Document:

EX-10.2

GUARANTEE

GUARANTEE, dated as of September 20, 2006, made by RAIT INVESTMENT TRUST, a Maryland trust (the
“Guarantor”), on behalf of RAIT FINANCE I, LLC, a Delaware limited liability company (the
“Seller”), in favor of UBS REAL ESTATE SECURITIES INC., a Delaware corporation
(“UBS”), a party to the Repurchase Agreement and the Custodial Agreement, each referred to
below.

RECITALS

Pursuant to that certain Master Repurchase Agreement, dated as of the date hereof (as amended,
supplemented or otherwise modified from time to time, the “Repurchase Agreement”), between
UBS and the Seller, the Seller has agreed to sell, from time to time, to UBS certain mortgage loans
and mezzanine loans (the “Mortgage Assets”) upon the terms and subject to the conditions
set forth therein. The Guarantor owns directly and indirectly all interests in the Seller.
Pursuant to the terms of that certain Custodial Agreement, dated as of the date hereof (the
“Custodial Agreement”), LaSalle Bank National Association is required to take possession
of certain documents relating to the Mortgage Assets specified in the Repurchase Documents, as the
Custodian of UBS and any future purchaser, on several delivery dates, in accordance with the terms
and conditions of the Custodial Agreement. It is a condition precedent to the obligation of UBS to
purchase the Mortgage Assets under the Repurchase Agreement that the Guarantor shall have executed
and delivered this Guarantee with respect to the performance of any and all representations,
warranties, covenants and other obligations (collectively, the “Obligations”) of the Seller
with respect to UBS under each of the Repurchase Agreement, the Custodial Agreement and each other
Repurchase Document.

NOW, THEREFORE, in consideration of the premises and to induce UBS to enter into the
Repurchase Agreement and the Custodial Agreement, the Guarantor hereby agrees, for the benefit of
UBS, as follows:

1. Defined Terms.

(a) Unless otherwise defined herein, terms defined in the Repurchase Agreement and used herein
shall have the meanings given to them in the Repurchase Agreement.

(b) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this
Guarantee shall refer to this Guarantee as a whole and not to any particular provision of this
Guarantee, and section and paragraph references are to this Guarantee unless otherwise specified.

(c) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.

2. Guarantee.

(a) The Guarantor hereby, unconditionally and irrevocably, guarantees, for the benefit of UBS
and its successors, indorsees, transferees and assigns, the prompt and complete payment by the
Seller when such payment is due in accordance with the Obligations up to a maximum amount of
$100,000,000 (the “Maximum Amount”).

(b) Anything herein to the contrary notwithstanding, the maximum liability of the Guarantor
hereunder shall in no event exceed the amount which can be guaranteed by the Guarantor under
applicable federal and state laws relating to the insolvency of the debtors.

(c) The Guarantor further agrees to pay any and all expenses (including, without limitation,
all fees and disbursements of counsel) which may be paid or incurred by UBS in enforcing, or
obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of
the Obligations and/or enforcing any rights with respect to, or collecting against, the Guarantor
under this Guarantee. This Guarantee shall remain in full force and effect up to the Maximum
Amount until the Obligations are performed and/or paid in full and the Repurchase Documents are
terminated, notwithstanding that from time to time prior thereto the Seller may be free from any
Obligations.

(d) No actions or payments made by the Seller, the Guarantor, any other guarantor or any other
Person or received or collected by UBS from the Seller, the Guarantor, any other guarantor or any
other Person by virtue of any action or proceeding or any set-off or appropriation or application
at any time or from time to time in reduction of or in payment of the Obligations shall be deemed
to modify, reduce, release or otherwise affect the liability of the Guarantor hereunder which
shall, notwithstanding any such payment or payments other than payments made by the Guarantor in
respect of the Obligations or payments received or collected from the Guarantor in respect of the
Obligations, remain liable for the Obligations hereunder until the Obligations are paid in full and
the Repurchase Documents are terminated.

(e) The Guarantor agrees that whenever, at any time, or from time to time, it shall make any
payment to UBS on account of its liability hereunder, it will notify UBS in writing that such
payment or performance is made under this Guarantee for such purpose.

