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<CONFORMED-NAME>STAAR SURGICAL COMPANY
<CIK>0000718937
<ASSIGNED-SIC>3851
<IRS-NUMBER>953797439
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<BUSINESS-ADDRESS>
<STREET1>1911 WALKER AVE
<CITY>MONROVIA
<STATE>CA
<ZIP>91016
<PHONE>8183037902
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<TYPE>8-K
<SEQUENCE>1
<FILENAME>staar611038k.txt
<DESCRIPTION>CURRENT REPORT
<TEXT>






                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 8-K


                                 CURRENT REPORT
     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


        Date of Report (Date of earliest event reported): June 11, 2003



                             STAAR SURGICAL COMPANY
             (Exact name of registrant as specified in its charter)



         Delaware                        0-11634                95-3797439
(State or other jurisdiction)     (Commission File Number)   (I.R.S. Employer
of incorporation or organization)                            Identification No.)



1911 Walker Avenue, Monrovia, California                            91016
(Address of principal executive offices)                          (Zip Code)



                                 (626) 303-7902
              (Registrant's telephone number, including area code)



<PAGE>


Item 4.  Changes in Registrant's Certifying Accountant

      On June 12, 2003, the Company formally engaged McGladrey & Pullen,  LLP as
independent  accountants  to audit the Company's  financial  statements  for the
fiscal year ending January 2, 2004. The selection of McGladrey & Pullen, LLP was
made by the Audit  Committee of the Board of Directors of the Company and,  upon
recommendation by that committee, was approved by the full Board of Directors.

      During the two most recent fiscal years of the Company and the  subsequent
interim  period prior to the  selection of McGladrey & Pullen,  LLP, the Company
has not consulted with McGladrey & Pullen,  LLP regarding any of the matters set
forth in Item 304(a)(2)(i)-(ii) of Regulation S-K.

Item 5. Other Events and Regulation FD Disclosure.

      Private Placement of Common Stock

      On June 11, 2003,  the Company  entered into  Purchase  Agreements  with a
group of private  investors (the  "Investors") who agreed to privately  purchase
1,000,000  shares of the  Company's  Common  Stock at a price per share of $9.60
(the "Private  Placement").  Payment for the $9,600,000 aggregate purchase price
for the Private Placement was received by the Company on June 12, 2003.

      Adams,  Harkness & Hill,  Inc.  acted as  placement  agent for the Private
Placement. In consideration of its services, it is receiving from the Company an
engagement  fee of $25,000 plus a commission of 5% of the gross  proceeds of the
Private Placement, for aggregate fees of $505,000.

      Net  proceeds  of the  Private  Placement  will be used by the Company for
repayment of indebtedness and for working capital.

      The  following  summary of the  Private  Placement  is not  intended to be
exhaustive  and is  qualified  in its entirety by reference to the form of Stock
Purchase  Agreement,  which is  attached  to this  report as Exhibit  10.96 (the
"Stock Purchase Agreement").

      As of June 11, 2003,  the Company and the  Investors  signed and delivered
Stock Purchase Agreements evidencing the commitment of each Investor to purchase
shares of Common  Stock from the Company at a price per share of $9.60,  and the
commitment  of the  Company  to  complete  such  sale.  The  aggregate  purchase
commitment under all of the Stock Purchase  Agreements was 1,000,000 shares (the
"Shares"). Funding of the purchases was completed on June 12, 2003.

      Each of the Investors is an "accredited  purchaser"  within the meaning of
Rule 501(a) of  Regulation D under the  Securities  Act of 1933, as amended (the
"Act").  The Private  Placement  is intended to be exempt from the  registration
requirements  of Section 5 of the Act  through  the  exemption  available  under
Section 4(2) of the Act and Rule 506 of Regulation D.


                                      -2-
<PAGE>

      The Shares are "restricted securities," as defined in Rule 144(a)(3) under
the Act, and accordingly  the Shares may not be resold by the Investors  without
registration under the Act or an available  exemption from  registration.  Under
the  Purchase  Agreements,  the  Company  will be  obligated  to file  with  the
Securities  and  Exchange   Commission  (the  "SEC"),   as  soon  as  reasonably
practicable  after the closing of the Private  Placement (the "Closing") (but no
more than 30 days  after the  Closing),  a  registration  statement  on Form S-3
registering  under  the Act the  resale  of the  Shares  by the  Investors  (the
"Registration Statement").

      The Company will be required to keep the Registration  Statement effective
until the earlier of (1) two years after the  Closing,  (2) the time when all of
the  Shares  have  been  sold  under  the  Registration  Statement  or in  other
transactions  that result in the Shares being freely  tradable,  or (3) the time
when all of the Shares can be sold  without  registration  or  restriction.  The
Company  will  be  required  to  keep a  current  prospectus  available  for the
Investors to use for resales during that period.

      The Company can suspend the use of the Registration  Statement for resales
up to two times each year,  for a period of no longer  than 45 days on each such
occasion,  if  required  to do so  by  regulatory  action  or  because  material
information or events affecting the Company are not adequately  disclosed in the
then available prospectus.

      If for any reason the  Company  fails to file the  Registration  Statement
within 30 days after the Closing, the Company will be required to issue "Penalty
Shares"  to the  Investors  in a  number  equal  to 1% of the  Shares  for  each
subsequent  30-day period during which the Registration  Statement is not filed.
The  Company  will also be required  to issue  Penalty  Shares if for any reason
there are more than two such  suspension  periods in any year,  or if the 45-day
limit for each suspension  period is exceeded,  again in a number equal to 1% of
the Shares for each 30-day  period during which the  Registration  Statement was
unavailable in excess of the permitted suspensions.

      If the  number of  Penalty  Shares  would  exceed  the number of shares of
Common Stock that the Company can issue without  stockholder  approval under the
Nasdaq  rules,  the Company will instead pay the cash  equivalent of the Penalty
Shares based on the average  trading price on the three last days of the related
30-day penalty period.

      The Purchase Agreement includes standard representations and warranties by
the Company for a transaction  of this type,  which in general  require that the
business,  financial  condition and results of operations of the Company conform
with the descriptions and financial statements included in the Company's reports
and other documents filed with the SEC.

      In the Private Placement the Investors received no securities or rights to
acquire  securities,  other than the  Shares  and the right to  receive  Penalty
Shares if the  Company  fails to satisfy  the  registration  obligations  in the
Purchase Agreements.  No warrants or convertible securities were included in the
Private Placement.

                                      -3-
<PAGE>

Item 7.  Financial Statements and Exhibits

(a) Not applicable.

(b) Not applicable.

(c)  Exhibits.  The  following  is a list of  exhibits  filed  as a part of this
report.

    Exhibit Number            Description
    --------------            -----------

         10.96      Form of Stock Purchase Agreement dated June 11, 2003

         99.1       Press Release dated June 12, 2003.

Item 9.  Regulation FD Disclosure

      On June 12, 2003, STAAR Surgical Company issued a press release announcing
the signing of the  Purchase  Agreements.  A copy is attached as Exhibit 99.1 to
this report and is incorporated herein by this reference.
























                                      -4-
<PAGE>

                                   SIGNATURES

      Pursuant to the  requirements of the Securities  Exchange Act of 1934, the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                         STAAR SURGICAL COMPANY


Date: June 13, 2003                      By:  /s/ John Bily
                                              _____________________________
                                              John Bily
                                              Chief Financial Officer


























                                      -5-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1
<SEQUENCE>3
<FILENAME>staar8kex1096.txt
<DESCRIPTION>FORM OF STOCK PURCHASE AGREEMENT
<TEXT>
                                                                   Exhibit 10.96
                                                                   -------------

                           STAAR SURGICAL CORPORATION

                         INSTRUCTION SHEET FOR INVESTOR




To be read in conjunction with the entire attached Stock Purchase  Agreement and
Investor Questionnaire.  All capitalized terms used but not defined herein shall
have the meaning assigned to each such term in the Stock Purchase Agreement.

A. Complete  the  following   items in the Stock  Purchase  Agreement and in the
   Investor Questionnaire:

   1. Provide the information  regarding the Investor requested on the signature
      page to the Stock  Purchase  Agreement and in the Investor  Questionnaire.
      The Stock Purchase Agreement must be executed by an individual  authorized
      to bind the Investor.

   2. Return the signed Stock Purchase Agreement and Investor Questionnaire to:

                  Sheppard, Mullin, Richter & Hampton LLP
                  333 South Hope Street, 48th Floor
                  Los Angeles, CA  90072
                  Attention:  Charles S. Kaufman, Esq.
                  Phone: (213) 620-1780
                  Facsimile:  (213) 620-1398

            And fax copies to:

                  STAAR Surgical Company
                  Attn:  John Bily, Chief Financial Officer
                  Phone:  (626) 303-7902 ext. 2370
                  Facsimile:  (626) 303-0895

   An executed original Stock Purchase Agreement and Investor Questionnaire or a
   fax thereof must be received by 5:00 p.m. Los Angeles time on June 12, 2003.

B. Instructions  regarding the transfer of funds for the purchase of Shares will
   be faxed to the Investor at a later date.

C. To resell the Shares after the Registration  Statement covering the Shares is
   effective and the Investor  receives  notification in the form of Annex II to
   the Stock Purchase Agreement:

   1. Provided  that a suspension of the  Registration  Statement is not then in
      effect pursuant to the terms of the Stock Purchase Agreement, the Investor
      may  sell  Shares  under  the  Registration   Statement   subject  to  the
      notification provisions in the Stock Purchase Agreement, provided that the
      Investor arranges for delivery of a current  prospectus to the transferee.
      Upon receipt of a request  therefor,  the Company has agreed to provide an
      adequate  number of current  prospectuses  to each  Investor and to supply
      copies to any other parties requiring such prospectuses.

   2. The Investor must also deliver to the  Company's  transfer  agent,  with a
      copy to the Company, a Certificate of Subsequent Sale in the form attached
      to Exhibit A to Annex II, so that the Shares may be properly transferred.

                                      -1-
<PAGE>

                            STOCK PURCHASE AGREEMENT



STAAR Surgical Company
1911 Walker Avenue
Monrovia, CA  91016
Phone:  (626) 303-7902 ext. 2370
Facsimile:  (626) 303-0895

Ladies and Gentlemen:

      The undersigned  investor (the "Investor"),  hereby confirms its agreement
with you as follows:

      1. This Stock Purchase  Agreement (the "Agreement") is made as of June 11,
2003 between STAAR Surgical Company (the "Company") and the Investor.

      2. The  Company has  authorized  the sale of up to  1,250,000  shares (the
"Company Shares") of common stock of the Company, $0.01 par value per share (the
"Common Stock"),  subject to adjustment by the Company's Board of Directors,  to
certain investors in a private placement (the "Offering").

      3. The Company and the Investor agree that the Investor will purchase from
the Company, and the Company will sell to the Investor,  the number of shares of
Common Stock set forth  opposite the  Investor's  name on the signature  page of
this Agreement (the "Shares"),  at a purchase price per share of $9.60, pursuant
to the Terms and  Conditions for Purchase of Shares  attached  hereto as Annex I
and  incorporated  herein by  reference  as if fully set  forth  herein.  Unless
otherwise requested by the Investor,  certificates  representing the Shares will
be registered in the Investor's name and address as set forth below.

      4. The Investor represents that, except as set forth below, (a) he, she or
if it has had no position, office or other material relationship within the past
three  years with the  Company or persons  known to it to be  affiliates  of the
Company,  (b) neither  the  Investor,  nor any group of which the  Investor is a
member or to which the Investor is related,  beneficially  owns  (including  the
right to acquire or vote) any securities of the Company and (c) the Investor has
no direct or indirect  affiliation or association with any NASD member as of the
date hereof.

