Advanced Medical Optics (EYE)

TERMINATION

Section 4.1 TERMINATION. The provisions of Article 3.1(a) and 3.1(b) of this Agreement shall remain in full force and effect until the earlier of (a) such time that Mr. Morfit (or a designee of the Stockholders who is approved by the Committee) no longer serves as a director of the Company or is not re-nominated for election as a director, (b) the date immediately following the 2008 Annual Meeting, (c) the date the Stockholders beneficially own less than 5 % of the shares of Common Stock outstanding or (d) a date established by mutual consent of the Company and the Stockholders. The other provisions of this Agreement shall remain in full force and effect until the earlier of (a) such time that Mr. Morfit (or a designee of the Stockholders who is approved by the Committee) no longer serves as a director of the Company or is not re-nominated for election as a director, (b) the date the Stockholders beneficially own less than 5 % of the shares of Common Stock outstanding or (c) a date established by mutual consent of the Company and the Stockholders.

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Section 4.2 EFFECT OF TERMINATION. In the event of any termination of this Agreement, this Agreement (other than Sections 5.1 through 5.8, inclusive) shall become void and of no effect with no liability on the part of any party hereto; provided that no such termination shall relieve any party hereto from liability for any breach of this Agreement prior to termination thereof.

TERMINATION

25.01 Termination by AMO

AMO may terminate the Agreement, or, as specified below, any Services Tower, for any of the following reasons:

AMO may terminate this Agreement, or any Services Tower, for convenience at any time by giving IBM written notice of the termination at least *** prior to the termination date specified in the notice. If AMO terminates a Services Tower, then the Annual Services Charges shall be adjusted by an amount as set forth in Schedule C (Charges).

In the event of a Change in Control of AMO, AMO may terminate this Agreement by giving IBM notice of the termination at least *** prior to the termination date specified in the notice. IBM, however, may not terminate this Agreement due to a Change in Control of AMO or any AMO Entity.

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In the event of a Change in Control of IBM, AMO may terminate this Agreement by giving IBM written notice of the termination at least *** prior to the termination date specified in the notice.

Subject to the provisions of Section 17.1, if IBM: (a) defaults in the performance of any of its material obligations under this Agreement, and does not cure such default within thirty (30) days of receipt (the “Default Cure Period”) of a notice of default specifying the nature of the default (the “Default Notice”), provided that if such breach is not capable of being cured within the Default Cure Period and IBM is using its commercially reasonable best efforts to cure, IBM shall have an additional thirty (30) days to cure, or (b) commits numerous breaches of its duties hereunder, which in the aggregate become material even if such breaches are not themselves material, and such breaches are not cured within the Default Cure Period following a Default Notice; AMO may, by giving notice to IBM, terminate this Agreement in whole, or any affected Services Tower, as of the termination date specified in the Default Notice. If AMO terminates any Services Tower of the Covered Services pursuant to this Section, then the Annual Services Charges shall be adjusted by an amount set forth in Schedule C (Charges).

AMO may terminate the Agreement, or any affected Services Tower, in the event of a Transition Services Default, provided that such failure is not the result of a failure by AMO, or an AMO Agent, to perform its dependencies as set forth in the Transition Plan with respect to such Transition Deliverable or Transition Milestone, upon ten (10) days prior written notice to IBM given within thirty (30) days after the occurrence of such failure and, in any case, prior to the Transition Date (as such date may be extended by agreement of the Parties); and provided, however, that IBM shall have a minimum of fifteen (15) days to cure such failure.

AMO may terminate this Agreement, or any affected Services Tower, due to the occurrence of a Service Level Termination Event, upon ninety (90) days prior written notice to IBM given not later than 180 days after the occurrence of such Service Level Termination Event.

AMO may terminate this Agreement, or any affected Services Tower, under the circumstances set forth in Section 17.02 (Alternate Source).

