Document:

<PAGE>   1
                                                                    EXHIBIT 10.4

                                  KING WARRANT

NEITHER THIS WARRANT NOR THE SECURITIES TO BE ISSUED UPON EXERCISE HEREOF HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER THE SECURITIES LAWS OF ANY STATE. THIS WARRANT AND THE SECURITIES TO BE
ISSUED UPON EXERCISE HEREOF ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT
AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN
FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.

                    SUNRISE TECHNOLOGIES INTERNATIONAL, INC.

               WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK

No. 2000 W-K-1                                                     67,500 Shares

    FOR VALUE RECEIVED, SUNRISE TECHNOLOGIES INTERNATIONAL, INC., a corporation
duly organized and existing under the laws of the State of Delaware (the
"Company," which term includes any successor), with its principal office at 3400
West Warren Avenue, Fremont, California 94538, hereby certifies that Edward
Vincent King, Jr. (the "Holder") is entitled, subject to the provisions of this
Warrant, to purchase from the Company, at any time after the Warrant Shares, as
defined herein, are registered with the Securities and Exchange Commission (the
"SEC"), but before 5:00 p.m. (Eastern Standard Time) on June 16, 2005 (the
"Expiration Date"), the number of fully paid and nonassessable shares of Common
Stock of the Company set forth above, subject to adjustment as hereinafter
provided.

    The Holder may purchase such number of shares of Common Stock at a purchase
price per share (as appropriately adjusted pursuant to Section 6 hereof) of $.01
(the "Exercise Price"). The term "Common Stock" shall mean the aforementioned
Common Stock of the Company, together with any other equity securities that may
be issued by the Company in addition thereto or in substitution therefor as
provided herein.

    The number of shares of Common Stock to be received upon the exercise or
exchange of this Warrant and the price to be paid for a share of Common Stock
are subject to adjustment from time to time as hereinafter set forth. The shares
of Common Stock deliverable upon such exercise or exchange, as adjusted from
time to time, are hereinafter sometimes referred to as "Warrant Shares."

                                      -1-
<PAGE>   2
    Section 1. Exercise of and Payment for Warrant. Subject to Sections 3, 9, 10
and 11 (and in no event later than the Expiration Date), this Warrant may be
exercised, in whole or in part on any business day on or before the Expiration
Date by presentation and surrender hereof to the secretary of the Company at its
principal office at the address set forth in the initial paragraph hereof (or at
such other address as the Company may hereafter notify the Holder in writing)
with the Purchase Form attached hereto as Exhibit A duly executed and
accompanied by proper payment of the Exercise Price in one or more of the
following methods, at the election of the Board of the Company:

        (a) cash;

        (b) check; or

        (c) surrender of other shares of Common Stock of the Company which: (A)
either have been owned by the Holder for more than six (6) months on the date of
surrender or were not acquired, directly or indirectly, from the Company; and
(B) have a Current Market Price on the date of surrender equal to the Exercise
Price of the Warrant Shares as to which the Warrant is being exercised.

    If this Warrant should be exercised in part only, the Company shall, upon
surrender of this Warrant, execute and deliver a new Warrant evidencing the
rights of the Holder thereof to purchase the balance of the Warrant Shares
purchasable hereunder. Upon receipt by the secretary of the Company of this
Warrant and such Purchase Form, together with proper payment of the Exercise
Price, at such office, the Holder shall be deemed to be the holder of record of
the Warrant Shares, notwithstanding that the stock transfer books of the Company
shall then be closed or that certificates representing such Warrant Shares shall
not then be actually delivered to the Holder. The Company shall pay any and all
documentary stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of the Warrant Shares. Notwithstanding the above, no Warrant
Shares will be issued unless such issuance shall comply with all relevant
provisions of law and the requirements of any stock exchange upon which the
Common Stock may then be listed.

    Section 2. Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and delivery upon exercise or
exchange of this Warrant all shares of its Common Stock or other shares of
capital stock of the Company from time to time issuable upon exercise or
exchange of this Warrant. All such shares shall be duly authorized and, when
issued upon the exercise or exchange of the Warrant in accordance with the terms
hereof, shall be validly issued, fully paid and nonassessable, free and clear of
all liens, security interests, charges and other encumbrances or restrictions on
sale (other than as provided in the Company's certificate of incorporation and
any restrictions on sale set forth herein or pursuant to applicable federal and
state securities laws) and free and clear of all preemptive rights.

    Section 3. Fractional Interest. The Company will not issue a fractional
share of Common Stock upon exercise or exchange of this Warrant. Instead, the
Company will

                                      -2-
<PAGE>   3
deliver its check for the current market value of the fractional share. The
current market value of a fraction of a share is determined as follows: multiply
the Current Market Price of a full share by the fraction of a share and round
the result to the nearest cent.

    Section 4. Assignment or Loss of Warrant.

        (a) This Warrant may not be transferred in any manner otherwise than by
will or by the laws of descent or distribution and may be exercised during the
lifetime of Holder only by him. The terms of this Warrant shall be binding upon
the executors, administrators, heirs, successors, and assigns of the Holder.

        (b) Upon receipt of evidence satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant, and (in the case of loss,
theft or destruction) of indemnification satisfactory to the Company, and upon
surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date.

    Section 5. Rights of the Holder. The Holder shall not, by virtue hereof, be
entitled to any rights of a stockholder in the Company, either at law or equity,
and the rights of the Holder are limited to those set forth in this Warrant.
Nothing contained in this Warrant shall be construed as conferring upon the
Holder hereof the right to vote or to consent or to receive notice as a
stockholder of the Company on any matters or with respect to any rights
whatsoever as a stockholder of the Company. No dividends or interest shall be
payable or accrued in respect of this Warrant or the interest represented hereby
or the Warrant Shares purchasable hereunder until, and only to the extent that,
this Warrant shall have been exercised or exchanged in accordance with its
terms.

    Section 6. Adjustment of Exercise Price and Number of Shares. The number and
kind of securities purchasable upon the exercise or exchange of this Warrant and
the Exercise Price shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:

        (a) Adjustment for Change in Capital Stock. If at any time after the
date hereof, the Company:

                (1)     pays a dividend or makes a distribution on its Common
                        Stock in shares of its Common Stock;

                (2)     subdivides its outstanding shares of Common Stock into a
                        greater number of shares;

                (3)     combines its outstanding shares of Common Stock into a
                        smaller number of shares;

                (4)     makes a distribution on its Common Stock in shares of
                        its capital stock other than Common Stock; or

                                      -3-
<PAGE>   4
                (5)     issues by reclassification of its Common Stock any
                        shares of its capital stock;

then the Exercise Price in effect immediately prior to such action shall be
adjusted so that the Holder may receive, upon exercise or exchange of this
Warrant and payment of the same aggregate consideration, the number of shares of
capital stock of the Company which the Holder would have owned immediately
following such action if the Holder had exercised or exchanged the Warrant
immediately prior to such action.

        The adjustment shall become effective immediately after the record date
in the case of a dividend or distribution and immediately after the effective
date in the case of a subdivision, combination or reclassification.

        (b) Deferral of Issuance or Payment. In any case in which an event
covered by this Section 6 shall require that an adjustment in the Exercise Price
be made effective as of a record date, the Company may elect to defer until the
occurrence of such event: (i) issuing to the Holder, if this Warrant is
exercised after such record date, the shares of Common Stock and other capital
stock of the Company, if any, issuable upon such exercise over and above the
shares of Common Stock or other capital stock of the Company, if any, issuable
upon such exercise on the basis of the Exercise Price in effect prior to such
adjustment; and (ii) paying to the Holder by check any amount in lieu of the
issuance of fractional shares pursuant to Section 3.

        (c) When No Adjustment Required. No adjustment need be made for a change
in the par value or no par value of the Common Stock.

        (d) Current Market Price. The "Current Market Price" per share of Common
Stock on any date is the average of the Quoted Prices of the Common Stock for
the 30 consecutive trading days prior to the date in question. The "Quoted
Price" of the Common Stock is the last reported sales price of the Common Stock
as reported by NASDAQ, or the primary national securities exchange on which the
Common Stock is then quoted; provided, however, that if quotes for the Common
Stock are not reported by NASDAQ and the Common Stock is neither traded on the
NASDAQ National Market, on a national securities exchange, on the NASDAQ Small
Cap Market nor on the OTC Electronic Bulletin Board, the price referred to above
shall be the price reflected in the over-the-counter market as reported by the
National Quotation Bureau, Inc. or any organization performing a similar
function.