Exceptions to Paragraph 4:

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(If no exceptions, write "none."  If left blank, response will be deemed to
be "none.")


                      The next page is the signature page.

                                      -2-
<PAGE>

      Please  confirm  that the  foregoing  correctly  sets forth the  agreement
between us by signing in the space provided below for that purpose. By executing
this  Agreement,  you  acknowledge  that the Company may use the  information in
paragraph 4 above and the name and address  information  below in preparation of
the Registration Statement (as defined in Annex I).

AGREED AND ACCEPTED:

                  Company:      STAAR SURGICAL COMPANY

                                By:   __________________________________________
                                      David Bailey
                                      President and Chief Executive Officer

                  Investor:     ________________________________________________
                                            name of investor

                                Number of Shares: _____________

                                By:   __________________________________________
                                      signature of investor or authorized person

                                Its:  __________________________________________
                                            title of authorized person

                                Address:    _________________________
                                _____________________________________
                                _____________________________________
                                Contact Name:     ___________________
                                Facsimile Number: ___________________
                                Email Address:    ___________________

                                Name in which share certificates should
                                be registered (if different):
                                _____________________________________

                                Social Security   ___________________
                                or Tax I.D. No.:  ___________________

                                Address  where shares should be sent (if
                                different):__________________________
                                _____________________________________
                                _____________________________________


                                      -3-
<PAGE>

                                     ANNEX I

                 TERMS AND CONDITIONS FOR PURCHASE OF SHARES

1. Authorization and Sale of the Shares. Subject to the terms and conditions set
forth  in  this  Annex  I to  the  Stock  Purchase  Agreement  (the  "Terms  and
Conditions"),  the Company has authorized the sale of up to 1,250,000  Shares of
Common  Stock.  The Company  reserves  the right to  increase  or decrease  this
number.

2. Agreement to Sell and Purchase the Shares; Subscription Date.

         2.1 At the Closing (as defined in Section 3), the Company  will sell to
the Investor,  and the Investor  will purchase from the Company,  upon the terms
and conditions hereinafter set forth, the Shares.

         2.2 The Company is entering into a substantially  similar form of stock
purchase  agreement,  including  these  Terms  and  Conditions,  with the  other
investors  listed  along with the  Investor  on  Schedule I hereto  (the  "Other
Investors")  and  expects to complete  sales of shares of Common  Stock to them.
(The Investor and the Other  Investors are  hereinafter  sometimes  collectively
referred to as the "Investors," and the Stock Purchase  Agreement to which these
Terms and Conditions are attached and the stock purchase  agreements executed by
the Other Investors are hereinafter  sometimes  collectively  referred to as the
"Agreements.")

         2.3 The Investor  acknowledges  that the Company  intends to pay Adams,
Harkness & Hill,  Inc. (in its capacity as placement  agent for the Shares,  the
"Placement  Agent") a fee with respect to the sales of Shares to the  Investors,
such fee not to exceed $25,000,  plus 5% of the aggregate purchase of the Shares
and all other  shares of Common Stock sold to  Investors,  plus related fees and
expenses incurred by the Placement Agent in connection with such sales.

3. Delivery of the Shares at Closing. The completion of the purchase and sale of
the Shares (the "Closing") shall occur no later than June 13, 2003 (the "Closing
Date"), at the offices of Sheppard, Mullin, Richter & Hampton LLP, the Company's
counsel.  At the Closing,  the Company shall deliver to the Investor one or more
stock certificates  representing,  in the aggregate, the Shares, each such stock
certificate  to be registered in the name of the Investor or, if so indicated on
the signature  page of the Stock  Purchase  Agreement,  in the name of a nominee
designated  by the  Investor.  If neither the Investor nor a  representative  of
Investor  is  present  at  the  Closing  to  take   physical   delivery  of  the
certificates,  then delivery shall be deemed made at Closing by the transmission
of a facsimile of the certificates to the Investor (or nominee designated by the
Investor)  followed by delivery by a  nationally  recognized  overnight  express
courier.

      The  Company's  obligation  to issue the Shares to the  Investor  shall be
subject to the following  conditions,  any one or more of which may be waived by
the  Company:  (a)  receipt by the  Company,  or the nominee  designated  by the
Company,  as applicable,  of a certified or official bank check or wire transfer
of funds in the full amount of the aggregate  purchase price for the Shares; (b)
completion  of the  purchases  and  sales  under the  Agreements  with the Other
Investors;  (c) the accuracy of the  representations  and warranties made by the
Investors  and the  fulfillment  of those  undertakings  of the  Investors to be
fulfilled prior to the Closing.


                                      -1-
<PAGE>



      The  Investor's  obligation to purchase the Shares shall be subject to the
following  conditions,  any one or more of which may be waived by the  Investor:
(a) the  representations and warranties of the Company set forth herein shall be
true and complete as of the Closing  Date in all  material  respects (or if such
representation  or warranty is  qualified as to  materiality,  shall be true and
complete as of the Closing Date in all  respects);  (b) the Investor  shall have
received  such  documents  as the  Investor  shall  reasonably  have  requested,
including an opinion of Company counsel substantially in the form of attached as
Exhibit B to Annex II; (c) the  Company  shall not have  experienced  a Material
Adverse  Change (as defined in paragraph  4.11);  and (d) the Company shall have
delivered to Investor a certificate of its Chief  Executive  Officer dated as of
the Closing Date certifying (i) that the  representations  and warranties of the
Company  remain true and complete as of the  Closing,  (ii) that the Company has
performed all  covenants in the  Agreements to be performed by it on or prior to
Closing,  (iii) setting forth in detail the  capitalization of the Company as of
June 11,  2003,  (iv) that the Company has not  experienced  a Material  Adverse
Change,  (v) that the Common  Stock has not been  suspended  from trading on the
Nasdaq Stock Market,  and (vi) the Company is not subject to a stop order of the
Securities and Exchange  Commission (the "SEC") or any state securities  agency,
and the Company has not received notice from the Nasdaq Stock Market that it has
failed to comply with any material rule or agreement applicable to it.

4. Representations,  Warranties and Covenants of the Company. The Company hereby
represents and warrants to, and covenants with, the Investor, as follows:

         4.1  Organization.  The Company and each of its subsidiaries  listed on
Exhibit 21 to its Annual  Report on Form 10-K for the year ended January 3, 2003
(the  "Subsidiaries")  is duly  organized  and validly  existing  and is in good
standing under the laws of the  jurisdiction  of its  organization.  Each of the
Company and its  Subsidiaries  has full power and authority to own,  operate and
occupy its properties and to conduct its business as presently  conducted and as
described in Company's  SEC  Documents  (as defined in  paragraph  4.4),  and is
registered  or  qualified  to do  business  and  is in  good  standing  in  each
jurisdiction  in which the  failure  to be so  qualified  would  have a material
adverse effect upon the business, financial condition,  properties or operations
of the Company and its  Subsidiaries,  considered as one  enterprise  ("Material
Adverse  Effect"),  and to the  Company's  knowledge,  no  proceeding  has  been
instituted  in any such  jurisdiction,  revoking,  limiting  or  curtailing,  or
seeking to revoke, limit or curtail, such power and authority or qualification.

         4.2 Due Authorization and Valid Issuance. The Company has all requisite
power and authority to execute,  deliver and perform its  obligations  under the
Agreements,  and the Agreements have been duly  authorized and validly  executed
and delivered by the Company and constitute legal,  valid and binding agreements
of the Company  enforceable  against the Company in accordance with their terms,
except  as rights to  indemnity  and  contribution  may be  limited  by state or
federal  securities laws or the public policy  underlying  such laws,  except as
enforceability   may  be   limited   by   applicable   bankruptcy,   insolvency,
reorganization,  fraudulent  conveyance,  moratorium  or similar laws  affecting
creditors'   and   contracting   parties'   rights   generally   and  except  as
enforceability  may be subject to general  principles of equity  (regardless  of
whether such enforceability is considered in a proceeding in equity or at law).


                                      -2-
<PAGE>


         4.3 Non-Contravention.  The execution and delivery of the Agreements by
the Company, the issuance and sale of the Shares to be sold by the Company under
the  Agreements,  the  fulfillment of the terms of the Agreements by the Company
and the consummation by the Company of the transactions  contemplated hereby and
thereby will not (A)  conflict  with or  constitute  a violation  of, or default
(with the passage of time or otherwise) under (i) any material bond,  debenture,
note or other evidence of indebtedness,  or under any material lease,  contract,
indenture,  mortgage,  deed of trust,  loan  agreement,  joint  venture or other
agreement or  instrument  to which the Company or any of its  Subsidiaries  is a
party or by which it or any of its Subsidiaries or their  respective  properties
are bound, (ii) the charter,  by-laws or other  organizational  documents of the
Company or any Subsidiary, or (iii) any material law, administrative regulation,
ordinance or order of any court or  governmental  agency,  arbitration  panel or
authority  applicable  to the  Company  or any  Subsidiary  or their  respective
properties,   or  (B)  result  in  the  creation  or  imposition  of  any  lien,
encumbrance,  claim, security interest or restriction whatsoever upon any of the
material   properties  or  assets  of  the  Company  or  any  Subsidiary  or  an
acceleration of indebtedness pursuant to any obligation,  agreement or condition
contained  in any  material  bond,  debenture,  note or any  other  evidence  of
indebtedness  or any material  indenture,  mortgage,  deed of trust or any other
agreement or instrument to which the Company or any  Subsidiary is a party or by
which  any of them is bound or to which  any of the  property  or  assets of the
Company or any Subsidiary is subject.  No consent,  approval,  authorization  or
other order of, or  registration,  qualification  or filing with, any regulatory
body,  administrative agency, or other governmental body in the United States is
required for the execution and delivery of the Agreements by the Company and the
valid issuance and sale of the Shares to be sold by the Company  pursuant to the
Agreements,  other than such as have been made or  obtained,  and except for any
post-closing  securities  filings  or  notifications  required  to be made under
federal or state securities laws.

         4.4  Reporting  Status.  The Company  has filed in a timely  manner all
documents  that the Company was required to file under the  Securities  Exchange
Act of 1934, as amended (the "Exchange Act") during the 12 months  preceding the
date of this Agreement  (such filings,  including all exhibits,  supplements and
amendments  thereto,  the "SEC  Documents").  The SEC  Documents  and all  other
materials  filed  with the SEC  during  such  period  complied  in all  material
respects with the SEC's  requirements as of their  respective  filing dates, and
the  information  contained  therein as of the date  thereof  did not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated  therein or necessary to make the  statements  therein in light of the
circumstances under which they were made not misleading.

