TEMPORARY
WAIVER AGREEMENT

     

    THIS
TEMPORARY WAIVER AGREEMENT (this “Waiver”), dated as of the 2nd day of April,
2009, is made by and between Broadwood Partners, L.P. (“Broadwood” or the
“Investor”) and STAAR Surgical Company (“STAAR” or the “Company”). Unless otherwise
defined herein, capitalized terms used but not defined in this Waiver shall have
the meaning ascribed to such term in the Senior Note.

     

    WITNESSETH:

     

    WHEREAS,
the Investor currently owns a $5,000,000 senior note (the “Senior Note”), issued
to the Investor on December 14, 2007 by the Company;

     

    WHEREAS,
an order of judgment was rendered on March 23, 2009 by the California Superior
Court, County of Orange (the “Court”), Case No. 07CC10136 in the matter of Parallax Medical Systems, Inc. v.
STAAR Surgical Company in the amount of $2.2 million in compensatory
damages and $2.7 million in punitive damages, (collectively, and as it may be
modified by the Court, the “Judgment”);

     

    WHEREAS,
the Court executed an order on March 23, 2009 staying execution of judgment (the
“Stay”) pursuant to Section 918 of the California Code of Civil Procedure
(“CCCP”);

     

    WHEREAS,
as to any Event of Default that occurs or may be deemed to have occurred
pursuant to Section 8(f) of the Senior Note as a result of the Judgment
(“Judgment Default”), the Investor and the Company wish to provide, subject to
the terms and conditions set forth below, that remedies for any such default
under the Senior Note shall not be enforced during the period of the
Stay.

     

    NOW,
THEREFORE, for and in consideration of the premises and the mutual covenants and
agreements herein contained, the Investor and the Company do hereby agree as
follows:

     

    
      	
               
      

            	
              1.

            	
              The
      Investor hereby temporarily waives any Judgment Default during the Stay
      Period.  For purposes hereof, “Stay Period” shall mean the
      shorter of (i) the duration of the Stay, and (ii) July 6,
      2009.

            


    

     

    
      	
               
      

            	
              2.

            	
              In
      consideration of the Investor’s providing this Waiver, the Company hereby
      agrees, within seven business days from the date hereof, to amend the
      Senior Note to irrevocably grant (i) a first-priority security interest on
      all of the Company’s unencumbered assets as of the date hereof and (ii) a
      second-priority security interest on all of the Company’s assets subject
      to any purchase money indebtedness, to the Investor to secure the
      Company’s obligations under the Senior Note.  The Investor
      agrees that the amendment shall also provide that the period of notice for
      prepayment under Section 6(a) of the Senior Note shall be changed to seven
      days for any notice period beginning on or after June 1,
    2009.

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              3.

            	
              The
      Company hereby represents and warrants that, as of the date hereof, other
      than any Event of Default relating to the Judgment, no Event of Default
      has occurred and is continuing.

            


    

     

    
      	
               
      

            	
              4.

            	
              If,
      prior to the expiration of the Stay Period, the Company fully satisfies
      the Judgment,
      then any Judgment Default will be deemed cured and any resulting
      remedies that the Investor may have had under the Senior Note with respect
      to any Judgment Default will be
waived.

            


    

     

    
      	
               
      

            	
              5.

            	
              If,
      prior to the expiration of the Stay Period, the Company secures a stay of
      execution of Judgment until the completion of an appeal pursuant to CCCP
      Section 917.1 by posting an appeal bond, or by other action of the
      California courts, then any Judgment Default shall be Partially
      Cured.  For purposes herein, “Partially Cured” shall mean that
      the Investor shall not have the right to any acceleration remedies that
      the Investor may have had under the Senior Note with respect to the
      Judgment Default but from and after the expiration of the Stay Period the
      Investor shall have the right to receive interest at a rate of 20% per
      annum as provided in the first paragraph of Section 4 of the Senior
      Note.

            


    

     

    
      	
               
      

            	
              6.

            	
              If
      the Judgment Default is Partially Cured pursuant to Paragraph 5 hereof,
      and during the pendency of appeal the Company fully satisfies the Judgment
      and finally resolves all other material litigation of the Company that as
      of the date of this Waiver is pending and not yet decided, then the
      Judgment Default shall be deemed fully cured and the interest rate on the
      Senior Note shall be reduced to 7% per annum from the date of such
      cure.

            


    

     

    
      	
               
      

            	
              7.

            	
              If,
      as of the expiration of the Stay Period, the Company has satisfied neither
      the conditions for a cure pursuant to Paragraph 4 nor the conditions for
      the note to be Partially Cured pursuant to Paragraph 5, the Company agrees
      and acknowledges that an Event of Default pursuant to Section 8(f) of the
      Senior Note shall have occurred and that Broadwood may enforce any and all
      rights resulting from such waiver without further notice, demand or
      presentment.

            


    

     

    
      	
               
      

            	
              8.

            	
              This
      Waiver contains the entire understanding between and among the parties and
      supersedes any prior understandings and agreements among them respecting
      the subject matter of the Waiver.

            


    

     

    
      	
               
      

            	
              9.

            	
              This
      Waiver is only effective in the specific instances set forth
      herein.  No other waiver by the Investor or the Company is
      granted or intended except as expressly set forth herein, and the Investor
      and the Company expressly reserve the right, now and at all times
      hereafter, to require strict compliance with the terms of the Senior Note
      in all other respects, whether in connection with any future transaction
      in respect of similar matters to those waived herein, or
      otherwise.

            


    

     

    
      	
               
      

            	
              10.

            	
              This
      Waiver shall be governed by and construed in accordance with the laws of
      the State of New York without regard to choice of law
      principles.

            


    

     

    
      	
               
      

            	
              11.

            	
              This
      Waiver may be executed in any number of counterparts, each of which shall
      be an original but all of which together shall constitute one and the same
      instrument.

            


    

     

    
      	
               
      

            	
              12.

            	
              In
      case any provision of this Waiver shall be held to be invalid, illegal or
      unenforceable, such provision shall be severable from the rest of this
      Waiver, and the validity legality and enforceability of the remaining
      provisions shall not in any way be affected or impaired
      thereby.

            


    

     

    [-signature
page follows-]

     

    
      
         

      

      
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    IN
WITNESS WHEREOF, this Temporary Waiver Agreement has been executed as of the
date first written above.

     

    BROADWOOD
PARTNERS, L.P.

    


     

    By: /s/Neal C.
Bradsher

     

    Name:  Neal
C. Bradsher

     

    Title:
General Partner

     

     

    STAAR
SURGICAL COMPANY

    


     

    By:/s/Barry G.
Caldwell

     

    Name:  Barry
G. Caldwell

     

    Title:  President
and Chief Executive Officer

     

    
      
         

      

      
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