manually or by facsimile signature,

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and shall have affixed thereto the Company's seal or a facsimile thereof which
shall be attested by the Secretary or any Assistant Secretary of the Company,
either manually or by facsimile signature. The Right Certificates shall be
countersigned, either manually or by facsimile signature, by an authorized
signatory of the Rights Agent, but it shall not be necessary for the same
signatory to countersign all of the Right Certificates hereunder. No Right
Certificate shall be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Right Certificates shall
cease to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and issued and delivered
by the Company with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Agreement any such person was not such an officer.

                  Following the Distribution Date and receipt by the Rights
Agent of all necessary information, the Rights Agent will keep or cause to be
kept, at its principal office, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right Certificates, the certificate number of each of
the Right Certificates and the date of each of the Right Certificates.

                  Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
Subject to the provisions of Section 11.1.2 and Section 14, at any time after
the Close of Business on the Distribution Date, and at or prior to the Close of
Business on the Expiration Date, any Right Certificate or Right Certificates
(other than Right Certificates representing Rights that have become null and
void pursuant to Section 11.1.2 or that have been exchanged pursuant to Section
27) may be transferred, split up or combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to purchase a
like number of one one-hundredths of a Preferred Share as the Right Certificate
or Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up or combine or exchange any
Right Certificate shall make such request in writing delivered to the Rights
Agent, and shall surrender, together with any required form of assignment and
certificate duly completed, the Right Certificate or Right Certificates to be
transferred, split up or combined or exchanged at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate or Right Certificates until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right Certificate or Right Certificates
and shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request. Thereupon the Rights Agent
shall countersign and deliver to the person entitled thereto a Right Certificate
or Right Certificates, as the case may be, as so requested. The Company may
require payment from the holders of Right Certificates of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up or combination or exchange of such Right Certificates. The
Rights

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Agent shall have no duty or obligation under this Section 6 unless and until it
is satisfied that all such taxes and/or governmental charges have been paid in
full.

                  Subject to the provisions of Section 11.1.2, at any time
after the Distribution Date and prior to the Expiration Date, upon receipt by
the Company and the Rights Agent of evidence reasonably satisfactory to them of
the loss, theft, destruction or mutilation of a Right Certificate, and, in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory
to them, and, at the Company's request, reimbursement to the Company and the
Rights Agent of all reasonable expenses incidental thereto, and upon surrender
to the Rights Agent and cancellation of the Right Certificate if mutilated, the
Company will make and deliver a new Right Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered owner in lieu
of the Right Certificate so lost, stolen, destroyed or mutilated.

                  Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.

                  7.1 Exercise of Rights. Subject to Section 11.1.2 and except
as otherwise provided herein, the registered holder of any Right Certificate may
exercise the Rights evidenced thereby in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and certification on the reverse side thereof duly
executed, to the Rights Agent at the office of the Rights Agent designated for
such purpose, together with payment of the aggregate Purchase Price for the
total number of one one-hundredths of a Preferred Share (or other securities,
cash or other assets) as to which the Rights are exercised, at or prior to the
time (the "Expiration Date") that is the earliest of (i) the Close of Business
on June 24, 2012 (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 (the "Redemption Date"), (iii) the
closing of any merger or other acquisition transaction involving the Company
pursuant to an agreement of the type described in Section 13.3 at which time the
Rights are deemed terminated, or (iv) the time at which the Rights are exchanged
as provided in Section 27.

                  7.2 Purchase. The Purchase Price for each one one-hundredth of
a Preferred Share pursuant to the exercise of a Right shall be initially $60,
shall be subject to adjustment from time to time as provided in Sections 11, 13
and 26 and shall be payable in lawful money of the United States of America in
accordance with Section 7.3.

                  7.3 Payment Procedures. Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to purchase and
certification duly executed, accompanied by payment of the aggregate Purchase
Price for the total number of one one-hundredths of a Preferred Share to be
purchased and an amount equal to any applicable tax or governmental charge
required to be paid by the holder of such Right Certificate in accordance with
Section 9, in cash or by certified or cashier's check or money order payable to
the order of the Company, the Rights Agent shall thereupon promptly (i)(A)
requisition from any transfer agent of the Preferred Shares (or make available,
if the Rights Agent is the transfer agent) certificates for the number of
Preferred Shares to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests, or (B) if the Company shall
have elected to deposit the total number of Preferred Shares issuable upon
exercise of the Rights hereunder with a depository agent, requisition from the
depositary agent depositary receipts representing interests in such number of
one one-hundredths of a Preferred Share as are

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to be purchased (in which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent with the depositary
agent) and the Company hereby directs the depositary agent to comply with all
such requests, (ii) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of the issuance of fractional shares in accordance with
Section 14 or otherwise in accordance with Section 11.1.3, (iii) promptly after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, promptly deliver such cash to
or upon the order of the registered holder of such Right Certificate. In the
event that the Company is obligated to issue other securities of the Company,
pay cash and/or distribute other property pursuant to Section 11.1.3, the
Company will make all arrangements necessary so that such other securities
necessary to comply with this Agreement.

                  7.4 Partial Exercise. In case the registered holder of any
Right Certificate shall exercise less than all the Rights evidenced thereby, a
new Right Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the registered
holder of such Right Certificate or to his duly authorized assigns, subject to
the provisions of Sections 6 and 14.

                  7.5 Full Information Concerning Ownership. Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to a registered
holder of Rights upon the occurrence of any purported exercise as set forth in
this Section 7 unless the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered for
such exercise shall have been duly and properly completed and signed by the
registered holder thereof and the Company shall have been provided with such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company or the
Rights Agent shall reasonably request.

                  Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written request
of the Company destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company. The Company may
then destroy the Certificates after any retention period required by the
Securities and Exchange Commission.

                  Section 9. Reservation and Availability of Capital Stock. The
Company covenants and agrees that from and after the Distribution Date it will
cause to be reserved and kept available out of its authorized and unissued
Preferred Shares (and, following the occurrence of a Trigger Event, out of its
authorized and unissued Common Shares or other securities or out of its shares
held in its treasury) the number of Preferred Shares (and, following the
occurrence

                                       10
<PAGE>
of a Trigger Event, Common Shares and/or other securities) that will be
sufficient to permit the exercise in full of all outstanding Rights.

                  So long as the Preferred Shares (and, following the occurrence
of a Trigger Event, Common Shares and/or other securities) issuable upon the
exercise of Rights may be listed on any stock exchange or traded in the
over-the-counter market and quoted on the National Association of Securities
Dealers, Inc. Automated Quotation System ("Nasdaq") (including the National
Market or Small Cap Market), the Company shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares reserved
for such issuance to be listed or admitted to trading on such exchange or quoted
on Nasdaq upon official notice of issuance upon such exercise.

                  The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all Preferred Shares (and, following
the occurrence of a Trigger Event, Common Shares and/or other securities)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable shares.

                  From and after such time as the Rights become exercisable, the
Company shall use its best efforts, if then necessary to permit the issuance of
Preferred Shares upon the exercise of Rights, to register and qualify such
Preferred Shares under the Securities Act and any applicable state securities or
"Blue Sky" laws (to the extent exemptions therefrom are not available), cause
such registration statement and qualifications to become effective as soon as
possible after such filing and keep such registration and qualifications
effective until the earlier of the date as of which the Rights are no longer
exercisable for such securities and the Expiration Date. The Company may
temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file a registration
statement under the Securities Act and permit it to become effective. Upon any
such suspension, the Company shall promptly notify the Rights Agent thereof and
issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement (with prompt notice
thereof to the Rights Agent) at such time as the suspension is no longer in
effect. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction unless the requisite
qualification in such jurisdiction shall have been obtained and until a
registration statement under the Securities Act (if required) shall have been
declared effective.

                  The Company further covenants and agrees that it will pay when
due and payable any and all taxes and governmental charges which may be payable
in respect of the issuance or delivery of the Right Certificates or of any
Preferred Shares (or Common Shares and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not, however, be required to pay
any tax or governmental charge which may be payable in respect of any transfer
or delivery of Right Certificates to a Person other than, or the issuance or
delivery of certificates for the Preferred Shares (or Common Shares and/or other
securities, as the case may be) in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered for exercise or to
issue or deliver any certificates for Preferred Shares (or Common Shares and/or
other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until any such tax or
governmental charge shall have been

                                       11
<PAGE>
paid (any such tax being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the Company's
satisfaction that no such tax or governmental charge is due.

                  Section 10. Preferred Shares Record Date. Each Person in whose
name any certificate for Preferred Shares (or Common Shares and/or other
securities, as the case may be) is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares (or Common Shares and/or other securities, as the case may be)
represented thereby on, and such certificate shall be dated, the date upon which
the Right Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and any applicable taxes or governmental charges) was made;
PROVIDED, HOWEVER, that if the date of such surrender and payment is a date upon
which the Preferred Shares (or Common Shares and/or other securities, as the
case may be) transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares (fractional or otherwise)
on, and such certificate shall be dated, the next succeeding Business Day on
which the Preferred Shares (or Common Shares and/or other securities, as the
case may be) transfer books of the Company are open. Prior to the exercise of
the Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preferred Shares for which the Rights
shall be exercisable, including, without limitation, the right to vote or to
receive dividends or other distributions, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided herein.

                  Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of Preferred Shares or other
securities or property purchasable upon exercise of each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.

                  11.1     Post-Execution Events.

                  11.1.1 Corporate Dividends, Reclassifications, Etc. In the
event the Company shall at any time after the date of this Agreement (A) declare
and pay a dividend on the Preferred Shares payable in Preferred Shares, (B)
subdivide the outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares into a smaller number of Preferred Shares or (D) issue any
shares of its capital stock in a reclassification of the Preferred Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11.1, the Purchase Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Company were open, he would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; PROVIDED, HOWEVER, that in no
event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock of the Company
issuable upon exercise of one Right. If an event occurs which would require an
adjustment under both Section 11.1.1 and Section 11.1.2, the adjustment provided
for

                                       12
<PAGE>
in this Section 11.1.1 shall be in addition to, and shall be made prior to, the
adjustment required pursuant to, Section 11.1.2.

                  11.1.2 Acquiring Person Events; Triggering Events. Subject to
Sections 23.1 and 27, in the event that a Trigger Event occurs, then, from and
after the first occurrence of such event, each holder of a Right, except as
provided below, shall thereafter have a right to receive, upon exercise thereof
at a price per Right equal to the then current Purchase Price multiplied by the
number of one one-hundredths of a Preferred Share for which a Right is then
exercisable (without giving effect to this Section 11.1.2), in accordance with
the terms of this Agreement and in lieu of Preferred Shares, such number of
Common Shares as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the then number of one one-hundredths of a Preferred
Share for which a Right is then exercisable (without giving effect to this
Section 11.1.2) and (y) dividing that product by 50% of the current per share
market price of the Common Shares (determined pursuant to Section 11.4) on the
first of the date of the occurrence of, or the date of the first public
announcement of, a Trigger Event (the "Adjustment Shares"); PROVIDED that the
Purchase Price and the number of Adjustment Shares shall thereafter be subject
to further adjustment as appropriate in accordance with Section 11.6.
Notwithstanding the foregoing, upon the occurrence of a Trigger Event, any
Rights that are or were acquired or beneficially owned by (1) any Acquiring
Person or any Associate or Affiliate thereof, (2) a transferee of any Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (3) a transferee of any Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect avoidance
of this Section 11.1.2, and subsequent transferees, shall become null and void
without any further action, and any holder (whether or not such holder is an
Acquiring Person or an Associate or Affiliate of an Acquiring Person) of such
Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement or otherwise. From and after the Trigger Event, no
Right Certificate shall be issued pursuant to Section 3 or Section 6 that
represents Rights that are or have become null and void pursuant to the
provisions of this paragraph, and any Right Certificate delivered to the Rights
Agent that represents Rights that are or have become null and void pursuant to
the provisions of this paragraph shall be canceled.

                  The Company shall use all reasonable efforts to ensure that
the provisions of this Section 11.1.2 are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a result of its
failure to make any determinations with respect to any Acquiring Person or its
Affiliates, Associates or transferees hereunder.

                  From and after the occurrence of an event specified in Section
13.1, any Rights that theretofore have not been exercised pursuant to this
Section 11.1.2 shall thereafter be exercisable only in accordance with Section
13 and not pursuant to this Section 11.1.2.

                                       13
<PAGE>
                  11.1.3 Insufficient Shares. The Company may at its option
substitute for a Common Share issuable upon the exercise of Rights in accordance
with the foregoing Section 11.1.2 a number of Preferred Shares or fraction
thereof such that the current per share market price of one Preferred Share
multiplied by such number or fraction is equal to the current per share market
price of one Common Share. In the event that upon the occurrence of a Trigger
Event there shall not be sufficient Common Shares authorized but unissued, or
held by the Company as treasury shares, to permit the exercise in full of the
Rights in accordance with the foregoing Section 11.1.2, the Company shall take
all such action as may be necessary to authorize additional Common Shares for
issuance upon exercise of the Rights, PROVIDED, HOWEVER, that if the Company
determines that it is unable to cause the authorization of a sufficient number
of additional Common Shares, then, in the event the Rights become exercisable,
the Company, with respect to each Right and to the extent necessary and
permitted by applicable law and any agreements or instruments in effect on the
date hereof to which it is a party, shall: (A) determine the excess of (1) the
value of the Adjustment Shares issuable upon the exercise of a Right (the
"Current Value"), over (2) the Purchase Price (such excess, the "Spread") and
(B) with respect to each Right (other than Rights which have become null and
void pursuant to Section 11.1.2), make adequate provision to substitute for the
Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2)
a reduction in the Purchase Price, (3) Preferred Shares or other equity
securities of the Company (including, without limitation, shares, or fractions
of shares, of preferred stock which, by virtue of having dividend and
liquidation rights substantially comparable to those of the Common Shares, the
Board of Directors of the Company has deemed in good faith to have substantially
the same value as Common Shares) (each such share of preferred stock or
fractions of shares of preferred stock constituting a "common stock
equivalent")), (4) debt securities of the Company, (5) other assets or (6) any
combination of the foregoing having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board of Directors
of the Company based upon the advice of a nationally recognized investment
banking firm selected in good faith by the Board of Directors of the Company;
PROVIDED, HOWEVER, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) days following the
occurrence of a Trigger Event, then the Company shall be obligated to deliver,
to the extent necessary and permitted by applicable law and any agreements or
instruments in effect on the date hereof to which it is a party, upon the
surrender for exercise of a Right and without requiring payment of the Purchase
Price, Common Shares (to the extent available) and then, if necessary, such
number or fractions of Preferred Shares (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value equal to the
Spread. If the Board of Directors of the Company shall determine in good faith
that it is unlikely that sufficient additional Common Shares could be authorized
for issuance upon exercise in full of the Rights, the thirty (30) day period set
forth above may be extended and re-extended to the extent necessary, but not
more than ninety (90) days following the occurrence of a Trigger Event, in order
that the Company may seek stockholder approval for the authorization of such
additional shares (such period as may be extended, the "Substitution Period").
To the extent that the Company determines that some action need be taken
pursuant to the second and/or third sentences of this Section 11.1.3, the
Company (x) shall provide that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the Rights until
the expiration of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of distribution to be
made pursuant to

                                       14
<PAGE>
such first sentence and to determine the value thereof. In the event of any such
suspension, the Company shall promptly notify the Rights Agent thereof and issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended as well as a public announcement (with prompt notice
thereof to the Rights Agent) at such time as the suspension is no longer in
effect. For purposes of this Section 11.1.3, the value of a Common Share shall
be the current per share market price (as determined pursuant to Section 11.4)
on the date of the occurrence of a Trigger Event and the value of any "common
stock equivalent" shall be deemed to have the same value as the Common Shares on
such date. The Board of Directors of the Company may, but shall not be required
to, establish procedures to allocate the right to receive Common Shares upon the
exercise of the Rights among holders of Rights pursuant to this Section 11.1.3.