         4.5  Capitalization.  The  capitalization of the Company as of April 4,
2003 is as set  forth in the SEC  Documents.  The  Company  has not  issued  any
capital stock since that date other than pursuant to (i) employee  benefit plans
disclosed in the SEC Documents,  or (ii) outstanding warrants,  options or other
securities disclosed in the SEC Documents.  The Shares to be sold by the Company
pursuant to the Agreements have been duly authorized and issued, and when issued
and paid for in accordance with the terms of the Agreements,  will be fully paid
and nonassessable.  Except (i) as set forth in the SEC Documents and (ii) except
for  the  Company  granting  to  employees,  directors,  officers,  advisors  or
consultants  of  the  Company  rights,   warrants  or  options  to  acquire,  or
instruments convertible into or exchangeable for, authorized but unissued shares
of Common  Stock from a pool of shares of Common  Stock  reserved by the Company
for such  purpose  and  reported  in the SEC Documents, there are no outstanding


                                      -3-
<PAGE>


rights  there  are  no  outstanding  rights  (including,   without   limitation,
preemptive rights),  warrants or options to acquire, or instruments  convertible
into or  exchangeable  for, any unissued shares of capital stock or other equity
interest  in  the  Company  or any  Subsidiary,  or  any  contract,  commitment,
agreement,  understanding  or  arrangement of any kind to which the Company is a
party or of which the Company has knowledge and relating to the issuance or sale
of any capital stock of the Company or any Subsidiary,  any such  convertible or
exchangeable  securities  or any  such  rights,  warrants  or  options.  Without
limiting the  foregoing,  no preemptive  right,  co-sale  right,  right of first
refusal, registration right (except as set forth herein), or other similar right
exists  with  respect to the Shares to be issued and sold by the  Company or the
issuance  and  sale  thereof.  No  further  approval  or  authorization  of  any
stockholder, the Board of Directors of the Company or others is required for the
issuance and sale of the Shares by the  Company.  Except as disclosed in the SEC
Documents,  there are no stockholders'  agreements,  voting  agreements or other
similar  agreements  with  respect to the Common Stock to which the Company is a
party or, to the knowledge of the Company, between or among any of the Company's
stockholders.  Except as set forth in the SEC Documents, no holder of any of the
securities of the Company has any rights ("demand," "piggyback" or otherwise) to
have such  securities  registered by reason of the intention to file,  filing or
effectiveness of a Registration Statement (as defined in Section 7.1 hereof).

         4.6  Legal  Proceedings.  There is no  material  legal or  governmental
proceeding pending or, to the knowledge of the Company,  threatened to which the
Company  or any  Subsidiary  is or may be a party or of which  the  business  or
property of the Company or any  Subsidiary  is subject that is not  disclosed in
the  SEC  Documents.   There  is  no  action,  suit,   proceeding,   inquiry  or
investigation  before or by any court, public board or body (including,  without
limitation,  the SEC) pending or, to the  knowledge of the Company or any of its
Subsidiaries,  threatened  against  or  affecting  the  wherein  an  unfavorable
decision,   ruling  or  finding   could   adversely   affect  the   validity  or
enforceability  of, or the  authority  or ability of the  Company to perform its
obligations under the Agreements.

         4.7 No  Violations.  Neither  the  Company  nor  any  Subsidiary  is in
violation  of its  charter,  bylaws,  or other  organizational  document,  or in
violation of any material law, administrative regulation,  ordinance or order of
any court or governmental  agency,  arbitration panel or authority applicable to
the Company or any Subsidiary,  which  violation  would have a Material  Adverse
Effect,  or in default (and there exists no condition  that, with the passage of
time or otherwise, would constitute a default) in any respect in the performance
of any material bond,  debenture,  note or any other evidence of indebtedness in
any  indenture,  mortgage,  deed of trust or any  other  material  agreement  or
instrument  to which the  Company or any  Subsidiary  is a party or by which the
Company or any  Subsidiary is bound or by which the properties of the Company or
any  Subsidiary  are bound  that would be  reasonably  likely to have a Material
Adverse Effect.

         4.8 Governmental Permits, Etc. The Company and its Subsidiaries possess
all necessary franchises,  licenses,  certificates and other authorizations from
any  foreign,  federal,  state  or  local  government  or  governmental  agency,
department,  or body that are  currently  necessary  for the  operation of their
respective  business  as  currently  conducted,  except  where  the  failure  to
currently  possess could not  reasonably be expected to have a Material  Adverse
Effect.


                                      -4-
<PAGE>


         4.9  Intellectual  Property.  The Company and its  Subsidiaries  own or
possess  sufficient  rights  to use  all  patents,  patent  rights,  trademarks,
copyrights,  licenses,  inventions,  trade  secrets,  trade  names and  know-how
(collectively,  "Intellectual  Property")  that are necessary for the conduct of
their  respective  businesses  as now  conducted  except  where the  failure  to
currently own or possess such  Intellectual  Property  would not have a Material
Adverse  Effect.  Except  as set forth in the SEC  Documents,  (i)  neither  the
Company  nor any of its  Subsidiaries  has  received  any  notice of, or has any
knowledge of, any  infringement of asserted rights of a third party with respect
to any Intellectual Property that, individually or in the aggregate,  would have
a  Material  Adverse  Effect,  and  (ii)  neither  the  Company  nor  any of its
Subsidiaries has received any notice of any infringement rights by a third party
with  respect  to  any  Intellectual  Property  that,  individually  or  in  the
aggregate, would have a Material Adverse Effect.

         4.10 Financial Statements. The consolidated financial statements of the
Company  and  the  Subsidiaries  and  the  related  notes  contained  in the SEC
Documents  present  fairly,  in accordance with the rules and regulations of the
SEC, the consolidated  financial position of the Company and its Subsidiaries as
of the dates indicated, and the results of its operations and cash flows for the
periods  therein  specified.  Such financial  statements  (including the related
notes) have been  prepared in  accordance  with  generally  accepted  accounting
principles  applied  on  a  consistent  basis  throughout  the  periods  therein
specified,  except as set forth in the  financial  statements  (and the  related
notes).

         4.11 No Material  Adverse Change.  Except as publicly  disclosed in the
SEC Documents,  press releases or in other "public  disclosures" as such term is
defined in Section  101(e) of Regulation FD of the Exchange Act,  since April 4,
2003  there  has not been  (i) any  material  adverse  change  in the  financial
condition or earnings of the Company and its Subsidiaries  taken as a whole, nor
has  any  material  adverse  event  occurred  to  the  Company  or  any  of  its
Subsidiaries  (it being  understood  that the  Company  has  incurred  operating
losses),  (ii) any  obligation,  direct or  contingent,  that is material to the
Company and its Subsidiaries taken as a whole, incurred by the Company or any of
its  Subsidiaries,  except  obligations  incurred  in  the  ordinary  course  of
business,  (iii) any dividend or distribution of any kind declared, paid or made
on the capital stock of the Company,  or (iv) any loss or damage (whether or not
insured) to the  physical  property  of the  Company or any of its  Subsidiaries
which has been  sustained  which has a material  adverse effect on the condition
(financial or otherwise),  earnings, operations,  business or business prospects
of the  Company  and its  Subsidiaries  taken as a  whole.  Except  as  publicly
disclosed in the SEC Documents,  press releases or in other "public disclosures"
as such term is defined in Section  101(e) of Regulation FD of the Exchange Act,
since April 4, 2003,  neither the  Company nor any of its  Subsidiaries  has (a)
sold, assigned, transferred,  abandoned, mortgaged, pledged or subjected to lien
any of its  material  properties,  tangible or  intangible,  or rights under any
material contract,  permit, license,  franchise or other agreement or (b) waived
or cancelled any material indebtedness or other material obligations owed to the
Company or any of its  Subsidiaries.  Except as disclosed in the SEC  Documents,
the  occurrence  of any of the events  described in clauses (i) through (iv) and
clauses (a) and (b) of this  paragraph  is  referred  to as a "Material  Adverse
Change."

         4.12  Nasdaq.  The  Company's  Common Stock is  registered  pursuant to
Section  12(g) of the Exchange Act and is listed on the Nasdaq  National  Market


                                      -5-
<PAGE>


(the  "Nasdaq").  The Company has taken no action designed to, or likely to have
the effect of,  terminating  the  registration  of the  Common  Stock  under the
Exchange Act or de-listing the Common Stock from the Nasdaq nor to the Company's
knowledge is the National  Association of Securities  Dealers ("NASD") currently
contemplating  terminating such listing.  Upon the Closing,  the Company and the
Common  Stock meet the  criteria  for  continued  quotation  and  trading on the
Nasdaq.

         4.13  Listing  of  the  Shares.  The  Company  shall  comply  with  all
requirements  of the National  Association  of  Securities  Dealers,  Inc.  with
respect to the  issuance  of the Shares  and the  listing  thereof on the Nasdaq
National Market. In furtherance  thereof, the Company shall use its commercially
reasonable  efforts  to take such  actions  as may be  necessary  and as soon as
practicable  and in no event later than 20 days after the  Closing  Date to file
with the Nasdaq National Market an application or other document required by the
Nasdaq National Market and pay all applicable fees for the listing of the Shares
with the Nasdaq National Market and shall provide evidence of such filing to the
Investors.  The  Company  knows of no reason why the Shares will not be eligible
for listing on the Nasdaq National Market.

         4.14 No Manipulation of Stock.  The Company has not taken and will not,
in violation  of  applicable  law,  take,  any action  designed to or that might
reasonably be expected to cause or result in  stabilization  or  manipulation of
the price of the Common Stock to facilitate the sale or resale of the Shares.

         4.15 S-3 Status. The Company meets the requirements for the use of Form
S-3 for the  registration  of the resale of the Shares by the Investors and will
use its best efforts to maintain S-3 status with the SEC during the Registration
Period (as defined in Section 7.1(c)).

         4.16  Insurance.  The Company and its  Subsidiaries  maintain  and will
continue to maintain  insurance against loss or damage by fire or other casualty
and such other  insurance,  including,  but not  limited to,  product  liability
insurance,  in such amounts and covering  such risks as is  reasonably  adequate
consistent with industry practice for the conduct of their respective businesses
and the value of their respective properties.

         4.17 Tax  Matters.  The  Company  and its  Subsidiaries  have filed all
material  federal,  state,  local and foreign income and franchise and other tax
returns required to be filed by any jurisdiction to which it is subject, and has
paid or accrued all taxes due in accordance therewith; and no tax deficiency has
been determined  adversely to the Company or any of its  Subsidiaries  which has
had (nor does the Company or any of its  Subsidiaries  have any knowledge of any
tax  deficiency  which,  if  determined  adversely  to the Company or any of its
Subsidiaries, would reasonably be expected to have) a Material Adverse Effect.

         4.18  Investment  Company.  The Company is not an "investment  company"
within the meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the SEC thereunder.

         4.19 No Registration.  Assuming the accuracy of the representations and
warranties  made by, and compliance  with the covenants of, (i) the Investors in
Section 5 of the Terms and  Conditions to each of the  Agreements,  and (ii) the
Placement Agent in the engagement letter of the Placement Agent with the Company
(the "Engagement Letter"), no  registration  of  the Shares under the Securities


                                      -6-
<PAGE>

Act is  required  in  connection  with the offer  and sale of the  Shares by the
Company to the Investors as contemplated by the Agreements.

         4.20  Internal  Accounting  Controls.  The  Company  and  each  of  its
Subsidiaries  maintains a system of internal accounting controls sufficient,  in
the  judgment  of the  Company's  board  of  directors,  to  provide  reasonable
assurance that (i)  transactions  are executed in accordance  with  management's
general or specific authorizations,  (ii) transactions are recorded as necessary
to permit  preparation of consolidated  financial  statements in conformity with
generally accepted accounting  principles and to maintain asset  accountability,
(iii) access to assets is permitted only in accordance with management's general
or specific  authorization  and (iv) the recorded  accountability  for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

         4.21 Form D. Subject to the continuing  accuracy of the representations
and warranties  made by, and compliance  with the covenants of, the Investors in
Section 5 of the Agreements and the Placement Agent in the Engagement Agreement,
the Company  agrees to file one or more Forms D with  respect to the Shares on a
timely basis as required  under  Regulation D under the  Securities Act to claim
the exemption provided by Rule 506 of Regulation D and to provide a copy thereof
to the Investors and their counsel promptly after such filing.

