Advanced Medical Optics (EYE)

A significant amount of our debt agreements contain covenant restrictions that may limit our ability to operate our business.

The agreements governing our senior credit facility contain covenant restrictions that limit our ability to operate our business, including restrictions on our ability to:

·                                          incur additional debt or issue guarantees;

·                                          create liens;

·                                          make certain investments;

·                                          enter into transactions with our affiliates;

·                                          sell certain assets;

·                                          redeem capital stock or make other restricted payments;

·                                          declare or pay dividends or make other distributions to stockholders; and

·                                          consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries on a consolidated basis.

Our senior credit facility requires us to maintain specific leverage, fixed charge coverage and interest coverage ratios. Our ability to comply with these covenants is dependent on our future performance, which will be subject to many factors, some of which are beyond our control, including prevailing economic conditions. Our failure to comply with these obligations would

22

prevent us from borrowing additional money under the facility and could result in a default under it. If a default occurs under any of our senior indebtedness, the relevant lenders could elect to declare the indebtedness, together with accrued interest and other fees, to be immediately due and payable and proceed against substantially all of our assets, which will serve as collateral securing the indebtedness. Moreover, if the lenders under a facility or other agreement in default were to accelerate the indebtedness outstanding under that facility, it could result in a default under other indebtedness. If all or any part of our indebtedness were to be accelerated, we may not have or be able to obtain sufficient funds to repay it. In addition, we may incur other indebtedness in the future that may contain financial or other covenants that are more restrictive than those contained in our current indentures.

As a result of these covenants, our ability to respond to changes in business and economic conditions and to obtain additional financing, if needed, may be significantly restricted, and we may be prevented from engaging in transactions that might otherwise be beneficial to us. In addition, our failure to comply with these covenants could result in a default under our debt, which could permit the holders to accelerate such debt. If any of our debt is accelerated, we may not have sufficient funds available to repay such debt.  As of December 31, 2006, we were in compliance with our financial and other covenants.

A significant amount of our debt agreements contain covenant restrictions that may limit our ability to operate our business.

The agreements governing our senior credit facility contain covenant restrictions that limit our ability to operate our business, including restrictions on our ability to:

•                                          incur additional debt or issue guarantees;

•                                          create liens;

•                                          make certain investments;

•                                          enter into transactions with our affiliates;

•                                          sell certain assets;

•                                          redeem capital stock or make other restricted payments;

•                                          declare or pay dividends or make other distributions to stockholders; and

•                                          consolidate, merge or transfer all or substantially all of our assets and the assets of our subsidiaries on a consolidated basis.

23