        (e) No Adjustment Upon Exercise of Warrants. No adjustments shall be
made under any Section herein in connection with the issuance of Warrant Shares
upon exercise or exchange of the Warrants.

        (f) Common Stock Defined. Whenever reference is made in Section 6(a) to
the issue of shares of Common Stock, the term "Common Stock" shall include any
equity securities of any class of the Company hereinafter authorized which shall
not be

                                      -4-
<PAGE>   5
limited to a fixed sum or percentage in respect of the right of the holders
thereof to participate in dividends or distributions of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the Company.
Subject to the provisions of Section 8 hereof, however, shares issuable upon
exercise or exchange hereof shall include only shares of the class designated as
Common Stock of the Company as of the date hereof or shares of any class or
classes resulting from any reclassification or reclassifications thereof or as a
result of any corporate reorganization as provided for in Section 8 hereof.

        Section 7. Officers' Certificate. Whenever the Exercise Price shall be
adjusted as required by the provisions of Section 6, the Company shall forthwith
file in the custody of its secretary or an assistant secretary at its principal
office an officers' certificate showing the adjusted Exercise Price determined
as herein provided, setting forth in reasonable detail the facts requiring such
adjustment and the manner of computing such adjustment. Each such officers'
certificate shall be signed by the chairman, president or chief financial
officer of the Company and by the secretary or any assistant secretary of the
Company. Each such officers' certificate shall be made available at all
reasonable times for inspection by the Holder or any holder of a Warrant
executed and delivered pursuant to Section 4 hereof.

        Section 8. Reclassification, Reorganization, Consolidation or Merger. In
the event of any reclassification, capital reorganization or other change of
outstanding shares of Common Stock of the Company (other than a subdivision or
combination of the outstanding Common Stock or other change contemplated by
Section 6(a) hereof and other than a change in the par value of the Common
Stock) or in the event of any consolidation or merger of the Company with or
into another corporation (other than a merger in which merger the Company is the
continuing corporation and that does not result in any reclassification, capital
reorganization or other change of outstanding shares of Common Stock of the
class issuable upon exercise or exchange of this Warrant) or in the event of any
sale, lease, transfer or conveyance to another corporation of the property and
assets of the Company as an entirety or substantially as an entirety, the
Company shall use its best efforts to cause effective provisions to be made so
that the Holder shall have the right thereafter, by exercising this Warrant, to
purchase the kind and amount of shares of stock and other securities and
property (including cash) receivable upon such reclassification, capital
reorganization and other change, consolidation, merger, sale or conveyance by a
holder of the number of shares of Common Stock that might have been received
upon exercise or exchange of this Warrant immediately prior to such
reclassification, capital reorganization, change, consolidation, merger, sale or
conveyance. Any such provision shall include provisions for adjustments in
respect of such shares of stock and other securities and property that shall be
as nearly equivalent as may be practicable to the adjustments provided for in
this Warrant. The foregoing provisions of this Section 8 shall similarly apply
to successive reclassifications, capital reorganizations and changes of shares
of Common Stock and to successive consolidations, mergers, sales or conveyances.

                                      -5-
<PAGE>   6
    Section 9. Transfer to Comply with the Securities Act of 1933: Registration
Rights.

        (a) No sale, transfer, assignment, hypothecation or other disposition of
this Warrant or of the Warrant Shares, in whole or in part, shall be made unless
any such transfer, assignment or other disposition will comply with the rules
and statutes administered by the Securities and Exchange Commission and: (i) a
Registration Statement under the Act including such shares is currently in
effect; or (ii) in the opinion of counsel, which counsel and which opinion shall
be reasonably satisfactory to the Company, a current Registration Statement is
not required for such disposition of the shares. Each stock certificate
representing Warrant Shares issued upon exercise or exchange of this Warrant
shall bear the following legend (unless, in the opinion of counsel, which
counsel and which opinion shall be reasonably satisfactory to the Company, such
legend is not required):

        "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
        SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES
        LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
        TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT
        AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
        PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE
        SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
        SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
        RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES
        LAWS."

    Section 10. Holder's Representations. In the event the Shares purchasable
pursuant to the exercise of this Warrant have not been registered under the
Securities Act of 1933, as amended, at the time this Warrant is exercised,
Holder shall, concurrently with the exercise of all or any portion of this
Warrant, deliver to the Company his Investment Representation Statement attached
hereto as Exhibit B.

    Section 11. Modification and Waiver. Neither this Warrant nor any term
hereof may be changed, waived, discharged or terminated other than by an
instrument in writing signed by the Company and by the holder hereof.

    Section 12. Notices. Any notice, request or other document required or
permitted to be given or delivered to the holder hereof or the Company shall be
delivered or shall be sent by certified mail, postage prepaid, to each such
holder at its address as shown on the books of the Company or to the Company at
the address indicated therefor in the first paragraph of this Warrant.

                                      -6-
<PAGE>   7
    Section 13. Descriptive Headings and Governing Law. The description headings
of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. This Warrant
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the laws of the State of Delaware.

    Section 14. Registration of Warrant Shares. The Company shall attempt to
duly register the Warrant Shares with the SEC within 90 days after the execution
of this Warrant.

    IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed by
its duly authorized officer and to be dated as of June 16, 2000.

                                       SUNRISE TECHNOLOGIES INTERNATIONAL, INC.

                                       By:    /s/ JOHN N. HENDRICK
                                              ----------------------------------
                                       Name:  John N. Hendrick
                                              ----------------------------------
                                       Title: C.O.O.
                                              ----------------------------------

                                      -7-
<PAGE>   8
                                EXHIBIT A

                      NOTICE OF EXERCISE OF WARRANT

Date:

To: Sunrise Technologies International, Inc.
    Attn: Secretary
    3400 West Warren Avenue
    Fremont, California  94538

This is my notice to exercise my Warrant:

<TABLE>
<CAPTION>
                             Number                  Exercise               Total Cost of
     Grant Date             of Shares                 Price               Exercised Shares
     ----------             ---------               ---------             -----------------
<S>                         <C>            <C>  <C>                  <C>  <C>

                                             x                        =
                                             x                        =
                                             x                        =
                                             x                        =
                                             x                        =
</TABLE>

* PLEASE ENCLOSE A CASHIER'S CHECK FOR THE TOTAL COST OF SHARES YOU WISH TO
  EXERCISE. YOUR REQUEST WILL NOT BE PROCESSED WITHOUT PAYMENT.

Please deliver shares to:
                           -----------------------------------------------------

                           Acct. No. (if applicable)
                                                     ---------------------------

                                      -8-
<PAGE>   9
I understand the exercise of this Warrant and my ownership of the shares is
subject to all the terms and provisions of the Warrant and its related
agreements.

Print Name as it appears on share certificate     Signature of Holder

Address                                           Telephone Number

City/State/Zip                                    Social Security Number

Approved: Sunrise Technologies International, Inc.

By:                                               Title:
    --------------------------------------------         -----------------------

                                      -9-
<PAGE>   10
                                   EXHIBIT B

                      INVESTMENT REPRESENTATION STATEMENT

PURCHASER:
           ----------------------------------------

COMPANY:   SUNRISE TECHNOLOGIES INTERNATIONAL, INC.

SECURITY:  COMMON STOCK

AMOUNT:                              SHARES
           -------------------------

    In connection with the purchase of the above-listed Securities, I, the
Purchaser, represent to the Company the following:

        (a) I am aware of the Company's business affairs and financial
condition, and have acquired sufficient information about the Company to reach
an informed and knowledgeable decision to acquire the Securities. I am
purchasing these Securities for my own account for investment purposes only and
not with a view to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act of 1933, as amended (the "Securities
Act")

        (b) I understand that the Securities have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of my investment intent
as expressed herein. In this connection, I understand that, in the view of the
Securities and Exchange Commission (the "SEC"), the statutory basis for such
exemption may be unavailable if my representation was predicated solely upon a
present intention to hold these Securities for any fixed period in the future,
including but not limited to, the minimum capital gains period specified under
tax statutes, for a deferred sale, or until an increase or decrease in the
market price of the Securities, or for a period of one year, or any other fixed
period in the future.