         4.22 Integration and Future Financings

              (a) The  Company  shall  not,  and shall use its best  efforts  to
ensure that no affiliate of the Company shall,  sell,  offer for sale or solicit
offers to buy or  otherwise  negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the Offering in a
manner that would require the  registration  of the issuance of the Shares under
the Securities Act.

              (b) The Company shall not offer,  sell,  contract to sell or issue
(or  engage any person to assist  the  Company  in taking any such  action)  any
equity securities or securities convertible into,  exchangeable for or otherwise
entitling  the holder to acquire,  any Common  Stock at a price below the market
price of the Common Stock  during the period from the date of this  Agreement to
the  effective  date of the  Registration  Statement;  provided,  however,  that
nothing  in this  Section  4.22(b)  shall  prohibit  the  Company  from  issuing
securities (i) to employees, directors, officers, advisors or consultants of the
Company; (ii) upon exercise of conversion,  exchange, purchase or similar rights
issued,  granted or given by the Company and  outstanding as of the date of this
Agreement; (iii) pursuant to a public offering underwritten on a firm commitment
basis  registered  under the Securities Act; (iv) for the purpose of funding the
acquisition  of securities or assets of any entity in a single  transaction or a
series of related  transactions;  or (v) pursuant to a strategic  partnership or
alliance  agreement,  loan  agreement,  equipment  lease or  similar  commercial
agreement (including licensing and similar arrangements).

         4.23 Use of Proceeds.  The Company  will use the net proceeds  from the
sale of the Shares for working capital and general corporate  purposes,  subject
to  the  Company  obtaining  from  Wells Fargo Business Credit ("Wells Fargo") a


                                      -7-
<PAGE>


waiver of any  provision  in the Second  Amended and Restated  Credit  Agreement
between  the  Company  and Wells Fargo  requiring  the  application  of such net
proceeds to repayment of indebtedness of the Company to Wells Fargo.

5. Representations, Warranties and Covenants of the Investor.

         5.1 The Investor  represents  and warrants to, and covenants  with, the
Company that:  (i) the Investor is an  "accredited  investor" as defined in Rule
501 of  Regulation  D  under  the  Securities  Act , and  the  Investor  is also
knowledgeable, sophisticated and experienced in making, and is qualified to make
decisions  with  respect to,  investments  in shares  presenting  an  investment
decision like that involved in the purchase of the Shares, including investments
in securities issued by the Company and investments in comparable companies, and
has  requested,  received,  reviewed and  considered  all  information it deemed
relevant  in making an  informed  decision  to  purchase  the  Shares;  (ii) the
Investor is acquiring the Shares in the ordinary  course of its business and for
its  own  account  for  investment  only  and  with  no  present   intention  of
distributing  any of such Shares or any  arrangement or  understanding  with any
other persons regarding the distribution of such Shares; (iii) the Investor will
not, directly or indirectly,  offer, sell, pledge, transfer or otherwise dispose
of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of) any of the Shares except in compliance with the Securities  Act,  applicable
state  securities  laws and the  respective  rules and  regulations  promulgated
thereunder;  (iv) the Investor has answered all questions on the signature  page
hereto for use in  preparation  of the  Registration  Statement  (as  defined in
Section  7.1(a))  and the answers  thereto are true and  complete as of the date
hereof and will be true and  complete as of the Closing  Date;  (v) the Investor
will notify the  Company  immediately  of any change in any of such  information
until such time as the  Investor has sold all of its Shares or until the Company
is no longer required to keep the  Registration  Statement  effective;  (vi) the
Investor  and  the  Investor's   representatives,   if  any,  have  been  solely
responsible for the Investor's own "due diligence"  investigation of the Company
and its management and business, for its own analysis of the merits and risks of
this  investment,  and for the  Investor's  own  analysis  of the  fairness  and
desirability  of the terms of the  investment;  and (vii) the  Investor  has, in
connection  with its decision to purchase  the Shares,  relied only upon the SEC
Documents  and the  representations  and  warranties  of the  Company  contained
herein. The Investor understands that its acquisition of the Shares has not been
registered  under the Securities Act or registered or qualified  under any state
securities law in reliance on specific  exemptions  therefrom,  which exemptions
may depend  upon,  among other  things,  the bona fide nature of the  Investor's
investment intent as expressed  herein.  The Investor has completed or caused to
be completed and delivered to the Company the Investor Questionnaire attached to
this Annex I as Exhibit A, which completed  questionnaire  is true,  correct and
complete in all material respects.

         5.2 The Investor acknowledges, represents and agrees that no action has
been or will be taken in any  jurisdiction  outside  the  United  States  by the
Company  that  would  permit  an  offering  of  the  Shares,  or  possession  or
distribution  of the  offering  materials  in  connection  with the issue of the
Shares, if any, in any jurisdiction outside the United States where legal action
by the Company for that purpose is required.  The Investor  will comply with all
applicable laws and regulations in each foreign  jurisdiction,  if any, in which
it  purchases,  offers,  sells or delivers  Shares or has in its  possession  or
distributes any offering material, in all cases at its own expense.


                                      -8-
<PAGE>


         5.3 The Investor hereby covenants with the Company not to make any sale
of the Shares without complying with the provisions of this Agreement, including
Section 7.2 hereof,  and without  causing the  prospectus  delivery  requirement
under the Securities Act to be satisfied, and the Investor acknowledges that the
certificates  evidencing  the  Shares  will  be  imprinted  with a  legend  that
prohibits   their  transfer  except  in  accordance   therewith.   The  Investor
acknowledges  that there may  occasionally be times when the Company  determines
that  it  must  suspend  the  use  of  the  prospectus  forming  a  part  of the
Registration Statement, as set forth in Section 7.2(c).

         5.4 The Investor  further  represents  and  warrants to, and  covenants
with,  the Company that (i) the Investor has full right,  power,  authority  and
capacity  to enter  into  this  Agreement  and to  consummate  the  transactions
contemplated  hereby  and has  taken  all  necessary  action  to  authorize  the
execution,  delivery and performance of this Agreement,  and (ii) this Agreement
constitutes a valid and binding obligation of the Investor  enforceable  against
the  Investor in  accordance  with its terms,  except as  enforceability  may be
limited by  applicable  bankruptcy,  insolvency,  reorganization,  moratorium or
similar laws affecting  creditors' and contracting parties' rights generally and
except  as  enforceability  may be  subject  to  general  principles  of  equity
(regardless  of whether such  enforceability  is  considered  in a proceeding in
equity or at law) and except as the indemnification and contribution  agreements
of the Investor herein may be legally unenforceable.

         5.5  The  Investor  will  not,  prior  to  the   effectiveness  of  the
Registration Statement,  sell, offer to sell, solicit offers to buy, dispose of,
loan, pledge or grant any right with respect to (collectively,  a "Disposition")
the Common Stock of the Company,  nor will the Investor engage in any hedging or
other  transaction  which is designed to or could reasonably be expected to lead
to or result in a  Disposition  of Common Stock by the Investor or any person or
entity  except  as  permitted  under  the  Securities  Act and  the  regulations
promulgated  thereunder.  Such  prohibited  hedging or other  transaction  would
include,  without  limitation,  effecting  any short  sale or having in effect a
short  position  (whether or not such sale or position is "against  the box" and
regardless  of when such  position was entered  into) or any  purchase,  sale or
grant of any right (including,  without limitation, any put or call option) with
respect  to the  Common  Stock or with  respect to any  security  (other  than a
broad-based  market  basket or index)  that  includes,  relates or  derived  any
significant part of its value from the Shares.  The Investor  acknowledges  that
the SEC staff has  published an  interpretation  to the effect that prior to the
effectiveness of the  Registration  Statement a short sale of Common Stock to be
covered by the Shares would violate Section 5 of the Securities Act.

         5.6 The Investor  understands  that nothing in the SEC Documents,  this
Agreement or any other  materials  presented to the Investor in connection  with
the purchase and sale of the Shares constitutes legal, tax or investment advice.
The Investor has consulted such legal, tax and investment advisors as it, in its
sole  discretion,  has deemed  necessary or appropriate  in connection  with its
purchase of Shares.

6. Survival of Representations,  Warranties and Agreements.  Notwithstanding any
investigation  made by any party to this Agreement,  all covenants,  agreements,
representations and warranties made herein by the Company and the Investor shall
survive the  execution  of this  Agreement,  the delivery to the Investor of the
Shares being purchased and the payment therefor.


                                      -9-
<PAGE>


7. Registration of the Shares; Compliance with the Securities Act.

         7.1 Registration Procedures and Other Matters. The Company shall:

              (a)  subject  to  receipt  of  necessary   information   from  the
Investors, use commercially reasonable efforts to prepare and file with the SEC,
as soon as  reasonably  practicable  but in any event  within 30 days  after the
Closing Date, a registration  statement (the  "Registration  Statement") on Form
S-3 to enable the resale of the  Registrable  Shares (as  defined  below) by the
Investors on a delayed or continuous basis under Rule 415 of the Securities Act.
"Registrable  Shares"  means (a) the Shares and (b)  Penalty  Shares (as defined
below), if any;

              (b) use  commercially  reasonable  efforts,  subject to receipt of
necessary information from the Investors, to cause the Registration Statement to
become  effective as soon as reasonably  practicable but in any event within 120
days after the  Closing  Date (with  respect to this  Section  7.1(b),  the term
"commercially  reasonable  efforts"  shall mean that the Company shall submit to
the SEC, within two business days after the Company learns that no review of the
Registration  Statement  will be made by the  staff of the SEC or that the staff
has no further  comments on the  Registration  Statement,  as the case may be, a
request for acceleration of  effectiveness  of the  Registration  Statement to a
time and date not later than 48 hours after the submission of such request);

              (c) use commercially  reasonable  efforts to prepare and file with
the SEC such  amendments and supplements to the  Registration  Statement and the
Prospectus  used in connection  therewith and take all such other actions as may
be necessary to keep the  Registration  Statement  current and  effective  for a
period  (the  "Registration  Period")  not  exceeding,   with  respect  to  each
Investor's  Registrable Shares, the earlier of (i) the second anniversary of the
Closing Date,  (ii) the date on which the Investor may sell all Shares then held
by the  Investor  within a 90-day  period under the volume  limitations  of Rule
144(e) of the Securities Act, and (iii) such time as all Registrable Shares held
by such Investor have been sold (A) pursuant to a registration statement, (B) to
or  through  a broker or dealer or  underwriter  in a public  distribution  or a
public  securities  transaction,  and/or (C) in a  transaction  exempt  from the
registration  and prospectus  delivery  requirements of the Securities Act under
Section 4(1) thereof so that all transfer  restrictions and restrictive  legends
with respect thereto, if any, are removed upon the consummation of such sale.