3. Right of Set-off. The Guarantor hereby irrevocably authorizes UBS at any time and
from time to time without notice to the Guarantor, any such notice being expressly waived by the
Guarantor, upon the occurrence of an Event of Default to set-off and appropriate and apply any and
all deposits (general or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether direct or indirect,
absolute or contingent, matured or unmatured, at any time held or owing by UBS to or for the credit
or the account of the Guarantor, or any part thereof in such amounts as UBS may elect, against and
on account of the obligations and liabilities of the Guarantor to UBS hereunder and claims of every
nature and description of UBS against the Guarantor, in any currency, whether arising hereunder, or
otherwise, as UBS may elect, whether or not UBS has made any demand for payment and although such
obligations, liabilities and claims may be contingent or unmatured. UBS shall notify the Guarantor
promptly of any such set-off and the application made by UBS; provided that the failure to
give such notice shall not affect the validity of such set-off and application. The rights of UBS
under this Section are in addition to other rights and remedies (including, without limitation,
other rights of set-off) which UBS may have.

4. No Subrogation. Notwithstanding any payment or payments made by the Guarantor
hereunder or any set off or application of funds of the Guarantor by UBS, the Guarantor shall not
be entitled to be subrogated to any of the rights of UBS against the Seller or any other guarantor
or any collateral security or guarantee or right of offset held by UBS for the payment of the
Obligations, nor shall the Guarantor seek or be entitled to seek any contribution or reimbursement
from the Seller or any other guarantor in respect of any payments made by the Guarantor hereunder,
until all amounts owing to UBS are paid in full and the Repurchase Documents are terminated. If
any amount shall be paid to the Guarantor on account of such subrogation rights at any time when
all of the Obligations shall not have been paid in full, such amount shall be held by the Guarantor
in trust for UBS segregated from other funds of the Guarantor, and shall, forthwith upon receipt by
the Guarantor, be turned over to UBS, in the exact form received by the Guarantor (duly indorsed by
the Guarantor to UBS, if required), to be applied against the Obligations, whether matured or
unmatured, in such order as UBS may determine.

5. Amendments, etc. with respect to the Obligations; Waiver of Rights. The Guarantor
shall remain obligated hereunder notwithstanding that, without any reservation of rights against
the Guarantor and without notice to or further assent by the Guarantor, any demand for repurchase
or other performance or payment under any of the Obligations made by UBS may be rescinded by such
party and any of the Obligations continued, and the Obligations, or the liability of any other
party upon or for any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by UBS, and the
Repurchase Documents and any other documents executed and delivered in connection therewith may be
amended, modified, supplemented or terminated, in whole or in part, as UBS may deem advisable from
time to time, and any collateral security, guarantee or right of offset at any time held by UBS for
the payment of the Obligations may be sold, exchanged, waived, surrendered or released. UBS shall
have no obligation to protect, secure, perfect or insure any lien at any time held by it as
security for the Obligations or for this Guarantee or any property subject thereto. When making
any demand hereunder against the Guarantor, UBS may, but shall be under no obligation to, make a
similar demand on the Seller or any other guarantor, and any failure by UBS to make any such demand
or to collect any payments from the Seller or any such other guarantor or any release of the Seller
or such other guarantor shall not relieve the Guarantor of its obligations or liabilities
hereunder, and shall not impair or affect the rights and remedies, express or implied, or as a
matter of law, of UBS against the Guarantor. For the purposes hereof “demand” shall include the
commencement and continuance of any legal proceedings.