        (c) I further understand that the Securities must be held indefinitely
unless subsequently registered under the Securities Act or unless an exemption
from registration is otherwise available. Moreover, I understand that the
Company is under no obligation to register the Securities. In addition, I
understand that the certificate evidencing the Securities will be imprinted with
a legend which prohibits the transfer of the Securities unless they are
registered or such registration is not required in the opinion of counsel for
the Company.

        (d) I am familiar with the provisions of Rule 144, promulgated under the
Securities Act, which, in substance, permits limited public resale of
"restricted

                                      -10-
<PAGE>   11
securities" acquired, directly or indirectly, from the issuer thereof, in a
non-public offering subject to the satisfaction of certain conditions. The
Securities may be resold in certain limited circumstances subject to the
provisions of Rule 144, which requires among other things: (1) the availability
of certain public information about the Company; (2) the resale occurring not
less than one year after the party has purchased, and made full payment for,
within the meaning of Rule 144, the securities to be sold; and, in the case of
an affiliate, or a non-affiliate who has held the securities less than two
years; and (3) the sale being made through a broker in an unsolicited "broker's
transaction" or in transactions directly with a market maker (as said term is
defined under the Securities Exchange Act of 1934) and the amount of securities
being sold during any three month period not exceeding the specified limitations
stated therein, if applicable.

        (e) I agree, in connection with a public offering of the Company's
securities, (1) not to sell, make short sale of, loan, grant any options for the
purchase of, or otherwise dispose of any shares of Common Stock of the Company
held by me (other than those shares included in the registration) without the
prior written consent of the Company or the underwriters managing such
underwritten public offering of the Company's securities for one hundred eighty
(180) days from the effective date of such registration, and (2) I further agree
to execute any agreement reflecting (1) above as may be requested by the
underwriters at the time of the public offering; provided however that the
officers and directors of the Company who own the stock of the Company also
agree to such restrictions.

        (f) I further understand that in the event all of the applicable
requirements of Rule 144 are not satisfied, registration under the Securities
Act, compliance with Regulation A, or some other registration exemption will be
required; the Staff of the SEC has expressed its opinion that persons proposing
to sell private placement securities other than in a registered offering and
otherwise than pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk.

                                        (Signature of Purchaser)

                                        Date:
                                              ----------------------------------

                                      -11-
<PAGE>   12
                          DRAFTER'S INFORMATION SHEET
                          (for Document Number 14995)

1. Number of Warrant Shares:
                             ---------------------------------------------------

2. Name of Warrant Holder:
                             ---------------------------------------------------

3. Expiration Date:
                             ---------------------------------------------------

4. Exercise Price:
                             ---------------------------------------------------

5. Date of Warrant:
                             ---------------------------------------------------

                                      -12-<PAGE>   1
                                                                    EXHIBIT 10.5

                           LOAN AND SECURITY AGREEMENT

                    SUNRISE TECHNOLOGIES INTERNATIONAL, INC.

<PAGE>   2

        THIS LOAN AND SECURITY AGREEMENT (this "Agreement") dated June 29, 2000,
between SILICON VALLEY BANK ("Bank") located at 3003 Tasman Drive, Santa Clara,
CA 95054 and SUNRISE TECHNOLOGIES INTERNATIONAL, INC. ("Borrower") located at
3400 West Warren Ave., Fremont, CA 94538, provides the terms on which Bank will
lend to Borrower and Borrower will repay Bank. The parties agree as follows:

1. ACCOUNTING AND OTHER TERMS

        Accounting terms not defined in this Agreement will be construed
following GAAP. Calculations and determinations must be made following GAAP. The
term "financial statements" includes the notes and schedules. The terms
"including" and "includes" always mean "including (or includes) without
limitation" in this or any Loan Document. Capitalized terms in this Agreement
shall have the meanings set forth in Section 13. This Agreement shall be
construed to impart upon Bank a duty to act reasonably at all times.

2. LOAN AND TERMS OF PAYMENT

2.1 CREDIT EXTENSIONS. Borrower will pay Bank the unpaid principal amount of all
Credit Extensions and interest on the unpaid principal amount of the Credit
Extensions.

2.1.1 REVOLVING ADVANCES.

        (a) Bank will make Advances not exceeding the Committed Revolving Line,
provided that Borrower may request Advances in excess of $7,000,000 only after
Guarantor pledges marketable securities, cash or cash equivalents with a
Collateral Value (as defined in the Third Party Pledge and Security Agreement
between Guarantor and Bank, of at least $3,000,000 to secure the Guaranty on
terms acceptable to Bank. Amounts borrowed under this Section may be repaid and
reborrowed during the term of this Agreement.

        (b) To obtain an Advance, Borrower must notify Bank by facsimile or
telephone by 3:00 p.m. Pacific time on the Business Day the Advance is to be
made. Borrower must promptly confirm the notification by delivering to Bank the
Payment/Advance Form attached as Exhibit B. Bank will credit Advances to
Borrower's deposit account. Bank may make Advances under this Agreement based on
instructions from a Responsible Officer or his or her designee or without
instructions if the Advances are necessary to meet Obligations which have become
due. Bank may rely on any telephone notice given by a person whom Bank believes
is a Responsible Officer or designee. Borrower will indemnify Bank for any loss
Bank suffers due to that reliance.

        (c) The Committed Revolving Line terminates on the Revolving Maturity
Date, when all Advances are immediately payable

        (d) Borrower may prepay all or any amounts outstanding hereunder without
penalty or premium.

2.2 OVERADVANCES. If Borrower's Obligations under Section 2.1.1 exceed the
Committed Revolving Line, Borrower must immediately pay in cash to Bank the
excess.

2.3 INTEREST RATE; PAYMENTS.

        (a) Interest Rate. Advances accrue interest on the outstanding principal
balance at a per annum rate equal to the Prime Rate. After an Event of Default,
Obligations accrue interest at 5 percent above the rate effective immediately
before the Event of Default. The interest rate increases or decreases when the
Prime Rate changes. Interest is computed on a 360 day year for the actual number
of days elapsed.

        (b) Payments. Interest is payable on the twentieth of each month. Bank
may debit any of Borrower's deposit accounts including Account Number __________
for principal and interest payments or any amounts Borrower owes Bank. Bank will
notify Borrower when it debits Borrower's accounts. These debits are not a
set-off. Payments received after 12:00 noon Pacific time are considered received
at the opening of business on the next

                                       1
<PAGE>   3

Business Day. When a payment is due on a day that is not a Business Day, the
payment is due the next Business Day and additional fees or interest accrue.

2.4 FEES. Borrower will pay to Bank:

        (a) Facility Fee. A fully earned, non-refundable facility fee of $37,500
due on the Closing Date;

        (b) Non-usage Fee. A quarterly fee equal to 0.25% per annum of the
difference between the Committed Revolving Line and the average outstanding
balance of the Advances for the preceding three months, which fee shall be
payable on the fifteenth day of the month following the last day of each fiscal
quarter; and

        (c) Bank Expenses. All Bank Expenses (including reasonable attorneys'
fees and expenses of up to $10,000) incurred through and after the Closing Date
when due; provided that if such attorneys' fees and expenses exceed $10,000,
then Bank and Borrower shall share evenly the amount of such excess.

3. CONDITIONS OF LOANS

3.1 CONDITIONS PRECEDENT TO INITIAL CREDIT EXTENSION. Bank's obligation to make
the initial Credit Extension is subject to the condition precedent that it
receive the agreements, documents and fees it requires.

3.2 CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS. Bank's obligations to make
each Credit Extension, including the initial Credit Extension, is subject to the
following:

        (a) timely receipt of any Payment/Advance Form; and

        (b) the representations and warranties in Section 5 must be materially
true on the date of the Payment/Advance Form and on the effective date of each
Credit Extension and no Event of Default may have occurred and be continuing, or
exist after Bank makes the Credit Extension. Each Credit Extension is Borrower's
representation and warranty on that date that the representations and warranties
in Section 5 remain true.