              (d) promptly  furnish to the  Investor  with respect to the Shares
registered  under  the  Registration  Statement  such  number  of  copies of the
Registration Statement,  Prospectuses and Preliminary Prospectuses in conformity
with the  requirements  of the  Securities  Act and such other  documents as the
Investor may reasonably request, in order to facilitate the public sale or other
disposition of all or any of the Shares by the Investor;

              (e) promptly  take such action as may be necessary to qualify,  or
obtain,  an  exemption  for the  Registrable  Shares  under  such  of the  state
securities laws of United States jurisdictions as shall be necessary to qualify,
or  obtain  an  exemption  for,  the sale of the  Registrable  Shares  in states
specified in writing by the Investor;  provided, however, that the Company shall


                                      -10-
<PAGE>


not be  required  to qualify to do  business or consent to service of process in
any jurisdiction in which it is not now so qualified or has not so consented;

              (f)  bear all  expenses  in  connection  with  the  procedures  in
paragraph (a) through (e) of this Section 7.1 and the registration of the Shares
pursuant to the  Registration  Statement,  regardless of whether a  Registration
Statement becomes effective,  including without limitation: (i) all registration
and filing fees and expenses  (including  filings made with the NASD); (ii) fees
and  expenses of  compliance  with  federal  securities  and state "blue sky" or
securities laws; (iii) expenses of printing (including printing certificates for
the Registrable  Securities and  Prospectuses),  messenger and delivery services
and telephone;  (iv) all  application and filing fees in connection with listing
the  Registrable  Securities  on a national  securities  exchange  or  automated
quotation  system  pursuant  to the  requirements  hereof;  and (v) all fees and
disbursements  of  counsel  of the  Company  and  independent  certified  public
accountants  of the Company  (including  the  expenses of any special  audit and
"cold comfort" letters required by or incident to such  performance);  provided,
however,  that each Investor  shall be responsible  for paying the  underwriting
commissions  or  brokerage  fees,  and  taxes  of any kind  (including,  without
limitation,  transfer taxes) applicable to any disposition,  sale or transfer of
such Investor's  Registrable  Securities.  The Company shall, in any event, bear
its internal expenses (including,  without limitation, all salaries and expenses
of its  officers and  employees  performing  legal or  accounting  duties),  the
expense of any annual audit, rating agency fees and the fees and expenses of any
person, including special experts, retained by the Company;

              (g) advise the Investors, within the two succeeding business days,
by e-mail, fax or other type of communication, and, if requested by such person,
confirm  such advice in  writing:  (i) after it shall  receive  notice or obtain
knowledge of the  issuance of any stop order by the SEC  delaying or  suspending
the  effectiveness of the Registration  Statement or of the initiation or threat
of any  proceeding  for that  purpose,  or any other  order  issued by any state
securities commission or other regulatory authority suspending the qualification
or exemption  from  qualification  of such  Registrable  Securities  under state
securities  or "blue sky" laws;  and it will  promptly  use its best  efforts to
prevent  the  issuance  of any  stop  order  or other  order  or to  obtain  its
withdrawal  at the  earliest  possible  moment if such stop order or other order
should be issued;  and (ii) when the Prospectus or any Prospectus  Supplement or
post-effective  amendment has been filed,  and, with respect to the Registration
Statement  or any  post-effective  amendment  thereto,  when the same has become
effective.;

              (h) otherwise use commercially  reasonable  efforts to comply with
all applicable rules and regulations of the SEC;

              (i) use commercially  reasonable  efforts to cause all Registrable
Shares to be listed on each  securities  exchange  or market,  if any,  on which
equity securities issued by the Company are then listed; and

              (j) use  commercially  reasonable  efforts to take all other steps
necessary to effect the  registration  of the  Registrable  Shares  contemplated
hereby and to enable the Investors to sell the Shares under Rule 144.


                                      -11-
<PAGE>

                   7.1.2 The Company  further agrees that, in the event that the
Registration  Statement has not (i) been filed with the SEC within 30 days after
the  Closing  Date or (ii) been  declared  effective  by the SEC within 120 days
after the Closing  Date,  unless the failure to become  effective  is due to the
fault of one or more Investors or the Placement  Agent (each such event referred
to in clauses (i) and (ii), a "Registration  Default"),  for all or part of each
30-day period (a "Penalty Period") during which the Registration Default remains
uncured,  the Company  shall issue to the Investor 1% of the Shares,  payable in
validly  issued,  fully  paid and  nonassessable  shares  of Common  Stock  (the
"Penalty Shares");  provided, however, that if the issuance of Penalty Shares by
the Company  would result in the Company  being  required  under Nasdaq rules or
other  applicable  rules to obtain the approval of the  Company's  stockholders,
then the  Company  shall pay cash (in an amount per  Penalty  Share equal to the
average of the Closing  Price for the Common Stock for three trading days ending
on the last  trading day of the Penalty  Period)  rather than issue such Penalty
Shares to the extent  needed to avoid such  stockholder  approval.  The  Company
shall deliver said shares or cash payment to the Investor by the fifth  business
day after the end of each such Penalty Period.  Notwithstanding  anything to the
contrary in Section 7.3 or any other provision of this  Agreement,  the issuance
of the Penalty  Shares or cash as provided in this  Section  7.1(k) shall be the
Investor's sole and exclusive remedy in the event of any  Registration  Default;
provided,  however,  that if the foregoing  remedy is deemed  unenforceable by a
court of competent  jurisdiction then the Investor shall have all other remedies
available at law or in equity.  The Penalty Shares,  if any, shall be subject to
the same  restrictions  on transfer  as those on  transfer of Shares,  including
without limitation the restrictions of Section 5.3, 5.5 and 7.2.

         7.2 Transfer of Shares After Registration; Suspension.

              (a) The Investor agrees that it will not effect any Disposition of
the Shares or its right to  purchase  the Shares  that would  constitute  a sale
within  the  meaning  of  the  Securities  Act  except  as  contemplated  in the
Registration  Statement  referred to in Section 7.1 and as described below or as
otherwise in  accordance  with the  Securities  Act,  and that it will  promptly
notify  the  Company  of  any  changes  in  the  information  set  forth  in the
Registration Statement regarding the Investor or its plan of distribution.

              (b)  Except in the event that  paragraph  (c) below  applies,  the
Company  shall,  at all times during the  Registration  Period,  promptly (i) if
deemed necessary by the Company, prepare and file from time to time with the SEC
a post-effective  amendment to the Registration Statement or a supplement to the
related  prospectus  or a supplement  or amendment to any document  incorporated
therein  by  reference  or  file  any  other  required  document  so  that  such
Registration  Statement will not contain an untrue  statement of a material fact
or omit to state a material fact  required to be stated  therein or necessary to
make the statements therein not misleading, and so that, as thereafter delivered
to  purchasers of the Shares being sold  thereunder,  such  prospectus  will not
contain an untrue  statement of a material fact or omit to state a material fact
required to be stated  therein or necessary to make the statements  therein,  in
light of the  circumstances  under which they were made,  not  misleading;  (ii)
provide  the  Investor  copies  of  any  documents  filed  pursuant  to  Section
7.2(b)(i); and (iii) inform each Investor that the Company has complied with its
obligations  in  Section  7.2(b)(i)  (or  that,  if  the  Company  has  filed  a
post-effective  amendment to the  Registration  Statement which has not yet been
declared  effective,  the Company will notify the Investor to that effect,  will

                                      -12-
<PAGE>


use its  commercially  reasonable  efforts to secure the  effectiveness  of such
post-effective  amendment as promptly as possible and will  promptly  notify the
Investor  pursuant to Section  7.2(b)(i)  hereof when the  amendment  has become
effective).

              (c)  Subject  to  paragraph  (d)  below,  in the  event (i) of any
request by the SEC or any other federal or state  governmental  authority during
the period of  effectiveness  of the  Registration  Statement for  amendments or
supplements to a Registration  Statement or related prospectus or for additional
information;  (ii) of the  issuance  by the SEC or any  other  federal  or state
governmental  authority  of any stop order  suspending  the  effectiveness  of a
Registration  Statement or the initiation of any  proceedings  for that purpose;
(iii) of the  receipt by the  Company of any  notification  with  respect to the
suspension of the  qualification  or exemption from  qualification of any of the
Registrable Shares for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose;  or (iv) of any event or circumstance  which
necessitates  the  making  of any  changes  in  the  Registration  Statement  or
prospectus, or any document incorporated or deemed to be incorporated therein by
reference,  so that,  in the  case of the  Registration  Statement,  it will not
contain  any untrue  statement  of a material  fact or any  omission  to state a
material fact required to be stated  therein or necessary to make the statements
therein  not  misleading,  and that in the case of the  prospectus,  it will not
contain  any untrue  statement  of a material  fact or any  omission  to state a
material fact required to be stated  therein or necessary to make the statements
therein,  in the light of the  circumstances  under  which they were  made,  not
misleading;  then the Company  shall deliver a notice in writing to the Investor
(the  "Suspension  Notice") to the effect of the foregoing  and, upon receipt of
such  Suspension  Notice,  the  Investor  will  refrain  from selling any Shares
pursuant to the  Registration  Statement (a  "Suspension")  until the Investor's
receipt of copies of a supplemented or amended prospectus  prepared and filed by
the  Company,  or until it is advised in writing by the Company that the current
prospectus  may  be  used,  and  has  received   copies  of  any  additional  or
supplemental  filings that are incorporated or deemed  incorporated by reference
in any such prospectus. In the event of any Suspension, the Company will use its
commercially  reasonable efforts to cause the use of the prospectus so suspended
to be  resumed  as  soon as  reasonably  practicable  after  the  delivery  of a
Suspension Notice to the Investor. In addition to and without limiting any other
remedies (including,  without limitation,  at law or at equity) available to the
Investor,  the Investor  shall be entitled to specific  performance in the event
that the Company fails to comply with the provisions of this Section 7.2(c).

              (d) Notwithstanding the foregoing  paragraphs of this Section 7.2,
the Investor shall not be prohibited from selling  Registrable  Shares under the
Registration  Statement as a result of  Suspensions  on more than two  occasions
(for two separate suspension events) of not more than 45 days each in any twelve
month period.  If the Investor is  prohibited  from selling  Registrable  Shares
under the  Registration  Statement as a result of  Suspensions  on more than two
occasions  in any  twelve-month  period  or for  more  than  45  days on any one
occasion, it shall be deemed a Registration Default, and the Company shall issue
Penalty Shares or cash, as the case may be, in accordance with the provisions of
Section  7.1(k)  based on the number of  Registrable  Shares  that have not been
previously sold by the Investor.

              (e) Provided that a Suspension is not then in effect, the Investor
may sell Registrable Shares under the Registration Statement,  provided that (i)
the Investor arranges for delivery of a current Prospectus to the transferee of

                                      -13-
<PAGE>


such Shares and (ii) the Investor  must also deliver to the  Company's  transfer
agent,  with a copy to the Company,  a completed  Certificate of Subsequent Sale
substantially  in the  form  attached  as  Exhibit  A to Annex  II,  so that the
Registrable  Shares  may be  properly  transferred.  Upon  receipt  of a request
therefor,  the Company has agreed to provide,  at its own  expense,  an adequate
number of current Prospectuses  (including  documents  incorporated by reference
therein) to the Investor  and to supply  copies to any other  parties  requiring
such Prospectuses.

         7.3 Indemnification. For the purpose of this Section 7.3:

            (i) the  term  "Registration  Statement"  shall  include  any  final
prospectus,  exhibit,  supplement  or  amendment  included in or relating to the
Registration Statement referred to in Section 7.1; and

            (ii) the term "untrue  statement" shall include any untrue statement
or alleged  untrue  statement  contained  in the  Registration  Statement or the
prospectus related thereto,  or any omission or alleged omission to state (1) in
the  Registration  Statement a material  fact  required to be stated  therein or
necessary to make the statements therein not misleading or (2) in the prospectus
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements  therein,  in the light of the  circumstances  under  which they were
made, not misleading.