25.02 Termination by IBM

IBM may terminate this Agreement, or, as specified below, any Services Tower, for any of the following reasons:

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IBM may terminate this Agreement immediately if AMO fails to pay to IBM when due under this Agreement any amounts other than as permitted pursuant to Section 19.03 (Disputed Charges/Credits) and such failure remains uncured for a period of ten (10) days after sending AMO a Default Notice thereof.

IBM may terminate this Agreement, or any affected Services Tower, under the circumstances set forth in Section 17.02 (Alternate Source).

25.03 Termination for Insolvency.

Either Party may terminate this Agreement upon written notice to the other Party if the other Party ceases to function as a going concern, becomes insolvent, makes an assignment for the benefit of creditors, files a petition in bankruptcy, permits a petition in bankruptcy to be filed against it and such petition or proceeding is not terminated or dismissed within sixty (60) days of such filing, or admits in writing its inability to pay its debts as they mature, or if a receiver is appointed for a substantial part of its assets.

25.04 Termination Charges / Wind-Down Costs

In the event of a termination by IBM pursuant to Section 25.02, IBM may seek all remedies available to IBM under law and in equity, except as limited by the terms of this Agreement.

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TERMINATION

Section 8.1             Termination.  This Agreement may be terminated at any time prior to the Effective Time, notwithstanding approval thereof by the stockholders of the Company:

(a)       by mutual written consent duly authorized by the Company Board and the Parent Board;

(b)       by either Parent or the Company if the Merger shall not have been consummated by July 31, 2007 (the “Outside Date”); provided, however, that the right to terminate this Agreement under this Section 8.1(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement has been the principal cause of, or resulted in, the failure of the Effective Time to occur on or before the Outside Date; provided, further, that no termination by a party pursuant to this Section 8.1(b) shall be effective unless concurrently therewith such party fulfills its obligation under Section 8.3;

(c)       by either Parent or the Company if a court of competent jurisdiction or governmental, regulatory or administrative agency or commission shall have issued a nonappealable final order, decree or ruling or taken any other action having the effect of permanently restraining, enjoining or otherwise prohibiting the Merger (provided that the party seeking to terminate pursuant to this Section 8.1(c) shall have complied with its obligations under Section 6.5 and used its reasonable best efforts to have any such order, decree, ruling or other action vacated or lifted);

(d)       by either Parent or the Company if any approval of the Voting Proposal by the stockholders of the Company required for consummation of the Merger shall not have been obtained; provided, however, that the right to terminate this Agreement under this Section 8.1(d) shall not be available to the Company if the Company has materially breached the provisions of Section 6.2 or Section 6.4; provided, further, that no termination by a party pursuant this Section 8.1(d) shall be effective unless concurrently therewith the Company fulfills its obligation under Section 8.3;

(e)       by Parent, if the Company shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement (other than the obligation to close the transaction which shall be governed by Section 1.7), which breach or failure to perform would cause the conditions set forth in Section 7.2(a) or Section 7.2(b) to not be satisfied and which breach or failure, if capable of being cured, shall not have been cured within twenty (20) days following receipt by the Company of written notice of such breach or failure from Parent;

(f)        by the Company, if Parent shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement (other than the obligation to close the transaction which shall be governed by

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Section 1.7), which breach or failure to perform would cause the conditions set forth in Section 7.3(a) or Section 7.3(b), to not be satisfied and which breach or failure, if capable of being cured, shall not have been cured within twenty (20) days following receipt by Parent of written notice of such breach from the Company; or

(g)       by the Company pursuant to Section 6.2(e); provided, however, that no termination by the Company pursuant to this Section 8.1(g) shall be effective unless the Company concurrently fulfills its obligations under Section 8.3.

Section 8.2             Effect of Termination.  In the event of the termination of this Agreement pursuant to Section 8.1, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto or any of its affiliates, directors, officers or stockholders except (i) that the provisions of Section 3.23, Section 4.5, Section 8.3, this Section 8.2 and Article IX hereof shall survive termination and (ii) nothing herein shall relieve any party from liability for any willful breach of this Agreement.  The Confidentiality Agreement shall survive termination of this Agreement as provided therein.

Section 8.3             Fees and Expenses.