                  11.2 Dilutive Rights Offering. In case the Company shall fix a
record date for the issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Shares (or
securities having the same rights, privileges and preferences as the Preferred
Shares ("equivalent preferred stock")) or securities convertible into Preferred
Shares or equivalent preferred stock at a price per Preferred Share or per share
of equivalent preferred stock (or having a conversion or exercise price per
share, if a security convertible into or exercisable for Preferred Shares or
equivalent preferred stock) less than the current per share market price of the
Preferred Shares (as determined pursuant to Section 11.4) on such record date,
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the number of Preferred Shares
and shares of equivalent preferred stock outstanding on such record date plus
the number of Preferred Shares and shares of equivalent preferred stock which
the aggregate offering price of the total number of Preferred Shares and/or
shares of equivalent preferred stock to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current per share market price and the denominator of which shall be the
number of Preferred Shares and shares of equivalent preferred stock outstanding
on such record date plus the number of additional Preferred Shares and/or shares
of equivalent preferred stock to be offered for subscription or purchase (or
into which the convertible securities so to be offered are initially
convertible); PROVIDED, HOWEVER, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise of one Right. In
case such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights for all
purposes. Preferred Shares and shares of equivalent preferred stock owned by or
held for the account of the Company or any Subsidiary of the Company shall not
be deemed outstanding for the purpose of any such computation. Such adjustments
shall be made successively whenever such a record date is fixed; and in the
event that such rights or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.

                  11.3 Distributions. In case the Company shall fix a record
date for the making of a distribution to all holders of the Preferred Shares
(including any such distribution made in

                                       15
<PAGE>
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash, securities or
assets (other than a regular periodic cash dividend at a rate not in excess of
125% of the rate of the last regular periodic cash dividend theretofore paid or,
in case regular periodic cash dividends have not theretofore been paid, at a
rate not in excess of 50% of the average net income per share of the Company for
the four quarters ended immediately prior to the payment of such dividend, or a
dividend payable in Preferred Shares (which dividend, for purposes of this
Agreement, shall be subject to the provisions of Section 11.1.1(A))) or
convertible securities, or subscription rights or warrants (excluding those
referred to in Section 11.2), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the current per share market price of the Preferred Shares (as
determined pursuant to Section 11.4) on such record date, less the fair market
value (as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes) of the portion of the cash,
assets, securities or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred Share and the
denominator of which shall be such current per share market price of the
Preferred Shares (as determined pursuant to Section 11.4); PROVIDED, HOWEVER,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital stock of the
Company to be issued upon exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to be
the Purchase Price which would then be in effect if such record date had not
been fixed.

                  11.4     Current Per Share Market Value.

                  11.4.1 General. For the purpose of any computation hereunder,
the "current per share market price" of any security (a "Security" for the
purpose of this Section 11.4.1) on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the thirty (30)
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date; PROVIDED, HOWEVER, that in the event that the current per share
market price of the Security is determined during any period following the
announcement by the issuer of such Security of (i) a dividend or distribution on
such Security payable in shares of such Security or securities convertible into
such shares or (ii) any subdivision, combination or reclassification of such
Security, and prior to the expiration of thirty (30) Trading Days after the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the
"current per share market price" shall be appropriately adjusted to reflect the
current market price per share equivalent of such Security. The closing price
for each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Security is not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the

                                       16
<PAGE>
over-the-counter market, as reported by Nasdaq or such other system then in use,
or, if on any such date the Security is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Security selected by the Board of Directors
of the Company. If on any such date no such market maker is making a market in
the Security, the fair value of the Security on such date as determined in good
faith by the Board of Directors of the Company shall be used. The term "Trading
Day" shall mean a day on which the principal national securities exchange on
which the Security is listed or admitted to trading is open for the transaction
of business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day. If the Security is not publicly
held or not so listed or traded, or if on any such date the Security is not so
quoted and no such market maker is making a market in the Security, "current per
share market price" shall mean the fair value per share as determined in good
faith by the Board of Directors of the Company or, if at the time of such
determination there is an Acquiring Person, by a nationally recognized
investment banking firm selected by the Board of Directors, which shall have the
duty to make such determination in a reasonable and objective manner, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.

                  11.4.2 Preferred Shares. Notwithstanding Section 11.4.1, for
the purpose of any computation hereunder, the "current per share market price"
of the Preferred Shares shall be determined in the same manner as set forth
above in Section 11.4.1 (other than the last sentence thereof). If the current
per share market price of the Preferred Shares cannot be determined in the
manner described in Section 11.4.1, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be an amount equal to 100 (as
such number may be appropriately adjusted for such events as stock splits, stock
dividends and recapitalizations with respect to the Common Shares occurring
after the date of this Agreement) multiplied by the current per share market
price of the Common Shares (as determined pursuant to Section 11.4.1). If
neither the Common Shares nor the Preferred Shares are publicly held or so
listed or traded, or if on any such date neither the Common Shares nor the
Preferred Shares are so quoted and no such market maker is making a market in
either the Common Shares or the Preferred Shares, "current per share market
price" of the Preferred Shares shall mean the fair value per share as determined
in good faith by the Board of Directors of the Company, or, if at the time of
such determination there is an Acquiring Person, by a nationally recognized
investment banking firm selected by the Board of Directors of the Company, which
shall have the duty to make such determination in a reasonable and objective
manner, which determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. For purposes of this
Agreement, the "current per share market price" of one one-hundredth of a
Preferred Share shall be equal to the "current per share market price" of one
Preferred Share divided by 100.

                  11.5 Insignificant Changes. No adjustment in the Purchase
Price shall be required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price. Any adjustments which by reason
of this Section 11.5 are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one-hundred
thousandth of a Preferred Share or the nearest one-hundredth of a Common Share
or other share or security, as the case may be.

                                       17
<PAGE>
                  11.6 Shares Other Than Preferred Shares. If as a result of an
adjustment made pursuant to Section 11.1, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock of the
Company other than Preferred Shares, thereafter the number of such other shares
so receivable upon exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Shares contained in Sections 11.1,
11.2, 11.3, 11.5, 11.8, 11.9 and 11.13, and the provisions of Sections 7, 9, 10,
13 and 14 with respect to the Preferred Shares shall apply on like terms to any
such other shares.

                  11.7 Rights Issued Prior to Adjustment. All Rights originally
issued by the Company subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the adjusted Purchase Price,
the number of one one-hundredths of a Preferred Share purchasable from time to
time hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.

                  11.8 Effect of Adjustments. Unless the Company shall have
exercised its election as provided in Section 11.9, upon each adjustment of the
Purchase Price as a result of the calculations made in Sections 11.2 and 11.3,
each Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of one one-hundredths of a Preferred Share (calculated to the nearest
one-hundred thousandth of a Preferred Share) obtained by (i) multiplying (x) the
number of one one-hundredths of a Preferred Share covered by a Right immediately
prior to this adjustment by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such adjustment of
the Purchase Price.

                  11.9 Adjustment in Number of Rights. The Company may elect on
or after the date of any adjustment of the Purchase Price to adjust the number
of Rights, in substitution for any adjustment in the number of one
one-hundredths of a Preferred Share issuable upon the exercise of a Right. Each
of the Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one one-hundredths of a Preferred Share for which
a Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that number
of Rights (calculated to the nearest one-hundredth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement (with prompt notice thereof
to the Rights Agent) of its election to adjust the number of Rights, indicating
the record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11.9, the Company may, as promptly
as practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing, subject to
Section 14, the additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by

                                       18
<PAGE>
the Company, new Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner provided
for herein (and may bear, at the option of the Company, the adjusted Purchase
Price) and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.

                  11.10 Right Certificates Unchanged. Irrespective of any
adjustment or change in the Purchase Price or the number of one one-hundredths
of a Preferred Share issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of one one-hundredths of a Preferred
Share which were expressed in the initial Right Certificates issued hereunder.

                  11.11 Par Value Limitations. Before taking any action that
would cause an adjustment reducing the Purchase Price below one one-hundredth of
the then par value, if any, of the Preferred Shares or other shares of capital
stock issuable upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable Preferred
Shares or other such shares at such adjusted Purchase Price.

                  11.12 Deferred Issuance. In any case in which this Section 11
shall require that an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer (with prompt
notice of such election to the Rights Agent) until the occurrence of such event
the issuance to the holder of any Right exercised after such record date of that
number of Preferred Shares and shares of other capital stock or securities of
the Company, if any, issuable upon such exercise over and above the Preferred
Shares and shares of other capital stock or other securities, assets or cash of
the Company, if any, issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment; PROVIDED, HOWEVER, that the Company
shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.

                  11.13 Reduction in Purchase Price. Anything in this Section 11
to the contrary notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole discretion
shall determine to be advisable in order that any consolidation or subdivision
of the Preferred Shares, issuance wholly for cash of any of the Preferred Shares
at less than the current market price, issuance wholly for cash of Preferred
Shares or securities which by their terms are convertible into or exchangeable
for Preferred Shares, dividends on Preferred Shares payable in Preferred Shares
or issuance of rights, options or warrants referred to hereinabove in this
Section 11, hereafter made by the Company to holders of its Preferred Shares
shall not be taxable to such stockholders.

                  11.14 Company Not to Diminish Benefits of Rights. The Company
covenants and agrees that after the earlier of the Shares Acquisition Date or
Distribution Date it will not, except as permitted by Section 23, Section 26 or
Section 27, take (or permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that such action

                                       19
<PAGE>
will substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights.

                  11.15 Adjustment of Rights Associated with Common Shares.
Notwithstanding anything contained in this Agreement to the contrary, in the
event that the Company shall at any time after the date hereof and prior to the
Distribution Date (i) declare or pay any dividend on the outstanding Common
Shares payable in Common Shares, (ii) effect a subdivision or consolidation of
the outstanding Common Shares (by reclassification or otherwise than by the
payment of dividends payable in Common Shares), or (iii) combine the outstanding
Common Shares into a greater or lesser number of Common Shares, then in any such
case, the number of Rights associated with each Common Share then outstanding,
or issued or delivered thereafter but prior to the Distribution Date or in
accordance with Section 22 shall be proportionately adjusted so that the number
of Rights thereafter associated with each Common Share following any such event
shall equal the result obtained by multiplying the number of Rights associated
with each Common Share immediately prior to such event by a fraction, the
numerator of which shall be the total number of Common Shares outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of Common Shares outstanding immediately following the
occurrence of such event. The adjustments provided for in this Section 11.15
shall be made successively whenever such a dividend is declared or paid or such
a subdivision, combination or consolidation is effected.

                  Section 12. Certificate of Adjusted Purchase Price or Number
of Shares. Whenever an adjustment is made as provided in Sections 11 or 13, the
Company shall (a) promptly prepare a certificate setting forth such adjustment,
and a brief statement of the facts and computations accounting for such
adjustment, (b) promptly file with the Rights Agent and with each transfer agent
for the Common Shares or the Preferred Shares a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate in accordance
with Section 25. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained and shall have no duty
with respect to and shall not be deemed to have knowledge of any such adjustment
unless and until it shall have received such certificate.

                  Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.

                  13.1 Certain Transactions. In the event that, from and after
the first occurrence of a Trigger Event, directly or indirectly, (A) the Company
shall consolidate with, or merge with and into, any other Person and the Company
shall not be the continuing or surviving Person, (B) any Person shall
consolidate with the Company, or merge with and into the Company and the Company
shall be the continuing or surviving Person of such merger and, in connection
with such merger, all or part of the Common Shares shall be changed into or
exchanged for stock or other securities of the Company or any other Person or
cash or any other property, or (C) the Company shall sell, exchange, mortgage or
otherwise transfer (or one or more of its Subsidiaries shall sell, exchange,
mortgage or otherwise transfer), in one or more transactions, assets or earning
power aggregating 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or Persons (other than
the Company or one or more wholly-owned Subsidiaries of the Company in one or
more transactions each of which

                                       20
<PAGE>
complies with Section 11.14), then, and in each such case, proper provision
shall be made so that (i) each holder of a Right (other than Rights which have
become null and void pursuant to Section 11.1.2) shall thereafter have the right
to receive, upon the exercise thereof at a price per Right equal to the then
current Purchase Price multiplied by the number of one one-hundredths of a
Preferred Share for which a Right was exercisable immediately prior to the first
occurrence of a Trigger Event (as subsequently adjusted pursuant to Sections
11.1.1, 11.2, 11.3, 11.8, 11.9 and 11.12), in accordance with the terms of this
Agreement and in lieu of Preferred Shares or Common Shares, such number of
validly authorized and issued, fully paid, non-assessable and freely tradable
Common Shares of the Principal Party (as such term is hereinafter defined) not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred Share
for which a Right was exercisable immediately prior to the first occurrence of a
Trigger Event (as subsequently adjusted pursuant to Sections 11.1.1, 11.2, 11.3,
11.8, 11.9 and 11.12) and (y) dividing that product by 50% of the then current
per share market price of the Common Shares of such Principal Party (determined
pursuant to Section 11.4) on the date of consummation of such consolidation,
merger, sale or transfer; PROVIDED, that the price per Right so payable and the
number of Common Shares of such Principal Party so receivable upon exercise of a
Right shall thereafter be subject to further adjustment as appropriate in
accordance with Section 11.6 to reflect any events covered thereby occurring in
respect of the Common Shares of such Principal Party after the occurrence of
such consolidation, merger, sale or transfer; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party; and (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
Common Shares in accordance with Section 9) in connection with such consummation
as may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights; PROVIDED that, upon the
subsequent occurrence of any consolidation, merger, sale or transfer of assets
or other extraordinary transaction in respect of such Principal Party, each
holder of a Right shall thereupon be entitled to receive, upon exercise of a
Right and payment of the Purchase Price as provided in this Section 13.1, such
cash, shares, rights, warrants and other property which such holder would have
been entitled to receive had such holder, at the time of such transaction, owned
the Common Shares of the Principal Party receivable upon the exercise of a Right
pursuant to this Section 13.1, and such Principal Party shall take such steps
(including, but not limited to, reservation of shares of stock) as may be
necessary to permit the subsequent exercise of the Rights in accordance with the
terms hereof for such cash, shares, rights, warrants and other property. The
Company shall not consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement confirming that the
requirements of this Section 13.1 and Section 13.2 shall promptly be performed
in accordance with their terms and that such consolidation, merger, sale or
transfer of assets shall not result in a default by the Principal Party under
this Agreement as the same shall have been assumed by the Principal Party
pursuant to this Section 13.1 and Section 13.2 and providing that, as soon as
practicable after executing such agreement pursuant to this Section 13, the
Principal Party, at its own expense, shall:

                                       21
<PAGE>
                  (1) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the Expiration Date and
similarly comply with applicable state securities laws;

                  (2) use its best efforts, if the Common Shares of the
Principal Party shall be listed or admitted to trading on the New York Stock
Exchange or on another national securities exchange, to list or admit to trading
(or continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on the New York Stock Exchange or such securities
exchange, or, if the Common Shares of the Principal Party shall not be listed or
admitted to trading on the New York Stock Exchange or a national securities
exchange, to cause the Rights and the securities receivable upon exercise of the
Rights to be authorized for quotation on Nasdaq or on such other system then in
use;

                  (3) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and

                  (4) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Shares of the Principal Party subject
to purchase upon exercise of outstanding Rights.

                  In case the Principal Party has provision in any of its
authorized securities or in its certificate of incorporation or by-laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue (other than to holders of
Rights pursuant to this Section 13), in connection with, or as a consequence of,
the consummation of a transaction referred to in this Section 13, Common Shares
or common stock equivalents of such Principal Party at less than the then
current market price per share thereof (determined pursuant to Section 11.4) or
securities exercisable for, or convertible into, Common Shares or common stock
equivalents of such Principal Party at less than such then current market price
(other than to holders of Rights pursuant to this Section 13), or (ii) providing
for any special payment, taxes or similar provision in connection with the
issuance of the Common Shares of such Principal Party pursuant to the provision
of Section 13, then, in such event, the Company hereby agrees with each holder
of Rights that it shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.