              (a) The Company agrees to indemnify and hold harmless the Investor
(and each officer,  director or  controlling  person of the  Investor)  from and
against any losses,  claims,  damages or  liabilities  to which the Investor may
become subject  (under the Securities Act or otherwise)  insofar as such losses,
claims,  damages or liabilities  (or actions or proceedings in respect  thereof)
arise out of, or are based upon (i) any  untrue  statement  of a  material  fact
contained in the Registration  Statement or the prospectus,  (ii) any failure by
the Company to fulfill any undertaking  included in the Registration  Statement,
or  (iii) a breach  of any  representation,  warranty  or  covenant  made by the
Company in this Agreement,  and the Company will reimburse the Investor (or such
officer,  director  or  controlling  person of the  Investor)  on demand for any
reasonable  legal  or  other  expenses  reasonably  incurred  in  investigating,
defending  or  preparing  to defend any such  action,  proceeding  or claim,  or
preparing to defend any such action,  proceeding  or claim,  provided,  however,
that the  Company  shall not be liable in any such case to the extent  that such
loss, claim,  damage or liability arises out of, or is based upon, (x) an untrue
statement made in such Registration Statement in reliance upon and in conformity
with  information  furnished  to the  Company  by or on behalf  of the  Investor
specifically for use in the preparation of the Registration  Statement,  (y) the
failure of the Investor to comply with its covenants and agreements contained in
Section  7.2 hereof  respecting  sale of the  Shares,  or (z) any  statement  or
omission in any prospectus  that is corrected in any subsequent  prospectus that
was  delivered  to the  Investor  prior  to the  pertinent  sale or sales by the
Investor.  Notwithstanding the foregoing, the Company shall not be liable to the
Investor (or any officer,  director or  controlling  person of the Investor) for
any  consequential  damages,  including  lost  profits,  solely with  respect to
losses, claims, damages,  liabilities or expenses to which such Investor (or any
officer,  director or  controlling  person of the Investor)  may become  subject
arising out of, or based  upon,  any breach of any  representation,  warranty or
covenant made by the Company in this Agreement.


                                      -14-
<PAGE>


              (b) The Investor agrees (separately and not jointly with any other
Investor) to indemnify and hold  harmless the Company (and each person,  if any,
who controls the Company within the meaning of Section 15 of the Securities Act,
each  officer  of the  Company  who signs the  Registration  Statement  and each
director of the Company),  as applicable,  from and against any losses,  claims,
damages or  liabilities  to which the Company (or any such officer,  director or
controlling  person) may become subject (under the Securities Act or otherwise),
insofar  as  such  losses,   claims,  damages  or  liabilities  (or  actions  or
proceedings in respect thereof) arise out of, or are based upon, (i) any failure
by the Investor to comply with the covenants and agreements contained in Section
5.3,  5.5 or 7.2  hereof  respecting  sale of the  Shares,  or (ii)  any  untrue
statement of a material  fact  contained in the  Registration  Statement if such
untrue  statement was made in reliance upon and in conformity  with  information
furnished by or on behalf of the Investor specifically for use in preparation of
the Registration  Statement (provided,  however,  that the Investor shall not be
liable in any such case for any untrue statement in any  Registration  Statement
or Prospectus if such  statement has been  corrected in writing by such Investor
and delivered to the Company at least three business days prior to the pertinent
sale or sales by the Investor)  and the Investor will  reimburse the Company (or
such officer, director or controlling person) on demand, as the case may be, for
any legal or other expenses reasonably  incurred in investigating,  defending or
preparing to defend any such action,  proceeding or claim.  Notwithstanding  the
foregoing,  (x) the Investor's  aggregate  liability pursuant to this subsection
(b) and  subsection  (d) shall be limited to the net  proceeds  received  by the
Investor from the sale of the Registrable  Shares and (y) the Investor shall not
be liable to the Company for any consequential damages,  including lost profits,
solely with respect to losses, claims, damages, liabilities or expenses to which
the Company (or any officer,  director or controlling person as set forth above)
may become subject  (under the Securities Act or otherwise),  arising out of, or
based upon, any failure to comply with the covenants and agreements contained in
Section 5.3, 5.5 or 7.2 hereof respecting sale of the Registrable Shares.

              (c) Promptly after receipt by any  indemnified  person of a notice
of a claim or the beginning of any action in respect of which indemnity is to be
sought  against an  indemnifying  person  pursuant  to this  Section  7.3,  such
indemnified person shall notify the indemnifying person in writing of such claim
or of the  commencement  of such  action,  but the  omission  to so  notify  the
indemnifying  party will not relieve it from any liability  which it may have to
any  indemnified  person  under this Section 7.3 (except to the extent that such
omission  materially and adversely affects the indemnifying  person's ability to
defend such action) or from any liability otherwise than under this Section 7.3.
Subject to the provisions  hereinafter  stated, in case any such action shall be
brought against an indemnified person, the indemnifying person shall be entitled
to participate therein, and, to the extent that it shall elect by written notice
delivered to the  indemnified  person  promptly  after  receiving  the aforesaid
notice  from such  indemnified  person,  shall be entitled to assume the defense
thereof, with counsel reasonably  satisfactory to such indemnified person. After
notice from the indemnifying  person to such indemnified  person of its election
to assume the defense thereof,  such indemnifying  person shall not be liable to
such  indemnified  person for any legal expenses  subsequently  incurred by such
indemnified  person in connection with the defense thereof,  provided,  however,

                                      -15-
<PAGE>

that if there  exists or shall exist a conflict  of interest  that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof,  the indemnified person shall be entitled to
retain its own counsel at the  expense of such  indemnifying  person;  provided,
however,  that no  indemnifying  person  shall be  responsible  for the fees and
expenses of more than one separate  counsel  (together  with  appropriate  local
counsel) for all indemnified  parties. In no event shall any indemnifying person
be liable in respect of any amounts paid in  settlement of any action unless the
indemnifying  person shall have approved the terms of such settlement;  provided
that such consent shall not be unreasonably  withheld.  No  indemnifying  person
shall,  without the prior written consent of the indemnified person,  effect any
settlement  of any  pending  or  threatened  proceeding  in respect of which any
indemnified person is or could have been a party and indemnification  could have
been  sought  hereunder  by such  indemnified  person,  unless  such  settlement
includes an unconditional  release of such indemnified person from all liability
on claims that are the subject matter of such proceeding.

              (d) If the  indemnification  provided  for in this  Section 7.3 is
unavailable  to or  insufficient  to hold harmless an  indemnified  person under
subsection  (a) or (b)  above in  respect  of any  losses,  claims,  damages  or
liabilities (or actions or proceedings in respect thereof)  referred to therein,
then each indemnifying  person shall contribute to the amount paid or payable by
such  indemnified  person  as a  result  of  such  losses,  claims,  damages  or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the Company,  on the one hand and the Investor,
as well as any of the other Investors under such Registration  Statement, on the
other in  connection  with the  statements  or omissions or other  matters which
resulted in such losses,  claims,  damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable  considerations.  The relative
fault shall be determined by reference to, among other things, in the case of an
untrue statement,  whether the untrue statement relates to information  supplied
by the Company,  on the one hand, or specifically  for use in the preparation of
the Registration  Statement by the Investor,  or any of the other Investors,  on
the other, and the parties'  relative intent,  knowledge,  access to information
and opportunity to correct or prevent such untrue statement. The Company and the
Investor agree that it would not be just and equitable if contribution  pursuant
to this  subsection  (d) were  determined  by pro rata  allocation  (even if the
Investor and other  Investors were treated as one entity for such purpose) or by
any other method of  allocation  which does not take into account the  equitable
considerations  referred  to above in this  subsection  (d).  The amount paid or
payable by an indemnified person as a result of the losses,  claims,  damages or
liabilities (or actions in respect thereof) referred to above in this subsection
(d) shall be deemed to include any legal or other expenses  reasonably  incurred
by such  indemnified  person in connection with  investigating  or defending any
such action or claim. Notwithstanding the provisions of this subsection (d), the
Investor  shall not be  required to  contribute  any amount in excess of the net
proceeds  received by the Investor from the sale of the Registrable  Shares.  No
person  guilty of  fraudulent  misrepresentation  (within the meaning of Section
11(f) of the Securities Act) shall be entitled to  contribution  from any person
who  was  not  guilty  of  such  fraudulent  misrepresentation.  The  Investor's
obligations in this subsection to contribute  shall be in proportion to its sale
of Shares to which such loss relates and shall be several and not joint with any
other Investors.

              (e) The parties to this Agreement hereby acknowledge that they are
sophisticated  business  persons who were represented by counsel (or waived such
right)  during the  negotiations  regarding  the  provisions  hereof  including,
without  limitation,  the provisions of this Section 7.3, and are fully informed
regarding said provisions.


                                      -16-
<PAGE>


         7.4 Rule 144.  The  Company  covenants  that it will  file the  reports
required to be filed by it under the Securities Act and the Exchange Act and the
rules and  regulations  adopted by the SEC thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any Investor holding
Shares purchased hereunder made after the first anniversary of the Closing Date,
make publicly  available such  information as necessary to permit sales pursuant
to Rule 144 under the  Securities  Act), and it will take such further action as
the Investor may  reasonably  request,  all to the extent  required from time to
time  to  enable  the  Investor  to  sell  Shares  purchased  hereunder  without
registration  under the  Securities  Act within the limitation of the exemptions
provided by (a) Rule 144 under the  Securities  Act, as such rule may be amended
from time to time,  or (b) any similar rule or regulation  hereafter  adopted by
the SEC.

         7.5 Termination of Conditions and Obligations. The conditions precedent
imposed  by  Section  5 or  this  Section  7  upon  the  transferability  of the
Registrable  Shares shall cease and terminate as to any particular number of the
Shares and the restrictive  legend shall be removed when the Registrable  Shares
shall have been  effectively  registered  under the  Securities  Act and sold or
otherwise  disposed of in accordance with the intended method of disposition set
forth in the Registration  Statement covering such Registrable Shares or at such
time as an  opinion  of  counsel  satisfactory  to the  Company  shall have been
rendered to the effect that such conditions are not necessary in order to comply
with the Securities Act (provided that such opinion shall not be required if the
Company shall be furnished with written documentation reasonably satisfactory to
it that such Shares are being transferred in a customary transaction exempt from
registration  under Rule 144 under the  Securities  Act or that such  Shares are
subject to Rule 144(k)).

8. Notices.  Except as  specifically  provided in section  7.1(g),  all notices,
requests, consents and other communications hereunder shall be in writing, shall
be mailed  (A) if within  the  United  States by  first-class  registered  mail,
Express  Mail  or  nationally  recognized  overnight  express  courier,  postage
prepaid, or by facsimile, or (B) if delivered from outside the United States, by
International  Federal  Express or  facsimile,  and shall be deemed given (i) if
delivered by first-class  registered  mail, three business days after so mailed,
(ii) if delivered by Express Mail or a nationally  recognized overnight carrier,
one business day after so mailed,  (iii) if delivered by  International  Federal
Express, two business days after so mailed, (iv) if delivered by facsimile, upon
electronic  confirmation  of receipt  and shall be  delivered  as  addressed  as
follows:

         (a) if to the Company, to:

                        STAAR Surgical Company
                        Attention: John Bily, Chief Financial Officer
                        Phone: (626) 303-7902 ext. 2370
                        Fax:  (626) 303-0895

                                      -17-
<PAGE>


                        with a copy to:

                        Sheppard, Mullin, Richter & Hampton LLP
                        333 South Hope Street, 48th Floor
                        Los Angeles, CA  90072
                        Attention:  Charles S. Kaufman, Esq.
                        Phone:  (213) 620-1780
                        Fax:   (213) 620-1398

         (b) if to the Investor, at its address on the signature page hereto, or
at such other address or addresses as may have been  furnished to the Company in
writing

9. Changes.  This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and the Investor.

10.  Headings.  The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement.

11.  Severability.  In case any provision  contained in this Agreement should be
invalid,  illegal or  unenforceable in any respect,  the validity,  legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.