4. CREATION OF SECURITY INTEREST

4.1 GRANT OF SECURITY INTEREST. Borrower grants Bank a continuing security
interest in all presently existing and later acquired Collateral to secure all
Obligations and performance of each of Borrower's duties under the Loan
Documents. Except for Permitted Liens, any security interest will be a first
priority security interest in the Collateral. Upon the occurrence and
continuation of an Event of Default, Bank may place a "hold" on any deposit
account pledged as Collateral. If the Agreement is terminated, Bank's lien and
security interest in the Collateral will continue until Borrower fully satisfies
its Obligations.

5. REPRESENTATIONS AND WARRANTIES

        Borrower represents and warrants as follows:

5.1 DUE ORGANIZATION AND AUTHORIZATION. Borrower and each Subsidiary is duly
existing and in good standing in its state of formation and qualified and
licensed to do business in, and in good standing in, any state in which the
conduct of its business or its ownership of property requires that it be
qualified. The execution, delivery and performance of the Loan Documents have
been duly authorized, and do not conflict with Borrower's formation documents,
nor constitute an event of default under any material agreement by which
Borrower is bound. Borrower is not in default under any agreement to which or by
which it is bound in which the default could cause a Material Adverse Change.

5.2 COLLATERAL. Borrower has good title to the Collateral, free of Liens except
Permitted Liens. The Accounts are bona fide, existing obligations, and the
service or property has been performed or delivered to the account debtor or its
agent for immediate shipment to and unconditional acceptance by the account
debtor. All Inventory is in all material respects of good and marketable
quality, free from material defects. Borrower is the sole owner of the

                                       2
<PAGE>   4

Intellectual Property, except for non-exclusive licenses granted to its
customers in the ordinary course of business, and exclusive licenses granted to
its customers in the ordinary course of business, provided all such exclusive
licenses are limited to specific geographic regions or indications and do not
impair Borrower's ability to commercialize its Intellectual Property in its
primary business markets in the United States. Each Patent is valid and
enforceable and no part of the Intellectual Property has been judged invalid or
unenforceable, in whole or in part, and no claim has been made that any part of
the Intellectual Property violates the rights of any third party.

5.3 LITIGATION. Except as shown in the Schedule, there are no actions or
proceedings pending or, to Borrower's knowledge, threatened by or against
Borrower or any Subsidiary in which an adverse decision could cause a Material
Adverse Change.

5.4 NO MATERIAL ADVERSE CHANGE IN FINANCIAL STATEMENTS. All consolidated
financial statements for Borrower and any Subsidiary delivered to Bank fairly
present in all material respects Borrower's consolidated financial condition and
Borrower's consolidated results of operations. There has not been any material
deterioration in Borrower's consolidated financial condition since the date of
the most recent financial statements submitted to Bank.

5.5 SOLVENCY. Borrower is able to pay its debts (including trade debts) as they
mature.

5.6 REGULATORY COMPLIANCE. Borrower is not an "investment company" or a company
"controlled" by an "investment company" under the Investment Company Act.
Borrower is not engaged as one of its important activities in extending credit
for margin stock (under Regulations T and U of the Federal Reserve Board of
Governors). Borrower has complied in all material respects with the Federal Fair
Labor Standards Act. Borrower has not violated any laws, ordinances or rules,
the violation of which could cause a Material Adverse Change. None of Borrower's
or any Subsidiary's properties or assets has been used by Borrower or any
Subsidiary or, to the best of Borrower's knowledge, by previous Persons, in
disposing, producing, storing, treating, or transporting any hazardous substance
other than legally. Borrower and each Subsidiary has timely filed all required
tax returns and paid, or made adequate provision to pay, all material taxes.
Borrower and each Subsidiary has obtained all consents, approvals and
authorizations of, made all declarations or filings with, and given all notices
to, all government authorities that are necessary to continue its business as
currently conducted.

5.7 SUBSIDIARIES. Borrower does not own any stock, partnership interest or other
equity securities except for Permitted Investments.

5.8 FULL DISCLOSURE. No representation, warranty or other statement of Borrower
in any certificate or written statement given to Bank contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements contained in the certificates or statements not misleading.

6. AFFIRMATIVE COVENANTS

        Borrower will do all of the following:

6.1 GOVERNMENT COMPLIANCE. Borrower will maintain its and all Subsidiaries'
corporate existence and good standing in its jurisdiction of incorporation and
maintain qualification in each jurisdiction in which the failure to so qualify
could have a material adverse effect on Borrower's business or operations.
Borrower will comply, and have each Subsidiary comply, with all laws, ordinances
and regulations to which it is subject, noncompliance with which could have a
material adverse effect on Borrower's business or operations or cause a Material
Adverse Change.

6.2 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.

        (a) Borrower will deliver to Bank: (i) within 5 days of filing, copies
of all statements, reports and notices made available to Borrower's security
holders or to any holders of Subordinated Debt and all reports on Form 10-K,
10-Q and 8-K filed with the Securities and Exchange Commission; (ii) a prompt
report of any legal actions pending or threatened against Borrower or any
Subsidiary that could result in damages or costs to Borrower or any Subsidiary
of $250,000 or more; (iii) prompt notice of any material change in the
composition of the

                                       3
<PAGE>   5

Intellectual Property, including knowledge of an event that materially adversely
affects the value of the Intellectual Property; and (iv) budgets, sales
projections, operating plans or other financial information Bank requests.

        (b) Bank has the right to audit Borrower's Accounts at Borrower's
expense, but the audits will be conducted no more often than once every six (6)
months unless an Event of Default has occurred and is continuing.

6.3 INVENTORY; RETURNS. Borrower will keep all Inventory in good and marketable
condition, free from material defects. Borrower will: (i) protect, defend and
maintain the validity and enforceability of the Intellectual Property; (ii)
promptly advise Bank in writing of material infringements of the Intellectual
Property; and (iii) not allow any Intellectual Property to be abandoned,
forfeited or dedicated to the public without Bank's written consent. Returns and
allowances between Borrower and its account debtors will follow Borrower's
customary practices as they exist at the Closing Date. Borrower must promptly
notify Bank of all returns, recoveries, disputes and claims that involve more
than $250,000.

6.4 TAXES. Borrower will make, and cause each Subsidiary to make, timely payment
of all material federal, state, and local taxes or assessments and will deliver
to Bank, on demand, appropriate certificates attesting to the payment.

6.5 INSURANCE. Borrower will keep its business and the Collateral insured for
risks and in amounts, as Bank requests. Insurance policies will be in a form,
with companies, and in amounts that are satisfactory to Bank. All property
policies will have a lender's loss payable endorsement showing Bank as a loss
payee and all liability policies will show the Bank as an additional insured and
provide that the insurer must give Bank at least 20 days notice before canceling
its policy. Upon Bank's reasonable request, Borrower will deliver certified
copies of policies and evidence of all premium payments. If no Event of Default
has occurred and is continuing, proceeds payable under any casualty policy will,
at Borrower's option, be payable to Borrower to replace the property subject to
the claim, provided that any such replacement property shall be deemed
Collateral in which Bank has been granted a first priority security interest. If
an Event of Default has occurred and is continuing, then, at Bank's option,
proceeds payable under any policy will be payable to Bank on account of the
Obligations.

6.6 PRIMARY ACCOUNTS. Not later than July 31, 2000, Borrower will maintain its
primary operating account with Bank. Prior to such date, Borrower will maintain
in accounts with Bank not less than $1,000,000.

6.7 FINANCIAL COVENANTS. None.

6.8 MANAGEMENT CONSULTATION. Bank shall have a right to initiate discussions
with Guarantor and the senior management of Borrower upon the occurrence of an
adverse deviation of Borrower's business in excess of 30 percent from the
operations forecast delivered to and accepted by Bank as of the date hereof.

6.9 FURTHER ASSURANCES. Borrower will execute any further instruments and take
further action as Bank requests to perfect or continue Bank's security interest
in the Collateral or to effect the purposes of this Agreement.

7. NEGATIVE COVENANTS

        Borrower will not do any of the following without the Bank's written
consent, which will not be unreasonably withheld:

7.1 DISPOSITIONS. Convey, sell, lease, transfer or otherwise dispose of
(collectively a "Transfer"), or permit any of its Subsidiaries to Transfer, all
or any part of its business or property, other than a Transfer (i) of Inventory
in the ordinary course of business; (ii) of non-exclusive licenses granted to
its customers in the ordinary course of business, and exclusive licenses granted
to its customers in the ordinary course of business, provided all such exclusive
licenses are limited to specific geographic regions or indications and do not
impair Borrower's ability to commercialize its Intellectual Property in its
primary business markets in the United States; or (iii) of worn-out or obsolete
Equipment.