                  The Company covenants and agrees that it shall not, at any
time after the Trigger Event, enter into any transaction of the type described
in clauses (A) through (C) of this Section 13.1 if (i) at the time of or
immediately after such consolidation, merger, sale, transfer or other
transaction there are any rights, warrants or other instruments or securities
outstanding or

                                       22
<PAGE>
agreements in effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights, (ii) prior to,
simultaneously with or immediately after such consolidation, merger, sale,
transfer or other transaction, the stockholders of the Person who constitutes,
or would constitute, the Principal Party for purposes of Section 13.2 shall have
received a distribution of Rights previously owned by such Person or any of its
Affiliates or Associates or (iii) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the Rights. The
provisions of this Section 13 shall similarly apply to successive transactions
of the type described in clauses (A) through (C) of this Section 13.1.

                  13.2 Principal Party.  "Principal Party" shall mean:

                           (i) in the case of any transaction described in (A)
or (B) of the first sentence of Section 13.1: (i) the Person that is the issuer
of the securities into which the Common Shares are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer the Common
Shares of which have the greatest aggregate market value of shares outstanding,
or (ii) if no securities are so issued, (x) the Person that is the other party
to the merger, if such Person survives said merger, or, if there is more than
one such Person, the Person the Common Shares of which have the greatest
aggregate market value of shares outstanding or (y) if the Person that is the
other party to the merger does not survive the merger, the Person that does
survive the merger (including the Company if it survives) or (z) the Person
resulting from the consolidation; and

                           (ii) in the case of any transaction described in (C)
of the first sentence in Section 13.1, the Person that is the party receiving
the greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons is the
issuer of Common Shares having the greatest aggregate market value of shares
outstanding; PROVIDED, HOWEVER, that in any such case described in the foregoing
clause (i) or (ii) of this Section 13.2, if the Common Shares of such Person are
not at such time or have not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, then (1) if such Person
is a direct or indirect Subsidiary of another Person the Common Shares of which
are and have been so registered, the term "Principal Party" shall refer to such
other Person, or (2) if such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Shares of all of which are and have been so
registered, the term "Principal Party" shall refer to whichever of such Persons
is the issuer of Common Shares having the greatest aggregate market value of
shares outstanding, or (3) if such Person is owned, directly or indirectly, by a
joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in clauses (1) and (2) above
shall apply to each of the owners having an interest in the venture as if the
Person owned by the joint venture was a Subsidiary of both or all of such joint
venturers, and the Principal Party in each such case shall bear the obligations
set forth in this Section 13 in the same ratio as its interest in such Person
bears to the total of such interests.

                  13.3 Approved Acquisitions. Notwithstanding anything contained
herein to the contrary, upon the consummation of any merger or other acquisition
transaction of the type described in clause (A), (B) or (C) of Section 13.1
involving the Company pursuant to a merger

                                       23
<PAGE>
or other acquisition agreement between the Company and any Person (or one or
more of such Person's Affiliates or Associates) which agreement has been
approved by the Board of Directors of the Company prior to any Person becoming
an Acquiring Person, this Agreement and the rights of holders of Rights
hereunder shall be terminated in accordance with Section 7.1.

                  Section 14.       Fractional Rights and Fractional Shares.

                  14.1 Cash in Lieu of Fractional Rights. The Company shall not
be required to issue fractions of Rights or to distribute Right Certificates
which evidence fractional Rights (except prior to the Distribution Date in
accordance with Section 11.15). In lieu of such fractional Rights, there shall
be paid to the registered holders of the Right Certificates with regard to which
such fractional Rights would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole Right. For the purposes
of this Section 14.1, the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date on
which such fractional Rights would have been otherwise issuable. The closing
price for any day shall be the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by Nasdaq or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights, the current market
value of the Rights on such date shall be the fair value of the Rights as
determined in good faith by the Board of Directors of the Company, or, if at the
time of such determination there is an Acquiring Person, by a nationally
recognized investment banking firm selected by the Board of Directors of the
Company, which shall have the duty to make such determination in a reasonable
and objective manner, which determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.

                  14.2 Cash in Lieu of Fractional Preferred Shares. The Company
shall not be required to issue fractions of Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share) upon exercise or exchange of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Interests in
fractions of Preferred Shares in integral multiples of one one-hundredth of a
Preferred Share may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it; PROVIDED, that such agreement shall provide that the
holders of such depositary receipts shall have all the rights, privileges and
preferences to which they are entitled as beneficial owners of the Preferred
Shares represented by such depositary receipts. In lieu of fractional Preferred
Shares that are not integral multiples of one one-hundredth of a Preferred
Share, the Company shall pay to the registered holders of Right

                                       24
<PAGE>
Certificates at the time such Rights are exercised or exchanged as herein
provided an amount in cash equal to the same fraction of the current per share
market price of one Preferred Share (as determined in accordance with Section
14.1) for the Trading Day immediately prior to the date of such exercise or
exchange.

                  14.3 Cash in Lieu of Fractional Common Shares. The Company
shall not be required to issue fractions of Common Shares or to distribute
certificates which evidence fractional Common Shares upon the exercise or
exchange of Rights. In lieu of such fractional Common Shares, the Company shall
pay to the registered holders of the Right Certificates with regard to which
such fractional Common Shares would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole Common Share
(as determined in accordance with Section 14.1) for the Trading Day immediately
prior to the date of such exercise or exchange.

                  14.4 Waiver of Right to Receive Fractional Rights or Shares.
The holder of a Right by the acceptance of the Rights expressly waives his right
to receive any fractional Rights or any fractional shares upon exercise or
exchange of a Right, except as permitted by this Section 14.

                  Section 15. Rights of Action. All rights of action in respect
of this Agreement, except the rights of action given to the Rights Agent in this
Agreement, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit, enforce this Agreement, and may institute and maintain any suit, action
or proceeding against the Company to enforce this Agreement, or otherwise
enforce or act in respect of his right to exercise the Rights evidenced by such
Right Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
shall be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person (including, without limitation, the Company) subject to this
Agreement.

                  Section 16. Agreement of Right Holders. Every holder of a
Right by accepting the same consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:

                           (a) prior to the Distribution Date, the Rights will
         be transferable only in connection with the transfer of the Common
         Shares;

                           (b) as of and after the Distribution Date, the Right
         Certificates are transferable only on the registry books of the Rights
         Agent if surrendered at the office of the Rights Agent designated for
         such purpose, duly endorsed or accompanied by a proper instrument of
         transfer with all required certifications completed; and

                                       25
<PAGE>
                           (c) the Company and the Rights Agent may deem and
         treat the Person in whose name the Right Certificate (or, prior to the
         Distribution Date, the associated Common Shares certificate) is
         registered as the absolute owner thereof and of the Rights evidenced
         thereby (notwithstanding any notations of ownership or writing on the
         Right Certificates or the associated Common Shares certificate made by
         anyone other than the Company or the Rights Agent) for all purposes
         whatsoever, and neither the Company nor the Rights Agent shall be
         affected by any notice to the contrary.

                  Section 17. Right Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.

                  Section 18. Concerning the Rights Agent. The Company agrees to
pay to the Rights Agent reasonable compensation for all services rendered by it
hereunder in accordance with a fee schedule, to be mutually agreed upon and,
from time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the preparation, execution,
delivery, administration and amendment of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, damage,
judgment, fine, penalty, claim, demand, settlement, cost or expense, incurred
without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent, as each is finally determined by a court of competent
jurisdiction, for any action taken, suffered or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability arising
therefrom, directly or indirectly. The provisions of this Section 19 and 20
below shall survive the termination of this Agreement, the termination and
expiration of the Rights and the resignation or removal of the Rights Agent. The
costs and expenses incurred in enforcing this right of indemnification shall be
paid by the Company.

                  The Rights Agent shall be authorized to rely on, shall be
protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its acceptance and administration
of this Agreement in reliance upon any Right Certificate or certificate for the
Preferred Shares or the Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, instruction, direction, consent, certificate, statement, or
other paper or document believed by it to be genuine and to be signed, executed
and, where necessary, verified or acknowledged, by the proper Person or Persons.

                                       26
<PAGE>
                  Section 19. Merger or Consolidation or Change of Name of
Rights Agent. Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
shareholder services or stock transfer business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, PROVIDED that such Person would be eligible
for appointment as a successor Rights Agent under the provisions of Section 21.
In case at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.

                  In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.

                  Section 20. Duties of Rights Agent. The Rights Agent
undertakes only the duties and obligations expressly imposed by this Agreement
(and no implied duties or obligations) upon the terms and conditions set forth
in this Section 20, by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:

                  20.1 Legal Counsel. The Rights Agent may consult with legal
counsel selected by it (who may be legal counsel for the Company), and the
advice or opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent, and the Rights Agent shall incur no liability
for or the respect or any action taken, suffered, or omitted by it in good faith
and in accordance with such opinion.

                  20.2 Certificates as to Facts or Matters. Whenever in the
performance of its duties under this Agreement the Rights Agent shall deem it
necessary or desirable that any fact or matter be proved or established by the
Company prior to taking, suffering or omitting any action hereunder, such fact
or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board of Directors, the
Chief Executive Officer, the President, the Chief Financial Officer, any Vice
President, the Treasurer, the Secretary or any Assistant Treasurer or Assistant
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization and protection to the Rights Agent, and the Rights
Agent shall incur no liability for or in respect of any action taken, suffered
or

                                       27
<PAGE>
omitted in good faith by it under the provisions of this Agreement in reliance
upon such certificate.

                  20.3 Standard of Care. The Rights Agent shall be liable
hereunder only for its own gross negligence, bad faith or willful misconduct, as
each is finally determined by a court of competent jurisdiction. Anything to the
contrary notwithstanding, in no event shall the Rights Agent be liable for
special, punitive, indirect, consequential or incidental loss or damage of any
kind whatsoever (including but not limited to lost profits), even if the Rights
Agent has been advised of the likelihood of such loss or damage. Any liability
of the Rights Agent under this Rights Agreement will be limited to the amount of
fees paid by the Company to the Rights Agent. This Section shall survive the
termination of this Agreement, the termination and the expiration of the Rights
and the resignation or removal of the Rights Agent.

                  20.4 Reliance on Agreement and Right Certificates. The Rights
Agent shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Right Certificates (except as to
its countersignature thereof) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by the Company
only.

                  20.5 No Responsibility as to Certain Matters. The Rights Agent
shall not have any liability for, nor be under any responsibility in respect of
the validity of this Agreement or the execution and delivery hereof (except the
due execution hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its countersignature thereof); nor
shall it be liable or responsible for any breach by the Company of any covenant
or condition contained in this Agreement or in any Right Certificate; nor shall
it be liable or responsible for any change in the exercisability of the Rights
(including the Rights becoming null and void pursuant to Section 11.1.2) or any
adjustment required under the provisions of Sections 3, 11, 13, 23 or 27 or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after actual notice of any such change or adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares or other securities to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Shares will, when so issued, be validly authorized and issued, fully
paid and nonassessable.

                  20.6 Further Assurance by Company. The Company agrees that it
will perform, execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the Rights Agent for
the carrying out or performing by the Rights Agent of the provisions of this
Agreement.

                  20.7 Authorized Company Officers. The Rights Agent is hereby
authorized and directed to accept instructions with respect to the performance
of its duties hereunder from any one of the Chairman of the Board of Directors,
the Chief Executive Officer, the President, the Chief Financial Officer, any
Vice President, the Treasurer, the Secretary or any Assistant Treasurer or
Assistant Secretary of the Company, and to apply to such officers for advice or
instructions in connection with its duties under this Agreement, and it shall
not be liable for any

                                       28
<PAGE>
action taken, suffered or omitted to be taken by it in good faith in accordance
with instructions of any such officer or for any delay in acting while waiting
for these instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent, set forth
in writing any action proposed to be taken or omitted by the Rights Agent with
respect to its duties or obligations under this Agreement and the date on and/or
after which such action shall be taken or such omission shall be effective. The
Rights Agent shall not be liable to the Company for any action taken, suffered
or omitted by the Rights Agent in accordance with a proposal included in any
such application on or after the date specified therein (which date shall not be
less than three business days after the date any such officer actually receives
such application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking of any such action (or the effective date
in the case of omission), the Rights Agent shall have received written
instructions in response to such application specifying the action to be taken
or omitted.

                  20.8 Freedom to Trade in Company Securities. The Rights Agent
and any stockholder, Affiliates, director, officer or employee of the Rights
Agent may buy, sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other Person.

                  20.9 Reliance on Attorneys and Agents. The Rights Agent may
execute and exercise any of the rights or powers hereby vested in it or perform
any duty hereunder either itself or by or through its attorneys or agents, and
the Rights Agent shall not be answerable or accountable for any act, omission,
default, neglect or misconduct of any such attorneys or agents or for any loss
to the Company, any holder of Rights or any other Person resulting from any such
act, omission, default, neglect or misconduct, absent gross negligence, bad
faith willful misconduct, as finally determined by a court of competent
jurisdiction, in the selection and continued employment thereof.

                  20.10 Incomplete Certificate. If, with respect to any Rights
Certificate surrendered to the Rights Agent for exercise or transfer, the
certificate contained in the form of assignment or the form of election to
purchase set forth on the reverse thereof, as the case may be, has not been
completed to certify the holder is not an Acquiring Person (or an Affiliate or
Associate thereof), the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with the
Company.

                  20.11 Rights Holders List. At any time and from time to time
after the Distribution Date, upon the request of the Company, the Rights Agent
shall promptly deliver to the Company a list, as of the most recent practicable
date (or as of such earlier date as may be specified by the Company), of the
holders of record of Rights.

                  20.12 Rights Agent's Funds. No provision of this Agreement
shall require the Rights Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder
or in the exercise of its rights if it believes that

                                       29
<PAGE>
repayment of such funds or adequate indemnification against such risk or
liability is not assured to is.

         Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares and/or Preferred Shares, as applicable, by
registered or certified mail. Following the Distribution Date, the Company shall
promptly notify the holders of the Right Certificates by first-class mail of any
such resignation. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Common Shares and/or Preferred Shares, as applicable, by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the resigning, removed, or incapacitated Rights Agent shall
remit to the Company, or to any successor Rights Agent designated by the
Company, all books, records, funds, certificates or other documents or
instruments of any kind then in its possession which were acquired by such
resigning, removed or incapacitated Rights Agent in connection with its services
as Rights Agent hereunder, and shall thereafter be discharged from all duties
and obligations hereunder. Following notice of such removal, resignation or
incapacity, the Company shall appoint a successor to such Rights Agent. If the
Company shall fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by the holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered holder of
any Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be a Person organized and doing
business under the laws of the United States or of the State of New York or the
State of California (or any other state of the United States so long as such
Person is authorized to do business in the State of New York or California) in
good standing, which is authorized under such laws to exercise stock transfer or
shareholder services and is subject to supervision or examination by Federal or
state authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $10 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares and/or Preferred Shares, as
applicable, and, following the Distribution Date, mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.

         Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of

                                       30
<PAGE>
Directors to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of Common Shares
following the Distribution Date and prior to the Expiration Date, the Company
shall, with respect to Common Shares so issued or sold pursuant to the exercise
of stock options or under any employee plan or arrangement, granted or awarded,
or upon exercise, conversion or exchange of securities hereinafter issued by the
Company, in each case existing prior to the Distribution Date, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; PROVIDED, HOWEVER, that (i) no such Right Certificate
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Right Certificate
would be issued and (ii) no such Right Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been made in lieu
of the issuance thereof.

         Section 23. Redemption.

         23.1 Right to Redeem. The Board of Directors of the Company may, at its
option, at any time prior to a Trigger Event, redeem all but not less than all
of the then outstanding Rights at a redemption price of $.01 per Right,
appropriately adjusted to reflect any stock split, stock dividend,
recapitalization or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption Price"), and
the Company may, at its option, pay the Redemption Price in Common Shares (based
on the "current per share market price," determined pursuant to Section 11.4, of
the Common Shares at the time of redemption), cash or any other form of
consideration deemed appropriate by the Board of Directors. The redemption of
the Rights by the Board of Directors may be made effective at such time, on such
basis and subject to such conditions as the Board of Directors in its sole
discretion may establish.