6. Guarantee Absolute and Unconditional. The Guarantor waives any and all notice of
the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of
reliance by UBS upon this Guarantee or acceptance of this Guarantee, and any creation, renewal
extension or accrual of any of the Obligations, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance upon this Guarantee;
and all dealings between the Seller and the Guarantor, on the one hand, and UBS and the Seller, on
the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance
upon this Guarantee. The Guarantor waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Seller or the Guarantor with respect to the
Obligations. The Guarantor understands and agrees that this Guarantee shall be construed as a
continuing, absolute and unconditional guarantee of payment up to the Maximum Amount and not of
collection without regard to (a) the validity, regularity or enforceability of the Repurchase
Agreement, the Custodial Agreement, or any other document, any of the Obligations or any other
collateral security therefor or guarantee or right of offset with respect thereto at any time or
from time to time held by UBS, (b) any defense, set-off or counterclaim (other than a defense of
payment or performance in full) which may at any time be available to or be asserted by the Seller
against UBS, or (c) any other circumstance whatsoever (other than a defense of payment or
performance in full) (with or without notice to or knowledge of the Seller or the Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal discharge of the Seller
from the Obligations, or of the Guarantor under this Guarantee, in bankruptcy or in any other
instance. When pursuing its rights and remedies hereunder against the Guarantor, UBS may, but
shall be under no obligation to, pursue such rights and remedies as it may have against the Seller
or any other Person or against any collateral security or guarantee for the Obligations or any
right of offset with respect thereto and any failure by UBS to pursue such other rights or remedies
or to collect any payments from the Seller or any such other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any release of the
Seller or any such other Person or any such collateral security, guarantee or right of offset shall
not relieve the Guarantor of any liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of UBS against the Guarantor.
This Guarantee shall remain in full force and effect and be binding in accordance with and to the
extent of its terms upon the Guarantor and the successors and assigns thereof, and shall inure to
the benefit of UBS, and its respective successors, indorsees, transferees and assigns, until all
the Obligations and the obligations of the Guarantor under this Guarantee shall have been satisfied
by complete performance and payment in full and the Repurchase Documents shall be terminated,
notwithstanding that from time to time during the term of the Repurchase Documents the Guarantor
may be free from any Obligations.

7. Reinstatement. Subject to Section 2(a), this Guarantee shall continue to be
effective, or be reinstated, as the case may be, if at any time payment and/or performance, or any
part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by
UBS upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of the Seller or
the Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator
of, or trustee or similar officer for, the Seller or the Guarantor or any substantial part of their
respective property, or otherwise, all as though such payments had not been made.

8. Payments. The Guarantor hereby guarantees that payments hereunder will be paid to
UBS without set-off or counterclaim in U.S. Dollars at the office of UBS as specified in Section 8
of the Repurchase Agreement.

9. Representations and Warranties. The Guarantor hereby represents and warrants that:

(a) it is duly organized, validly existing and in good standing under the laws of the state of
Maryland and has the power and authority and the legal right to own and operate its property, to
lease the property it operates as lessee and to conduct the business in which it is currently
engaged;

(b) it has the power and authority and the legal right to execute and deliver, and to perform
its obligations under, this Guarantee, and has taken all necessary action to authorize its
execution, delivery and performance of this Guarantee;

(c) this Guarantee has been duly executed and delivered on behalf of the Guarantor, and
constitutes a legal, valid and binding obligation of the Guarantor enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights generally, general
equitable principles (whether considered on a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing;

(d) neither the execution and delivery of this Guarantee, nor the fulfillment of or compliance
with the terms and conditions of this Guarantee, will conflict with or result in a breach of any of
the terms, conditions or provisions of the Guarantor’s organizational documents or any agreement or
instrument to which the Guarantor is now a party or by which it is bound, or constitute a default
or result in an acceleration under any of the foregoing, or result in the violation of any law,
rule, regulation, order, judgment or decree to which the Guarantor or its property is subject;

(e) no consent or authorization of, filing with, notice to, or other act by or in respect of,
any governmental authority or any other Person (including, without limitation, any stockholder or
creditor of the Guarantor) is required in connection with the execution, delivery, performance,
validity or enforceability of this Guarantee;

(f) there are no actions, suits, arbitrations, investigations (including, without limitation,
any of the foregoing which are pending or, to Guarantor’s knowledge, threatened) or other legal or
arbitrable proceedings affecting the Guarantor or any of its subsidiaries or affecting any of its
properties before any governmental authority which (i) questions or challenges the validity or
enforceability of the Repurchase Documents or any action to be taken in connection with the
transactions contemplated thereby, (ii) makes a claim or claims in an aggregate amount greater than
$10,000,000, or (iii) individually or in the aggregate, if adversely determined, could be
reasonably likely to have a Material Adverse Effect (as defined in the Repurchase Agreement).