12.  Governing  Law.  This  Agreement  shall be governed  by, and  construed  in
accordance  with,  the internal  laws of the State of Delaware,  without  giving
effect to the principles of conflicts of law.

13. Entire  Agreement.  This Agreement  constitutes the entire agreement between
the parties  hereto  pertaining to the subject  matter  hereof,  and any and all
other written or oral  agreements  relating to such subject matter are expressly
cancelled.

14.  Finders'  Fees.  Neither  the Company nor the  Investor  nor any  affiliate
thereof has incurred any  obligation  which will result in the obligation of the
other  party to pay any  finder's  fee or  commission  in  connection  with this
transaction, except for fees payable by the Company to the Placement Agent.

15.  Counterparts.  This Agreement may be executed in two or more  counterparts,
each of which  shall  constitute  an  original,  but all of  which,  when  taken
together,  shall constitute but one instrument,  and shall become effective when
one or more  counterparts have been signed by each party hereto and delivered to
the other parties.

16. Confidential Information; 8-K Filing. The Investor represents to the Company
that, at all times during the Company's offering of the Shares, the Investor has
maintained  in  confidence  all  non-public  information  regarding  the Company
received by the Investor  from the Company or its agents,  has not traded in the
Company's  securities on the basis of any non-public  information  and covenants
that it will  continue to maintain in  confidence  such  information  until such
information becomes generally publicly available, other than through a violation
of this  provision by the Investor or its agents.  Within two (2) business  days
after the  Closing  Date,  the  Company  shall  file a Form 8-K  concerning  the
Agreements  and the  transactions  contemplated  thereby,  which  Form 8-K shall
attach a Form of the  Agreements  as an  exhibit  to such  Form  8-K  (the  "8-K

                                      -18-
<PAGE>


Filing"). From and after the 8-K Filing, the Company hereby acknowledges that no
Investor shall be in possession of any material nonpublic  information  received
from the Company or any of its  respective  officers,  directors,  employees  or
agents, that is not disclosed in the 8-K Filing.

17. Successors and Assigns.  This Agreement shall inure to the benefit of and be
binding  upon the  successors  and  permitted  assigns  of the  Company  and the
Investor,  including  without  limitation  and  without  the need for an express
assignment,  affiliates of the Investor.  With respect to transfers that are not
made pursuant to the  Registration  Statement,  the rights and obligations of an
Investor under this Agreement shall be automatically assigned by the Investor to
any transferee of all or any portion of the Investor's Registrable Shares who is
a Permitted Transferee (as defined below);  provided,  however,  that within two
business days prior to the transfer,  (i) the Company is provided  notice of the
transfer  including  the name and  address of the  transferee  and the number of
Registrable Shares transferred;  and (ii) that such transferee agrees in writing
to be bound by the terms of this Agreement.  (For purposes of this Agreement,  a
"Permitted  Transferee"  shall  mean  any  person  who  (a)  is  an  "accredited
investor,"  as that term is defined  in Rule  501(a) of  Regulation  D under the
Securities  Act  and  (b) is a  transferee  of at  least  25% of the  Investor's
Registrable Shares received in a transaction permitted under the securities laws
of the United  States).  Upon any transfer  permitted by the second  sentence of
this Section 17, the Company  shall be obligated to such  transferee  to perform
all of its  covenants  under  this  Agreement  as if  such  transferee  were  an
Investor.

18. Expenses.  Each of the Company and the Investors shall bear its own expenses
in connection with the preparation and negotiation of the Agreement.




                                      -19-
<PAGE>
                                   Schedule I


                                    Investors
                                    ---------



[Names]

<PAGE>


                                    EXHIBIT A
                STAAR SURGICAL COMPANY INVESTOR QUESTIONNAIRE
               (ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)


To:   STAAR Surgical Company

      This Investor  Questionnaire  ("Questionnaire")  must be completed by each
potential  investor in  connection  with the offer and sale of the shares of the
common  stock,  par value  $0.01  per  share,  of STAAR  Surgical  Company  (the
"Securities").  The  Securities  are being  offered  and sold by STAAR  Surgical
Company (the "Company")  without  registration under the Securities Act of 1933,
as amended (the "Act"),  and the securities laws of certain states,  in reliance
on the  exemptions  contained  in Section  4(2) of the Act and on  Regulation  D
promulgated  thereunder and in reliance on similar  exemptions  under applicable
state laws. The Company must  determine that a potential  investor meets certain
suitability requirements before offering or selling Securities to such investor.
The purpose of this  Questionnaire  is to assure the Company that each  investor
will meet the applicable suitability  requirements.  The information supplied by
the potential  investor will be used in determining  whether such investor meets
such criteria,  and reliance on the private offering exemption from registration
is based in part on the information supplied in this Questionnaire.

      This  Questionnaire does not constitute an offer to sell or a solicitation
of an offer to buy any  security.  Except as  expressly  permitted  herein,  the
potential investor's answers are to be kept strictly  confidential.  However, by
signing this  Questionnaire  the  potential  investor  will be  authorizing  the
Company to provide a completed copy of this Questionnaire to such parties as the
Company  deems  appropriate  in order to  ensure  that the offer and sale of the
Securities  will not result in a violation of the Act or the securities  laws of
any state, and that the potential investor  otherwise  satisfies the suitability
standards  applicable to purchasers of the Securities.  All potential  investors
must  answer  all  applicable  questions  and  complete,   date  and  sign  this
Questionnaire.  Please print or type the responses and attach  additional sheets
of paper if necessary to complete the answers to any item.

A. BACKGROUND INFORMATION
   ----------------------

Name: ________________________________________________________________________

Business Address: ____________________________________________________________
                                    (Number and Street)

______________________________________________________________________________
(City)                          (State)                         (Zip Code)

Telephone Number: (___)_______________________________________________________


                                      A-1
<PAGE>


Residence Address: ___________________________________________________________
                                    (Number and Street)

______________________________________________________________________________
(City)                          (State)                         (Zip Code)

Telephone Number: (___)_______________________________________________________

If an individual:

Age:  _____  Citizenship:     _______________  Where registered to vote:


If a corporation, partnership, limited liability company, trust or other entity:
      Type of entity: ________________________________________________________

      State of formation:__________________  Date of formation:  _____________

Social Security or Taxpayer Identification No. _______________________________


Send all correspondence to (check one):   ___ Residence Address
                                          ___ Business Address


                                      A-2
<PAGE>

B. STATUS AS ACCREDITED INVESTOR
   -----------------------------

      The  undersigned  is an  "accredited  investor" as such term is defined in
Regulation  D under the Act,  as at the time of the sale of the  Securities  the
undersigned falls within one or more of the following categories (Please initial
one or more, as applicable):1

      ____ (1) a bank as defined in Section 3(a)(2) of the Act, or a savings and
loan  association or other  institution as defined in Section  3(a)(5)(A) of the
Act whether acting in its individual or fiduciary  capacity;  a broker or dealer
registered  pursuant to Section 15 of the  Securities  Exchange Act of 1934;  an
insurance company as defined in Section 2(13) of the Act; an investment  company
registered  under  the  Investment   Corporation  Act  of  1940  or  a  business
development company as defined in Section 2(a)(48) of that Act; a Small Business
Investment Corporation licensed by the U.S. Small Business  Administration under
Section  301(c)  or (d) of the Small  Business  Investment  Act of 1958;  a plan
established and maintained by a state, its political subdivisions, or any agency
or instrumentality  of a state or its political  subdivisions for the benefit of
its  employees,  if such plan has total  assets  in  excess  of  $5,000,000;  an
employee  benefit  plan within the  meaning of the  Employee  Retirement  Income
Security Act of 1974 if the investment decision is made by a plan fiduciary,  as
defined in Section 3(21) of such Act,  which is either a bank,  savings and loan
association,  insurance company,  or registered  investment  adviser,  or if the
employee  benefit  plan has  total  assets  in  excess  of  $5,000,000  or, if a
self-directed  plan,  with the investment  decisions made solely by persons that
are accredited investors;

      ____ (2) a private  business  development  company  as  defined in Section
202(a)(22) of the Investment Advisers Act of 1940;

      ____ (3) an  organization  described in Section  501(c)(3) of the Internal
Revenue Code of 1986, as amended, corporation, Massachusetts or similar business
trust,  or  partnership,  not formed for the specific  purpose of acquiring  the
Securities offered, with total assets in excess of $5,000,000;

      ____ (4) a natural person whose  individual net worth,  or joint net worth
with  that  person's  spouse,  at the  time of  such  person's  purchase  of the
Securities exceeds $1,000,000;

      ____ (5) a  natural  person  who had an  individual  income  in  excess of
$200,000,  or joint income with that person's  spouse in excess of $300,000,  in
2001 and 2002 and has a reasonable expectation of reaching the same income level
in 2003;

------------------
1     As used in this  Questionnaire,  the term "net worth"  means the excess of
      total  assets  over  total  liabilities.  In  computing  net worth for the
      purpose of subsection (4), the principal residence of the investor must be
      valued at cost,  including cost of improvements,  or at recently appraised
      value  by  an   institutional   lender  making  a  secured  loan,  net  of
      encumbrances.  In  determining  income,  the  investor  should  add to the
      investor's  adjusted gross income any amounts  attributable  to tax exempt
      income  received,  losses  claimed  as a limited  partner  in any  limited
      partnership,  deductions claimed for depiction, contributions to an IRA or
      KEOGH retirement plan,  alimony  payments,  and any amount by which income
      from  long-term  capital  gains has been  reduced in  arriving at adjusted
      gross income.

                                      A-3
<PAGE>


      ____ (6) a trust,  with total assets in excess of  $5,000,000,  not formed
for the specific purpose of acquiring the Securities offered,  whose purchase is
directed  by a  sophisticated  person  as  described  in Rule  506(b)(2)(ii)  of
Regulation D; and

      ____ (7) an  entity  in which  all of the  equity  owners  are  accredited
investors (as defined above).




                                      A-4
<PAGE>


C. REPRESENTATIONS
   ---------------

      The  undersigned  hereby  represents  and warrants to the  Corporation  as
follows:

1.    Any  purchase  of the  Securities  would be solely for the  account of the
      undersigned  and not for the account of any other person or with a view to
      any resale, fractionalization, division, or distribution thereof.

2.    The  information  contained  herein is complete  and  accurate  and may be
      relied  upon by the  Corporation,  and the  undersigned  will  notify  the
      Corporation  immediately of any material change in any of such information
      occurring  prior to the closing,  if any,  with respect to the purchase of
      Securities by the undersigned or any co-purchaser.

3.    There are no suits, pending litigation,  or claims against the undersigned
      that could materially  affect the net worth of the undersigned as reported
      in this Questionnaire.

4.    The undersigned acknowledges that there may occasionally be times when the
      Corporation  determines  that it must  suspend  the use of the  prospectus
      forming a part of the  Registration  Statement (as such term is defined in
      the Stock Purchase Agreement to which this Questionnaire is attached),  as
      set  forth  in  Section  7.2(c)  of  the  Stock  Purchase  Agreement.  The
      undersigned  is aware that,  in such  event,  the  Securities  will not be
      subject to ready  liquidation,  and that any  Securities  purchased by the
      undersigned  would have to be held  during  such  suspension.  The overall
      commitment  of the  undersigned  to  investments  which  are  not  readily
      marketable  is not  excessive in view of the  undersigned's  net worth and
      financial circumstances, and any purchase of the Securities will not cause
      such commitment to become  excessive.  The undersigned is able to bear the
      economic risk of an investment in the Securities.