         23.2 Redemption Procedures. Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights (or at such later
time as the Board of Directors may establish for the effectiveness of such
redemption), and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price for each Right so held. The
Company shall promptly give public notice of such redemption; PROVIDED, HOWEVER,
that the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. The Company shall promptly give notice of such
redemption to the Rights Agent and to the holders of the then outstanding Rights
by mailing such notice to all such holders at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Shares. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
shall state the method by which the payment of the Redemption Price will be
made. Neither the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any manner other than
that specifically set forth in this Section 23 or in Section 27, and other than
in connection with the purchase, acquisition or redemption of Common Shares
prior to the Distribution Date.

                                       31
<PAGE>
         Section 24. Notice of Certain Events. In case the Company shall propose
at any time after the earlier of the Shares Acquisition Date and the
Distribution Date (a) to pay any dividend payable in stock of any class to the
holders of Preferred Shares or to make any other distribution to the holders of
Preferred Shares (other than a regular periodic cash dividend at a rate not in
excess of 125% of the rate of the last regular periodic cash dividend
theretofore paid or, in case regular periodic cash dividends have not
theretofore been paid, at a rate not in excess of 50% of the average net income
per share of the Company for the four quarters ended immediately prior to the
payment of such dividends, or a stock dividend on, or a subdivision, combination
or reclassification of the Common Shares), or (b) to offer to the holders of
Preferred Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, or (c) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), or (d) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to permit one or more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person (other than pursuant to
a merger or other acquisition agreement of the type described in Section
1.3(ii)(A)(z)), or (e) to effect the liquidation, dissolution or winding up of
the Company, or (f) to declare or pay any dividend on the Common Shares payable
in Common Shares or to effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by payment of dividends in
Common Shares), then, in each such case, the Company shall give to the Rights
Agent and to each holder of a Right Certificate, in accordance with Section 25,
a notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Preferred Shares and/or Common
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of any action covered by clause (a) or (b) above at least ten (10) days
prior to the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at least ten
(10) days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Preferred Shares and/or Common
Shares, whichever shall be the earlier.

         In case any event set forth in Section 11.1.2 or Section 13 shall
occur, then, in any such case, (i) the Company shall as soon as practicable
thereafter give to the Rights Agent and to each holder of a Right Certificate,
in accordance with Section 25, a notice of the occurrence of such event, which
notice shall describe the event and the consequences of the event to holders of
Rights under Section 11.1.2 and Section 13, and (ii) all references in this
Section 24 to Preferred Shares shall be deemed thereafter to refer to Common
Shares and/or, if appropriate, other securities.

         Notwithstanding anything in this Agreement to the contrary, prior to
the Distribution Date a filing by the Company with the Securities and Exchange
Commission shall constitute sufficient notice to the holders of securities of
the Company, including the Rights, for purposes of this Agreement and no other
notice need be given.

                                       32
<PAGE>
         Section 25. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:

                           Advanced Medical Optics, Inc.
                           2525 Dupont Drive
                           Irvine, California  92612
                           Attention:  Secretary

Subject to the provisions of Section 21 and Section 24, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:

                           Mellon Investor Services LLC
                           400 South Hope Street, 4th Floor
                           Los Angeles, California  90071
                           Attention:  Relationship Manager

Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate (or, prior to
the Distribution Date, to the holder of any certificate representing Common
Shares) shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on the
registry books of the Company.

         Section 26. Supplements and Amendments. For so long as the Rights are
then redeemable, the Company may in its sole and absolute discretion, and the
Rights Agent shall, if the Company so directs, supplement or amend any provision
of this Agreement in any respect without the approval of any holders of Rights
or Common Shares. From and after the time that the Rights are no longer
redeemable, the Company may, and the Rights Agent shall, if the Company so
directs, from time to time supplement or amend this Agreement without the
approval of any holders of Rights (i) to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein or (ii) to make any other changes or provisions
in regard to matters or questions arising hereunder which the Company may deem
necessary or desirable, including but not limited to extending the Final
Expiration Date; PROVIDED, HOWEVER, that no such supplement or amendment shall
adversely affect the interests of the holders of Rights as such (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person), and no
such supplement or amendment may cause the Rights again to become redeemable or
cause this Agreement again to become amendable other than in accordance with
this sentence; PROVIDED FURTHER, that the right of the Board of Directors to
extend the Distribution Date shall not require any amendment or supplement
hereunder. Upon the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 26 and provided such supplement or amendment does
not change or increase the rights Agent's duties, liabilities or obligations
hereunder, the Rights Agent shall execute such supplement or amendment. Without
limiting the foregoing, at any time prior to

                                       33
<PAGE>
such time as any Person becomes an Acquiring Person, the Company and the Rights
Agent may amend this Agreement to lower the thresholds set forth in Sections 1.1
and 3.1 to not less than the greater of (i) any percentage greater than the
largest percentage of the outstanding Common Shares then known by the Company to
be beneficially owned by any Person (other than an Exempt Person) and (ii) 10%.

         Section 27. Exchange.

         27.1 Exchange of Common Shares for Rights. The Board of Directors of
the Company may, at its option, at any time after the occurrence of a Trigger
Event, exchange Common Shares for all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become null and
void pursuant to the provisions of Section 11.1.2) by exchanging at an exchange
ratio of one Common Share per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such amount per Right being hereinafter referred to as the "Exchange
Consideration"). Notwithstanding the foregoing, the Board of Directors shall not
be empowered to effect such exchange at any time after any Acquiring Person
shall have become the Beneficial Owner of 50% or more of the Common Shares then
outstanding. From and after the occurrence of an event specified in Section
13.1, any Rights that theretofore have not been exchanged pursuant to this
Section 27.1 shall thereafter be exercisable only in accordance with Section 13
and may not be exchanged pursuant to this Section 27.1. The exchange of the
Rights by the Board of Directors may be made effective at such time, on such
basis and with such conditions as the Board of Directors in its sole discretion
may establish.

         27.2 Exchange Procedures. Immediately upon the action of the Board of
Directors of the Company ordering the exchange for any Rights pursuant to
Section 27.1 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive the Exchange Consideration. The Company shall
promptly give public notice of any such exchange; PROVIDED, HOWEVER, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company promptly shall mail a notice of any such exchange to
all of the holders of such Rights at their last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange shall state the method by which the
exchange of the Common Shares for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
the Rights that have become null and void pursuant to the provisions of Section
11.1.2) held by each holder of Rights.

         27.3 Insufficient Shares. The Company may at its option substitute,
and, in the event that there shall not be sufficient Common Shares issued but
not outstanding or authorized but unissued to permit an exchange of Rights for
Common Shares as contemplated in accordance with this Section 27, the Company
shall substitute to the extent of such insufficiency, for each Common Share that
would otherwise be issuable upon exchange of a Right, a number of Preferred
Shares or fraction thereof (or equivalent preferred stock, as such term is
defined in Section 11.2) such that the current per share market price
(determined pursuant to Section 11.4) of one Preferred Share (or equivalent
preferred share) multiplied by such number or fraction is

                                       34
<PAGE>
equal to the current per share market price of one Common Share (determined
pursuant to Section 11.4) as of the date of such exchange.

         Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.

         Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares).

         Section 30. Determination and Actions by the Board of Directors. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise the rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including, without limitation, a determination
to redeem or not redeem the Rights or amend this Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) that are done or
made by the Board of Directors of the Company in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights, as such, and all other parties, and (y) not subject the Board of
Directors to any liability to the holders of the Rights.

         Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

         Section 32. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State; PROVIDED, HOWEVER, that all provisions
regarding the rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with laws of the State of New York
applicable to contracts made and to be performed entirely within such State.

         Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.

                                       35
<PAGE>
         Section 34. Descriptive Heading. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.

                                       36
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.

                                  ADVANCED MEDICAL OPTICS, INC.

                                  By  /s/ Aimee Weisner
                                      ----------------------------
                                      Name:  Aimee Weisner
                                      Title:   Corporate Vice President,
                                               General Counsel and Secretary

                                  MELLON INVESTOR SERVICES LLC, AS RIGHTS AGENT

                                  By  /s/ Sharon Knepper
                                      ---------------------------
                                      Name:  Sharon Knepper
                                      Title:  Vice President

                                      S-1
<PAGE>
                                                                       EXHIBIT A

                                     FORM OF

                           CERTIFICATE OF DESIGNATIONS

                                       of

                  SERIES A JUNIOR PARTICIPATING PREFERRED STOCK

                                       of

                          ADVANCED MEDICAL OPTICS, INC.

                         (Pursuant to Section 151 of the
                        Delaware General Corporation Law)

                          -----------------------------

                  Advanced Medical Optics, Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (hereinafter
called the "Corporation"), hereby certifies that the following resolution was
adopted by the Board of Directors of the Corporation as required by Section 151
of the General Corporation Law at a meeting duly called and held on June 24,
2002.

                  RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Certificate
of Incorporation of this Corporation, the Board of Directors hereby creates a
series of Preferred Stock, par value $.01 per share (the "Preferred Stock"), of
the Corporation and hereby states the designation and number of shares, and
fixes the relative rights, powers and preferences, and qualifications,
limitations and restrictions thereof as follows:

                  Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Participating Preferred Stock" (the
"Series A Preferred Stock") and the number of shares constituting the Series A
Preferred Stock shall be 1,200,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; PROVIDED, that no decrease
shall reduce the number of shares of Series A Preferred Stock to a number less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.

                  Section 2. Dividends and Distributions.

                  (A) Subject to the prior and superior rights of the holders of
         any shares of any class or series of stock of this Corporation ranking
         prior and superior to the Series A Preferred Stock with respect to
         dividends, the holders of shares of Series A Preferred Stock, in
         preference to the holders of Common Stock, par value $.01 per share
         (the

                                      A-1
<PAGE>
         "Common Stock"), of the Corporation, and of any other stock ranking
         junior to the Series A Preferred Stock, shall be entitled to receive,
         when, as and if declared by the Board of Directors out of funds legally
         available for the purpose, quarterly dividends payable in cash on the
         first day of March, June, September and December in each year (each
         such date being referred to herein as a "Quarterly Dividend Payment
         Date"), commencing on the first Quarterly Dividend Payment Date after
         the first issuance of a share or fraction of a share of Series A
         Preferred Stock, in an amount per share (rounded to the nearest cent)
         equal to the greater of (a) $1.00 or (b) subject to the provision for
         adjustment hereinafter set forth, 100 times the aggregate per share
         amount of all cash dividends, and 100 times the aggregate per share
         amount (payable in kind) of all non-cash dividends or other
         distributions, other than a dividend payable in shares of Common Stock
         or a subdivision of the outstanding shares of Common Stock (by
         reclassification or otherwise), declared on the Common Stock since the
         immediately preceding Quarterly Dividend Payment Date or, with respect
         to the first Quarterly Dividend Payment Date, since the first issuance
         of any share or fraction of a share of Series A Preferred Stock. In the
         event the Corporation shall at any time declare or pay any dividend on
         the Common Stock payable in shares of Common Stock, or effect a
         subdivision, combination or consolidation of the outstanding shares of
         Common Stock (by reclassification or otherwise than by payment of a
         dividend in shares of Common Stock) into a greater or lesser number of
         shares of Common Stock, then in each such case the amount to which
         holders of shares of Series A Preferred Stock were entitled immediately
         prior to such event under clause (b) of the preceding sentence shall be
         adjusted by multiplying such amount by a fraction, the numerator of
         which is the number of shares of Common Stock outstanding immediately
         after such event and the denominator of which is the number of shares
         of Common Stock that were outstanding immediately prior to such event.

                  (B) The Corporation shall declare a dividend or distribution
         on the Series A Preferred Stock as provided in paragraph (A) of this
         Section 2 immediately after it declares a dividend or distribution on
         the Common Stock (other than a dividend payable in shares of Common
         Stock); provided that, in the event no dividend or distribution shall
         have been declared on the Common Stock during the period between any
         Quarterly Dividend Payment Date and the next subsequent Quarterly
         Dividend Payment Date, a dividend of $1.00 per share on the Series A
         Preferred Stock shall nevertheless be payable on such subsequent
         Quarterly Dividend Payment Date.

                  (C) Dividends shall begin to accrue and be cumulative on
         outstanding shares of Series A Preferred Stock from the Quarterly
         Dividend Payment Date next preceding the date of issue of such shares,
         unless the date of issue of such shares is prior to the record date for
         the first Quarterly Dividend Payment Date, in which case dividends on
         such shares shall begin to accrue from the date of issue of such
         shares, or unless the date of issue is a Quarterly Dividend Payment
         Date or is a date after the record date for the determination of
         holders of shares of Series A Preferred Stock entitled to receive a
         quarterly dividend and before such Quarterly Dividend Payment Date, in
         either of which events such dividends shall begin to accrue and be
         cumulative from such Quarterly Dividend Payment Date. Accrued but
         unpaid dividends shall not bear interest. Dividends paid on the shares
         of Series A Preferred Stock in an amount less than the total amount of
         such dividends at the time accrued and payable on such shares shall be

                                      A-2
<PAGE>
         allocated pro rata on a share-by-share basis among all such shares at
         the time outstanding. The Board of Directors may fix a record date for
         the determination of holders of shares of Series A Preferred Stock
         entitled to receive payment of a dividend or distribution declared
         thereon, which record date shall be not more than 60 days prior to the
         date fixed for the payment thereof.

                  Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:

                  (A) Subject to the provision for adjustment hereinafter set
         forth, each share of Series A Preferred Stock shall entitle the holder
         thereof to 100 votes on all matters submitted to a vote of the
         stockholders of the Corporation. In the event the Corporation shall at
         any time declare or pay any dividend on the Common Stock payable in
         shares of Common Stock, or effect a subdivision, combination or
         consolidation of the outstanding shares of Common Stock (by
         reclassification or otherwise than by payment of a dividend in shares
         of Common Stock) into a greater or lesser number of shares of Common
         Stock, then in each such case the number of votes per share to which
         holders of shares of Series A Preferred Stock were entitled immediately
         prior to such event shall be adjusted by multiplying such number by a
         fraction, the numerator of which is the number of shares of Common
         Stock outstanding immediately after such event and the denominator of
         which is the number of shares of Common Stock that were outstanding
         immediately prior to such event.

                  (B) Except as otherwise provided herein, in any other
         Certificate of Designations creating a series of Preferred Stock or any
         similar stock, or by law, the holders of shares of Series A Preferred
         Stock and the holders of shares of Common Stock and any other capital
         stock of the Corporation having general voting rights shall vote
         together as one class on all matters submitted to a vote of
         stockholders of the Corporation.

                  (C) Except as set forth herein, or as otherwise provided by
         law, holders of Series A Preferred Stock shall have no special voting
         rights and their consent shall not be required (except to the extent
         they are entitled to vote with holders of Common Stock as set forth
         herein) for taking any corporate action.

                  Section 4. Certain Restrictions.

                  (A) Whenever quarterly dividends or other dividends or
         distributions payable on the Series A Preferred Stock as provided in
         Section 2 are in arrears, thereafter and until all accrued and unpaid
         dividends and distributions, whether or not declared, on shares of
         Series A Preferred Stock outstanding shall have been paid in full, the
         Corporation shall not:

                           (i) declare or pay dividends, or make any other
                  distributions, on any shares of stock ranking junior (either
                  as to dividends or upon liquidation, dissolution or winding
                  up) to the Series A Preferred Stock;

                                      A-3
<PAGE>
                           (ii) declare or pay dividends, or make any other
                  distributions, on any shares of stock ranking on a parity
                  (either as to dividends or upon liquidation, dissolution or
                  winding up) with the Series A Preferred Stock, except
                  dividends paid ratably on the Series A Preferred Stock and all
                  such parity stock on which dividends are payable or in arrears
                  in proportion to the total amounts to which the holders of all
                  such shares are then entitled;

                           (iii) redeem or purchase or otherwise acquire for
                  consideration shares of any stock ranking junior (either as to
                  dividends or upon liquidation, dissolution or winding up) to
                  the Series A Preferred Stock, provided that the Corporation
                  may at any time redeem, purchase or otherwise acquire shares
                  of any such junior stock in exchange for shares of any stock
                  of the Corporation ranking junior (both as to dividends and
                  upon dissolution, liquidation or winding up) to the Series A
                  Preferred Stock; or

                           (iv) redeem or purchase or otherwise acquire for
                  consideration any shares of Series A Preferred Stock, or any
                  shares of stock ranking on a parity with the Series A
                  Preferred Stock, except in accordance with a purchase offer
                  made in writing or by publication (as determined by the Board
                  of Directors) to all holders of such shares upon such terms as
                  the Board of Directors, after consideration of the respective
                  annual dividend rates and other relative rights and
                  preferences of the respective series and classes, shall
                  determine in good faith will result in fair and equitable
                  treatment among the respective series or classes.