(g) [Reserved]

(h) it has filed or caused to be filed all tax returns which, to its knowledge, are required
to be filed and has paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any governmental authority (other than any amount or
validity of which is currently being contested in good faith by appropriate proceedings and with
respect to which reserves in conformity with GAAP have been provided on the books of the
Guarantor); no tax lien has been filed, and, to the knowledge of the Guarantor, no claim is being
asserted, with respect to any such tax, fee or other charge;

(i) it has not engaged in any material “prohibited transactions” as defined in Section
857(b)(6)(B)(iii) and (C) of the Code. RAIT Financial Trust for its current “tax year” (as defined
in the Code) is and for all prior tax years subsequent to its election to be a real estate
investment trust has been entitled to a dividends paid deduction under the requirements of Section
857 of the Code with respect to any dividends paid by it with respect to each such year for which
it claims a deduction in its Form 1120-REIT filed with the United States Internal Revenue Service
for such year; and

(j) The consolidated balance sheet of the Guarantor as of December 31, 2005 and the related
consolidated statements of income and retained earnings and of cash flows for such fiscal year,
reported on by Grant Thornton, LLP copies of which have heretofore been furnished to UBS, are
complete and correct and present fairly the financial condition of the Guarantor as at such date,
and the results of its operations and its cash flow for such fiscal year. The consolidated balance
sheet of the Guarantor for the six month period ended as of June 30, 2006 and its consolidated
balance sheet as of June 30, 2006 and the related consolidated statements of income and retained
earnings and of cash flows for such period, certified by a responsible officer, copies of which
have heretofore been furnished to UBS, are complete and correct and present fairly the financial
condition of the Guarantor as of such date, and the results of its operations and its cash flows
for such periods (subject to normal year-end audit adjustments). All such financial statements,
including the related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by such accountants or
responsible officer, as the case may be, and as disclosed therein). At the date of the most recent
balance sheet referred to above, the Guarantor had no material guarantee obligation, contingent
liability or liability for taxes, or any long-term lease or unusual forward or long-term
commitment, including, without limitation, any interest rate or foreign currency swap or exchange
transaction or other financial derivative, which is not reflected in the foregoing statements or in
the notes thereto. During the period from June 30, 2006, to and including the date hereof there
has been no sale, transfer or other disposition by the Guarantor of any material part of its
business or property and no purchase or other acquisition of any business or property (including
any capital stock of any other Person) material in relation to the financial condition of the
Guarantor at June 30, 2006 other than mortgage loans, mezzanine loans and other similar loans to
third parties in the ordinary course of business.

10. Notices. All notices, requests and demands which are required or permitted to be
given under this Guarantee shall be in writing (or by Electronic Transmission) and shall be deemed
to have been duly given or made (1) when delivered by hand or (2) if given by mail, when deposited
in the mails by certified mail, return receipt requested, or (3) if by Electronic Transmission,
when sent and receipt has been confirmed, addressed as follows:

(a) if to UBS or to the Seller, at their respective addresses or transmission numbers for
notices provided in Section 18 of the Repurchase Agreement; and

(b) if to the Guarantor, at its address or transmission number for notices set forth under its
signature below.

Each of UBS, the Seller or the Guarantor may change its address and transmission numbers for
notices by notice in the manner provided in this Section.

11. Severability. Any provision of this Guarantee which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

12. Integration. This Guarantee represents the agreement of the Guarantor with
respect to the subject matter hereof.

13. Amendments in Writing; No Waiver; Cumulative Remedies.

(a) None of the terms or provisions of this Guarantee may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by the Guarantor, the Seller and UBS.

(b) UBS shall not by any act, delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any breach of any of the terms and
conditions hereof. No failure to exercise, nor any delay in exercising, on the part of UBS, any
right, power or privilege hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by UBS of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which
UBS would otherwise have on any future occasion.

The rights and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies provided by law.

14. Section Headings. The section headings used in this Guarantee are for convenience
of reference only and are not to affect the construction hereof or be taken into consideration in
the interpretation hereof.

15. Successors and Assigns. This Guarantee shall be binding upon the successors and
assigns of the Guarantor and shall inure to the benefit of UBS and its successors and assigns.
This Guarantee may not be assigned by the Guarantor without the prior written consent of UBS, which
consent shall be at UBS’s sole discretion. This Guarantee may be assigned by UBS without the
consent of the Guarantor to any assignee of the Repurchase Agreement.

16. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

17. SUBMISSION TO JURISDICTION; WAIVERS. THE GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY:

(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
GUARANTEE AND THE OTHER REPURCHASE DOCUMENTS, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN
RESPECT THEREOF, TO THE EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
SITTING IN THE BOROUGH OF MANHATTAN, THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;

(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN SUCH COURTS AND, TO THE
EXTENT PERMITTED BY LAW, WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY
SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR PROCEEDING WAS BROUGHT IN AN
INCONVENIENT COURT AND AGREES NOT TO PLEAD OR CLAIM THE SAME;

(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING
A COPY THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR AT SUCH OTHER ADDRESS OF WHICH UBS
SHALL HAVE BEEN NOTIFIED; AND

(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT SERVICE OF PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT TO SUE IN ANY OTHER JURISDICTION.

(e) WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTEE, ANY OTHER REPURCHASE
DOCUMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

(f) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN THIS SECTION ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES.

18. Acknowledgments. The Guarantor hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of this
Guarantee;

(b) UBS does not have any fiduciary relationship with or duty to the Guarantor arising out of
or in connection with this Guarantee, and the relationship between the Guarantor, the Seller and
UBS; and

(c) no joint venture is created hereby or otherwise exists by virtue of the transactions
contemplated hereby among the Guarantor, the Seller and UBS.

1

IN WITNESS WHEREOF, the undersigned has caused this Guarantee to be duly executed and
delivered by its duly authorized officer as of the day and year first above written.

RAIT INVESTMENT TRUST, a Maryland trust

	 	 	 	By:
/s/ Ellen J. DiStefano

	 	 	Name: Ellen J. DiStefano

Title: Executive Vice President & Chief

Financial Officer

Address for Notices:

RAIT INVESTMENT TRUST

1818 Market Street, 28th Floor

Philadelphia, PA 19103

Attention: Ken Frappier

Telecopier No.: (215) 861-7920

Telephone No: (215) 861-7900

2EX-10.62

AGREEMENT OF SETTLEMENT AND MUTUAL RELEASE

This Agreement of Settlement and Mutual Release (this “Release”) is made and entered into as
of the 22nd day of September, 2006, by and between Peter J. Utrata, M.D., an individual
(“Borrower”) and STAAR Surgical Company, a Delaware corporation (“STAAR” and, collectively with the
Borrower, the “Parties”) with reference to the following facts:

RECITALS

A. On June 16, 1999, the Borrower made for the benefit of STAAR a Promissory Note, in the
original principal amount of $1,258,000 (the “1999 Note”), which was originally due and payable on
June 15, 2004.

B. On June 2, 2000, the Borrower made for the benefit of STAAR a Promissory Note in the
original principal amount $272,500 (the “2000 Note” and, collectively with the 1999 Note, the
“Notes”), which became due and payable on June 1, 2005.

C. A Pledge Agreement between the Borrower and STAAR, dated as of June 16, 1999 (the “Pledge
Agreement”), pledges 120,000 shares of STAAR Common Stock owned by the Borrower (the “Pledged
Shares”) as security for the Borrower’s obligations under the Notes.

D. The Borrower and STAAR entered into a Forbearance Agreement on July 22, 2004 (the
“Forbearance Agreement”), whereby in consideration of a payment by the Borrower of $150,000 against
amounts owed under the Notes, STAAR agreed to forbear in the exercise of rights or remedies under
the 1999 Note and the 1999 Pledge Agreement until March 15, 2005 (the “Forbearance Deadline”).

E. The due dates of the Notes and the Forbearance Date have passed, the entire amount of
principal and accrued interest under the Notes is due and payable, and the Borrower has failed to
pay the amounts due under the Notes. As of the date hereof, interest in the amount of $ 410,218.28
has accrued on the Notes.

F. The Borrower has asserted certain counterclaims and offsets against STAAR.

G. The Borrower and STAAR wish to settle, compromise and resolve all debts, obligations and
claims between them on the terms set forth below.