5.    In addition to reviewing the Corporation's filings with the Securities and
      Exchange   Commission,   the  undersigned  has  carefully  considered  the
      potential  risks  relating  to  the  Corporation  and a  purchase  of  the
      Securities,  and fully  understands  that the Securities  are  speculative
      investments   which  involve  a  high  degree  of  risk  of  loss  of  the
      undersigned's entire investment.

      IN WITNESS WHEREOF,  the undersigned has executed this  Questionnaire this
_____ day of _______ ___,  2003, and declares under oath that it is truthful and
correct.

                                         _____________________________________
                                         Print Name

                                         By:   _______________________________
                                               Signature

                                         Title: _______________________________
                                               (required for any purchaser  that
                                                is a corporation,  partnership,
                                                trust or other entity)


                                      A-5
<PAGE>

                                    EXHIBIT B

                  Form of Opinion of Counsel to the Company
                  -----------------------------------------

      1. The Company is a corporation duly incorporated, validly existing and in
good  standing  under the laws of the State of  Delaware  and has all  corporate
power and authority necessary to own and lease its properties and to conduct its
business as described in the SEC Documents,  except as would not have a material
adverse  effect  upon the  Company and its  Subsidiaries  taken as a whole.  The
Company is  qualified  to do business as a foreign  corporation  in the state of
California.

      2. The Company has the requisite corporate power and authority to execute,
deliver and perform its obligations under the Agreements.

      3. The  Agreements  have been duly  authorized by all necessary  corporate
action on the part of the Company.

      4. The Agreements constitute valid and binding obligations of the Company,
enforceable  against the company in  accordance  with their  terms.  Each of the
Agreements has been duly executed and delivered by the Company.

      5. The Shares to be issued on the date hereof,  when issued in  compliance
with the provisions of the Agreements,  including without  limitation payment in
full of the  consideration  therefor,  will be duly authorized,  validly issued,
fully paid and nonassessable.

      6. The  execution,  delivery  and  performance  of the  Agreements  by the
Company and the consummation of the transactions  contemplated  thereby have not
resulted in and will not result in (i) a violation of the Company's  Certificate
of  Incorporation or Bylaws,  (ii) a material  violation of the Delaware General
Corporation Law or any United States Federal Statute, rule or regulation that we
have,  in the  exercise  of  customary  professional  diligence,  recognized  as
applicable to the Company, or (iii) a violation of any judgment, order or decree
specifically  identified in the SEC Documents,  or (iv) a default by the Company
or any of its Subsidiaries  under any of the contracts  expressly  identified on
Schedule A hereto,  except as would not have a material  adverse effect upon the
Company and its Subsidiaries taken as a whole.

      7. No consent, approval or authorization of or designation, declaration or
filing  with,  any United  States  federal,  Delaware  corporate  or  California
governmental authority on the part of the Company is required in connection with
the valid execution,  delivery and performance of the Agreements,  or the offer,
sale or issuance of the Shares,  other than such as have been made or  obtained,
and except for  compliance  with the Blue Sky laws and federal  securities  laws
applicable to the offering of the Shares.

      8. Based in part upon the representations  made in the Agreements and made
by the Placement Agent in the Engagement Letter, the offer, sale and issuance of
the  Shares  to be  issued  in  conformity  with  the  terms  of the  Agreements
constitute  transactions exempt from the registration  requirements of Section 5
of the Securities Act.


                                      B-1
<PAGE>


      In addition,  to our knowledge,  except as disclosed in the SEC Documents,
there is no action,  suit,  proceeding  or  investigation  pending or threatened
against the Company or any of its  Subsidiaries  that (i) questions the validity
of the  Agreements  or the right of the  Company or any of its  Subsidiaries  to
enter into the  Agreements or (ii) if determined  adversely,  would be likely to
result in a material  adverse  change in the financial  condition or business of
the Company and its Subsidiaries taken as a whole.  Please note that we have not
conducted a docket search in any  jurisdiction  with respect to litigation  that
may be  pending  against  the  company  or any of its  Subsidiaries  nor have we
undertaken any other inquiry whatsoever.






                                      B-2
<PAGE>

                                    Annex II

                       LETTER REGARDING RESALE PROCEDURES

                              [Company Letterhead]

                                 _________, 2002

         Re: STAAR Surgical Company; Registration Statement on Form S-3
             ----------------------------------------------------------

Dear Selling Stockholder:

      Enclosed please find five (5) copies of a prospectus dated ______________,
____ (the  "Prospectus")  for your use in reselling your shares of common stock,
$0.01 par value (the "Shares"), of STAAR Surgical Company (the "Company"), under
the   Company's   Registration   Statement   on  Form  S-3   (Registration   No.
333-____________)  (the  "Registration  Statement"),  which  has  been  declared
effective by the Securities and Exchange  Commission.  As a selling  stockholder
under the  Registration  Statement,  you have an obligation to deliver a copy of
the Prospectus to each purchaser of your Shares,  either directly or through the
broker-dealer who executes the sale of your Shares.

      The  Company is  obligated  to notify  you in the event  that it  suspends
trading under the  Registration  Statement in  accordance  with the terms of the
Stock Purchase Agreement between the Company and you. During the period that the
Registration  Statement  remains  effective and trading  thereunder has not been
suspended,  you will be  permitted  to sell your Shares that are included in the
Prospectus under the Registration Statement. Upon a sale of any Shares under the
Registration  Statement,  you or your  broker will be required to deliver to the
Transfer  Agent,  Registrar  and Transfer  Company,  (1) your  restricted  stock
certificate(s)  representing  the Shares,  (2)  instructions for transfer of the
Shares sold and (3) a representation letter from your broker, or from you if you
are  selling  in  a  privately  negotiated  transaction,   or  from  such  other
appropriate party, in the form of Exhibit A attached hereto (the "Representation
Letter").  The  Representation  Letter  confirms  that the Shares have been sold
pursuant  to the  Registration  Statement  and in a manner  described  under the
caption "Plan of  Distribution" in the Prospectus and that such sale was made in
accordance  with  all  applicable  securities  laws,  including  the  prospectus
delivery requirements.

      Please note that you are under no  obligation  to sell your Shares  during
the registration period. However, if you do decide to sell, you must comply with
the requirements  described in this letter or otherwise applicable to such sale.
Your failure to do so may result in liability  under the Securities Act of 1933,
as amended, and the Securities Exchange Act of 1934, as amended. Please remember
that all sales of your  Shares must be carried out in the manner set forth under
the  caption  "Plan of  Distribution"  in the  Prospectus  if you sell under the
Registration Statement. The Company may require an opinion of counsel reasonably
satisfactory  to the Company if you choose  another  method of sale.  You should
consult  with your own  legal  advisor(s)  on an  ongoing  basis to ensure  your
compliance with the relevant securities laws and regulations.

      You must notify the undersigned if you enter into any  arrangement  with a
broker-dealer  for the sale of shares through a block trade,  special  offering,
exchange   distribution   or   secondary   distribution   or  a  purchase  by  a


                                      II-1
<PAGE>

broker-dealer. Depending on the circumstances, such transactions may require the
filing of a supplement to the Prospectus in order to update the  information set
forth under the caption "Plan of Distribution" in the Prospectus.

      Should you need any additional  copies of the  Prospectus,  or if you have
any questions  concerning  the  foregoing,  please write to me at STAAR Surgical
Company, 1911 Walker Avenue, Monrovia, California, 91016. Thank you.

                                           Sincerely,



                                           John Bily
                                           Chief Financial Officer



                                      II-2
<PAGE>

                                                                       Exhibit A
                                                                       ---------

                         CERTIFICATE OF SUBSEQUENT SALE
                         ------------------------------

American Stock Transfer & Trust Co.
59 Maiden Lane
New York, NY  10038

            RE:   Sale of  Shares of Common  Stock of STAAR  Surgical  Company
                  (the "Company")  pursuant to the Company's  Prospectus dated
                     _____________, ____ (the "Prospectus")

Dear Sir/Madam:

      The undersigned hereby certifies, in connection with the sale of shares of
Common Stock of the Company included in the table of Selling Stockholders in the
Prospectus,  that the undersigned has sold the shares pursuant to the Prospectus
and in a manner  described  under  the  caption  "Plan of  Distribution"  in the
Prospectus,  and that such sale complies with all securities  laws applicable to
the  undersigned,   including,   without  limitation,  the  Prospectus  delivery
requirements of the Securities Act of 1933, as amended.

Selling Stockholder (the beneficial owner): ___________________________________

Record Holder (e.g., if held in name of nominee): _____________________________

Restricted Stock Certificate No.(s): __________________________________________

Number of Shares Sold:  _______________________________________________________

Date of Sale: _________________________________________________________________


      In the event that you  receive a stock  certificate(s)  representing  more
shares of Common Stock than have been sold by the  undersigned,  then you should
return to the  undersigned a newly issued  certificate for such excess shares in
the name of the Record Holder and BEARING A  RESTRICTIVE  LEGEND.  Further,  you
should place a stop transfer on your records with regard to such certificate.

                                           Very truly yours,

Date: ___________________                  By:  _______________________________

                                           Name: ______________________________

                                           Title: _____________________________

cc:   STAAR Surgical Company
      1911 Walker Avenue
      Monrovia, CA  91016
      Attn:  John Bily
      Chief Financial Officer



                                      II-3

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>4
<FILENAME>staar611038kex991.txt
<DESCRIPTION>PRESS RELEASE
<TEXT>
                                                                    Exhibit 99.1
                                                                    ------------

STAAR Surgical Signs Definitive Agreements to Sell 1,000,000 Shares of Common
Stock

Thursday June 12, 11:48 am ET

MONROVIA,  Calif., June 12 -- STAAR Surgical Company (Nasdaq: STAA - News) today
announced  that it has entered  into  definitive  agreements  to sell  1,000,000
shares of newly issued common stock at a purchase  price of $9.60 per share in a
private placement to institutional  investors. The offering is expected to close
within two business days.

The common stock to be issued in the private  placement has not been  registered
under the Securities Act of 1933, as amended,  and may not be offered or sold in
the U.S.  absent  registration  or an  applicable  exemption  from  registration
requirements.  STAAR  Surgical  does,  however,  intend  to file a  registration
statement covering the resale of the common stock within 30 days of the closing.

This release is not an offer to sell or the solicitation of an offer to buy, nor
shall there be any sale of the  company's  securities in any state in which such
offer,  solicitation  or sale would be unlawful prior to their  registration  or
qualification under the securities laws of any such state.

Safe Harbor

All statements in this press release that are not statements of historical  fact
are  forward-looking  statements,  including the statement  that the offering is
expected  to close  within two  business  days.  These  statements  are based on
expectations  and  assumptions  as of the  date of this  press  release  and are
subject to numerous risks and uncertainties, which could cause actual results to
differ materially from those described in the  forward-looking  statements.  The
risks and uncertainties  include the ability of the Company and the investors to
comply  with  certain  conditions  to  closing  as set  forth in the  definitive
agreements.  STAAR  Surgical  Company  assumes  no  obligation  to update  these
forward-looking statements, and does not intend to do so.

For   further   information   please   contact:   Investors,    Douglas   Sherk,
1-415-659-2285,  or  Jennifer  Cohn,  1-415-659-2289,  or Media,  Sheryl  Seapy,
1-415-272-3323, all of EVC Group, for STAAR Surgical Company.



</TEXT>
</DOCUMENT>
</SUBMISSION>