                  (B) The Corporation shall not permit any subsidiary of the
         Corporation to purchase or otherwise acquire for consideration any
         shares of stock of the Corporation unless the Corporation could, under
         paragraph (A) of this Section 4, purchase or otherwise acquire such
         shares at such time and in such manner.

                  Section 5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock and may be reissued as part of a new series of
Preferred Stock subject to the conditions and restrictions on issuance set forth
herein, in the Certificate of Incorporation, or in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.

                  Section 6. Liquidation, Dissolution or Winding Up.

                  (A) Upon any liquidation, dissolution or winding up of the
         Corporation, voluntary or otherwise no distribution shall be made (1)
         to the holders of shares of stock ranking junior (either as to
         dividends or upon liquidation, dissolution or winding up) to the Series
         A Preferred Stock unless, prior thereto, the holders of shares of
         Series A Preferred Stock shall have received an amount per share (the
         "Series A Liquidation Preference") equal to $100 per share, plus an
         amount equal to accrued and unpaid dividends and distributions thereon,
         whether or not declared, to the date of such payment, provided that the
         holders of shares of Series A Preferred Stock shall be entitled to
         receive

                                      A-4
<PAGE>
         an aggregate amount per share, subject to the provision for adjustment
         hereinafter set forth, equal to 100 times the aggregate amount to be
         distributed per share to holders of shares of Common Stock, or (2) to
         the holders of shares of stock ranking on a parity (either as to
         dividends or upon liquidation, dissolution or winding up) with the
         Series A Preferred Stock, except distributions made ratably on the
         Series A Preferred Stock and all such parity stock in proportion to the
         total amounts to which the holders of all such shares are entitled upon
         such liquidation, dissolution or winding up. In the event the
         Corporation shall at any time declare or pay any dividend on the Common
         Stock payable in shares of Common Stock, or effect a subdivision,
         combination or consolidation of the outstanding shares of Common Stock
         (by reclassification or otherwise than by payment of a dividend in
         shares of Common Stock) into a greater or lesser number of shares of
         Common Stock, then in each such case the aggregate amount to which
         holders of shares of Series A Preferred Stock were entitled immediately
         prior to such event under the proviso in clause (1) of the preceding
         sentence shall be adjusted by multiplying such amount by a fraction the
         numerator of which is the number of shares of Common Stock outstanding
         immediately after such event and the denominator of which is the number
         of shares of Common Stock that are outstanding immediately prior to
         such event.

                  (B) In the event, however, that there are not sufficient
         assets available to permit payment in full of the Series A Liquidation
         Preference and the liquidation preferences of all other classes and
         series of stock of the Corporation, if any, that rank on a parity with
         the Series A Preferred Stock in respect thereof, then the assets
         available for such distribution shall be distributed ratably to the
         holders of the Series A Preferred Stock and the holders of such parity
         shares in proportion to their respective liquidation preferences.

                  (C) Neither the merger or consolidation of the Corporation
         into or with another corporation nor the merger or consolidation of any
         other corporation into or with the Corporation shall be deemed to be a
         liquidation, dissolution or winding up of the Corporation within the
         meaning of this Section 6.

                  Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each share
of Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision,
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the

                                      A-5
<PAGE>
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

                  Section 8. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable by the Company.

                  Section 9. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up, junior to all series of any other class
of the Corporation's Preferred Stock, except to the extent that any such other
series specifically provides that it shall rank on a parity with or junior to
the Series A Preferred Stock.

                  Section 10. Amendment. At any time any shares of Series A
Preferred Stock are outstanding, the Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series A Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least two-thirds of the outstanding shares of Series A Preferred Stock, voting
separately as a single class.

                  Section 11. Fractional Shares. Series A Preferred Stock may be
issued in fractions of a share that shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series A Preferred Stock.

                  IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Corporation by its Chairman of the Board this 24th day
of June, 2002.

                                       ----------------------------------------
                                       Chairman of the Board

                                      A-6
<PAGE>
                                                                       EXHIBIT B

                           [Form of Right Certificate]

Certificate No. R-                                               _______ Rights

         NOT EXERCISABLE AFTER JUNE 24, 2012 OR EARLIER IF NOTICE OF REDEMPTION
         OR EXCHANGE IS GIVEN OR IF THE COMPANY IS MERGED OR ACQUIRED PURSUANT
         TO AN AGREEMENT OF THE TYPE DESCRIBED IN SECTION 1.3(ii)(A)(z) OF THE
         AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT, AND
         TO EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT. UNDER CERTAIN
         CIRCUMSTANCES (SPECIFIED IN SECTION 11.1.2 OF THE AGREEMENT), RIGHTS
         BENEFICIALLY OWNED BY OR TRANSFERRED TO AN ACQUIRING PERSON (AS DEFINED
         IN THE AGREEMENT), OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS WILL BECOME
         NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.

                                Right Certificate

                          ADVANCED MEDICAL OPTICS, INC.

                  This certifies that            , or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of June 24, 2002, as the same may be amended from time to
time (the "Agreement"), between Advanced Medical Optics, Inc., a Delaware
corporation (the "Company"), and Mellon Investor Services LLC, a New Jersey
limited liability company, as Rights Agent (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date and prior to 5:00 P.M.
(Los Angeles time) on June 24, 2012, at the offices of the Rights Agent, or its
successors as Rights Agent, designated for such purpose, one one-hundredth of a
fully paid, nonassessable share of Series A Junior Participating Preferred
Stock, par value $.01 per share (the "Preferred Shares") of the Company, at a
purchase price of $60 per one one-hundredth of a Preferred Share, subject to
adjustment (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and certification duly
executed. The number of Rights evidenced by this Right Certificate (and the
number of one one-hundredths of a Preferred Share which may be purchased upon
exercise thereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of June 24, 2002, based on the Preferred Shares
as constituted at such date. Capitalized terms used in this Right Certificate
without definition shall have the meanings ascribed to them in the Agreement. As
provided in the Agreement, the Purchase Price and the number of Preferred Shares
which may be purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.

                  This Right Certificate is subject to all of the terms,
provisions and conditions of the Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Agreement reference is hereby made for a full

                                      B-1
<PAGE>
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Right Certificates. Copies of the Agreement are on file at the principal offices
of the Company and the Rights Agent.

                  This Right Certificate, with or without other Right
Certificates, upon surrender at the offices of the Rights Agent designated for
such purpose, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one one-hundredths of a Preferred Share as
the Rights evidenced by the Right Certificate or Right Certificates surrendered
shall have entitled such holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Right Certificate or Right Certificates for the number of whole Rights
not exercised.

                  Subject to the provisions of the Agreement, the Board of
Directors may, at its option, (i) redeem the Rights evidenced by this Right
Certificate at a redemption price of $.01 per Right or (ii) exchange Common
Shares for the Rights evidenced by this Certificate, in whole or in part.

                  No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions of
Preferred Shares which are integral multiples of one one-hundredth of a
Preferred Share, which may, at the election of the Company, be evidenced by
depository receipts), but in lieu thereof a cash payment will be made, as
provided in the Agreement.

                  No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
the Preferred Shares or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in the
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised as provided in the Agreement.

                  If any term, provision, covenant or restriction of the
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of the Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.

                  This Right Certificate shall not be valid or binding for any
purpose until it shall have been countersigned by the Rights Agent.

                                      B-2
<PAGE>
                  WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _______________.

Attest:                                ADVANCED MEDICAL OPTICS, INC.

By ______________________              By ______________________________________
     Title:                                 Title:

Countersigned:

Mellon Investor Services LLC, as Rights Agent

By_____________________
     Authorized Signature

                                      B-3
<PAGE>
                   [Form of Reverse Side of Right Certificate]

                               FORM OF ASSIGNMENT

             (To be executed by the registered holder if such holder
                  desires to transfer the Right Certificate.)

FOR VALUE RECEIVED
                   -------------------------------------------------------------
hereby sells, assigns and transfers unto
                                         ---------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

                         (Please print name and address
                                 of transferee)

Rights evidenced by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
Attorney, to transfer the within Right Certificate on the books of the within-
named Company, with full power of substitution.

Dated:

                                                     Signature

Signature Guaranteed:

                  Signatures must be guaranteed by an "eligible guarantor
institution" as defined in Rule 17Ad-15 promulgated under the Securities
Exchange Act of 1934, as amended.

                                      B-4
<PAGE>
The undersigned hereby certifies that:

                  (1) the Rights evidenced by this Right Certificate are not
beneficially owned by and are not being assigned to an Acquiring Person or an
Affiliate or an Associate thereof; and

                  (2) after due inquiry and to the best knowledge of the
undersigned, the undersigned did not acquire the Rights evidenced by this Right
Certificate from any person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof.

Dated:

                                                     Signature

                                      B-5
<PAGE>
                          FORM OF ELECTION TO PURCHASE

                      (To be executed if holder desires to
                        exercise the Right Certificate.)

To:  Advanced Medical Optics, Inc.

                  The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Right Certificate to purchase the
Preferred Shares issuable upon the exercise of such Rights (or such other
securities or property of the Company or of any other Person which may be
issuable upon the exercise of the Rights) and requests that certificates for
such shares be issued in the name of:

------------------------------------------------------------
(Please print name and address)

------------------------------------------------------------

If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:

Please insert social security
or other identifying number

------------------------------------------------------------
                  (Please print name and address)

------------------------------------------------------------

Dated:
       ------------------

                                 --------------------------------------------
                                 Signature

Signature Guaranteed:

                  Signatures must be guaranteed by an "eligible guarantor
institution" as defined in Rule 17Ad-15 promulgated under the Securities
Exchange Act of 1934, as amended.

                                      B-6
<PAGE>
The undersigned hereby certifies that:

                  (1) the Rights evidenced by this Right Certificate are not
beneficially owned by and are not being assigned to an Acquiring Person or an
Affiliate or an Associate thereof; and

                  (2) after due inquiry and to the best knowledge of the
undersigned, the undersigned did not acquire the Rights evidenced by this Right
Certificate from any person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate thereof.

Dated:_______________

                                          Signature

________________________________________________________________________________

                                     NOTICE

                  The signature in the foregoing Form of Assignment and Form of
Election to Purchase must conform to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or any
change whatsoever.

                  In the event the certification set forth above in the Form of
Assignment or Form of Election to Purchase is not completed, the Company will
deem the beneficial owner of the Rights evidenced by this Right Certificate to
be an Acquiring Person or an Affiliate or Associate hereof and such Assignment
or Election to Purchase will not be honored.

                                      B-7
<PAGE>
                                                                       EXHIBIT C

             As described in the Rights Agreement, Rights which are held
     by or have been held by an Acquiring Person or Associates or Affiliates
  thereof (as defined in the Rights Agreement) and certain transferees thereof
         shall become null and void and will no longer be transferable.

                          SUMMARY OF RIGHTS TO PURCHASE
                                PREFERRED SHARES

                  On June 24, 2002 the Board of Directors of Advanced Medical
Optics, Inc. (the "Company") declared a dividend of one preferred share purchase
right (a "Right") for each share of common stock, $.01 par value (the "Common
Shares"), of the Company outstanding at the Close of Business on June 25, 2002
(the "Record Date"). As long as the Rights are attached to the Common Shares,
the Company will issue one Right (subject to adjustment) with each new Common
Share so that all such shares will have attached Rights. When exercisable, each
Right will entitle the registered holder to purchase from the Company one
one-hundredth of a share of Series A Junior Participating Preferred Stock (the
"Preferred Shares") at a price of $60 per one one-hundredth of a Preferred
Share, subject to adjustment (the "Purchase Price"). The description and terms
of the Rights are set forth in a Rights Agreement, dated as of June 24, 2002, as
the same may be amended from time to time (the "Agreement"), between the Company
and Mellon Investor Services LLC, a New Jersey limited liability company, as
Rights Agent (the "Rights Agent").

                  Until the earlier to occur of (i) ten (10) days following a
public announcement that a person or group of affiliated or associated persons
has acquired, or obtained the right to acquire, beneficial ownership of 15% or
more of the Common Shares (an "Acquiring Person") or (ii) ten (10) business days
(or such later date as may be determined by action of the Board of Directors
prior to such time as any person or group of affiliated persons becomes an
Acquiring Person) following the commencement or announcement of an intention to
make a tender offer or exchange offer the consummation of which would result in
the beneficial ownership by a person or group of 15% or more of the Common
Shares (the earlier of (i) and (ii) being called the "Distribution Date"), the
Rights will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate together
with a copy of this Summary of Rights.

                  The Agreement provides that until the Distribution Date (or
earlier redemption exchange, termination, or expiration of the Rights), the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Close of Business on the Record Date
upon transfer or new issuance of the Common Shares will contain a notation
incorporating the Agreement by reference. Until the Distribution Date (or
earlier redemption, exchange, termination or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares, with or without
such notation or a copy of this Summary of Rights, will also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common

                                      C-1
<PAGE>
Shares as of the Close of Business on the Distribution Date and such separate
Right Certificates alone will evidence the Rights.

                  The Rights are not exercisable until the Distribution Date.
The Rights will expire on June 24, 2012, subject to the Company's right to
extend such date (the "Final Expiration Date"), unless earlier redeemed or
exchanged by the Company or terminated.

                  Each Preferred Share purchasable upon exercise of the Rights
will be entitled, when, as and if declared, to a minimum preferential quarterly
dividend payment of $1.00 per share but will be entitled to an aggregate
dividend of 100 times the dividend, if any, declared per Common Share. In the
event of liquidation, dissolution or winding up of the Company, the holders of
the Preferred Shares will be entitled to a minimum preferential liquidation
payment of $100 per share (plus any accrued but unpaid dividends) but will be
entitled to an aggregate payment of 100 times the payment made per Common Share.
Each Preferred Share will have 100 votes and will vote together with the Common
Shares. Finally, in the event of any merger, consolidation or other transaction
in which Common Shares are exchanged, each Preferred Share will be entitled to
receive 100 times the amount received per Common Share. Preferred Shares will
not be redeemable. These rights are protected by customary antidilution
provisions. Because of the nature of the Preferred Share's dividend, liquidation
and voting rights, the value of one one-hundredth of a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.

                  The Purchase Price payable, and the number of Preferred Shares
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares or
convertible securities at less than the current market price of the Preferred
Shares or (iii) upon the distribution to holders of the Preferred Shares of
evidences of indebtedness, cash, securities or assets (excluding regular
periodic cash dividends at a rate not in excess of 125% of the rate of the last
regular periodic cash dividend theretofore paid or, in case regular periodic
cash dividends have not theretofore been paid, at a rate not in excess of 50% of
the average net income per share of the Company for the four quarters ended
immediately prior to the payment of such dividend, or dividends payable in
Preferred Shares (which dividends will be subject to the adjustment described in
clause (i) above)) or of subscription rights or warrants (other than those
referred to above).

                  In the event that a Person becomes an Acquiring Person or if
the Company were the surviving corporation in a merger with an Acquiring Person
or any affiliate or associate of an Acquiring Person and the Common Shares were
not changed or exchanged, each holder of a Right, other than Rights that are or
were acquired or beneficially owned by the Acquiring Person (which Rights will
thereafter be null and void), will thereafter have the right to receive upon
exercise that number of Common Shares having a market value of two times the
then current Purchase Price of the Right. In the event that, after a person has
become an Acquiring Person, the Company were acquired in a merger or other
business combination transaction or more than 50% of its assets or earning power
were sold, proper provision shall be made so that each holder of a Right shall
thereafter have the right to receive, upon the exercise thereof at the then
current

                                      C-2
<PAGE>
Purchase Price of the Right, that number of shares of common stock of the
acquiring company which at the time of such transaction would have a market
value of two times the then current Purchase Price of the Right.