AGREEMENT

In consideration of the foregoing facts and the mutual promises contained herein, the parties
agree as follows.

1. Defined Terms. Capitalized terms used but not defined herein shall have the
meanings set forth in the Pledge Agreement.

2. Cash Payment by Borrower. No later than the close of business on Wednesday,
September 28, 2006, the Borrower shall pay to STAAR the sum of $175,000 by wire transfer of
immediately available funds (the “Cash Payment”).

3. Sale of Collateral. Borrower agrees that upon the instruction of STAAR the
Borrower shall cause the Pledged Shares to be sold for cash in one or more transactions at the
market price on the Nasdaq National Stock Market applicable at such time, and to cause the proceeds
of such transaction (net of broker’s commissions, if any) be delivered to STAAR. STAAR agrees that
it shall request the sale of all of the Pledged shares no later than December 31, 2006. The
Borrower agrees to execute and deliver any certificates or other documents, and to perform all
other acts, reasonably necessary to effectuate the sale of the Pledged Shares.

4. Release of Liens. As soon as practicable after its receipt of the net proceeds of
the Pledged Shares, STAAR shall provide such documents as reasonably necessary to release any lien
for the benefit of STAAR on the real or personal property of the Borrower (“Lien Release
Documents”); provided that the Borrower shall be responsible for any filing or recording of Lien
Release Documents and the associated fees. STAAR agrees to execute and deliver any Lien Release
Documents provided by the Borrower within two business days after receipt by STAAR, provided such
net proceeds have been received. Delivery of Lien Release Documents shall be effective when STAAR
delivers the documents to an overnight delivery service or mails them in accordance with the
instructions of the Borrower.

5.  Release of STAAR Claims. Subject to the condition that the Borrower performs all
of his obligations hereunder and STAAR receives the Cash Payment within the time period set forth
in Paragraph 2 and receives the proceeds of the Pledged Shares, STAAR, for itself and for its
present and former related and affiliated entities and its legal predecessors, successors and
assigns (all of whom are hereinafter collectively referred to as the “STAAR Releasing Parties”)
hereby releases and absolves and forever discharges the Borrower and his successors and assigns
(collectively the “Borrower Releasees”), of and from any and all claims, demands, damages, debts,
liabilities, accounts, reckonings, obligations, costs, expenses, liens, actions and causes of
action, of every kind and nature whatsoever, whether now known or unknown, foreseen or unforeseen,
matured or unmatured, suspected or unsuspected, that the STAAR Releasing Parties, or any of them,
now have, own or hold, or at any time heretofore had, owned or held, or could, shall or may
hereafter have, own or hold against any of the Company Releasees, based on any act, omission,
matter, thing, event, or other transaction or occurrence, existing or occurring from the beginning
of time through the date of this Agreement.

6. Release of Borrower Claims. Subject to the condition that STAAR performs all of
its obligations hereunder, the Borrower hereby, for itself and for its present and former related
and affiliated entities and its legal predecessors, successors and assigns (all of whom are
hereinafter collectively referred to as the “Borrower Releasing Parties”) hereby releases and
absolves and forever discharges STAAR and any all related or affiliated entities and its successors
and assigns (collectively the “STAAR Releasees”), of and from any and all claims, demands, damages,
debts, liabilities, accounts, reckonings, obligations, costs, expenses, liens, actions and causes
of action, of every kind and nature whatsoever, whether now known or unknown, foreseen or
unforeseen, matured or unmatured, suspected or unsuspected, that the Borrower Releasing Parties, or
any of them, now have, own or hold, or at any time heretofore had, owned or held, or could, shall
or may hereafter have, own or hold against any of the STAAR Releasees, based on any act, omission,
matter, thing, event, or other transaction or occurrence, existing or occurring from the beginning
of time through the date of this Agreement.

7. General Release. It is the intention of the Parties in executing this Agreement
that it shall be effective as a full and final General Mutual Release of and from each and every
matter described hereinabove, known or unknown, suspected or unsuspected. In furtherance of this
intention, each of the Parties acknowledges that it is familiar with Section 1542 of the California
Civil Code, which provides as follows:

“A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing
the release, which if known by him must have materially affected his
settlement with the debtor.”