(a)       Except as set forth in this Section 8.3, all Expenses (as defined below) incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such Expenses, whether or not the Merger is consummated; provided, however, that Parent and the Company shall share equally all Expenses (but not including attorneys’ fees and expenses) incurred in connection with the filings by Parent and the Company under the HSR Act, the EC Merger Regulation or any similar antitrust filing requirement of any Governmental Entity applicable to the Merger or this Agreement.  For purposes of this Agreement, “Expenses” includes all reasonable out-of-pocket expenses (including all reasonable fees and expenses of counsel, accountants, investment bankers, experts and consultants to a party hereto and its Affiliates) incurred by a party or on its behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement and the transactions contemplated hereby, including the preparation, printing, filing and mailing of the Proxy Statement and the Company’s solicitation of stockholder approval and all other matters related to the transactions contemplated hereby.

(b)       Notwithstanding the provisions of Section 8.3(a), in addition to such other remedies as Parent may have in law or equity for the Company’s breach of this Agreement, if any, the Company shall reimburse Parent for documented Expenses not to exceed $10.0 million upon the termination of this Agreement (i) by Parent pursuant to Section 8.1(b) if the failure to satisfy the conditions set forth in Section 7.2(a) or Section 7.2(b) shall have resulted in the Closing not occurring prior to the Outside Date, (ii) by Parent or the Company pursuant to Section 8.1(d) or (iii) by Parent pursuant to Section 8.1(e), provided, however, that the Company shall not be obligated to pay such Expenses incurred by Parent if it pays a Termination Fee pursuant to Section 8.3(d).

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(c)       Notwithstanding the provisions of Section 8.3(a), in addition to such other remedies as the Company may have in law or equity for Parent’s breach of this Agreement, if any, Parent shall reimburse the Company for documented Expenses not to exceed $7.0 million upon the termination of this Agreement (i) by the Company pursuant to Section 8.1(b) if the failure to satisfy the conditions set forth in Section 7.3(a) or Section 7.3(b) shall have resulted in the Closing not occurring prior the Outside Date or (ii) by the Company pursuant to Section 8.1(f).

(d)       The Company shall pay to Parent a termination fee in the amount of $25.0 million (the “Termination Fee”) as follows:  (A) if, either party shall terminate this Agreement pursuant to Section 8.1(b) or Section 8.1(d) and both (i) prior to such termination (Y) an Acquisition  Proposal with respect to the Company shall have been publicly announced or otherwise become publicly known or any person shall have publicly announced an intention (whether or not conditional) to make an Acquisition Proposal with respect to the Company or (Z) the Company makes a Change of Recommendation, or in the case of a tender or exchange offer made directly to the Company’s stockholders, the Company recommends that its stockholders accept a tender or exchange offer, and (ii) within one (1) year of the date of such termination, the Company or any of its Subsidiaries enters into a definitive agreement with respect to any Acquisition Proposal, then the Company shall pay to Parent the Termination Fee on the date of the execution of such definitive agreement, or (B) if the Company terminates this Agreement pursuant to Section 8.1(g), then the Company shall pay to Parent the Termination Fee on the date of such termination.  The Termination Fee paid under this Section 8.3(d) shall be reduced by any payments made under Section 8.3(b).

(e)       All payments to be made pursuant to this Section 8.3 shall be made by wire transfer of immediately available funds.  If either party fails to timely pay the Expenses of the other party or the Termination Fee, as applicable, then such party shall pay all costs and expenses (including legal fees and expenses) incurred by the other party in connection with any action or proceeding (including the filing of any lawsuit) taken by it to collect such unpaid amounts, together with interest on such unpaid amounts at the prime lending rate prevailing at such time, as published in the Wall Street Journal, from the date such amounts were required to be paid until the date actually received by the such other party.

(f)        The parties acknowledge that the agreements contained in this Section 8.3 are an integral part of the transactions contemplated by this Agreement and constitute liquidated damages and not a penalty, and that, without these agreements, the parties would not have entered into this Agreement.

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