                  At any time after a Person becomes an Acquiring Person and
prior to the earlier of one of the events described in the last sentence of the
previous paragraph or the acquisition by such Acquiring Person of 50% or more of
the outstanding Common Shares, the Board of Directors may cause the Company to
exchange the Rights (other than Rights owned by an Acquiring Person which will
have become null and void), in whole or in part, for Common Shares at an
exchange rate of one Common Share per Right (subject to adjustment).

                  No adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such Purchase
Price. No fractional Preferred Shares or Common Shares will be issued (other
than fractions of Preferred Shares which are integral multiples of one
one-hundredth of a Preferred Share, which may, at the election of the Company,
be evidenced by depository receipts), and in lieu thereof, a payment in cash
will be made based on the market price of the Preferred Shares or Common Shares
on the last trading date prior to the date of exercise.

                  The Rights may be redeemed in whole, but not in part, at a
price of $.01 per Right (the "Redemption Price") by the Board of Directors at
any time prior to the time that an Acquiring Person has become such. The
redemption of the Rights may be made effective at such time, on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.

                  Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company beyond those as an existing
stockholder, including, without limitation, the right to vote or to receive
dividends.

                  Any of the provisions of the Agreement may be amended by the
Board of Directors of the Company for so long as the Rights are then redeemable,
and after the Rights are no longer redeemable, the Company may amend or
supplement the Agreement in any manner that does not adversely affect the
interests of the holders of the Rights (other than an Acquiring Person or an
affiliate or associate of an Acquiring Person). The Company may at any time
prior to such time as any person becomes an Acquiring Person amend the Agreement
to lower the thresholds described above to no less than the greater of (i) any
percentage greater than the largest percentage of the outstanding Common Shares
then known by the Company to be beneficially owned by any person or group of
affiliated or associated persons (other than an Exempt Person) and (ii) 10%.

                  A copy of the Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Current Report Form 8-K. A copy of the
Agreement is available free of charge from the Company. This summary description
of the Rights does not purport to be complete and is qualified in its entirety
by reference to the Agreement, which is incorporated herein by reference.

                                      C-3<PAGE>
                                                                    EXHIBIT 10.7

                       MANUFACTURING AND SUPPLY AGREEMENT

THIS MANUFACTURING AND SUPPLY AGREEMENT this ("Agreement") is effective as of
June 30, 2002 the ("Effective Date") by and between Allergan, Inc., a Delaware
corporation, on behalf of itself and its Affiliates ("Allergan"), having an
address at 2525 Dupont Drive, Irvine, California 92612 and Advanced Medical
Optics, Inc., a Delaware corporation, on behalf of itself and its affiliates
("AMO").

                                    RECITALS

A. Prior to the date hereof, AMO was a wholly owned subsidiary of Allergan.

B. Pursuant to that certain Contribution and Distribution Agreement, by and
between Allergan and AMO (the "Contribution Agreement"), Allergan by the
effective date hereof, will have spun off AMO by distributing a special dividend
to all of the Allergan stockholders consisting of all of the outstanding shares
of stock of AMO held by Allergan (the "Distribution").

C. Allergan currently manufactures and distributes various optical medical
devices and contact lens care products for AMO, each as more particularly
described in Exhibit "A" attached hereto.

D. AMO desires that Allergan continue, after the Distribution, to manufacture
and supply to AMO the Product(s) (as that term is defined herein) upon the terms
and conditions contained herein and Allergan desires to manufacture and supply
to AMO the Product(s) upon the terms and conditions contained herein.

                                    AGREEMENT

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

SECTION 1. DEFINITIONS

A. "Affiliates" of a party shall mean any corporation or other business entity
controlling, controlled by, or under common control with such party.

B. "Batch" shall mean that predetermined quantity of finished Product(s) listed
on and associated with a Product on Exhibit "A".

C. "CE Mark" shall mean the mark of conformity with one or more applicable
directives of the European Union.

D. "CFR" shall mean the United States Code of Federal Regulations.

                                                                          Page 1
<PAGE>
E. "COA" has the meaning given to it in Section 2.4.

F. "Control" (including "controlling", "controlled by" and "under common control
with" of any party, corporation, or other business entity) shall mean the direct
or indirect ownership of more than fifty percent (50%) of the voting or income
interest in such party, corporation, or other business entity, respectively.

G. "Contract Year" shall mean the twelve (12) month period following the
Effective Date of this Agreement and each subsequent twelve (12) month period
during the term of this Agreement.

H. "Cost" shall mean Allergan's cost to manufacture including direct labor,
direct material and overhead. Allergan uses full absorption inventory costing,
which includes all direct and indirect production costs. Direct and indirect
production costs are those costs incident to and necessary for production or
manufacturing operations or processes. Cost shall be consistent with the costing
methodology used by Allergan in determining 2002 prices and will be determined
in accordance with generally accepted accounting principles ("GAAP").

I. "cGMPs" shall mean the standards established by the FDA for current Good
Manufacturing Practices, as specified in 21 CFR Section 820 Quality System
Regulations; 21CFR Section 807 Establishment Registration and Device Listing for
Manufacturers of Devices; 21 CFR Section 803 Medical Device Reporting; 21CFR
Section 801 Labeling; 21CFR Section 810 Medical Devices Recall Authority; 21 CFR
Section 806 Medical Devices Reports of Corrections and Removals; the Federal
Food, Drug and Cosmetic Act, as amended; EN46000, 1 and/or 2; ISO 9001 and/or
9002; and the standards established in the European Union's Council Directive
93/42/EEC of 6/14/93 Concerning Medical Devices (the "MDD").

J. "ECR" (Engineering Change Request) shall mean the master change control form
defined by the Allergan Worldwide Specifications Change Control System used to
document requested changes to Product(s) Specifications or Packaging and
Labeling Specifications.

K. "Ex works" (or "EXW") means that the seller delivers title when it places the
goods at the disposal of the buyer at the seller's premises or another named
place not cleared for export and not loaded on any collecting vehicle, as
defined in the International Chamber of Commerce Incoterms 2000.

L. "Excess Materials" shall mean Raw Materials on hand and ordered consistent
with AMO's forecast at the agreed upon lead times and for which the forecasted
use is in excess of twelve (12) months. This would be a result of cancellations,
reschedules or other changes caused by AMO.

M. "Facilities" shall mean, collectively, the Waco Facility, the Westport
Facility and the Sao Paulo Facility and "Facility" shall refer to any one of
them, as the case maybe.

N. "FCA", as defined in the International Chamber of Commerce Incoterms 2000,
means that the seller delivers the goods, cleared for export, to the carrier
named by the buyer at the named place. The seller is responsible for loading the
goods. If the delivery to the carrier takes place at the buyer's named place,
the seller shall not be responsible for unloading the goods.

                                                                          Page 2
<PAGE>
O. "FDA" means the United States Food and Drug Administration.

P. "Lead-time" shall mean the time period that begins on the day Allergan
receives an order for the Product(s) and ends on the day Allergan is to deliver
the Product(s) to AMO.

Q. "Obsolete Inventory" shall mean (i) Raw Materials on hand that are no longer
in the Product(s) bill of material, (ii) Product(s) that are no longer
forecasted, or (iii) filters that are no longer used due to a mutually agreed
manufacturing process change.

R. "Packaging and Labeling Specifications" means the written specifications for
packaging and labeling the Product(s) set forth in Exhibit "B", which may be
amended from time to time by the written agreement of the parties.

S. "Product(s)" shall mean the products listed on Exhibit A hereto, which may be
amended from time to time by written agreement of the parties.

T. "Product(s) in Quarantine" shall have the meaning set forth in Section 4.1 of
this Agreement.

U. "Product(s) Specifications" shall mean the specifications set forth in
Exhibit "C", which may be amended from time to time by written agreement of the
parties.

V. "Quality Control" means the testing, other than clinical evaluation and on
going stability testing, associated with the manufacturing of the Product(s),
including but not limited to incoming component and Raw Material testing, in
process testing, and final testing, in accordance with cGMPs and the Product
Specifications.

W. "Quarantine Period" shall be sixteen (16) days.

X. "Raw Materials" shall mean all raw chemicals, packaging, labeling, filters,
components and work in process required to produce the Product(s).

Y. "Regulatory Approvals" means the approvals obtained through meeting the
requirements of the Federal Food, Drug and Cosmetic Act, as amended, and its
attendant regulations in addition to any approvals, licenses, registrations or
authorizations of any federal, state, local, or foreign regulatory agency,
department, bureau or other government entity, necessary for the manufacture,
storage, or export of Product(s) in the Territory.

Z. "Sao Paulo Facility" means the manufacturing plant operated by Allergan in
Sao Paulo Brazil as of the Effective date.

AA. "Territory" means the entire world.

BB. "Waco Facility" means the manufacturing plant operated by Allergan in Waco
Texas as of the Effective Date.

                                                                          Page 3
<PAGE>
CC. "Westport Facility" means the manufacturing plant operated by Allergan in
Westport Ireland as of the Effective Date.

SECTION 2. MANUFACTURE AND SALE OF PRODUCT(S)

2.1      Subject to the terms of this Agreement and in compliance with cGMP's,
         Allergan shall manufacture and sell to AMO and AMO shall purchase from
         Allergan all Product(s) that AMO desires during the term of this
         Agreement in accordance with the Product(s) Specifications set out in
         Exhibit "C" and the Packaging and Labeling Specifications set out in
         Exhibit "B". Allergan will not make substantial changes to the
         manufacturing capabilities, processes or locations of the Facilities
         associated with the manufacture of Products for AMO without the prior
         written consent of AMO, including material changes in significant
         subcontractors, suppliers or Raw Materials.

2.2      For any Product(s) with an expiration date, Allergan shall deliver
         those Product(s) with no less than seventy five percent (75%) of the
         original expiration date remaining, except that Vitrax shall be
         delivered with no less than fourteen (14) months of the expiration
         period remaining. Allergan will use its commercially reasonable efforts
         to (a) ensure that Product(s) are delivered with the maximum shelf life
         remaining and (b) ship Product(s) using the "first to expire shall be
         the first to ship" method. Allergan shall provide AMO with monthly
         written notice of all Product(s) in inventory with its expiration date.
         For the purpose of this Agreement, the expiration period ends on the
         last day of the month indicated on the label.

2.3      Allergan will manufacture all products in a good and workmanlike manner
         and will comply with and maintain all applicable federal, state, local,
         and environmental laws, ordinances and regulations, including but not
         limited to ISO 9002 and EN 46002 standards, as amended, and the Federal
         Food, Drug and Cosmetic Act as amended, including regulations relating
         thereto, pertinent to the services it performs relative to the
         manufacture of the Product(s).

2.4      Allergan shall test the Product(s) and provide the results for each
         Batch of Product(s) to AMO in the form of a certificate of analysis
         ("COA") as set forth in Exhibit "D".

2.5      Allergan and AMO operations management personnel shall meet quarterly
         to review and discuss operations, including but not limited to
         performance, quality of Product(s), delivery timeliness, forecast
         accuracy, and cost analysis.

SECTION 3. FORECAST AND PURCHASE ORDERS

3.1      AMO shall send purchase orders to Allergan Facilities on the following
         basis:

         (a)      Waco Facility: AMO shall send purchase orders to the Waco
                  facility on a (i) weekly basis for all Product(s) that are to
                  be shipped in the United States and (ii) on a

                                                                          Page 4
<PAGE>
                  monthly basis, on the second Tuesday of each month, for all
                  orders of Product(s) that are to be shipped outside the United
                  States;

         (b)      Westport Facility: AMO shall send purchase orders to the
                  Westport Facility on a monthly basis, on the second Tuesday of
                  each month, except for orders of "A" Product(s) identified on
                  Exhibit "H", which orders shall be provided on a weekly basis;
                  and

         (c)      Sao Paulo Facility: AMO shall send purchase orders to the Sao
                  Paulo Facility on a monthly basis on the second Tuesday of
                  each month.

         The minimum information required on all purchase orders shall be part
         number, description, quantity, price and delivery date. The purchase
         order quantities must be in multiples of the Batch quantities indicated
         in Exhibit "A", and the combined total purchase order quantities must
         consume manufacturing batch quantities indicated in Exhibit "C".

3.2      Allergan shall acknowledge AMO's purchase orders within ten (10)
         working days of receipt, and shall deliver the Product(s) as indicated
         on the purchase order. Allergan is allowed a delivery quantity
         tolerance of plus or minus ten percent (10%) of the quantity requested.
         Except as provided in Section 13, AMO shall provide Lead-time on the
         shipment of Product(s) from the Allergan Facilities as follows:

         (a)      Waco Facility: AMO shall provide Lead-time of no less than
                  fifty-six (56) calendar days for Product(s) to be distributed
                  in the U.S. and no less than eighty (80) days for other
                  Product(s). Lead-times for Product(s) distributed in the U.S.
                  do not include the Quarantine Period.

         (b)      Sao Paulo Facility: AMO shall provide Lead-time of no less
                  than seventy-seven (77) calendar days. Sao Paulo Lead-time
                  includes the Quarantine Period; and

         (c)      Westport Facility: AMO shall provide Lead-time of no less than
                  forty-two (42) calendar days for "A" Product(s) identified on
                  Exhibit H shipped to Europe, and between fifty-six (56) and
                  eighty (80) calendar days for all other Product(s). Westport
                  Lead-times for "A" Product(s) include the Quarantine Period.

         (d)      The terms for delivery shall be FCA, Allergan's Facility.

3.3      On a monthly basis AMO shall also provide Allergan with an eighteen
         (18) month forecast by month of its orders for all Product. Such
         forecast will be provided to Waco on the second Friday of each month
         and to Westport and Sao Paulo on the second Tuesday of each month.
         Allergan shall review such forecasts provided by AMO and advise AMO by
         the last calendar day of each month if Allergan anticipates any
         manufacturing capacity or raw material constraint that would make
         Allergan unable to achieve the requested volumes. Allergan shall use
         commercially reasonable efforts to maintain capacity to achieve the
         forecasted volumes.

                                                                          Page 5
<PAGE>
         The following forecast period for the Facilities shall be deemed firm
         purchase orders for the Product(s):

         (a)      Waco Facility: The first eight (8) weeks of each eighteen (18)
                  month forecast;

         (b)      Westport Facility: The first three (3) months of each eighteen
                  (18) month forecast; and

         (c)      Sao Paulo Facilities: The first eleven (11) weeks of each
                  eighteen (18) month forecast.

         For "A" Product(s) identified in Exhibit "H", month three (3) of the
         forecast will be used by Allergan to manufacture Product(s) and AMO
         will take delivery of these Product(s) over the following two (2)
         months.

3.4      The following forecast period for the Facilities shall be binding for
         the purpose of Allergan purchasing Raw Materials and will also be used
         to plan manufacturing resource requirements:

         (a)      Waco Facility: The first four (4) months of each eighteen (18)
                  month forecast;

         (b)      Westport Facility: The first six (6) months of each eighteen
                  (18) month forecast; and

         (c)      Sao Paulo Facility: The first six (6) months of each eighteen
                  (18) month forecast.

         A firm purchase order quantity for a specific Product may not vary by
         more than twenty- five percent (25%) from the forecasted quantity
         provided to Allergan three (3) months previous to the purchase order
         for the Westport and Sao Paulo facilities and two (2) months previous
         to the purchase order for the Waco facility.

         EXAMPLE:

         IN JANUARY AMO SUBMITS A FORECAST FOR PRODUCT X OF 10,000 UNITS TO BE
         DELIVERED IN JUNE. IN APRIL AMO'S FIRM ORDER FOR PRODUCT X FOR DELIVERY
         IN JUNE CANNOT BE LESS THAN 7,500 UNITS OR MORE THAN 12,500 UNITS.
         SUBSEQUENT FORECASTS FOR PRODUCT X MUST REFLECT THE PRECEDING FIRM
         ORDER VARIABILITY CONSTRAINTS.