THE PARTIES EACH WAIVE AND RELINQUISH ANY RIGHTS AND BENEFITS WHICH IT OR HE HAS OR MAY HAVE
UNDER SECTION 1542 OF THE CALIFORNIA CIVIL CODE TO THE FULLEST EXTENT PERMITTED BY LAW.

8. Exclusion. Nothing herein shall be construed as a waiver of STAAR’s right to
receive payment for ophthalmic products sold or consigned to the Borrower or a release of the
Borrower’s obligation to make such payments from time to time in the ordinary course.

9. Further Assurances. Each of the parties hereto shall, at the request of the other
Party hereto, deliver to the requesting Party all further documents or other assurances as may
reasonably be necessary or desirable to effectuate the terms of this Agreement.

10. Miscellaneous.

10.1 This Agreement shall be deemed to have been drafted jointly by the Parties, and the
language of this Agreement shall not be construed or interpreted for or against either Party.

10.2 The Parties acknowledge that neither of them, nor any agent or attorney of the other
Party, has made any promise, representation, or warranty whatsoever (express, implied, or
statutory) not contained herein concerning the subject matters hereof, to induce that Party to
execute this Agreement, and that the Parties have not executed this Agreement in reliance upon any
such promise, representation, or warranty not contained herein.

10.3 The Parties acknowledge that each has been represented by independent legal counsel of
their own choice throughout all of the negotiations which preceded the execution of this Agreement.
The Parties further acknowledge that they and their counsel have had adequate opportunity to make
whatever investigation or inquiry they may deem necessary or desirable in connection with the
subject matter of this Agreement prior to the execution hereof and the delivery and acceptance of
the consideration specified herein.

10.4 This Agreement constitutes the entire agreement of the parties in connection with the
subject matter hereof and cannot be changed or terminated orally. All prior agreements,
understandings, representations, warranties and negotiations regarding the subject matter hereof,
if any, are merged into this Agreement. This Agreement can be modified only by a writing signed by
all of the Parties.

10.5 This Agreement and all of its terms shall be binding upon and inure to the benefit of
the respective heirs, legal successors, trustees, and assigns of the Parties.

10.6 This Agreement shall be governed by and construed to be in accordance with the internal
laws of the State of California (excluding the conflicts of laws provisions). The Parties agree to
submit to personal jurisdiction and venue in any state or federal court located in Los Angeles
County, California, over any action or proceeding to enforce or defend any matter arising from or
related to this Agreement. Each Party waives, to the fullest extent permissible, the defense of
forum inconveniens and agrees not to institute any legal action or proceeding concerning any matter
arising out of or relating to this Agreement in any court other than one located in Los Angeles
County, California.

10.7 If any provision of this Agreement is deemed prohibited by or invalid by law, that
provision will be ineffective to the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of this Agreement.

10.8 Any Party who prevails in an action or proceeding to interpret or enforce this Agreement
shall be entitled to collect the reasonable attorneys’ fees and costs incurred in connection
therewith.

10.9 Each Party shall bear his or its own costs, expenses and attorneys’ fees incurred in
connection with the claims resolved by this Agreement and the resolution thereof as provided in
this Agreement.

10.10 Each Party to this Agreement understands and agrees that, if the facts with respect to
which this Agreement is executed are found hereafter to be different from the facts now believed to
be true, such Party expressly accepts and agrees that this Agreement shall be and remain effective
notwithstanding any such difference in fact.

10.11 Each Party represents and warrants that it has been fully empowered to execute this
Agreement and has the power and authority to grant the rights granted herein by such Party.

10.12 This Agreement may be executed in multiple counterparts, each of which when so executed
and delivered shall be deemed an original, and all of which, taken together, shall constitute but
one and the same agreement.

The next page is the signature page.

1

IN WITNESS WHEREOF, the Parties have caused this Agreement of Settlement and General Release
to be entered into as of the date first written above.

	 	 	 	 	 
	STAAR SURGICAL COMPANY,
a Delaware corporation.
/s/ David Bailey
—
	 	PETER J. UTRATA, M.D.

	David Bailey
	 	/s/ Peter J. Utrata
	President and Chief Executive Officer
	 	 	—	 

2

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