                                       4
<PAGE>   6

7.2 CHANGES IN BUSINESS, OWNERSHIP, MANAGEMENT OR BUSINESS LOCATIONS. Engage in
or permit any of its Subsidiaries to engage in any business other than the eye
care businesses currently engaged in by Borrower or have a change in its
ownership or management. Borrower will not, without at least 30 days prior
written notice to Bank, relocate its principal executive office or add any new
offices or business locations.

7.3 MERGERS OR ACQUISITIONS. Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person.

7.4 INDEBTEDNESS. Create, incur, assume, or be liable for any Indebtedness, or
permit any Subsidiary to do so, other than Permitted Indebtedness.

7.5 ENCUMBRANCE. Create, incur, or allow any Lien on any of its property, or
assign or convey any right to receive income, including the sale of any
Accounts, or permit any of its Subsidiaries to do so, except for Permitted
Liens, or agree with any person or entity other than Bank not to create, incur
or allow any Lien on any of its property, or permit any of its Subsidiaries to
do so.

7.6 INVESTMENTS; DISTRIBUTIONS. (i) Directly or indirectly acquire or own any
Person, or make any Investment in any Person, other than Permitted Investments,
or permit any of its Subsidiaries to do so; or (ii) pay any dividends or make
any distribution or payment or redeem, retire or purchase any capital stock,
except for repurchases of stock from former employees or directors of Borrower
under the terms of applicable repurchase agreements in an aggregate amount not
to exceed $250,000 in the aggregate during the term of this Agreement, provided
that an Event of Default has not occurred or is continuing or would exist after
giving effect to the repurchase.

7.7 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter or permit any
material transaction with any Affiliate, except transactions that are in the
ordinary course of Borrower's business, on terms less favorable to Borrower than
would be obtained in an arm's length transaction with a non-affiliated Person.

7.8 SUBORDINATED DEBT. Except as specified on the Schedule, make or permit any
payment on any Subordinated Debt, except under the terms of the Subordinated
Debt, or amend any provision in any document relating to the Subordinated Debt,
without Bank's prior written consent.

7.9 COMPLIANCE. Undertake as one of its important activities extending credit to
purchase or carry margin stock, or use the proceeds of any Credit Extension for
that purpose; fail to meet the minimum funding requirements of ERISA, permit a
Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail
to comply with the Federal Fair Labor Standards Act or violate any other law or
regulation, if the violation could have a material adverse effect on Borrower's
business or operations or cause a Material Adverse Change, or permit any of its
Subsidiaries to do so.

8. EVENTS OF DEFAULT

        Any one of the following is an Event of Default:

8.1 PAYMENT DEFAULT. Borrower fails to pay any of the Obligations within 3 days
after their due date. During the additional period the failure to cure the
default is not an Event of Default (but no Credit Extensions will be made during
the cure period);

8.2 COVENANT DEFAULT. Borrower does not perform any obligation in Section 6 or
violates any covenant in Article 7 or does not perform or observe any other
material term, condition or covenant in this Agreement, any Loan Documents, or
in any agreement between Borrower and Bank and as to any default under a term,
condition or covenant that can be cured, has not cured the default within 10
days after it occurs, or if the default cannot be cured within 10 days or cannot
be cured after Borrower's attempts in the 10 day period, and the default may be
cured within a reasonable time, then Borrower has an additional time, (of not
more than 30 days) to attempt to cure the default. During the additional period
the failure to cure the default is not an Event of Default (but no Credit
Extensions will be made during the cure period);

                                       5
<PAGE>   7

8.3 MATERIAL ADVERSE CHANGE. (i) A material impairment in the perfection or
priority of the Bank's security interest in the Collateral or in the value of
such Collateral which is not covered by adequate insurance occurs; (ii) a
material adverse change in the business, operations, or condition (financial or
otherwise) of the Borrower occurs; or (iii) a material impairment of the
prospect of repayment of any portion of the Obligations occurs;

8.4 ATTACHMENT. (i) Any material portion of Borrower's assets is attached,
seized, levied on, or comes into possession of a trustee or receiver and the
attachment, seizure or levy is not removed in 10 days; (ii) Borrower is
enjoined, restrained, or prevented by court order from conducting a material
part of its business; (iii) a judgment or other claim becomes a Lien on a
material portion of Borrower's assets; or (iv) a notice of lien, levy, or
assessment is filed against any of Borrower's assets by any government agency
and not paid within 10 days after Borrower receives notice. These are not Events
of Default if stayed or if a bond is posted pending contest by Borrower (but no
Advances will be made during the cure period);

8.5 INSOLVENCY. (i) Borrower fails or becomes unable to pay its debts as they
come due; (ii) Borrower begins an Insolvency Proceeding; or (iii) an Insolvency
Proceeding is begun against Borrower and not dismissed or stayed within 30 days
(but no Credit Extensions will be made before any Insolvency Proceeding is
dismissed);

8.6 OTHER AGREEMENTS. If there is a default in any agreement to which Borrower
is a party with a third party or parties resulting in a right by such third
party or parties, whether or not exercised, to accelerate the maturity of any
Indebtedness in an amount in excess of Two Hundred Fifty Thousand Dollars
($250,000) or that could have a Material Adverse Effect;

8.7 MISREPRESENTATIONS. If Borrower or any Person acting for Borrower makes any
material misrepresentation or material misstatement now or later in any warranty
or representation in this Agreement or in any communication delivered to Bank or
to induce Bank to enter this Agreement or any Loan Document;

8.8 JUDGMENTS. If a judgment or judgments for the payment of money in an amount,
individually or in the aggregate, of at least Two Hundred Fifty Thousand Dollars
($250,000) shall be rendered against Borrower and shall remain unsatisfied and
unstayed for a period of ten (10) days (provided that no Credit Extensions will
be made prior to the satisfaction or stay of such judgment); or

8.9 GUARANTY. Any guaranty of any Obligations, or any security agreement
securing performance of any such guaranty, or any control agreement or pledged
collateral account agreement executed in connection therewith, ceases for any
reason to be in full force or any Guarantor does not perform any obligation
under any guaranty of the Obligations or any such security agreement, or a
default or Event of Default occurs under any such guaranty or security
agreement, or the Collateral Value of the Pledged Collateral, as defined in the
Third Party Pledge and Security Agreement, falls below $3,000,000 at any time
after Borrower has requested aggregate Advances of $7,000,000 or more and the
Pledgor thereunder fails within three days to pledge additional collateral in
accordance with the terms thereof, or any material misrepresentation or material
misstatement exists now or later in any warranty or representation in any
guaranty of the Obligations or in any security agreement executed in connection
with such guaranty, or in any certificate delivered to Bank in connection with
the guaranty, or any circumstance described in Sections 8.4, 8.5, 8.7 or occurs
to any Guarantor.

9. BANK'S RIGHTS AND REMEDIES

9.1 RIGHTS AND REMEDIES. When an Event of Default occurs and continues Bank may,
without notice or demand, do any or all of the following:

        (a) Declare all Obligations immediately due and payable (but if an Event
of Default described in Section 8.5 occurs all Obligations are immediately due
and payable without any action by Bank);

        (b) Stop advancing money or extending credit for Borrower's benefit
under this Agreement or under any other agreement between Borrower and Bank;

                                       6
<PAGE>   8

        (c) Settle or adjust disputes and claims directly with account debtors
for amounts, on terms and in any order that Bank considers advisable;

        (d) Make any payments and do any acts it considers necessary or
reasonable to protect its security interest in the Collateral. Borrower will
assemble the Collateral if Bank requests and make it available as Bank
designates. Bank may enter premises where the Collateral is located, take and
maintain possession of any part of the Collateral, and pay, purchase, contest,
or compromise any Lien which appears to be prior or superior to its security
interest and pay all expenses incurred. Borrower grants Bank a license to enter
and occupy any of its premises, without charge, to exercise any of Bank's rights
or remedies;

        (e) Apply to the Obligations any (i) balances and deposits of Borrower
it holds, or (ii) any amount held by Bank owing to or for the credit or the
account of Borrower;

        (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare for
sale, advertise for sale, and sell the Collateral. Bank is granted a
non-exclusive, royalty-free license or other right to use, without charge,
Borrower's labels, Patents, Copyrights, Mask Works, rights of use of any name,
trade secrets, trade names, Trademarks, service marks, and advertising matter,
or any similar property as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in
connection with Bank's exercise of its rights under this Section, Borrower's
rights under all licenses and all franchise agreements inure to Bank's benefit;
and

        (g) Dispose of the Collateral according to the Code.