SECTION 4. QUARANTINE SHIPMENTS

         4.1      AMO is responsible for the Quality Control release of
                  Product(s) into the commercial marketplace once Allergan has
                  released Product(s) to AMO. Except as provided below, Allergan
                  shall be responsible for the timely performance of all Quality
                  Control procedures which shall occur before the release of
                  Product to AMO or its named carrier and Quality Control
                  release of Product(s) to AMO or its named carrier. Allergan
                  may deliver to AMO or its named carrier for shipment to an AMO
                  warehouse or location,

                                                                          Page 6
<PAGE>
                  which has been previously approved by AMO for such quarantine
                  shipments, Product(s) that has been manufactured in its Waco
                  or Westport facilities that has not yet been Quality Control
                  released to AMO ("Products in Quarantine"). It is AMO's
                  obligation to ensure that it has qualified AMO warehouses or
                  locations that can accept Products in Quarantine and the
                  parties anticipate that most Products in Quarantine will be
                  held at an AMO warehouse or location. For such Products in
                  Quarantine, Allergan shall provide a COA to AMO when such
                  Products in Quarantine have successfully passed Quality
                  Control. Allergan may not deliver any Products in Quarantine
                  to an AMO distributor or customer. For deliveries by Allergan
                  of Products in Quarantine for shipment to a pre-approved AMO
                  warehouse or location, AMO shall be responsible for quarantine
                  storage of Product(s) and shall ensure that the Product(s)
                  does not enter the commercial market until Allergan has
                  provided AMO with a COA.

4.2      AMO or its warehouse agents shall have appropriate physical or
         electronic systems that prevent the delivery of Products in Quarantine
         to customers until Allergan has provided a COA to AMO.

4.3      Any indirect and direct incremental costs associated with holding
         inventory at Allergan locations until Quality Control release is
         obtained, that has not already been included in the cost of the
         Products(s) shall be charged to AMO in the amount of the actual such
         costs plus ten percent (10%).

SECTION 5. PRICING AND PAYMENT

5.1      The initial pricing for the Product(s) shall be as set forth in Exhibit
         "A".

5.2      The parties agree to adjust prices once per year, as necessary, to
         reflect changes in Cost and currency exchange rates so that pricing of
         the Product(s) equals Cost plus an additional ten percent (10%). The
         adjusted pricing will utilize unit volume for AMO Product(s) submitted
         to Allergan on the second Tuesday of October each calendar year. The
         volume forecasted for January through December will be the "Base Units"
         and used to develop pricing. Once the pricing is developed, Allergan
         will communicate the new pricing to AMO by the following November 15.
         New prices will be effective for Product(s) shipped on or after the
         following January 1.

5.3      On an annual basis, a pricing "true up" calculation will be made during
         the beginning of the first calendar quarter immediately following the
         cut off for year-end shipments. This pricing "true up" calculation will
         be made based on the actual volume of Product(s) shipped during the
         pricing period versus the volume submitted by AMO on the second Tuesday
         of October that was used to calculate the invoiced prices. The volume
         to be utilized for the 2002 calendar year pricing "true up" will be the
         July through December 2002 shipped units for each Allergan facility as
         identified in Exhibit "F". The result of this true up will either be
         invoiced or credited to AMO no later than March 31 following the true
         up period.

                                                                          Page 7
<PAGE>
5.4      The pricing "true up" calculation will be equal to the actual units
         shipped less Base Units, multiplied by the Product's current overhead
         cost multiplied by the Product's fixed cost factor, multiplied by one
         hundred ten (110%) percent: i.e., [(Actual units shipped - Base Units)
         * (Product's current overhead cost * Product's fixed cost factor)] *
         110%.

         The fixed cost factors for the term of the agreement are as follows:

         Vitrax - Sixty-five (65%) percent All other products - Seventy-five
         (75%) percent

         For calculation purposes the unit volume will be adjusted in the event
         that Allergan is unable to ship a significant quantity of Product(s)
         ordered by AMO in accordance with the terms of this Agreement.

5.5      If a Product(s) Specification or Packaging and Labeling change results
         in a cost change, Allergan will adjust the price as soon as the change
         becomes effective.

5.6      Terms of payment shall be net forty-five (45) days from the date of
         delivery to AMO's specified carrier, provided however, that payment
         shall be net sixty (60) days for any shipments to Asia and Australia,
         and provided further that payment shall be extended an extra day for
         each day Quality Control exceeds the Quarantine Period. All Product(s)
         shall be shipped FCA, Allergan's Facility. Allergan will not be
         responsible for damage caused to Product(s) while in transit to AMO.
         Any storage and freight fees are in addition to the Product(s) prices
         contained within Exhibit "A".

SECTION 6.  ONGOING STABILITY TESTING AND REFERENCE STANDARDS

6.1      Allergan shall perform all on-going stability testing of the Product(s)
         according to ICH guidelines then in effect as long as Allergan is
         manufacturing and supplying the specific Product(s) to AMO. During the
         period Allergan manufactures the Product(s) for which stability testing
         is being performed, the cost of such stability testing is included in
         the prices set forth in Exhibit "A".

6.2      On the earlier of (i) the expiration or termination date of this
         Agreement or (ii) six months after Allergan has delivered to AMO its
         final order for a discontinued Product(s) to AMO, AMO will be solely
         responsible for all on-going stability testing of the Product(s). It is
         the responsibility of AMO to select the laboratory that AMO will use
         and the physical storage location for stability and retained samples.
         Allergan will ship Ex works all stability and retained samples to AMO's
         designated storage location no later than the earlier of (i) six months
         after Allergan had delivered its final order for that Product(s) or
         (ii) the expiration or termination date of this Agreement.

6.3      It is the sole responsibility of AMO to transfer all analytical and
         stability testing technology to a new site or sites of its choice.
         Allergan will provide its existing written methods for these tests to
         AMO to assist AMO in this effort. Additionally, Allergan will permit
         AMO to send not more than two (2) AMO representatives to Allergan's
         European

                                                                          Page 8
<PAGE>
         Technical Center for one three-day period for each Product not
         currently manufactured (as of the Effective Date) by AMO in its
         Hangzhou manufacturing facility to observe technology associated with
         such formulation. By way of example, the Product Total(R) is
         manufactured in the Westport Facility but not in AMO's Hangzhou
         manufacturing facility, and thus AMO may request a three-day period for
         this Product. On the other hand, Complete(R) brand Multipurpose
         Solution is manufactured in AMO's Hangzhou manufacturing facility and
         thus no three-day period is available for this Product.

         In the event AMO wishes a three-day period of observation for a
         formula, it shall make such request in writing. Allergan's European
         Technical Center shall accommodate that request at the next regularly
         scheduled test period for that Product formula. During that three-day
         period, AMO's representatives may observe Allergan's analysts as they
         perform the testing and may reasonably ask questions concerning testing
         procedures and practices, which Allergan's analysts will attempt to
         answer in good faith.

6.4      Allergan will provide to AMO its existing written procedures which are
         used to establish the chemical reference standards necessary to release
         and perform stability testing on Product(s). Until Product(s) are
         discontinued under the terms of this Agreement, Allergan will supply to
         AMO the reference standards that it requires to maintain its production
         in Hangzhou. Once AMO discontinues a Product under the terms of this
         Agreement, all chemical reference standards associated with that
         Product shall be the sole responsibility of AMO.

6.5      On-going stability testing costs incurred by Allergan on Products that
         AMO has discontinued from being manufactured by Allergan are the
         responsibility of AMO. The direct and indirect costs associated with
         that testing plus ten (10%) percent will be charged to AMO separately.
         Allergan will invoice AMO for on-going stability related to these
         Product(s) on a quarterly basis which will be payable by AMO within
         thirty (30) days.

SECTION 7. PRODUCT(S) SPECIFICATIONS AND DOCUMENTATION

AMO, by means of an ECR submitted to Allergan, may make changes to the Packaging
and Labeling Specifications from time to time. Allergan will make all changes to
the Packaging and Labeling Specifications requested by AMO on the ECR if the
parties agree on the applicable price and material terms associated with the
change. All terms and conditions regarding such change shall be negotiated in
good faith by the parties. AMO agrees to pay all third party supplier fees
charged to Allergan for set up, plus ten percent (10%), including charges for
printing plates, artwork and tooling. AMO must approve amounts in excess of
$1,200 before such amounts are incurred. Allergan will issue AMO an invoice for
all related costs with payment due within thirty (30) days of invoice receipt.
If the ECR change affects an open purchase order, Allergan will advise AMO of
the impact on delivery date. Unused Raw Materials as a result of the ECR will be
considered Obsolete Inventory and dispositioned as provided in Section 9.

                                                                          Page 9
<PAGE>
SECTION 8. LONG LEAD TIME RAW MATERIALS

8.1     AMO authorizes Allergan to purchase the (i) long lead time Raw
        Materials, (ii) minimum buy items and (iii) economic order quantities of
        Raw Materials, listed in Exhibit E, in accordance with AMO's forecast
        requirements. These materials may be in excess of six (6) months supply.

8.2      AMO further authorizes Allergan to purchase minimum buy items or
         economic order quantities of Raw Materials not listed in Exhibit E as
         reasonably necessary to support material requirements planning which
         may exceed authorized forecasts and purchase orders, subject to AMO
         written approval for all purchases ordered in excess of six (6) months
         forecast for Westport and Sao Paulo facilities or four (4) months for
         the Waco facility.

SECTION 9.  EXCESS MATERIALS AND OBSOLETE INVENTORY

9.1      All Raw Materials in Allergan's possession and on order on the
         Effective Date of this Agreement shall be considered to have been
         purchased to support AMO's future purchase orders to Allergan and any
         Excess Material or Obsolete Inventory associated with these Raw
         Materials is the responsibility of AMO. Allergan will use commercially
         reasonable efforts to return Raw Material for credit and cancel open
         orders if it is determined that the Raw Material is Excess Material or
         Obsolete Inventory.

9.2      Allergan shall provide to AMO a monthly written report identifying all
         Raw Materials on hand for which the forecasted use is in excess of six
         (6) months. Allergan will notify AMO of Excess Materials and Obsolete
         Inventory and associated costs on a quarterly basis. At Allergan's
         discretion, AMO shall purchase, via purchase order, all Excess
         Inventory and Obsolete Inventory at Allergan's Cost. Terms will be FCA.

SECTION 10. NEW PRODUCT(S)

10.1    In the event that AMO desires to commercialize and Allergan agrees to
        manufacture items not contained in Exhibit "A", both parties may amend
        Exhibit "A" in writing to reflect the new Product(s). AMO agrees to bear
        all direct and indirect costs associated with new product validations,
        as submitted to AMO in a cost quotation. Further, AMO acknowledges that
        while a validation is intended to challenge the design of a new Product,
        Allergan will not be held liable for the outcome, provided Allergan has
        performed its activities, as defined in mutually approved protocols.

10.2    In the event AMO desires to conduct new Product validations during the
        term of this Agreement, AMO will submit to Allergan a Master Validation
        Plan and required validation protocols for approval, which shall not be
        unreasonably withheld. Mutual approval is required, as indicated by the
        signatures of both parties on the Master Validation Plan, as well as the
        required protocols. Following approval, Allergan will provide a cost
        quotation to AMO listing all Allergan costs associated with the
        validation including clinical supplies. Upon approval of such costs, AMO
        will submit a purchase order to Allergan reflecting the costs as
        detailed in AMO's cost quotation. Allergan will

                                                                         Page 10
<PAGE>
         invoice AMO upon completion of each validation activity detailed in the
         cost quotation which shall be payable by AMO within thirty (30) days of
         invoice receipt.

10.3    The Lead-time for new Product(s) launches will be stipulated by a
        project plan as agreed to in writing by both parties. The project plan
        will include forecast requirements for the new Product(s) and define
        lead time for the initial deliveries of Product. In the event that the
        Raw Material is purchased pursuant to the Master Validation Plan and
        such Raw Material is unusable upon completion of the project, the Raw
        Material will be treated as Obsolete Inventory. Upon completion of the
        validation project, subsequent purchase requirements will follow the
        purchase order and forecast process contained within Section 3 of this
        Agreement.

10.4    Allergan will provide AMO with cost estimates for the remaining portion
        of any validations in progress as of the Effective Date. Upon approval
        of such costs, AMO will submit a purchase order to Allergan for the
        remaining costs, to be invoiced by Allergan upon completion of each
        validation activity. If AMO elects to cancel any validation in progress,
        Allergan will invoice all unpaid costs incurred to date, payable by AMO
        within thirty (30) days of receipt.

SECTION 11. MISCELLANEOUS

Allergan and AMO recognize and agree that following the Effective Date it may be
necessary or desirable for AMO to provide to Allergan Raw Materials or other
goods to facilitate the performance by Allergan of its obligations under this
Agreement. To the extent that AMO provides such Raw Materials or other goods to
Allergan without payment of consideration by Allergan and such Raw Materials or
other goods are used to manufacture products for AMO, the parties agree that the
value of such Raw Materials or goods will not be included in Allergan's fully
allocated cost to manufacture Product(s) for AMO under this Agreement. For
administrative convenience, Allergan will remove the value of such AMO provided
Raw Material or other goods from invoices to AMO by providing AMO with a credit
during the first three months of this Agreement in the amount of the value of
the Raw Material or other goods plus ten percent (10%). Allergan will supply to
AMO those items listed in Exhibit "G" in accordance with the terms of this
Agreement except as modified in Exhibit "G".

SECTION 12. TERM AND TERMINATION

12.1     The Term of this Agreement shall begin on the Effective Date and end at
         midnight on the day prior to the three (3) year anniversary of the
         Effective Date.

12.2     This Agreement may be immediately terminated by either of the parties
         for cause by giving written notice to the other upon the occurrence of
         any of the following events:

         (a)      The other party breaches any material provision of this
                  Agreement and fails to substantially cure such breach within
                  thirty (30) days following the receipt from the

                                                                         Page 11
<PAGE>
                  non-breaching party of a written notice of such breach; which
                  notice reasonably specifies the extent and nature of such
                  breach.

         (b)      The other party (i) commences a voluntary case or other
                  proceeding seeking liquidation, reorganization or other relief
                  with respect to its debts under any bankruptcy, insolvency, or
                  other similar law now or hereafter in effect; (ii) makes a
                  general assignment for the benefit of creditors, (iii) becomes
                  insolvent, (iv) ceases doing business, and/or (v) takes any
                  corporate action to authorize any of the foregoing.

12.3     AMO shall have the right to terminate this Agreement in its entirety at
         any time upon providing twelve (12) months written notice to Allergan.
         AMO may also discontinue the manufacture of any individual Product upon
         providing twelve (12) months written notice to Allergan. AMO shall send
         firm purchase orders to Allergan six (6) months prior to expiration or
         termination of this Agreement for all Product(s) AMO desires Allergan
         to deliver during the six (6) month period prior to termination.
         Allergan agrees to review these orders by the last calendar day of the
         month and advise AMO that it will be able, or unable, to achieve the
         requested volumes with either (i) confirmation of the purchase order(s)
         or (ii) notice of specific feasibility issues. Allergan shall use
         commercially reasonable efforts to maintain capacity in order to
         achieve the requested volumes.

12.4     Upon expiration or termination of this Agreement, the rights and
         obligations of the parties pursuant to this Agreement shall cease,
         except as follows: (i) Obligations of confidentiality and use of
         information under Section 16 of this Agreement shall survive such
         expiration or termination; (ii) the indemnity obligations under Section
         17 shall survive such expiration or termination; and (iii) expiration
         or termination of this Agreement for any reason by a party shall not
         relieve the parties of any obligation accruing prior to such expiration
         or termination.

12.5     It is AMO's sole responsibility to transfer the technology required to
         manufacture Product(s) from Allergan to other manufacturers upon the
         expiration or termination of this Agreement. Allergan's assistance in
         such transfer will be provided at either the Waco Facility, Westport
         Facility or Sao Paulo Facility, as applicable, under the same
         conditions, both in terms of duration and substantive assistance, as
         the analytical technology transfer assistance described in Section 6.3.

12.6     Upon expiration of this Agreement, or in the event this Agreement is
         terminated for any reason including force majeure, AMO shall purchase
         all Raw Materials and Product(s) existing at the time of expiration or
         termination at Cost, provided that such Raw Materials and Product(s)
         were produced or purchased pursuant to Section 3 or Section 8 in
         response to actual purchase orders and forecasts submitted by AMO.
         Payment is due within thirty (30) days of invoice receipt from
         Allergan.