9.2 POWER OF ATTORNEY. When an Event of Default occurs and continues, Borrower
irrevocably appoints Bank as its lawful attorney to: (i) endorse Borrower's name
on any checks or other forms of payment or security; (ii) sign Borrower's name
on any invoice or bill of lading for any Account or drafts against account
debtors, (iii) make, settle, and adjust all claims under Borrower's insurance
policies; (iv) settle and adjust disputes and claims about the Accounts directly
with account debtors, for amounts and on terms Bank determines reasonable; and
(v) transfer the Collateral into the name of Bank or a third party as the Code
permits. Bank may exercise the power of attorney to sign Borrower's name on any
documents necessary to perfect or continue the perfection of any security
interest regardless of whether an Event of Default has occurred. Bank's
appointment as Borrower's attorney in fact, and all of Bank's rights and powers,
coupled with an interest, are irrevocable until all Obligations have been fully
repaid and performed and Bank's obligation to provide Credit Extensions
terminates.

9.3 ACCOUNTS COLLECTION. When an Event of Default occurs and continues, Bank may
notify any Person owing Borrower money of Bank's security interest in the funds
and verify the amount of the Account. Borrower must collect all payments in
trust for Bank and, if requested by Bank, immediately deliver the payments to
Bank in the form received from the account debtor, with proper endorsements for
deposit.

9.4 BANK EXPENSES. If Borrower fails to pay any amount or furnish any required
proof of payment to third persons Bank may make all or part of the payment or
obtain insurance policies required in Section 6.5, and take any action under the
policies Bank deems prudent. Any amounts paid by Bank are Bank Expenses and
immediately due and payable, bearing interest at the then applicable rate and
secured by the Collateral. No payments by Bank are deemed an agreement to make
similar payments in the future or Bank's waiver of any Event of Default.

9.5 BANK'S LIABILITY FOR COLLATERAL. If Bank complies with reasonable banking
practices, it is not liable or responsible for: (a) the safekeeping of the
Collateral; (b) any loss or damage to the Collateral; (c) any diminution in the
value of the Collateral; or (d) any act or default of any carrier, warehouseman,
bailee, or other person. Borrower bears all risk of loss, damage or destruction
of the Collateral.

9.6 REMEDIES CUMULATIVE. Bank's rights and remedies under this Agreement, the
Loan Documents, and all other agreements are cumulative. Bank has all rights and
remedies provided under the Code, by law, or in equity. Bank's exercise of one
right or remedy is not an election, and Bank's waiver of any Event of Default is
not a continuing waiver. Bank's delay is not a waiver, election, or
acquiescence. No waiver is effective unless signed by Bank and then is only
effective for the specific instance and purpose for which it was given.

                                       7
<PAGE>   9

9.7 DEMAND WAIVER. Borrower waives demand, notice of default or dishonor, notice
of payment and nonpayment, notice of any default, nonpayment at maturity,
release, compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guaranties held by Bank on which Borrower is
liable.

10. NOTICES

        All notices or demands by any party to this Agreement or any other
related agreement must be in writing and be personally delivered or sent by an
overnight delivery service, by certified mail, postage prepaid, return receipt
requested, or by telefacsimile at the addresses listed at the beginning of this
Agreement. A party may change its notice address by giving the other party
written notice.

11. CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

        California law governs the Loan Documents without regard to principles
of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction
of the State and Federal courts in Santa Clara County, California.

BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY
CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER
CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS
AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

12. GENERAL PROVISIONS

12.1 SUCCESSORS AND ASSIGNS. This Agreement binds and is for the benefit of the
successors and permitted assigns of each party. Borrower may not assign this
Agreement or any rights or Obligations under it without Bank's prior written
consent which may be granted or withheld in Bank's discretion. Bank has the
right, without the consent of or notice to Borrower, to sell, transfer,
negotiate, or grant participation in all or any part of, or any interest in,
Bank's obligations, rights and benefits under this Agreement, the Loan Documents
or any related agreement.

12.2 INDEMNIFICATION. Borrower will indemnify, defend and hold harmless Bank and
its officers, employees and agents against: (a) all obligations, demands,
claims, and liabilities asserted by any other party in connection with the
transactions contemplated by the Loan Documents; and (b) all losses or Bank
Expenses incurred, or paid by Bank from, following, or consequential to
transactions between Bank and Borrower (including reasonable attorneys' fees and
expenses), except for losses caused by Bank's gross negligence or willful
misconduct.

12.3 TIME OF ESSENCE. Time is of the essence for the performance of all
Obligations in this Agreement.

12.4 SEVERABILITY OF PROVISION. Each provision of this Agreement is severable
from every other provision in determining the enforceability of any provision.

12.5 AMENDMENTS IN WRITING, INTEGRATION. All amendments to this Agreement must
be in writing signed by both Bank and Borrower. This Agreement and the Loan
Documents represent the entire agreement about this subject matter, and
supersedes prior or contemporaneous negotiations or agreements. All prior or
contemporaneous agreements, understandings, representations, warranties, and
negotiations between the parties about the subject matter of this Agreement and
the Loan Documents merge into this Agreement and the Loan Documents.

12.6 COUNTERPARTS. This Agreement may be executed in any number of counterparts
and by different parties on separate counterparts, each of which, when executed
and delivered, are an original, and all taken together, are one Agreement.

12.7 SURVIVAL. All covenants, representations and warranties made in this
Agreement continue in full force while any Obligations remain outstanding. The
obligations of Borrower in Section 12.2 to indemnify Bank will survive until all
statutes of limitations for actions that may be brought against Bank have run.

                                       8
<PAGE>   10

12.8 CONFIDENTIALITY. In handling any confidential information, Bank will
exercise the same degree of care that it exercises for its own proprietary
information, but disclosure of information may be made: (i) to Bank's
subsidiaries or affiliates in connection with their present or prospective
business relations with Borrower; (ii) to prospective transferees or purchasers
of any interest in the Advances; (iii) as required by law, regulation, subpoena,
or other order, (iv) as required in connection with Bank's examination or audit;
and (v) as Bank considers appropriate in exercising remedies under this
Agreement. Confidential information does not include information that either:
(a) is in the public domain or in Bank's possession when disclosed to Bank, or
becomes part of the public domain after disclosure to Bank; or (b) is disclosed
to Bank by a third party, if Bank does not know that the third party is
prohibited from disclosing the information.

12.9 ATTORNEYS' FEES, COSTS AND EXPENSES. In any action or proceeding between
Borrower and Bank arising out of the Loan Documents, the prevailing party will
be entitled to recover its reasonable attorneys' fees and other costs and
expenses incurred, in addition to any other relief to which it may be entitled,
whether or not a lawsuit is filed.

13. DEFINITIONS

13.1 DEFINITIONS.

        "ACCOUNTS" are all existing and later arising accounts, contract rights,
and other obligations owed Borrower in connection with its sale or lease of
goods (including licensing software and other technology) or provision of
services, all credit insurance, guaranties, other security and all merchandise
returned or reclaimed by Borrower and Borrower's Books relating to any of the
foregoing.

        "ADVANCE" or "ADVANCES" is a loan advance (or advances) under the
Committed Revolving Line.

        "AFFILIATE" of a Person is a Person that owns or controls directly or
indirectly the Person, any Person that controls or is controlled by or is under
common control with the Person, and each of that Person's senior executive
officers, directors, partners and, for any Person that is a limited liability
company, that Person's managers and members.

        "BANK EXPENSES" are all audit fees and expenses and reasonable costs or
expenses (including reasonable attorneys' fees and expenses) for preparing,
negotiating, administering, defending and enforcing the Loan Documents
(including appeals or Insolvency Proceedings).

        "BORROWER'S BOOKS" are all Borrower's books and records including
ledgers, records regarding Borrower's assets or liabilities, the Collateral,
business operations or financial condition and all computer programs or discs or
any equipment containing the information.

        "BUSINESS DAY" is any day that is not a Saturday, Sunday or a day on
which the Bank is closed.

        "CLOSING DATE" is the date of this Agreement.

        "CODE" is the California Uniform Commercial Code.

        "COLLATERAL" is the property described on Exhibit A.

        "COMMITTED REVOLVING LINE" is a Credit Extension of up to $10,000,000.

        "CONTINGENT OBLIGATION" is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (i) any indebtedness, lease,
dividend, letter of credit or other obligation of another such as an obligation
directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse by that Person, or for which that Person is directly or indirectly
liable; (ii) any obligations for undrawn letters of credit for the account of
that Person; and (iii) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest

                                       9
<PAGE>   11

rates, currency exchange rates or commodity prices; but "Contingent Obligation"
does not include endorsements in the ordinary course of business. The amount of
a Contingent Obligation is the stated or determined amount of the primary
obligation for which the Contingent Obligation is made or, if not determinable,
the maximum reasonably anticipated liability for it determined by the Person in
good faith; but the amount may not exceed the maximum of the obligations under
the guarantee or other support arrangement.

        "COPYRIGHTS" are all copyright rights, applications or registrations and
like protections in each work or authorship or derivative work, whether
published or not (whether or not it is a trade secret) now or later existing,
created, acquired or held.

        "CREDIT EXTENSION" is each Advance or any other extension of credit by
Bank for Borrower's benefit.

        "EQUIPMENT" is all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.

        "ERISA" is the Employment Retirement Income Security Act of 1974, and
its regulations.

        "GAAP" is generally accepted accounting principles.

        "GUARANTOR" is any present or future guarantor of the Obligations,
including David Brewer.

        "GUARANTY" is the unconditional guaranty issued by Guarantor.

        "INDEBTEDNESS" is (a) indebtedness for borrowed money or the deferred
price of property or services, such as reimbursement and other obligations for
surety bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations and (d)
Contingent Obligations.

        "INSOLVENCY PROCEEDING" is any proceeding by or against any Person under
the United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

        "INTELLECTUAL PROPERTY" is:

        (a) Copyrights, Trademarks, Patents, and Mask Works including
amendments, renewals, extensions, and all licenses or other rights to use and
all license fees and royalties from the use;

        (b) Any trade secrets and any Intellectual Property Rights in computer
software and computer software products now or later existing, created, acquired
or held;

        (c) All design rights which may be available to Borrower now or later
created, acquired or held;

        (d) Any claims for damages (past, present or future) for infringement of
any of the rights above, with the right, but not the obligation, to sue and
collect damages for use or infringement of the intellectual property rights
above;

        All proceeds and products of the foregoing, including all insurance,
indemnity or warranty payments.

        "INVENTORY" is present and future inventory in which Borrower has any
interest, including merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products intended for sale or
lease or to be furnished under a contract of service, of every kind and
description now or later owned by or in the custody or possession, actual or
constructive, of Borrower, including inventory temporarily out of its custody or
possession or in transit and including returns on any accounts or other proceeds
(including insurance proceeds) from the sale or disposition of any of the
foregoing and any documents of title.

                                       10
<PAGE>   12

        "INVESTMENT" is any beneficial ownership of (including stock,
partnership interest or other securities) any Person, or any loan, advance or
capital contribution to any Person.

        "LIEN" is a mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.

        "LOAN DOCUMENTS" are, collectively, this Agreement, any note, or notes
or guaranties executed by Borrower or Guarantor, and any other present or future
agreement between Borrower and/or for the benefit of Bank in connection with
this Agreement, all as amended, extended or restated.

        "MATERIAL ADVERSE CHANGE" is defined in Section 8.3.

        "MASK WORKS" are all mask works or similar rights available for the
protection of semiconductor chips, now owned or later acquired.

        "OBLIGATIONS" are debts, principal, interest, Bank Expenses and other
amounts Borrower owes Bank now or later, including letters of credit and foreign
exchange contracts, if any, and including interest accruing after Insolvency
Proceedings begin and debts, liabilities, or obligations of Borrower assigned to
Bank.

        "PATENTS" are patents, patent applications and like protections,
including improvements, divisions, continuations, renewals, reissues, extensions
and continuations-in-part of the same.

        "PERMITTED INDEBTEDNESS" is:

        (a) Borrower's indebtedness to Bank under this Agreement or the Loan
Documents;

        (b) Indebtedness existing on the Closing Date and shown on the Schedule;

        (c) Subordinated Debt;

        (d) Indebtedness to trade creditors incurred in the ordinary course of
business; and

        (e) Indebtedness secured by Permitted Liens.

        "PERMITTED INVESTMENTS" are:

        (a) Investments shown on the Schedule and existing on the Closing Date;
and

        (b) (i) marketable direct obligations issued or unconditionally
guaranteed by the United States or its agency or any State maturing within 1
year from its acquisition, (ii) commercial paper maturing no more than 1 year
after its creation and having the highest rating from either Standard & Poor's
Corporation or Moody's Investors Service, Inc., and (iii) Bank's certificates of
deposit issued maturing no more than 1 year after issue.

        "PERMITTED LIENS" are:

        (a) Liens existing on the Closing Date and shown on the Schedule or
arising under this Agreement or other Loan Documents;

        (b) Liens for taxes, fees, assessments or other government charges or
levies, either not delinquent or being contested in good faith and for which
Borrower maintains adequate reserves on its Books, if they have no priority over
any of Bank's security interests;

        (c) Purchase money Liens (i) on Equipment acquired or held by Borrower
or its Subsidiaries incurred for financing the acquisition of the Equipment, or
(ii) existing on equipment when acquired, if the Lien is confined to the
property and improvements and the proceeds of the equipment;

                                       11
<PAGE>   13

        (d) Leases or subleases and licenses or sublicenses granted in the
ordinary course of Borrower's business, if the leases, subleases, licenses and
sublicenses permit granting Bank a security interest; and

        (e) Liens incurred in the extension, renewal or refinancing of the
indebtedness secured by Liens described in (a) through (c), but any extension,
renewal or replacement Lien must be limited to the property encumbered by the
existing Lien and the principal amount of the indebtedness may not increase.

        "PERSON" is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.

        "PRIME RATE" is Bank's most recently announced "prime rate," even if it
is not Bank's lowest rate.

        "RESPONSIBLE OFFICER" is each of the Chief Executive Officer, the
President, the Chief Financial Officer and the Controller of Borrower.

        "REVOLVING MATURITY DATE" IS June 26, 2001.

        "SCHEDULE" is any attached schedule of exceptions.

        "SUBORDINATED DEBT" is debt incurred by Borrower subordinated to
Borrower's debt to Bank (and identified as subordinated by Borrower and Bank).

        "SUBSIDIARY" is for any Person, joint venture, or any other business
entity of which more than 50% of the voting stock or other equity interests is
owned or controlled, directly or indirectly, by the Person or one or more
Affiliates of the Person.

        "TRADEMARKS" are trademark and service mark rights, registered or not,
applications to register and registrations and like protections, and the entire
goodwill of the business of Assignor connected with the trademarks.

SUNRISE TECHNOLOGIES
INTERNATIONAL, INC.

By: /s/ PETER F. JANSEN
    ---------------------------------

Title: Vice President, Finance & CFO
       -----------------------------

SILICON VALLEY BANK

By: /s/ SAM THOMPSON
    ---------------------------------

Title: Associate
       ------------------------------

                                       12
<PAGE>   14

                                    EXHIBIT A

        The Collateral consists of all of Borrower's right, title and interest
in and to the following:

        All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;

        All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's custody or possession or in
transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above;

        All contract rights and general intangibles now owned or hereafter
acquired, including, without limitation, goodwill, trademarks, servicemarks,
trade styles, trade names, patents, patent applications, leases, license
agreements, franchise agreements, blueprints, drawings, purchase orders,
customer lists, route lists, infringements, claims, computer programs, computer
discs, computer tapes, literature, reports, catalogs, design rights, income tax
refunds, payments of insurance and rights to payment of any kind;

        All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Borrower, whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefor, as well as
all merchandise returned to or reclaimed by Borrower;

        All documents, cash, deposit accounts, securities, securities
entitlements, securities accounts, investment property, financial assets,
letters of credit, certificates of deposit, instruments and chattel paper now
owned or hereafter acquired and Borrower's Books relating to the foregoing;

        All copyright rights, copyright applications, copyright registrations
and like protections in each work of authorship and derivative work thereof,
whether published or unpublished, now owned or hereafter acquired; all trade
secret rights, including all rights to unpatented inventions, know-how,
operating manuals, license rights and agreements and confidential information,
now owned or hereafter acquired; all mask work or similar rights available for
the protection of semiconductor chips, now owned or hereafter acquired; all
claims for damages by way of any past, present and future infringement of any of
the foregoing; and

        All Borrower's Books relating to the foregoing and any and all claims,
rights and interests in any of the above and all substitutions for, additions
and accessions to and proceeds thereof.