12.7     Upon expiration or termination of the Agreement, AMO has the option to
         purchase from Allergan, at Allergan's depreciated book value,
         production assets used by Allergan solely to manufacture Product(s),
         for AMO. Allergan will provide a list of these production

                                                                         Page 12
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         assets to AMO twelve (12) months prior to the expiration of the
         Agreement. AMO must submit purchase orders for these assets at least
         six (6) months prior to the termination of the Agreement. AMO will be
         responsible for removal, crate and freight on this equipment.

12.8     Upon expiration or termination of this Agreement, AMO shall assume sole
         responsibility for all reference standards and ongoing stability
         testing of the Product(s). All stability and retained samples will be
         shipped by Allergan EXW to the physical storage location of AMO's
         choice at AMO's request, but no later than six (6) months from the
         expiration or termination of the Agreement. Allergan will cooperate
         with AMO in the stability testing technology transfer to a new site, to
         the extent provided in Section 6.3.

SECTION 13. REJECTIONS AND CLAIMS

13.1     Once the Product(s) is Quality Control released by Allergan, Allergan
         will not accept any claims for rework or rejection of the Product(s)
         unless the Product(s) is determined by both Allergan and AMO to fail to
         meet the Packaging and Labeling Specifications in Exhibit "B" or the
         Product(s) Specifications in Exhibit "C". Upon such a rejection or upon
         the request and requirement by Allergan that a Product in Quarantine be
         returned to Allergan because it cannot be Quality Control released and
         without prejudice to any of AMO's other rights under this Agreement,
         Allergan will have the sole discretion to rework or replace the
         Product(s) with conforming Product(s) as soon as possible thereafter.
         In addition, Allergan will reimburse AMO for the rejected Product(s)
         shipping and storage costs, and disposal fees within thirty (30) days
         from notification by AMO of such costs and fees.

13.2     Allergan and AMO agree that in the event of a disagreement regarding
         whether the Product meets the specifications, they shall first attempt
         to resolve disputes by mutual agreement of the parties. If any dispute
         is not resolved within thirty (30) days following written notification,
         both parties agree to submit the rejected unit to a mutually acceptable
         independent test facility. Further, both Allergan and AMO shall accept
         the results of the testing performed by that facility as binding with
         regard to that Batch. The expense of such testing shall be borne by the
         losing party.

SECTION 14. PRODUCT WARRANTY

Allergan warrants that the Product(s) supplied under this Agreement shall, when
they leave Allergan's possession and control, conform with the Packaging and
Labeling Specifications in Exhibit "B" and the Product(s) Specifications in
Exhibit "C",

SECTION 15. REGULATORY

15.1     AMO will be responsible for obtaining and maintaining all worldwide
         Regulatory Approvals and any amendments or supplements as required in
         order for AMO to sell or distribute the Product(s) worldwide. Allergan
         shall provide routine and customary information and data to AMO for the
         purpose of seeking or transferring Regulatory

                                                                         Page 13
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         Approvals. AMO will be responsible for maintaining Product complaint
         files and for submitting reports to Allergan, the FDA and all other
         regulatory agencies as appropriate. AMO shall, in a timely manner,
         provide to Allergan trend reports of Product(s) complaints and
         summaries of material correspondence or conversations with the FDA or
         other government agencies regarding the quality of the Product(s).

15.2     AMO, at AMO's expense, shall be responsible for handling all
         complaints, inquiries and any medical or non-medical device reporting
         requirements related to the Product(s) manufactured hereunder,
         including the expense of any related investigation and Product(s)
         testing performed by AMO. At the written request of AMO, Allergan will
         investigate manufacturing related complaints at Allergan's cost. A
         written report will be provided to AMO within forty-five (45) days
         following Allergan's receipt of the nonconforming product. If Allergan
         receives any information regarding real or potential adverse reactions
         or defects of the Product(s) or any information that might otherwise
         constitute a complaint about the Product(s), Allergan shall promptly
         provide to AMO all information that it has concerning the same. AMO
         shall have responsibility to comply with all federal, state and local
         laws and their foreign counterparts regarding the reporting of such
         medical and non-medical device reports and complaints. AMO shall
         promptly provide Allergan with trend reports summarizing any medical or
         non-medical reports or complaints. Each party shall reasonably
         cooperate with the other in sharing information that may constitute a
         medical or non-medical device complaint related to Product(s) and shall
         designate a representative responsible for the exchange of such
         information and all other regulatory information required to be shared
         under this Agreement.

15.3     AMO shall have the right, at AMO's expense, to declare any recall of,
         or field corrective action to, any Product(s) manufactured by Allergan
         for AMO after consultation with Allergan. Allergan agrees to indemnify
         AMO for that portion of the expenses in any such recall directly
         attributable to a breach by Allergan of its obligations under Section
         2.3 or any of the warranties provided in this Agreement.

15.4     AMO shall promptly inform Allergan of the existence and substance of
         any inquiry, investigation or inspection initiated by any government
         agency, department or body relating to the manufacture of the
         Product(s) during the term of this Agreement. The existence of any such
         inquiry, investigation or inspection shall not alone constitute a
         breach of this Agreement or excuse any performance due under this
         Agreement.

15.5     Allergan shall permit AMO or its agents, once each calendar year, for a
         period not to exceed three days, during reasonable business hours and
         upon at least 72 hours notice, access to inspect the Facilities where
         the Products are manufactured, handled, stored or tested. AMO or its
         agents may observe all processes relating to the manufacture, storage,
         handling, or testing of the Products and all manufacturing, handling,
         storage and test records regarding the Products. Allergan shall provide
         reasonable and customary assistance during such inspections.

         Allergan shall extend inspection privileges to agents of the FDA or
         other governmental authorities, as required. Allergan shall notify AMO
         within 24 hours of any such

                                                                         Page 14
<PAGE>
         inspection related to the Product(s). In addition, Allergan shall
         provide AMO with copies of any and all inspection reports from the FDA
         or other relevant governmental authorities regarding the manufacture of
         the Product(s) within three (3) days of receipt of such reports.

SECTION 16. CONFIDENTIALITY

The parties acknowledge that it may be necessary or desirable, before or during
the performance of this Agreement, to exchange information in order to
facilitate the manufacture and supply of Product(s), as contemplated hereby.
Allergan possesses proprietary and trade secret information, including, but not
limited to, its manufacturing capabilities, methods and processes and financial
information related thereto, and AMO possesses proprietary and trade secret
information, including, but not limited to, the Product(s), the Product(s)
Specifications, the Packaging and Labeling Specifications and marketing and
financial information related thereto. Each party desires to preserve the
confidential nature of such information and agrees as follows. Confidential
Information of a disclosing party shall be clearly marked "confidential" at the
time of disclosure, or indicated as such in a written memorandum delivered to
the receiving party within thirty (30) days following the date of disclosure. A
party receiving Confidential Information from a disclosing party shall not use
the Confidential Information except in furtherance of this Agreement and shall
not disclose Confidential Information to any third party other than to a
receiving party's employees and agents who agree to be bound by an obligation to
keep such Confidential Information secret and who have a need to know such
information in order to further the purposes of this Agreement. This obligation
shall survive the termination of this Agreement, and shall remain binding on the
parties hereto for a period of five (5) years following the date of such
disclosure. Allergan Confidential Information shall not include intellectual
property or confidential information transferred, assigned or licensed to AMO
under the Intellectual Property Assignment and License Agreement executed by the
parties concurrently herewith. Such intellectual property or confidential
information shall be AMO Confidential Information. This Agreement imposes no
obligation on a receiving party with regard to that portion of the Confidential
Information which a receiving party can demonstrate by written records was known
to it prior to the Effective Date; or which is now generally known to the
public, or becomes generally known in the future other than by breach of this
Agreement by a receiving party; or which is lawfully disclosed to a receiving
party by a third party who is not obligated to the disclosing party to retain
such information in confidence; or which is required to be produced pursuant to
a legal proceeding, provided the receiving party gives the disclosing party
prompt prior written notice of such requirement. Disclosure of Confidential
Information under this Agreement will create no license, right, interest or
ownership in any such information in a receiving party.

SECTION 17. INDEMNIFICATION

Each party (the "Indemnitor") shall indemnify the other (the "Indemnitee") for
any and all Liability or Loss (as defined below) it incurs from any and all
claims, suits, demands or proceedings (collectively referred to as "Claims")
brought against it by unrelated third parties for personal injury, death, or
damage to real or personal property arising out of the Indemnitor's negligence,
willful misconduct or breach of warranty under this Agreement. Without limiting

                                                                         Page 15
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the foregoing, AMO agrees to indemnify and defend Allergan for any Liability or
Loss Allergan incurs from any Claim brought against Allergan alleging that
Allergan has infringed the intellectual property rights of a third party by
virtue of properly performing its obligations to manufacture Products pursuant
to Packaging and Labeling Specifications and the Product(s) Specifications under
this Agreement. For purposes of indemnification under this section, "Liability"
or "Loss" shall include, but shall not be limited to, all defense costs,
settlement costs, court costs, damages, interests, penalties, judgments,
expenses, and reasonable fees of attorneys and professionals. The parties agree
that the Indemnitee shall only be entitled to such indemnification if: (a) the
Indemnitee had, at its own expense, promptly given the Indemnitor written notice
of such Claims upon their filing or creation; and (b) the Indemnitor had been
granted the right to take control of the settlement and defense of such Claims
with counsel reasonably acceptable to the Indemnitee in exchange for the
Indemnitor's written agreement to accept the defense and all liability for the
claim without reservation. The Indemnitee shall at all times reasonably
cooperate in the settlement and defense of all Claims and shall make available
all records, materials and other relevant matter reasonably requested by the
Indemnitor in connection with such Claims. No party shall have the right to
settle any Claims in a manner that materially diminishes the rights or interests
of the other without that party's prior written consent, which shall not be
unreasonably withheld or delayed. The Indemnitor shall not be liable for any
settlement made without its prior written consent. These indemnification
obligations shall survive the expiration or termination of this Agreement.

SECTION 18. NOTICES

Any notices to be given under this Agreement must be in writing and delivered
either in person, by any method of mail (postage prepaid) requiring return
receipt, or by overnight courier, to the party to be notified at its address
given below, or at any address such party has previously designated by prior
written notice to the other. Notice shall be presumptively deemed to be
sufficiently given for all purposes upon the earlier of: (a) the date of actual
receipt; (b) if mailed, three calendar days after the date of postmark; or (c)
if delivered by overnight courier, the next business day the overnight courier
regularly makes deliveries.

If to AMO:

Advanced Medical Optics, Inc.
1700 East St. Andrew Place
P.O. Box 25162
Santa Ana, California 92799-5162
Attn:  Vice President, Operations
Fax:

with a copy to the General Counsel at the same address.

                                                                         Page 16
<PAGE>
If to Allergan:
Allergan, Inc.
2525 Dupont Drive
Irvine, California 92612
Attn: Manager of Contracts
Fax:  (714) 246-5598

With a copy to the General Counsel at the same address.

SECTION 19. FORCE MAJEURE

Except for the obligation to make payment when due, each party shall be excused
from liability for the failure or delay in performance of any obligation under
this Agreement by reason of any event beyond such party's reasonable control
including but not limited to Acts of God, fire, flood, explosion, earthquake, or
other natural forces, war, civil unrest, accident, destruction or other
casualty, any act, inaction or delay of any government or government agency, any
lack or failure of transportation facilities, any lack or failure of supply of
raw materials, any strike or labor disturbance. Such excuse from liability shall
be effective only to the extent and duration of the event(s) causing the failure
or delay in performance and provided that the party has not caused such event(s)
to occur. Notice of a party's failure or delay in performance due to force
majeure must be given to the other party within three (3) calendar days after
its occurrence. All delivery dates under this Agreement that have been affected
by force majeure shall be tolled for the duration of such force majeure. In no
event shall any party be required to prevent or settle any labor disturbance or
dispute.

SECTION 20. ASSIGNMENT

This Agreement is binding upon and inures to the benefit of the parties to it,
and to their successors and assigns. No party may assign or delegate any or all
of its rights or obligations under this Agreement without the prior written
consent of the other party to this Agreement. Any assignment or delegation, or
attempt at the same, made in the absence of such prior written consent shall be
void and without effect. Either party may, however, without notice or consent
and at its sole discretion, assign any or all of its rights and obligations
under this Agreement to an Affiliate of such party.

SECTION 21. GOVERNING LAW

This Agreement shall be construed, and the rights of the parties determined, in
accordance with the laws of the State of California, without regard to that
State's rules regarding choice or conflict of laws.

SECTION 22. RELATIONSHIP BETWEEN THE PARTIES

Following the Effective Date, the parties will have no ownership interest in the
other and their relationship, as established by this Agreement, is solely that
of Buyer and Seller. This Agreement does not create any partnership, joint
venture or similar business relationship between the parties.

                                                                         Page 17
<PAGE>
Neither party is a legal representative of the other party, and neither party
can assume or create any obligation, representation, warranty or guarantee,
express or implied, on behalf of the other party for any purpose whatsoever.

SECTION 23. INTELLECTUAL PROPERTY

Allergan agrees that AMO individually, or through its Affiliates, is the sole
and exclusive owner of the Product(s) Specifications and/or Packaging and
Labeling Specifications (collectively defined as "Intellectual Property") in the
Territory. No such Intellectual Property is being assigned, licensed or
otherwise transferred to any person or entity hereunder. Allergan further agrees
that it has no rights to the Intellectual Property and that Allergan will not
contest or dispute the validity of or title to any Intellectual Property.
Allergan shall not take or cooperate in any action or threatened action which
might in any way impair or attack the Intellectual Property or the rights or
interests of AMO, its Affiliates, licensees or assignees in the same.

SECTION 24. SEVERABILITY

If any provision of this Agreement is adjudged to be invalid, illegal, or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired, and the parties shall
use their best efforts to substitute a valid, legal, and enforceable provision
which, insofar as practical, implements the purposes of this Agreement.

SECTION 25. WAIVER

The failure of either party to enforce, at any time or for any period of time,
the provisions hereof, or the failure of either party to exercise any option
herein shall not be construed as a waiver of such provision or option and shall
in no way affect that party's right to enforce such provisions or exercise such
option. No waiver of any provision hereof shall be deemed a waiver of any
succeeding breach of the same or any other provisions of this Agreement.

SECTION 26. MODIFICATION

This Agreement cannot be changed orally, and no modification of this Agreement
shall be recognized nor have any effect, unless the writing in which it is set
forth is signed by Allergan and AMO, nor shall any waiver of any of the
provisions of this Agreement be effective unless in writing and signed by the
party to be charged therewith.

SECTION 27. ENTIRE AGREEMENT

This Agreement, the Contribution and Distribution Agreement, the other Ancillary
Agreements, the exhibits, schedules and appendices hereto and thereto and the
specific agreements contemplated herein or thereby contain the sole and entire
understanding of the parties related to its subject matter, and supersedes all
oral or written agreements concerning this subject matter made prior to the date
of this Agreement.

                                                                         Page 18
<PAGE>
SECTION 28. INCORPORATION OF EXHIBITS

Exhibits A, B, C, D, E, F, G, and H attached hereto are hereby incorporated
herein by this reference.

SECTION 29. AUDIT

AUDIT RIGHTS. AMO, directly or through a third party, may audit the books,
records and operations of Allergan upon reasonable notice and during regular
business hours for the purpose of determining Allergan's compliance with the
terms of this Agreement. Allergan will cooperate with AMO and/or its independent
auditor in any such audit. Allergan shall provide AMO with information
reasonably requested before an on-site audit is to be conducted and shall
provide AMO with all information necessary to accurately complete the audit in a
timely fashion. Any information obtained during any such audit shall be
considered Confidential and shall be used only in connection with determining
compliance with the applicable terms of this Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Manufacturing and
Supply Agreement as of the date first written above.

ALLERGAN, INC., a Delaware corporation        ADVANCED MEDICAL OPTICS, INC.,
                                               a Delaware corporation

By:_________________________________          By:______________________________
Name: Jacqueline Schiavo                      Name:
Title:   Corporate Vice President of          Title:
Worldwide Operations
                                                           Page 19

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