        Notwithstanding the foregoing, the Collateral shall not be deemed to
include any copyrights, copyright applications, copyright registration and like
protection in each work of authorship and derivative work thereof, whether
published or unpublished, now owned or hereafter acquired; any patents, patent
applications and like protections including without limitation improvements,
divisions, continuations, renewals, reissues, extensions and
continuations-in-part of the same, trademarks, servicemarks and applications
therefor, whether registered or not, and the goodwill of the business of
Borrower connected with and symbolized by such trademarks, any trade secret
rights, including any rights to unpatented inventions, know-how, operating
manuals, license rights and agreements and confidential information, now owned
or hereafter acquired; or any claims for damage by way of any past, present and
future infringement of any of the foregoing (collectively, the "Intellectual
Property"), except that the Collateral shall include the proceeds of all the
Intellectual Property that are accounts, (i.e. accounts receivable) of Borrower,
or general intangibles consisting of rights to payment, if a judicial authority
(including a U.S. Bankruptcy Court) holds that a security interest in the
underlying Intellectual Property is necessary to have a security interest in
such accounts and general intangibles of Borrower that are proceeds of the
Intellectual Property, then the Collateral shall automatically, and effective as
of the Closing Date, include the Intellectual Property to the extent necessary
to permit perfection of Bank's security interest in such accounts and general
intangibles of Borrower that are proceeds of the Intellectual Property.

<PAGE>   15

                                    EXHIBIT B

                   LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM

           DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., Pacific Time

TO:  CENTRAL CLIENT DIVISION                              DATE:  _______________

FAX #:  (408) 496-2426                                    TIME:  _______________

________________________________________________________________________________

FROM: Sunrise Technologies International, Inc.

                                   CLIENT NAME

REQUESTED BY: __________________________________________________________________
                            AUTHORIZED SIGNER'S NAME

AUTHORIZED SIGNATURE: __________________________________________________________

PHONE NUMBER: __________________________________________________________________

FROM ACCOUNT # ______________________     TO ACCOUNT # _________________________

REQUESTED TRANSACTION TYPE                        REQUEST DOLLAR AMOUNT
                                                  $_____________________________
PRINCIPAL INCREASE (ADVANCE)                      $_____________________________
PRINCIPAL PAYMENT (ONLY)                          $_____________________________
INTEREST PAYMENT (ONLY)                           $_____________________________
PRINCIPAL AND INTEREST (PAYMENT)                  $_____________________________

OTHER INSTRUCTIONS: ____________________________________________________________
________________________________________________________________________________

        All representations and warranties of Borrower stated in the Loan and
Security Agreement are true, correct and complete in all material respects as of
the date of the telephone request for and Advance confirmed by this Borrowing
Certificate; provided, however, that those representations and warranties
expressly referring to another date shall be true, correct and complete in all
material respects as of such date.
________________________________________________________________________________

________________________________________________________________________________
                                  BANK USE ONLY

TELEPHONE REQUEST:

The following person is authorized to request the loan payment transfer/loan
advance on the advance designated account and is known to me.

________________________________________       _________________________________
           Authorized Requester                             Phone #

________________________________________       _________________________________
            Received By (Bank)                              Phone #

                   _____________________________________________
                           Authorized Signature (Bank)

________________________________________________________________________________

<PAGE>   16

                         CORPORATE RESOLUTIONS TO BORROW

================================================================================
BORROWER:         SUNRISE TECHNOLOGIES INTERNATIONAL, INC.
================================================================================

        I, the undersigned Secretary or Assistant Secretary of Sunrise
Technologies International, Inc. (the "Corporation"), HEREBY CERTIFY that the
Corporation is organized and existing under and by virtue of the laws of the
State of Delaware.

        I FURTHER CERTIFY that attached hereto as Attachments 1 and 2 are true
and complete copies of the Certificate of Incorporation and Bylaws of the
Corporation, each of which is in full force and effect on the date hereof.

        I FURTHER CERTIFY that at a meeting of the Directors of the Corporation,
duly called and held, at which a quorum was present and voting (or by other duly
authorized corporate action in lieu of a meeting), the following resolutions
were adopted.

        BE IT RESOLVED, that ANY ONE (1) of the following named officers,
employees, or agents of this Corporation, whose actual signatures are shown
below:

       NAMES                     POSITIONS                ACTUAL SIGNATURES
_______________________    ________________________    _______________________

_______________________    ________________________    _______________________

_______________________    ________________________    _______________________

_______________________    ________________________    _______________________

_______________________    ________________________    _______________________

acting for and on behalf of this Corporation and as its act and deed be, and
they hereby are, authorized and empowered:

        BORROW MONEY. To borrow from time to time from Silicon Valley Bank
("Bank"), on such terms as may be agreed upon between the officers, employees,
or agents and Bank, such sum or sums of money as in their judgment should be
borrowed, without limitation, including such sums as are specified in that
certain Loan and Security Agreement, as amended from time to time (the "Loan
Agreement").

        EXECUTE AGREEMENT. To execute and deliver to Bank the Loan Agreement, on
Bank's form on such terms as may be agreed upon, evidencing the sums of money so
borrowed or any indebtedness of the Corporation to Bank, and also to execute and
deliver to Lender one or more renewals, extensions, modifications, refinancings,
consolidations, or substitutions for the Loan Agreement.

        GRANT SECURITY. To grant a security interest to Bank in the Collateral
described in the Loan Agreement, which security interest shall secure all of the
Corporation's Obligations, as described in the Loan Agreement.

        NEGOTIATE ITEMS. To draw, endorse, and discount with Bank all drafts,
trade acceptances, promissory notes, or other evidences of indebtedness payable
to or belonging to the Corporation or in which the Corporation may have an
interest, and either to receive cash for the same or to cause such proceeds to
be credited to the account of the Corporation with Bank, or to cause such other
disposition of the proceeds derived therefrom as they may deem advisable.

        LETTERS OF CREDIT; FOREIGN EXCHANGE. To execute letters of credit
applications, foreign exchange agreements and other related documents pertaining
to Bank's issuance of letters of credit and foreign exchange contracts.

        CASH MANAGEMENT SERVICES. To enter into a Cash Management Services
Agreement by and between Borrower and Bank authorizing Bank to perform Cash
Management Services as defined therein.

        FURTHER ACTS. In the case of lines of credit, to designate additional or
alternate individuals as being authorized to request advances thereunder, and in
all cases, to do and perform such other acts and things, to pay any and all fees
and costs, and to execute

<PAGE>   17

and deliver such other documents and agreements as they may in their discretion
deem reasonably necessary or proper in order to carry into effect the provisions
of these Resolutions.

        BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to
these resolutions and performed prior to the passage of these resolutions are
hereby ratified and approved, that these Resolutions shall remain in full force
and effect and Bank may rely on these Resolutions until written notice of their
revocation shall have been delivered to and received by Bank. Any such notice
shall not affect any of the Corporation's agreements or commitments in effect at
the time notice is given.

        I FURTHER CERTIFY that the officers, employees, and agents named above
are duly elected, appointed, or employed by or for the Corporation, as the case
may be, and occupy the positions set forth opposite their respective names; that
the foregoing Resolutions now stand of record on the books of the Corporation;
and that the Resolutions are in full force and effect and have not been modified
or revoked in any manner whatsoever.

        IN WITNESS WHEREOF, I have hereunto set my hand on __________________,
2000 and attest that the signatures set opposite the names listed above are
their genuine signatures.

                                                   CERTIFIED TO AND ATTESTED BY:

                                                   X____________________________

================================================================================

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00012-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00012-of-00352.parquet"}]]